PRESIDENT Rodrigo Duterte has ordered Mighty Corp., the country’s oldest cigarette manufacturer, to increase its tax liabilities to more than 10 times its tax deficit even as he admitted his close relationship with the company’s owner, Alexander Wongchuking whom he described as his “mistah.”
Speaking at the PDP-Laban’s thanksgiving held in Pasay City on Sunday night, Duterte said that Finance Secretary Carlos Dominguez did not agree to his proposals to just levy the company more than P3 billion in exchange for a settlement on obligations with the government.
“Dominguez called up, he said that it’s ‘too small.’ The law provided 10 times over. But I’m not a tax lawyer. What’s my concern about … I don’t know if he will pay up or not,” Duterte said.
The president earlier ordered Wongchuking’s arrest for economic sabotage, but the Finance Department said it would file tax evasion raps against the company. Duterte then said he would clear Wongchuking from obligation, if he is able to pay P3 billion in tax liabilities then latter raised it to P5 billion.
The cigarette company has unpaid excise tax of P1.08 billion as it only paid P325 million of P1.4 billion in duties and taxes for the imports made from 2011 to 2013.
The President said Wongchuking remains free because no case has been filed against him yet.
Duterte said he has personal knowledge about Alexander Wongchuking, as they are both adopted members of the PMA “Dimasupil” class of 1967.
“What about this Mighty [owner]? You know, I was mayor that time when Mighty [owner Wongchuking] visited me. I could not remember his name but it’s something like Alex. I will tell you, he’s like my mistah. The two of us were adopted by Class 1967 of PMA so I know him. I really know him,” Duterte said.
“That’s why when [the issue about him] surfaced – I don’t have anything [against him] because you know, I have to tell you now, the tax cases, the tax evasion whatever, can really be compromised. The law says there can be compromise,” he added.
Duterte earlier said that the business tycoon tried to offer him guns and a package of cash, which he ordered to be returned.
Rumors earlier circulated that a group of Mindanao lawmakers tried to bribe the President on behalf of a tobacco firm that had been implicated in tax evasion and smuggling.
As this developed, the Bureau of Customs has asked the Supreme Court to investigate the administrative liability of a Manila City judge for stopping its raids and inspections on warehouses of Mighty Corp.
In a complaint filed before the Office of the Court Administrator, Customs Commissioner Nicanor Faeldon accused Judge Tita Alisuag of Manila City Regional Trial Court, Branch 1, of gross ignorance of the law in issuing a temporary restraining order against the continuous raids of BOC and Bureau of Internal Revenue against the firm for alleged tax evasion and smuggling.
Faeldon also alleged that the judge committed gross violation of the New Code of Judicial Conduct for allegedly “exhibiting unquestionable bias and partiality in favor of Mighty Corp.”
The BoC chief said that Judge Alisuag blatantly disregarded the long-established rule that regular courts do not have jurisdiction over seizure and forfeiture proceedings.
Through the BoC legal service, Faeldon said the bureau has exclusive jurisdiction over all seizure and forfeiture cases under Section 202 of Republic Act No. 10863 or the Customs Modernization and Tariff Act.
Section 301 of the said law, he said, further provides that “all goods, including means of transport, entering or leaving customs territory, regardless of whether they are liable to duties and taxes, shall be subject to customs control.”
“The TRO was overboard, practically prohibiting the BoC from exercising its mandate over Mighty Corporation. It effectively made Mighty Corporation untouchable and immune from any and all acts of the BoC,” the BoC said, in its complaint.
“Respondent judge’s issuance of the said order dated March 6, 2017 constitutes ignorance of the law, so gross that it strikes at the very core of the public’s faith and confidence on the integrity and competence of the country’s judicial system,” it said.
The judge issued the TRO after Mighty Corp. filed a petition on March 3, which alleged that the BoC and BIR operatives discovered “there were no counterfeit, fake or smuggled goods” in the warehouses but still proceeded with the raid, the conduct of which was not in the scope of their mission order.
The TRO is effective for 20 days from the filing of the case on March 3, or up to March 23.
The RTC is set to hear the case today the plea of Mighty Corp. for preliminary injunction. BOC legal service head Alvin Ebreo said they would seek the inhibition of Judge Alisuag.
The trial court issued the TRO after the BoC and BIR seized over P2 billion worth of cigarettes of the firm bearing fake tax stamps in a series of raids.
Earlier this month, the BoC and the Bureau of Internal Revenue confiscated 11,044 master cases of Mighty cigarettes worth P215 million in General Santos City and 62,200 master cases valued at P1.98 billion in San Simon, Pampanga.
Last week, the BoC seized three more containers carrying Might cigarettes in the Port of Cebu and in Tacloban in an operation led by Commissioner Faeldon himself.
