BIR probing 76 persons linked to Pharmally, submits tax records to Senate

The Bureau of Internal Revenue (BIR) on Friday said it has started its investigation of 76 individuals in connection with the Pharmally Pharmaceutical Corp. controversy.

In a statement, the BIR said Internal Revenue Commissioner Caesar Dulay ordered the taxman’s Investigation and Prosecution Teams, consisting of the Regional Directors, Revenue District Officers, Regional Investigation Divisions/National Investigation Division, Legal Divisions and Prosecution Division, “to check and verify the tax compliance of 76 taxpayers mentioned in the said COA Report and other related issues.”

“Just like any other taxpayer who had been subject of our tax audit, we will thoroughly check and verify the tax compliance of these 76 taxpayers and be filing appropriate criminal complaints as warranted against those found to have violated the Tax Code,” Dulay said.

Said Teams have been closely monitored and assisted, for proper coordination, by a newly created Taskforce, headed by Deputy Commissioners Marissa Cabreros and Arnel SD. Guballa, according to the BIR.

As of this date, the BIR sais it has issued a total of 115 Letters of Authority (LOAs) to conduct tax audit against the said 76 taxpayers.

Meanwhile, the taxman said it has Provided the Senate, last December 1, thru Senate President Vicente Sotto III “for its consideration in Executive Session, with a total of 23 tax records it subpoenaed to complete its investigation involving the 2020 COA Report and Other Issues Related to Budget Utilization of the Department of Health (DOH), especially its Expenditures Related to the Fight Against COVID”.

“As long as it is within our powers and jurisdiction as mandated under the Tax Code, we, at the BIR, will cooperate with the Senate in its investigation about the alleged anomalous government procurement deals for the country's COVID-19 response,” said Dulay.

The submission is consistent with the order of the Senate President to submit the documents for their consideration in Executive Session, it said.

Pharmarlly Pharmaceutical Corp. is under the spotlight after Senate Minority Leader Franklin Drilon grilled Lao for awarding an P8.68-billion contract for the procurement of face masks and face shields to the company that has a P625,000 paid-up capital. 

According to Drilon, the amount of contracts that Pharmally bagged was relatively high compared to the other companies that had secured the contracts for the procurement of personal protective equipment.

In 2019, Drilon said Pharmally’s income soared from zero to P284.9 million in 2020.

Pharmally’s assets “jumped” from P599,000 in 2019 to P284.9 million in 2020, he added.

The Commission on Audit (COA), in its 2020 audit report, said the PS-DBM ordered 113.95 million pieces of surgical masks and 1.32 million pieces of face shields in April and May 2020, a period when prices were “so high” because of high demand.

The masks were purchased from various suppliers for P13.50 to P27.72 per piece, while the face shields were bought for P120 each.

PS-DBM’s market surveys for the procurement were based on a DOH circular dated March 2020 that stated the suggested retail price (SRP) was P28 for face masks and P120 for face shields.

COA, however, said Regional Depot (RD) 11 received its share of the procured masks and shields “when the selling prices in the local market already dropped.”

Citing records he gathered, Drilon said Pharmally sold face masks at a P27.72, while the same item was sold by other suppliers to PS-DBM at P13.5, P16, and P17.50 during the same period in 2020.

It likewise sold test kits at a price of P1,720 when the kits can be bought at P925.

The senator added that the firm sold the PPEs P1,910 each when the cost of the material in the market cost is at P945. -NB, GMA News