July 20, 2017 / 10:07 AM / 2 months ago

Philippines to accept Mighty Corp's $69-mln initial payment of unpaid tax

MANILA, July 20 (Reuters) - The Philippines on Thursday said it would accept the first 3.5-billion-peso ($69-million) installment of Mighty Corp’s hefty unpaid tax bill, but had not settled arrears with the cigarette maker sought to be acquired by Japan Tobacco Inc.

Philippine Finance Secretary Carlos Dominguez said the government would receive the initial payment from Mighty, which has been charged with avoiding 37.88 billion pesos in tax payments.

“We will accept the initial payment,” Dominguez said in a statement.

Mighty has offered to pay the government 25 billion pesos, funded by selling its assets to Japan Tobacco, the world’s third-biggest tobacco company, for 45 billion pesos ($890 million).

In Tokyo, a Japan Tobacco spokesman told Reuters the company was in exclusive talks with Mighty on the sale of its cigarette making and distribution business and assets, and the two had signed a memorandum of agreement and a confidentiality pact.

Even the government’s acceptance of Mighty’s settlement offer would not stop the Bureau of Internal Revenue from filing tax evasion charges against the Filipino tobacco maker if warranted, Dominguez said, however.

Philippine President Rodrigo Duterte aims to replenish government coffers by raising new taxes, plugging leakages and hunting down tax evaders, to fund a multi-billion dollar infrastructure programme key to his economic agenda. ($1=50.8600 Philippine pesos) (Reporting by Neil Jerome Morales in MANILA and Taiga Uranaka in TOKYO; Editing by Clarence Fernandez)

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