Chinese Firm In P1.6-Billion PPE Mess Denies Tax Evasion
Xuzhou Construction Machinery Group or XCMG said its transactions in connection with the government’s COVID-19 emergency response were aboveboard and covered by local and international laws.
The Chinese firm that supplied some 1.2 million sets of personal protective equipment sets (PPEs) to the government denied on Tuesday, Nov. 2, the tax evasion allegations made by senators who are investigating alleged anomalies in the procurement of COVID-19 supplies.
In a statement sent to The Philippine STAR, the Xuzhou Construction Machinery Group (XCMG) said the allegations were “false and damaging.”
The company’s legal counsel, Kim Baltazar of the Espejo law firm, said the delivery of the medical equipment was in response to the Philippines’ urgent call to address supply shortage and protect health workers from the virus.
Baltazar said all XCMG transactions in connection with the government’s COVID-19 emergency response were aboveboard and covered by local and international laws.
“We responded to an urgent call from the Philippine government to deliver PPEs to protect Filipino medical frontliners from COVID-19,” Baltazar said.
“Our transaction of PPE sets with the Philippines is considered a form of international trade that rightfully complies with established international trade practices and the Philippine national laws. Therefore, we shall not allow the company’s name to be tarnished by any accusations of tax evasion,” she said.
Baltazar cited allegations made by Sen. Risa Hontiveros during the hearing of the Senate Blue Ribbon committee last week that the XCMG did not pay taxes in delivering some P1.6 billion worth of PPEs.
Hontiveros said XCMG’s denial does not bother her, saying she is leaving it up to the Bureau of Internal Revenue to investigate the matter.
“The documents we have on hand appear to contradict the claims of the Xuzhou and sustain the statements of Senate Minority Leader Franklin Drilon,” Hontiveros said.
An XCMG official said during a previous hearing of the Senate Blue Ribbon committee that the Procurement Service of the Department of Budget and Management (PS-DBM) had withheld the taxes, including the 12 percent value-added tax.
Some PS-DBM officials including its former head Lloyd Christopher Lao are accused of having favored Pharmally Pharmaceutical Corp. with a total of P11 billion in supply contracts, due to the company’s connection to President Duterte through his former adviser Michael Yang.
Baltazar said the senators’ allegations “caused damaging effects to our brand reputation and to the Filipino public opinion toward our company.”
She said the XCMG is highly qualified to export all kinds of medical devices and equipment that conform to international standards of quality.
The company is capable of supplying and had delivered medical devices in more than 10 countries including Australia, Bangladesh, Brazil, Canada, Malaysia, Nigeria, Spain, the United Arab Emirates, the United Kingdom and the US since the pandemic broke out, Baltazar said.
“The PPEs were delivered swiftly and in a few days, the medical frontliners were already using them. The XCMG helped save the lives of many frontliners. That is a fact,” she said. “The company was only responsible for export delivery, not the import, sales, use and links in the Philippines. Hence, the transaction is deemed completed once the goods are loaded at the Chinese port.”
Baltazar said the National Internal Revenue Code, specifically Section 42(e) and 52(A) as well as relevant international regulations provide that exporters of international trade are not required to register and pay income tax to their destination countries.
Over the limit??
Presidential aspirant Sen. Ronald “Bato” dela Rosa said the Senate investigation into the allegedly anomalous COVID supply deals has gone “over the limits.”?
Dela Rosa dared Senate Blue Ribbon committee chairman Sen. Richard Gordon to submit a report and file cases against people whom he believes violated the law.
Although he refused to judge his fellow senators, Dela Rosa said the hearings on the government’s procurement of P42 billion worth of COVID supplies have been dragging on for so long.?
Dela Rosa, an ally of Duterte, also fumed at the way Gordon has been handling the proceedings, saying he was given few chances to pose questions unlike their colleagues from the opposition.?
Dela Rosa said he would defer to the Senate Blue Ribbon committee report on whether there are anomalies in the government’s procurement?of COVID-19 supplies. – With Emmanuel Tupas
