The Philippine Bureau of Internal Revenue (BIR) has started an audit on the tax payments of cigarette manufacturer Mighty Corp., reports ABS-CBN News.
BIR personnel have been assigned to Mighty’s manufacturing facilities to ensure they are complying with tax payments.
The investigation follows allegations that the company has been underdeclaring its production volume, resulting in billions of pesos in foregone revenues for the government.
Mighty produces the Mighty Menthol and Mighty Filter brands. In February, it defended its pricing as a “marketing” strategy and noted that the company pays no royalties to foreign parents, giving it a cost advantage.
British American Tobacco will double its purchases of Philippine tobacco as it plans to invest more than $50 million in the country this year, reports The Manila Bulletin.
James Lafferty, general manager of BAT Philippines, said the company will buy 3.6 million kg of Philippine tobacco, valued at between $12 million and $14 million, in the 2012-2013 planting season.
Following the passage of tobacco tax reforms in late 2012, BAT Philippines announced the company would invest at least $200 million in the Philippines over five years starting in 2013.
The company intends to grow its market share, introducing new Lucky Strike variants and other brands. It is also looking into constructing a cigarette factory in the Philippines.
BAT currently employs 300 people directly and indirectly across the country.
The Philippine health department warned the public on April 12 against e-cigarettes, saying the tobacco substitute could turn children into smokers.
E-cigarettes have been gaining favor among Filipinos as higher tobacco taxes make smoking more expensive, according to a story in the Manila Times.
Food and Drug Administration director-general Kenneth Hartigan-Go disputed what he said were claims by vendors that e-cigarettes helped smokers kick the habit.
“Wittingly or unwittingly, the electronic cigarette promotes smoking among children and the youth. It makes them less fearful of hazards and risks of smoking,” he said in a health advisory posted on its website. “The public is advised not to smoke at all and not to use cigarettes, cigars, or e-cigarettes,” added Hartigan-Go.
Nearly one in five Filipinos smokes, according to the health department.
A law that came in effect this year will gradually raise the tax on cigarettes over five years, which would roughly double the price per pack to about PHP52 ($1.27) by 2017.
A basic e-cigarette kit in the Philippines costs as little as $24, featuring a battery-powered vaporiser that delivers a nicotine-laced mist.