MANILA – Part of the funds to be obtained by the government from the P25-billion tax settlement with tobacco firm Mighty Corporation will be used to bankroll the costly rehabilitation of Marawi City, gravely ruined by air strikes and fighting between soldiers and terrorists; and Ormoc City, which sustained damage from a recent strong earthquake.
President Rodrigo Duterte revealed his plan Monday during his second State of the Nation Address, days after clearing the Department of Finance (DOF) decision to proceed with the process of settlement with Mighty Corporation, accused of using fake BIR excise tax stamps.
The P25 billion would cover the deficiency excise taxes and internal revenue taxes of the company and its shareholders.
Duterte said the money from the settlement will be used by the government to fund the rebuilding of Marawi City and the rehabilitation of Ormoc City.
The government has started formulating a master plan for Marawi, which has been reduced to rubble because of the fighting between government troops and the Maute Group that began May 23 and continues to this day. This was one of the main reasons Congress in joint session on Saturday (July 22) approved Duterte’s request to extend martial law in Mindanao until Dec. 31, 2017.
Ormoc was recently hit by an earthquake that caused damage to several structures.
In his SONA, Duterte said the deal with Mighty Corp. could be the “biggest tax settlement” entered into by the government.
He stressed, however, that the settlement does not preclude any criminal charges that the Bureau of Internal Revenue might file against the firm.
He also said that after the settlement, Mighty Corp. will no longer engage in the tobacco business.