The Commission on Audit (COA) has issued another set of notices of disallowance (NDs) on tax credits worth a combined P228.71 million granted to four textile firms, the Department of Finance (DOF) said in a statement yesterday.
The DOF said these firms were earlier found to have secured a combined amount of P377.27 million in illegal tax perks from the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS).
The four errant firms had illegally acquired the tax credit certificates (TCCs) over a four-year period from 2008 to 2012, the DOF said.
According to COA, the combined NDs of these four textile companies now amount to P606 million.
In a letter signed by Gloria Silverio, COA-special audits office officer-in-charge, the audit body thanked Carlos Dominguez, DOF secretary, for the usual support and assistance extended by the DOF to the COA in conducting its audit of the OSS.
Several officials and employees of the DOF, Board of Investments (BOI), Bureau of Customs (BOC) and OSS who were responsible for processing and approving the illegal TCCs, as well as their recipients and claimants from the four 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 used in manufacturing these goods.
Approved applications meant refunds on their duties and taxes that were used to pay other tax liabilities due the government, the DOF said.
In July 2018, the DOF reported that COA uncovered a bigger scam in which the OSS granted TCCs worth P11.18 billion to 33 ineligible or even non-existent textile companies from 2008 to 2014.
Upon the receipt of the report on the tax credit scam, Dominguez had signed Department Order No. 039-2018 forming a task force to investigate and run after those involved in these illegal TCC transactions. – A. Celis