Senate eyes BIR role in Pharmally probe

The Bureau of Internal Revenue main office in Quezon City. (File photo from Philippine Daily Inquirer)

MANILA, Philippines — The Bureau of Internal Revenue (BIR) should ask for the financial records of Pharmally Pharmaceutical Corp. that its officials refuse to submit to the Senate blue ribbon panel that has been looking into its multibillion-peso deals with the government, according to Minority Leader Franklin Drilon.

The Senate blue ribbon committee has ordered the arrest of siblings Mohit and Twinkle Dargani after citing them in contempt for refusing to submit financial records pertaining to their contracts with the Procurement Service of the Department of Budget and Management (PS-DBM) to show Pharmally and its suppliers had paid the corresponding taxes on their transactions.

“The BIR has the power to ask for their support documents to back the P7.2 billion that they said they spent to buy supplies provided to the PS-DBM. So [the] BIR has the authority to require the production of documents. If they don’t want to submit these, the P7.2-billion cost of sales could be disallowed,” he said in a radio interview.

This would mean that Pharmally could be made to pay higher income taxes, Drilon said, adding that the Dargani siblings could not hide financial records forever because the company would eventually have to show documents to support their income tax payments.

But Drilon also said the Senate would continue to look for the Dargani siblings.

If they would not appear in the next hearing, the Senate could seek the help of the National Bureau of Investigation in searching for them, he said.

“If the NBI won’t look for them, our sergeant at arms would continue to search for them,” he said.

He defended the Senate’s decision to cite the Dargani siblings in contempt, saying it was within the power of the legislature to do so because they refuse to provide information that it needs to help it craft new laws.

The Senate is asking for a simple thing, which is the basis for the P7.2 billion it spent for the face masks and face shields that it sold to the PS-DBM for P7.4 billion, he said.

“This is also an issue of taxation so that you could get the net income and the amount of taxes that they should pay,” he said.

Pharmally’s refusal to provide the data could mean there could be overpricing or that the P7.2 billion could involve bribes, he said.

The Senate inquiry into the Pharmally’s transactions was triggered by an audit observation on the transfer of P42 billion from the Department of Health to the PS-DBM for the purchase of pandemic supplies, which state auditors said was not backed by supporting documents.