The notices of disallowance (NDs) issued by the Commission on Audit (COA) on the tax credit certificates (TCCs) granted to several textile companies from 2008 to 2014 are now worth a total of P3.83 billion, the Department of Finance (DOF) said in a statement yesterday.
As of last year, the COA-Special Audits Office (SAO) issued NDs to textile companies found to have illegally secured TCCs from the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) in the past, amounting to a combined P3.41 billion.
A new set of NDs involving P424.26 million was issued by the COA to two of these textile firms, bringing the total of their disallowed TCCs to P3.83 billion, based on a March 28, 2022 letter sent by the audit body to DOF Secretary Carlos Dominguez.
This latest set of NDs covered TCCs that were issued between 2012 and 2014, according to the letter sent by Gloria Silverio, COA-SAO officer-in-charge.
The COA-SAO discovered a new set of TCCs worth P366.63 million that were granted to TICIRI should also be disallowed.
UKC also received new NDs for a separate set of TCCs amounting to P53.34 million, according to the latest audit done by the COA-SAO.
Several past officials and employees of the DOF, Board of Investments, Bureau of Customs and the OSS who were responsible for processing and approving the illegal TCCs between 2008 and 2014, as well as the recipients and claimants from the six companies, were held liable by COA in various instances when the TCCs were issued.
Created under Administrative Order No. 266 issued in 1992 to process TCCs and duty drawback applications, the OSS is a composite body managed by the DOF, Bureau of Internal Revenue, BOC and the BOI.
Tax credits were offered as incentives under the Omnibus Investments Code to exporters and manufacturers of BOI-registered products for export that have actually paid duties and taxes on the raw materials and supplies they had used in manufacturing their goods.
Approved applications resulted TCCs that could be used to pay other tax liabilities due the government.
However, the OSS was subsequently found to have issued TCCs to either ghost exporters or real companies that were not entitled to the tax credits issued to them. – Angela Celis
