Senate panel formally asks BIR to probe suppliers for tax liabilities that could reach P7.5B

THE SENATE Blue Ribbon Committee on Thursday adopted a resolution urging the Bureau of Internal Revenue (BIR) to form a task force that will conduct a special audit on the returns submitted by companies that bagged pandemic supply contracts worth P42 billion to determine their potential tax liabilities.

Minority Leader Franklin M. Drilon, who made the motion for the resolution,

was prompted by the admission of the country representative of Xuzhou Construction Machinery, which bagged over P2.23 billion worth of contracts from the Procurement Service of the Department of Budget and Management, that the company did not pay any income tax last year.

“Apart from the overpricing, apart from the unqualified suppliers and apart from the preference on foreign suppliers, it is incumbent upon this committee to look into the tax liabilities of these companies. This is something that we have to look at,” Mr. Drilon said.

He estimated the total potential tax liability at P7.5 billion.

Some of these firms are Pharmally Pharmaceutical Corp., which has been at the center of the committee’s probe, that cornered over P10.40 billion; Element Trade Limited with P6.99 billion; Sunwest Construction and Development Corp. with P5.22 billion; and Hafid N’ Erasmus Corp. with P1.91 billion.

The committee also approved a motion to publicize the income tax returns of officials of Pharmally and Xuzhou as well as that of former economic presidential adviser Michael Yang.

“It appears like there could be violations of our tax laws. We should examine the potential tax liabilities of these companies, officials and employees,” Mr. Drilon said. — Alyssa Nicole O. Tan

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