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Strip Stamp ‘Scandal in the Making’ in the Philippines

In editorials directly addressing Bureau of Internal Revenue Commissioner Kim Henares, two Philippines-based journalists urged the government to exercise “extreme caution” before entertaining a contract bid from Chinese laser technology company Huagong Tech Company Ltd.  
Huagong is reportedly the lowest-bidding firm for a contract to supply the BIR with a new strip stamp and laser scanning system meant to combat smuggling and automate taxation for tobacco and alcohol companies.
Even if no new taxes are introduced, the new system is predicted to net 100 billion pesos (US $2.4 billion) in revenue for the government over seven years.
The journalists questioned Huagong’s ability to handle the specific technology required for this project.
They also pointed out that Huagong’s chairman Ma Xinqiang was recently removed from his post for insider trading, and several other Huagong executives have been accused of violating securities laws.  
“The Chinese firm might have the ability to submit the lowest bid but the government might be wasting money if all it would be getting is an obsolete and unreliable technology,” one of the journalists wrote.  
A reader commented, “It is always a mistake to allow Chinese firms to bid because they will buy their way in.”  
Sources: Manila Standard Today, Malaya Business Insight    


Ben Kessler is a contributing editor of the FCPA Blog. He serves as editor of the China Compliance Digest, where a version of this post previously appeared. The next 20 people to pre-order The China Anti-Corruption Handbook will receive an annual subscription to the China Compliance Digest at no additional cost.

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