Dominguez nails big fish: Mighty’s Wong Chu King to pay biggest tax settlement in PH history
The public wanted a big fish and Finance Secretary Sonny Dominguez delivered a monster.
Dominguez bared yesterday an offer by the Wong Chu King family to pay P25 billion to settle its P37.88 billion tax deficiencies and penalties for using fake stamp taxes on millions of cigarette packs seized inside its warehouses.
This will be the biggest tax settlement case in the country since 2012 when the Philippine dealer of Audi and Porsche, PGA Cars, paid P1 billion to settle its back taxes from 2007 to 2010.
Last April, President Rodrigo Duterte urged Dominguez to go hard on oligarchs who have cheated the government of billions of pesos in taxes.
“‘Yung mga mayaman, talagang kalaban ko ‘yan. Sabihin na ninyo na inggit ako sa inyo, totoo ‘yan, p— ina kayo pero magbayad kayo. Kaya inggit ako na galit sa inyo. Bakit ‘di ako maiinggit? Yumayaman kayo nang yumayaman ‘di naman kayo bumabayad ng taxes,” said Duterte who named Bilyonaryo Lucio Tan among them.
“Lucio Tan has almost billion, 30 billion. He has to pay. He has to pay. Lahat, they have to pay,” Duterte said.
But it was Tan’s biggest rival in the cigarette industry, the Wong Chu King family , who got nailed first by Dominguez.
Mighty is raising P45 billion by selling Mighty lock, stock and barrel to Japan Tobacco, makers of Winston and Camel cigarette brands and using part of the the money to pay the Bureau of Internal Revenue.
The P25 billion settlement would cover the P3.5 billion in deficiency excise taxes on its cigarette products that are now the subject of the three tax cases pending before the DOJ; and the P21.5 billion tax liabilities in the last six years.
The Wong Chu Kings have agreed to bury Mighty after surrendering to Japan Tobacco all its manufacturing and distribution business and assets, along with the intellectual property rights associated with these assets, including those owned by the company, Wong Chu King Holdings Inc., and other affiliates.
Dominguez said he was still studying the offer which Mighty hoped to conclude in one week or by July 20.
Dominguez was adamant that the settlement would only cover Mighty’s tax deficiencies and not the criminal charges that might be filed in court by the Bureau of Internal Revenue (BIR) against the company.