THE Department of Finance (DOF) has lauded the P46.8-billion investment by Japan Tobacco Inc. (JTI) secured by Finance Secretary Carlos G. Dominguez III during his Japan visit.
The DOF considers the investment as an expression of support by the company in the government's drive to broaden the country's revenue base through running after tax cheats in the country, according to the country's revenue supervisor.
In a Letter of Intent (LOI), the JTI said it will 'continue to support the economic growth of the [Philippines] with contributions to infrastructure and human-resource development, and help create more jobs in the country while fully complying with government regulations and promoting the welfare of the Filipino people through responsible corporate governance programs.'
Represented by its President and CEO Mitsuomi Koizumi, JTI said its investment underlines the firm's intent to 'consolidate and expand its presence in one of Asia's robust economies and enhance its business base in the Asean [Association of Southeast Asian Nations], with the Philippines serving as its regional hub.'
'JT Group enthusiastically supports the DOF in its tax-collection effectiveness program, and enthusiastically supports the realization of DOF goals to enhance the Philippines's revenue base to bring about inclusive growth,' the LOI read.
The LOI was presented to the DOF in signing ceremonies held at Imperial Hotel in Tokyo to signify JTI's commitment to continue expanding its affiliates' presence in the cigarette market in the Philippines following its acquisition of the tobacco-related assets of Mighty Corp.
JTI's purchase of Mighty led to a tax-collection windfall for the Philippine government of over P30 billion.
'The reason for the investment is two-fold: the transaction enables the JT Group to consolidate its business foundation through expanded distribution and strengthened brand portfolio by providing JTI with more than a quarter of market share in a country with robust economic growth, and the transaction allows JTI to enhance its business base in the Asean region with the Philippines serving as its regional hub,' the LOI read.
Japan's largest cigarette manufacturer, the JTI entered the Philippine market in 2000 with an initial investment of P10 billion. This increased to P20 billion in 2015 with the construction of a manufacturing plant at the Lima Technology Center in Batangas.
Early in the year, Bulacan-based Mighty sold its assets to JTI to settle tax liabilities to the government for P25 billion, which increased to P30 billion due to value-added tax.
(c) 2017 Business Mirror Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers