SENATE minority leader Franklin Drilon yesterday said the government may have lost around P7.5 billion in potential income taxes from Pharmally Pharmaceutical Corporation and other companies awarded supply contracts from the P42-billion COVID response fund transferred by the Department of Health to the Procurement Service of the Department of Budget and Management (PS-DBM.
This is due to the companies’ non-payment of taxes and under-declaration of income from the transactions, based on documents obtained from the Bureau of Internal Revenue, he said.
He urged the BIR to conduct a special audit on the tax returns made by the suppliers, which he estimated to yield P7.5 billion in potential tax.
Drilon said copies of the income tax returns (ITRs) of the suppliers, which were provided by the BIR in an executive session, should be made public since the ITRs “were either not filed, unreadable, and/or incomplete.”
He said that based on BIR records, the government even owes Pharmally P589,163 after the company claimed a tax credit of about P96.1 million since its total income tax due was around P95.5 million in 2020. This despite bagging over P10 billion worth of supply contracts in 2020 alone.
“May utang (Government owes Pharmally)… may reimbursement pa,” Drilon said.
On Pharmally’s officers, Drilon noted secretary/treasurer Mohit Dargani, who can afford luxury cars, paid only P22,062 in 2019 and P97,241 in 2020. He added Mohit’s taxable income from 2018 to 2020 were either unreadable or no information was available.
On Dargani’s sister and Pharmally president Twinkle Dargani, Drilon said she paid only P29,187 in taxes for 2018 and P1,000 for 2020. No information was available for 2019.
Pharmally president Huang Tzu Yen has no available tax records in 2019 and 2020.
For former presidential economic adviser Michael Yang, the BIR said he did not file ITRs from 2014 to 2017, while his taxable income for 2018 was only P208,000 while the tax paid was P76,000. His tax records from 2019 and 2020 were unreadable.
Tigerphil Marketing Corp., another company which was awarded contracts by the PS-DBM, has a taxable income of only P129,742 and paid taxes of P38,923 in 2020, but the company amended its taxable income to about P3.3 million and paid taxes of P1.1 million after the Senate questioned its income derived from the transactions.
Greentrends Trading International Inc. did not file from 2015 to 2021, while Xuzhou Construction Machinery Group has no tax records from 2017 to 2021.
As to former budget undersecretary Lloyd Christopher Lao, his tax records from 2017 to 2020 were also unclear. Lao was head of the PS-DBM head when billions in contracts were awarded last year to Pharmally which had a paid-up capital of only P625,000.
“Most of the ITRs were not filed, unreadable and/or incomplete,” Drilon said.
