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A
syndicate within a foreign vehicle manufacturer is said
to be bypassing its own dealership network in what is
emerging as a clear violation of the country’s business
rules that disallow retail trade practices.
This
clear case of unfair trade practices was unwittingly
exposed when the syndicate within the manufacturing firm
concerned tried to pull a fast one on the foreign firm’s
own dealer. What is worse, there seems to be an emerging
policy within the foreign firm itself that allows these
malpractices to be done with impunity.
This
is a clear circumventing of the country’s laws which
specifically prohibit foreign firms from selling
directly to Filipino consumers. Worse, the business
malpractice, when finally exposed, would unravel several
tax-dodging mechanisms that could swell the Bureau of
Internal Revenue’s (BIR) collection figure from its tax
fraud investigations. All the BIR has to do is to zero
in on the huge consumer sales of the foreign vehicle
manufacturer.
We
understand that the direct dealing of the foreign
vehicle manufacturer involves big orders of end-users
that initially established business contact with the
foreign firm’s own dealer network. The syndicate is said
to fill in orders that were previously made by the
firm’s own dealers. Thus, the reason for being of the
dealership network gets undue competition from the
syndicate that is operating with unbridled greed within
the foreign firm.
How
the “insiders” get to fill in the orders that were
initially placed by the dealers seemed to indicate that
the foreign firm’s officials could be in cahoots with
the syndicate since it would be nearly impossible for
the huge orders to be delivered without bypassing the
dealer network. Yet, an initial probe into the
malpractice shows that the orders are delivered to the
end-users, resulting in loss of business for the
dealers.
From
what is emerging so far, the dealers of the foreign firm
do not get to conclude their own business initiatives
because of this syndicate. In a sense, the business that
is supposed to go to the dealer network of the foreign
firm is “intercepted” along the way by the “office
syndicate.” How the order is booked is still a mystery.
But what is very clear is that the foreign firm is
destroying its own dealership network, even as it is
flagrantly violating Philippine laws.
It
would be interesting to know how the investigation
within the foreign vehicle manufacturer would end,
especially since the stakes are high: the loss of
confidence of its dealer network. These dealers spent a
sizeable sum trying to establish the business. They are
supposed to be the bridge between the foreign firm and
the vehicle end-users as the country’s laws specifically
prohibits the direct business deals between the foreign
firm and the Filipino consumers.
But
how the foreign firm is able to circumvent the law is
still a puzzle within the industry inasmuch as the
orders get filled. Is there a dummy dealer that the
foreign firm uses, courtesy of the syndicate within its
business confines? Since the sale has to be consummated
through a dealer, is the foreign firm issuing fake
invoices to circumvent prohibition of direct sales? If
so, then the government is losing millions in tax
receipts from the booking of the orders that did not
pass through the dealer network.
The
initial results of the internal probe seem to indicate
that the BIR may be losing millions of taxes from the
unreported sales that did not pass through the dealer
network. It is time for the BIR to wise up in much the
same way that the Land Transportation Office was able to
plug a loophole in the backlog in registration receipts
from the foreign vehicle manufacturers when the agency
insisted on the nonissuance of the license plates unless
the registration receipts are paid first. It is high
time this economic sabotage is exposed.
E-mail: hugagni@yahoo.com |
