MANILA, Philippines–Tanco Group-owned insurer Philplans First Inc. has decried the alleged nonpayment of taxes by Philippine American Life and General Insurance Co. (Philam Life) for its sale of two former subsidiaries that the group bought five years ago.
In a statement, Philplans chair Monico Jacob claimed Philam Life had been “refusing to pay the Bureau of Internal Revenue (BIR) the corresponding taxes” for the sale of Philam Plans and Philhealthcare in 2009.
Jacob claimed Philam Life’s tax payment deficiency had made it difficult for the group to secure the tax clearances necessary for the registration of the sale of the said two firms.
This was despite the fact that Philam Life has already been paid in full by the Tanco Group following the auction in 2009, Jacob pointed out.
In a statement issued to answer Philplans’ claims, Philam Life defended itself by saying that it “has a long track record of fully honoring all obligations to each and every one of our stakeholders and we are committed to honoring our commitments to the BIR.”
“The issue of any tax obligations… related to the sale of the former subsidiaries is a matter we have presented to the courts following advice from our legal counsel. The matter before the courts is the amount of the BIR assessment related to that transaction. Since this is a matter before the court, we are not able to go into the basis for that appeal, but we can say that we will fully abide by the decision of the court regarding that action,” Philam Life said.
Philam Life’s tax deficiencies were said to be worth “hundreds of millions of pesos,” he said.
“The BIR already ruled in February 2012 that Philam Life is liable to pay the deficiency tax and even emphasized that the tax code clearly says that there are no exemptions,” Jacob noted.
US firm United Health Group—Philam Life’s former partner in Philhealthcar—had already paid its share of the assessed taxes as well as delivered the tax clearances to Tanco Group, Jacob claimed.
“But Philam Life is still holding out and has been asking us to be patient,” he said.
“In one correspondence to us, Philam Life admitted that the high tax exposure was ‘not contemplated.’ If that was their mistake, it should not be at our expense. We bought something, paid for it in full and expect no less than the full transfer of the companies in our name,” he added.
“Philam Life reneged on its commitment to the Tanco Group in failing to deliver the tax clearances. The Tanco Group has suffered damages due to the delay. Philam Life, however, is trying to find a way out of the obligation. Corporate integrity is an issue here,” Jacob further said, citing that as an insurance company, Philam Life “is in the business of paying claims and relies heavily on public trust.”
In the meantime, Philam Life said Philplans was aware of the ongoing legal action.
“The discussions between our company and the BIR have no impact on the sale of our subsidiaries or their [Tanco Group’s] ability to operate them as they see fit as the full beneficial owner,” Philam Life said.
“This is a matter that will be resolved as soon as the court has made a decision on the appeal. In the meantime, as always, we will continue to honor all obligations to all of our stakeholders and to comply fully with our fiscal obligations,” the insurer added.–Ben O. de Vera