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Aud Theo Case
Aud Theo Case
Submitted to:
Ma’am Villegas (bsvillegas@addu.edu.ph)
1. Mighty Corporation Tax Evasion Case
2. Describe the scenario & attach original file and give a simple summary:
.
Mighty Corporation and La Campana and their sister company, Tobacco Industries
of the Philippines (Tobacco Industries) were suspected of using the GALLO cigarette
trademark since 1973 without the consent of GALLO Winery. GALLO Winery is is a
foreign corporation not operating in the Philippines but it has exclusive wine importer and
distributor in the Philippines called Andresons which claim to have no association with the
Mighty corporation. Mighty Corporation and La Campana & Tobacco Industries were
liable for trademark infringement, unfair competition and damages.
Investigations were conducted by the BIR on January 2017 wherein Mighty’s
products bearing suspected fake stamps were confiscated as evidence. In March 2017
BIR filed a P9.5-billion tax evasion case against the Mighty corporation for allegedly using
fake stamps on cigarettes to manipulate the company’s excise tax payments (Vera,
2017). Thus, tax evasion was included in the complaint of BIR against Mighty corporation.
The case now settles at the hands of the Department of Justice. At some point, President
Rodrigo Duterte publicly declared that he would allow a 3 billion settlement but because
Mighty corporation wanted to pay it on installment he dismissed the offer (The Philippine
Star, 2017).
Oscar Barrientos, the executive vice president of mighty together with the vice
president for external affairs and assistant corporate secretary (Alexander Wongchuking)
and mighty’s treasurer (Ernesto Victa) claimed that there is no probable cause for charges
of tax evasion to be filed against them. They reasoned that an appropriate inspection be
completed first before indicting violations of National Internal Revenue Code
(Mighty Corporation, 2017). Finally, the DOJ took action and shut down the
operations of mighty corporation by selling it to Japan Tobacco Inc. For USD $1
billion. In addition, a P 30 billion was paid by mighty for payment of their previous
tax liabilities and transaction taxes therefore settling their obligations to the
government (Department of Finance, 2018).
Caliwan, E. (2020). Mighty corporation and La campana fabrica de. Retrieved from
https://www.academia.edu/34995119/MIGHTY_CORPORATION_and_LA_C
AMPANA_FABRICA_DE
Department of Finance. (2018, January 24). P30-B haul from mighty tops DOF drive
from-mighty-tops-dof-drive-vs-tax-fraud/
Henares, K., & Recente, M. (n.d.). Philippines: Addressing the illicit flow of tobacco
http://pubdocs.worldbank.org/en/502721548435006600/WBG-Tobacco-
IllicitTrade-Philippines.pdf
The Philippine Star. (2016, September 18). A mighty story. Retrieved from
https://www.philstar.com/business/2016/09/18/1624993/mighty-story
The Philippine Star. (2017, May 9). What's happening to the Mighty tax evasion
https://www.philstar.com/business/2017/05/09/1691994/whats-happening-
mighty-tax-evasion-case
Vera, B. (2017, March 22). BIR files P9.5-billion tax evasion case vs. mighty corp.
evasion-case-vs-mighty-corp