Chinese company denounces “false and damaging” tax evasion claims against company


Mannequins wearing full PPE suits that were purchased by the Duterte government were used as props by presidential spokesman Harry Roque, Jr. during his briefing in Malacanang on September 6, 2021 to deny the premiums claims. Screenshot of RTVM

MANILA, Philippines – China’s Xuzhou Construction Machinery Group (XCMG) on Tuesday denounced “false and damaging” tax evasion claims against it, the company saying all its medical supply deals with the government were honest.

In a statement, Atty. Kim Baltazar, lawyer for XCMG and partner in Espejo law firm, said the company “acted in good faith” and only responded to the Philippine government’s request to provide sets of equipment for Personal protection (PPE) to Philippine health workers at the height of the COVID-19 pandemic when global supplies were scarce.

“We have responded to an urgent call from the Philippine government to provide PPE to protect Filipino primary care physicians from COVID-19,” Baltazar said.

During a Senate Blue Ribbon Committee hearing on October 19, several senators urged the Bureau of Internal Revenue to look into the transactions of the Procurement Service-Department of Budget and Management (PS-DBM) with the Chinese company for fear of possible “unpaid” income taxes in the Philippines.

They also learned that the company was not an importer accredited by the Philippine Customs Office. The company’s country manager told senators at the hearing that it was “accredited by Chinese customs” and that customs clearance in the Philippines was handled by PS-DBM.

Baltazar stressed that XCMG’s dealings with the government as part of its pandemic response were all honest and covered by local and international laws.

“Our transaction of PPE sets with the Philippines is viewed as a form of international trade that rightly follows established international business practices and Philippine national laws,” the attorney said.

“Therefore, we will not allow the name of the company to be tarnished by charges of illegal tax evasion,” she added.

Baltazar stressed that under the National Tax Code and international regulations, exporters involved in international trade “are not required to register at their destination and will not pay any income tax at the destination country.”

She added that the two consignments of PPE deliveries to the Philippines, which included a total of 1.25 million sets, “were made on CIF (cost, insurance and freight) terms.”

“Our company is only responsible for export delivery, not import, sales, use and linkage in the Philippines. Therefore, the transaction is considered to be completed once the goods are loaded in the Chinese port, ”Baltazar said.

Baltazar, meanwhile, criticized the “malicious innuendo” in photographs of XCMG officials with President Rodrigo Duterte in 2017. She said the occasion was part of an official visit, during which leaders of XCMG foreign companies paid a courtesy visit to the new administration.

She then pointed out that XCMG is a “reputable company both in Beijing and abroad”, owning more than 60 companies, covering eight industries and employing more than 26,000 people.

In addition, she said the company is “highly qualified” to export all kinds of medical devices and equipment that meet the highest international quality standards.

The Chinese firm, the lawyer, added that it has the experience and ability to deliver medical devices to more than 10 countries, including the

United States, United Kingdom, Canada, Australia, Spain, Brazil, Malaysia, United Arab Emirates, Nigeria and Bangladesh since the start of the pandemic.


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