Solon accuses Japanese car maker of tax evasion

An administration congressman accused a big Japanese car manufacturer yesterday of allegedly evading taxes in Japan with the connivance of a local corporation and some corrupt tax collectors of the Bureau of Internal Revenue.

In a privilege speech, Rep. Robert Ace Barbers (Lakas, Surigao del Norte) unraveled the manner by which Tokyo-based Mitsubishi Corp. and Alzen Enterprises, a local management consulting firm, defraud the Japanese and Philippine governments of taxes.

He said the big Japanese car maker routinely remits millions to Alzen, declaring such remittances as legitimate business expenses.

He said Mitsubishi Corp., through Alzen, obtains certifications from the BIR showing that it indeed made the remittances.

The BIR documents are used in Japan to evade payment of taxes there, he added.

Barbers pointed out that eventually, Alzen plows back the money to Mitsubishi Corp. and skirts the payment of the correct amount of taxes here for the remittances by submitting false income statements.

He revealed that from January 1996 to November 1997 alone, the "Mitsubishi-Alzen connection was able to defraud the Japanese and Philippine governments of revenues to the tune of a staggering P579 million."

"This amount could have paved another 10,000 kilometers of road, built additional 20,000 classrooms, or may even be enough to finance the operations of an entire municipality," he said.

He named the BIR officers involved in the fraud as Jose Ma. Hernandez and Raymond Gallardo.

He said the irregularity is both embarrassing for the Japanese and Philippine governments as the laws of the two countries have been violated.

He said he could not believe that a Japanese car manufacturer as huge as Mitsubishi Corp. could be involved in a tax evasion scheme.

"I now place Japan’s highly respected international organization – Mitsubishi Corp. – in public scrutiny. It is not only our laws but even treaties and agreements that have been violated, the very same treaties and agreements that we and Japan built upon mutual respect," he added.

He called for a congressional investigation into the activities of the Mitsubishi-Alzen group.

After Barbers’ exposé, the House voted to direct its ways and means committee to conduct an inquiry.

However, Mitsubishi Motors Phils. Corp. (MMPC) clarified that Barbers must have referred to Mitsubishi Corp., the trading company and not Mitsubishi Motors.

In a statement, an MMPC official said the company does not know and does not have any business dealings whatsoever with Alzen.

MMPC also clarified that it is not involved with Mitsubishi Corp. in the Philippines.

"MMPC is 100 percent Japanese-owned by Tokyo-based Mitsubishi Motors Corp. and its trading firm partner Nissho Iwai Corp.