Yang, Lao, firms linked to Pharmally didn’t file ITRs for several years — Drilon

MANILA, Philippines — Chinese businessman Michael Yang, former procurement chief Lloyd Christopher Lao, and the companies who have been dragged in the Pharmally Pharmaceutical Corp. issue have not filed their income tax returns (ITR) for several years, documents presented by Senator Franklin Drilon showed.

During the Senate blue ribbon committee hearing on Thursday, Drilon presented various documents, including a certification from the Bureau of Internal Revenue (BIR) saying that Yang, who provided financial assistance to Pharmally in supplying the government with pandemic supplies, did not submit ITRs.

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“Mr. Michael Yang, interesting.  The income tax returns for taxable years 2017 and prior years were not filed.  No income tax return filed, based on the verification made by the District’s Collection Section, and the income tax returns for 2014 to 2017 could not be found in the records of the BIR,” Drilon said.

“In 2018, the taxable income of Mr. Yang was at P208,000 and the taxes paid in 2018 was P7,600.  In 2019 and 2020, we’re sorry but the records are not readable,” he added.

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Yang is the former economic adviser of President Rodrigo Duterte.

Drilon also showed documents and another BIR certification that Lao, who was head of the Procurement Service of the Department of Budget and Management (PS-DBM) when the government procured from Pharmally, had no taxable income in 2017 and did not file the ITR in 2020.

“In 2017, he did not earn any taxable income and therefore paid zero taxes.  In 2018, the income tax returns were filed through the e-BIR forms online facility, but these could not be viewed by the BIR.  In 2020, he did not file an income tax return,” Drilon said.

Other companies which supplied face masks and face shields, and other medical equipment to Pharmally like Greentrends Trading International Inc. and Xuzhou Constructions Machinery Group, did not file any ITRs for several years.

Greentrends, Drilon said, did not file their ITR from 2015 to 2021, while Xuzhou had no tax records from 2017 to the present.

Pharmally remains at the center of the Senate’s investigation on the Commission on Audit (COA) report, which showed deficiencies in the Department of Health (DOH) COVID-19 funds amounting to P67.32 billion.

Part of that P67.32 billion is the P42 billion funds transferred by DOH to PS-DBM, which

then granted contracts worth P8.7 billion to Pharmally despite it having a small paid-up capital of P625,000.

There are also accusations that Pharmally’s equipment was overpriced, like in the case of face masks sold at over P27 per piece in April 2020, when other companies offered a price of P13 per piece.

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