The Commission on Audit (COA) has uncovered another set of illegal tax perks worth P390.04 million that were granted to textile companies from 2008 to 2014, the Department of Finance (DOF) said.
This brings the current total of invalidated tax credit certificates (TCCs) received by these unscrupulous firms to P3.41 billion, the DOF said in a statement.
A report by the COA Special Audits Office to Finance Secretary Carlos Dominguez dated November 17 said the new set of disallowed TCCs were worth P214.38 million which was granted to Primeknit Manufacturing Corp. (PMC), and P175.66 million which was given to Tai-Cheng Integrated Resource Inc. (TICIRI).
The DOF said the illegal TCCs were issued between 2008 and 2014 by the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) that is attached to the DOF.
Aside from PMC and TICIRI, the DOF said other errant textile firms with invalidated TCCs are Silvertex Weaving Corp., Knitech Manufacturing Inc., Capital-Roll Knit Corp., Uni-Glory’s Knitting Corp., Miskhu Industrial Corp., and Universal Pacific Knitting Mills Inc.
Past officials and employees of the DOF, Board of Investments, Bureau of Customs and OSS who were responsible for processing and approving the illegal TCCs issued over the 2008 to 2014 period, as well as the recipients and claimants from the six companies, were held liable by COA.
Approved applications referred to tax credits on the duties and taxes that exporters supposedly paid, and which they could then use to pay other tax liabilities due to the government.
The DOF said the practice of these alleged exporters who illegally obtained TCCs was to sell the OSS-issued certificates or tax credits to other companies at a discount, who would then use the TCCs to settle their own tax liabilities.
The COA found that the OSS had issued TCCs to either ghost exporters or to real companies that were not in the export trade, or which were nonetheless not qualified for the tax credits issued to them. – Angela Celis
