A technology used exclusively by Holcim Philippines for cement co-processing was tapped by the Department of Finance to destroy a total of P142 million worth of Mighty Corporation cigarettes on Sunday.
The incineration method ensured the total thermal destruction of waste materials and reduced toxic gas emissions and land and groundwater pollution.
The cigarettes, consisting of 9,496 mastercases or 4,748,000 packs of cigarettes, were first ran over by a roller and then was fed into Holcim’s incineration plant in Barangay Tibungco.
The cigarettes were seized from a warehouse in General Santos City earlier this year in Mindanao for having counterfeit tax stamps and due to excise tax liability.
In an emailed statement, the Department of Finance said that 9,496 mastercases or 4,748,000 packs of cigarettes of Mighty Menthol 100s, Marvels Menthol, Marvels FK and King Full Flavor brands—all manufactured by Mighty Corp.
The Department of Finance said that the 4.7 million packs of cigarettes were seized during a joint operation by officials of the Bureau of Internal Revenue and Bureau of Customs in Mindanao on March 6 for having counterfeit tax stamps.
DOF added that the destruction of all the 4,748,000 million packs will take place in batches because of their enormous quantity, further underscoring the scale of tax fraud attempted by the erring firm. About eight tons of cigarettes per day will be destroyed.
“The decision to destroy these confiscated cigarettes came easily. We imposed sin taxes on these products in part to protect the health of our people. It would be wrong to release these products to the market,” said Finance Secretary Carlos Dominguez III in his remarks read for him at the event by Assistant Secretary Kelvin Lee of the Office of the Executive Secretary.
“We will incinerate 9,496 cases of Mighty cigarettes confiscated in General Santos City. Each case contains 500 packs of cigarettes. In this lot, we have 4,748,000 packs to burn” said Dominguez.
Dominguez stressed that the destruction of the seized cigarettes “is intended to deliver this message: tax evasion does not pay. We will confiscate the offending products and destroy them. No one will profit from the commission of a crime.”
Aside from Lee, among those also present at the event were BIR Assistant Commissioner Teresita Angeles who heads the bureau’s Large Taxpayers’ Service (LTS); BIR Davao Regional Director Nuzar Balatero; BIR Revenue Region No. 18 – Koronadal City Regional Director Esmeralda Tabule; and Jeper Ylagan senior environmental management specialist of the Department of Environment and Natural Resources (DENR).
According to the BIR, the estimated deficiency excise tax liability of the seized cigarettes, including penalties, would have amounted to P1.39 billion.
The BIR said the warehouse where the seized cigarettes belonged to Sunshine Cornmill Corp. managed by Rosie and Alicia Liang.
On its press released, the confiscated tobacco products constituted the evidence in one of the three complaints filed by the BIR last May against Mighty Corp. before the Department of Justice for the use of fake tax stamps.
The government is also set to destroy 66,245 cases of Mighty cigarettes confiscated in San Simon, Pampanga, another 163,183 cases in San Ildefonso, Bulacan and other smaller stockpiles confiscated in Tacloban and Cebu. These seized cigarettes were also used as evidence in the complaints filed before the DOJ.
The complaints against Mighty had since been withdrawn after the company, with main headquarters in Bulacan, offered last July to settle its tax liabilities with the government for P25 billion and shut down its operations.
Mighty Corp. subsequently sold its assets to JTI to help pay off its tax arrears.
Dominguez has said the government stands to gain over P30 billion in additional revenues from Mighty’s tax settlement once the value-added tax from the sale and other fees are paid. He said this makes the tax settlement the largest sum ever paid by a single corporate entity in the country’s history.
“ I would like to emphasize that this is not the last incineration that will happen. All tobacco products found to have been produced without its manufacturer paying the corresponding amount of taxes will be promptly confiscated and destroyed. The men and women of our revenue agencies are dedicated to do their work and to do the job right,” he said.
