Tax suit filed vs subsidiary of World Bank-blacklisted firm

The Bureau of Internal Revenue on Thursday filed before the Department of Justice a tax evasion complaint against the owners of a construction firm linked to a company blacklisted by the World Bank for rigging road project bids. BIR Commissioner Kim Hacinto-Henares said the owners of China State Philippines Construction Engineering Corporation, or China Philippines, failed to pay some P712 million in taxes from 2003 to 2006. Its owners likewise falsified withholding tax certificates and certificates of final tax withheld belonging to its mother company, China State Construction Corporation Limited, or China Limited. "Aside from its criminal liabilities, China Philippines is likewise being sued to pay the government a total of P712,742,421.32 in unpaid taxes, inclusive of increments, as civil liability," said Henares, reading the bureau's statement. Charged for tax evasion were China Philippines managing officer and chairman of the board Fu Yu Cheng, president and director Fu Chun Yan, secretary and director Gerald Telebrico, chief finance officer Huang Xin Yu, and vice president Wu Zhi Gang. Their accountant, Daisy Guerrera, was also included in the charge sheet for supposedly making false entries in China Philippines' 2004 and 2006 income tax and VAT returns. The BIR said China Philippines used China Limited's withholding tax certificates to evade its tax responsibilities. The Department of Public Works and Highways also said it has transactions with China Limited, but not with China Philippines. Blacklisted by World Bank China Limited is among the seven firms blacklisted in 2009 by the World Bank after finding that they had rigged bids for local road projects funded by the multilateral agency. The six other firms were E.C. de Luna Construction Corp. Cavite Ideal International Construction and Development Corp., CM Pancho Construction Inc., and Chinese firms China Wu Yi Co. Ltd. and China Geo-Engineering Corp. Investigations by the bank’s Integrity Vice Presidency (INT) revealed that the construction firms were involved in a "major cartel" when they submitted bids for the first phase of the National Roads Improvement and Management Program or NRIMP 1. As a result, the firms were prevented from getting hold of $33 million in contracts. E.C. de Luna Construction Corp. is owned by Eduardo C. de Luna, alleged to be an ally of former First Gentleman Jose Miguel "Mike' Arroyo. Former President Gloria Macapagal-Arroyo's husband was accused of asking foreign construction firms for bribes so they can hold business in the Philippines. De Luna and Mr. Arroyo have since denied the allegations. Graphics firm charged for tax evasion, too Also on Thursday, the BIR also filed before the DOJ a tax evasion complaint against Grand C Graphics, Inc. for failure its "willful" failure to pay deficiency taxes arising from the following: final executory assessments, non-payment of taxes due. It also failed to remit taxes withheld, said the BIR. Charged were Gloria dela Cruz, and Deborah Cing, president and treasurer of the firm, respectively. The firm is asked to pay long overdue tax assessments amounting to more than P59 million for the taxable years of 2005 and 2003. It is also asked to pay governent deficiency taxes amounting to more than P36 million for the years 2005 to 2007. — RSJ, GMANews.TV