Senate Blue Ribbon Committee probers looking into anomalies in the use of P42-billion funds for pandemic-related contracts has formally asked the Bureau of Internal Revenue (BIR) to form a special task force to expedite the investigation of possible tax liabilities of certain government suppliers, led by the controversial startup Pharmally Pharmaceuticals Corporation.
In a letter dated October 29, Blue Ribbon chairman Sen. Richard J. Gordon asked BIR Commissioner Caesar Dulay to form the task force so that any unpaid taxes can be quickly collected from the contractors, and used by the cash-strapped government still relying on debts to fund its pandemic response.
Senate Minority Leader Franklin M. Drilon earlier estimated at P7.5 billion the potential taxes that government could collect from contractors who bagged contracts from the Procurement Service-Department of Budget and Management (PS-DBM).
The Department of Health in early 2020 had transferred P42 billion of its pandemic response funds to PS-DBM, but the absence of a memorandum of agreement covering such lump-sum transfer was flagged by the Commission on Audit’s 2020 report on DOH, thus sparking the Blue Ribbon inquiry.
At the last, or 13th BRC hearing, Drilon had moved for the Gordon-led panel to write BIR to ask it to expedite investigation into the tax liabilities of, among others, Pharmally and the Chinese firm Xuzhou Construction Machinery Group, whose Philippine representative told the BRC they did not pay taxes in the Philippines because, as an international trading group, they are not required to do so. Xuzhou bagged P2 billion worth of contracts from PS-DBM and Pharmally, P10 billion.
In his letter to Dulay, meanwhile, Gordon asked the BIR chief to – besides forming the special task force – direct such task force to apprise the BRC of the periodic results of their investigation.