MANILA - Japan Tobacco's takeover of cheap cigarette-maker Mighty Corp is expected to raise government revenues from "sin" taxes, the Department of Finance said Wednesday.
Mighty Corp is selling its business to the Japanese firm as part of a settlement of its tax liabilities with the government. The Department of Justice dismissed a P37.9-billion tax evasion complaint against Mighty on Oct. 2.
Citing preliminary computations, the DOF said Japan Tobacco would pay a minimum P3.1 billion monthly starting in January, compared to the P2 billion a month that Mighty had been paying.
The projected P40-billion take from Mighty is roughly a third of the total P118 billion in programmed revenues from the tobacco excise tax, Finance Secretary Carlos Dominguez said in the statement.
Mighty, which was accused of using fake tax stamps on its products, offered to pay P25 billion and shutter its business.