Philippine tobacco giant pays $586 million to settle tax case

The Philippine government had accused Mighty Corp. of using counterfeit tax stamps to avoid paying 37.88 billion pesos in taxes, and threatened it with criminal charges. (Reuters)
Updated 06 October 2017
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Philippine tobacco giant pays $586 million to settle tax case

MANILA: The Philippines said Friday it has dropped a tax evasion case against the country’s number-two cigarette manufacturer after it was sold to Japan Tobacco to raise funds for a record 30 billion-peso (SR220.8 million) settlement.
Manila had accused Mighty Corp. of using counterfeit tax stamps to avoid paying 37.88 billion pesos in taxes, and threatened it with criminal charges.
However in July, President Rodrigo Duterte ordered the finance department to accept a settlement, under which Mighty, which has 23 percent of the local cigarette market, would drop out of the tobacco business.
“We could consider this case as closed. (The) government of the Philippines is 40 billion pesos richer,” Justice Secretary Vitaliano Aguirre told reporters.
The company settled the case with a 30-billion-peso payment, and paid another 10 billion pesos in taxes and penalties, he explained.
Mighty had originally offered a 25-billion-peso settlement, Aguirre added.
The company sold off its assets to Japan Tobacco International in order to meet its tax deficiencies, the finance department said earlier.
The Japanese firm, one of the world’s biggest tobacco companies, whose global brands include Winston and Camel, announced on August 22 that it was purchasing Mighty for 46.8 billion pesos.
Asked to comment on the justice department decision, a Japan Tobacco spokesman in Japan said “the tax liability is an issue that should be solved appropriately between Mighty Corp. and the Philippine government.”


Greenland plans office in Beijing to boost trade ties with China

Updated 18 July 2018
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Greenland plans office in Beijing to boost trade ties with China

  • China could be potentially involved in the financing and construction of three airport expansions on the huge island
  • Greenland with a population of only 56,000 is rich in mineral resources but the development of its industry has been slow

COPENHAGEN: Greenland plans to open a representative office in Beijing to boost trade ties with China, the Arctic island’s new minister for foreign affairs was quoted as saying by state broadcaster KNR on Wednesday.
Denmark and the United States have been concerned about China’s interest in Greenland, a self-ruling part of the Kingdom of Denmark. Their most notable area of concern is China’s potential involvement in the financing and construction of three airport expansions on the huge island.
“We are planning to have a representative in China in order to continue strengthening trade with the country,” said minister for foreign affairs Vivian Motzfeldt, according to KNR.
The idea is not new, but it has not been discussed publicly at government level since 2014.
She did not set a timeline for when the office may be set up. Greenland already has foreign representations in Copenhagen, Brussels and Washington, and will open a fourth in Reykjavik later this year.
Beijing laid out ambitions in January to form a “Polar Silk Road” by developing shipping lanes opened up by global warming and encouraging enterprises to build infrastructure in the Arctic.
Greenland, with a population of only 56,000, is rich in mineral resources but the development of its industry has been slow, leaving its economy reliant on fishing.
A defense treaty between Denmark and the United States dating back to 1951 gives the US military almost unlimited rights in Greenland, where it has an air base at Thule.