Are you burning money when you light a cigarette?

TaxSome people, especially non-smokers, would say that when you light a cigarette, it’s like you’re also burning money.

Well, the government might not agree on that based on the taxes that it gets from Philippine tobacco manufacturers every year.

Take the case of Mighty Corporation which paid an excise tax of P8 billion last year. This is quite a hefty amount compared to the P300 million it shelled out in 2012

Mr. Oscar Barrientos, the company’s Executive Vice President said that the 2013 tax payment is a strong evidence that their company has been paying its correct duties and taxes.

“The tax we paid for the year 2013 reflects the jump in our market share and our fair share in the increased taxes on “sin” products during last year,” He added

Barrientos, a retired regional trial court (RTC) judge, reiterated that no case has been filed in court against Mighty Corp despite charges in the news media and by some members of Congress against the company for non-payment of taxes. The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BI) have assured that his company has no tax deficiency until February of this year.

The P300 million-tax of the company in 2012 is for the three percent market share of Mighty Corp in the local toba(co industry. Their market share only shot up when the government put into effect the new Sin Tax law (Republic Act 10352) which synchronized a five-year adjustment of taxes on cigar for it to become a uniform P30 per pack in five years, covering all brands in the country

Despite the decline in the number of cigarette sticks sold, records from the BIR revealed that excise taxes from both cigarettes and alcohol products increased by 81.5 percent. From January to November 2013, total tax-take hit an all-time high of P91.6 billion from P60.4 billion in 2012.

The health risk in smoking is something that manufacturers are not denying since they have also place warnings in every pack of their products But one thing that is really undeniable is the fact that the industry is helping improve the condition of the country’s economy in many ways.

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