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Mighty Corp agrees to Duterte's P3-B compromise offer but still has to face raps - Aguirre means BUSINESS

MANILA, Philippines -- Tobacco firm Mighty Corp. has written President Rodrigo Duterte accepting his suggestion to pay P3 billion to settle its tax liabilities, Justice Secretary Vitaliano Aguirre II said.  

But Aguirre said the deal can only be sealed to settle the case the government intends to file against Mighty Corp. following the seizure of tobacco products bearing P1.5 billion worth of fake tax stamps in the company’s warehouses.

Kung magkakaro’n ng filing dito sa DOJ against Mighty Corp. and its officers, do’n puwede ipatupad ang kagustuhan ng Pangulo (If the case against Mighty Corp. and its officers is filed here at the DOJ, then the President’s wishes can be carried out),” he said.

Aguirre also said government is not likely to agree to Mighty Corp.’s proposal to pay the P3 billion in instalments, echoing Finance Secretary Carlos Dominguez’s opinion that allowing it to do so would be tantamount allowing the firm to make a “donation” instead of paying for its liabilities.

Last week, Duterte said he was willing to accept Mighty Corp.’s offer to settle so long as it agreed to pay double the P1.5 billion it owed in taxes. He said he would allot P1 billion each from the compromise payment to repair hospitals in Basilan, Sulu and Tondo.

But the Action for Economic Reforms warned against the compromise, saying it would “send a wrong signal and encourage bad behavior” not only among tobacco companies but to other firms and taxpayers as well.

AER said that, under the law, Mighty Corp. could actually be compelled to pay as much as P15 billion in taxes and fines.

“(T)he President may be inviting far worse consequences of his attempt to resolve the conflict instead of letting the Department of Finance and the Bureau of Internal Revenue implement the rule of the existing law,” Jo-Ann Diosana, AER senior economist and trustee, said in a statement released after Duterte floated his compromise idea.