Senator: Pharmally did not pay taxes last year, Yang only paid ₱7,600 tax for ₱208,000 income in 2018

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Metro Manila (CNN Philippines, October 28) — A controversial government medical supplier did not pay taxes last year while a former presidential adviser only paid a fraction of his taxable income in 2018, a senator said on Thursday.

Senate Minority Leader Franklin Drilon presented a summary of tax records based on documents from the Bureau of Internal Revenue. In it, he noted that Pharmally Pharmaceutical Corp. claimed a tax credit worth over ₱96 million last year but did not pay any tax.

CNN Philippines requested comment from Pharmally on the issue.

Pharmally president Twinkle Dargani and corporate secretary Mohit Dargani, meanwhile, had “very low” ITRs considering their purchase of luxury cars, as pointed out by Drilon. He added that the ITRs of the company director, Linconn Ong, were all unreadable.

RELATED: Senators to Pharmally's Darganis: Come out of hiding, submit sought documents

Drilon also pointed out that former presidential adviser Michael Yang did not make any filings from 2014 to 2017. However, he paid ₱7,600 for a taxable income of ₱208,000 according to the Senate leader. Later in the hearing, the Chinese businessman said he will consult his accountant on the issue.

Resigned Budget Undersecretary Lloyd Christopher Lao, the former head of the agency’s Procurement Service, filed his ITRs through the eBIR Forms Online Facility but could not be viewed by the bureau, said the senator. Lao also did not make any filing last year, he added.

Drilon also noted that Greentrends Trading International, a supplier of Pharmally Pharmaceutical, did not file any ITRs from 2015 to 2021. Another company, Xuzhou, had no available records beginning 2017.

Xuzhou Construction, the government’s second top pandemic supplier, earlier told the committee it is a state-owned company in China and that it pays income taxes there. It said it doesn’t pay taxes in the Philippines since it doesn’t accept payments in the country.

Drilon’s presentation summed up that most of the ITRs of those allegedly involved in the anomalous deals were either not filed, unreadable or incomplete.

On his end, panel chairman Sen. Richard Gordon noted that the said documents were supposed to be for their executive session but emphasized the people's right to information on matters of public concern must be recognized. The committee "is in power" to declassify these, he added.

The Blue Ribbon Committee also adopted a motion urging the Bureau of Internal Revenue to form a task force that will perform a special audit on taxes paid by medical goods suppliers amid the COVID-19 pandemic.

Tax expert Mon Abrea reiterated during today’s hearing that not paying taxes, failure to register with the BIR, not filing tax returns, under-declaring sales, and claiming expenses without supporting documents are grounds for tax evasion and are criminal violations under the National Internal Revenue Code.