Metro Manila (CNN Philippines, January 27) – Pharmally Pharmaceutical Corporation, the company at the center of the alleged anomalous government purchase of COVID-19 medical supplies, incurred an estimated ₱6.3 billion in tax deficiencies, an expert who testified at a Senate hearing said.
The figure was divulged by tax expert Mon Abrea, who testified Thursday at the Senate Blue Ribbon Committee hearing into the alleged overpriced supplies deal, based on the financial statements submitted to the Bureau of Internal Revenue (BIR).
Abrea explained the tax deficiencies stemmed from about ₱3.9 billion disallowed purchases that should be charged with value added tax and around ₱1.3 billion purchases undeclared by Pharmally. Also included in the total tax deficiency are the penalties, surcharge, and interest from the purchases.
The tax expert also narrated the timeline of Pharmally’s business registration, which was finalized on Sept. 4, 2019.
Abrea noted that Pharmally’s alleged suppliers, Evermore Marketing and Acme Pinnacle, got their business registration on Sept. 17, 2019 or almost two weeks after the embattled firm received theirs.
“Wala tayong dokumentong nakita kung sila ay lehitimong supplier. Base sa isinumite ng BIR, wala rin po silang record (We have not seen any document to prove they are legitimate suppliers. They don’t have any record, based on the documents presented by the BIR),” said Abrea.
Based on Pharmally’s summary list of purchases and importations, the controversial corporation paid ₱2.99 billion to Evermore and ₱273 million to Acme. This was despite the two suppliers having a declared capital of only ₱3 million each.
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Abrea added Greentrends Trading International Inc., one of the listed suppliers in Pharmally’s distribution of COVID-19 test kits, is not a registered business entity and faces 94 “open cases” since 2015 for failing to declare their income tax returns.
With several tax deficiencies in Pharmally’s records, both Abrea and Senate Blue Ribbon Committee chairperson Sen. Richard Gordon concluded the controversial firm violated several provisions of the Tax Code.
They also both said the documents and figures presented in Thursday’s hearing constitute a prima facie case of tax evasion against Pharmally.
Abrea also mentioned other potential Tax Code violations made by Pharmally, such as failing to supply correct and accurate information in their tax records.
The Pharmally officials also claimed their tax deductions despite the amount exceeding 30% of their actual deductions, Abrea added.
The tax expert warned that Pharmally’s accountants may face suspension or cancellation of license if the false tax declarations are proven to be true.
“Lumalabas na ang daming tax deficiencies na hindi binayaran at mayroong maaaring fake na kumpanya dahil sabay halos nagpasa ng corporate documents, pero hindi maipaliwanag saan napunta ang pera,” Gordon said.
[Translation: It appears that Pharmally has many tax deficiencies that it failed to settle and there are fake companies because they passed their corporate documents almost at the same time. They failed to substantiate where the funds went.]
Gordon also announced in the hearing that the Senate is set to release on Jan. 31 its preliminary report on Pharmally’s alleged overpriced COVID-19 medical supplies deal with the government.
