COA voids P376.6-M TCCS of textile firms

THE Commission on Audit (COA) invalidated an additional P376.63 million worth of tax credit certi cates (TCCS) issued to six textile companies, bringing the rms’ total disallowed TCCS to nearly P1.2 billion.

The Department of Finance (DOF) on Wednesday said in a statement that Coa-special Audits O ce (COA-SAO) issued last month Notices of Disallowances (NDS) on P376.63-million TCCS issued to several textile rms in the past.

Capital-roll Knit Corp. (CRC), Uni-glory’s Knitting Corp. (UKC), Primeknit Manufacturing Corp. (PMC), Tai-cheng Integrated Resource Inc. (TICIRI), Miskhu Industrial Corp. (MIC) and Universal Paci c Knitting Mills Inc. (UPKM) were among the textile rms found to have secured illegal TCCS from the One-stop Shop Inter-agency Tax Credit and Duty Drawback Center (OSS).

According to the February 23 letter sent by COA-SAO O cerin-charge (OIC) Gloria Silverio to Finance Secretary Carlos G. Dominguez III, the new set of NDS covered TCCS that were issued between 2009 and 2013.

This new set of NDS is on top of the P818.6-million TCCS disallowed by COA-SAO last year.

The audit body so far disallowed P567.2 million TCCS granted to CRC, including the new set of NDS on its illegal tax credits totaling P111.30 million.

Apart from this, COA-SAO also issued NDS on P170.8-million TCCS of UKC, including the additional P55.48 million.

It also so far invalidated a total of P154.27-million illegal tax perks of PMC. is includes the P60.83million TCCS recently found by COA to have been illegally issued to the company.

Meanwhile, COA-SAO also found that P46.83 million of TCCS granted to TICIRI should also be disallowed, on top of the earlier NDS that the audit body issued against the rm— worth a combined P94.44 million.

The total value of TICIRI’S disallowed TCCS is now P141.27 million.

For UPKM Inc., its invalidated illegal tax credits went up to P81.59 million after the COA found a new set of spurious TCCS issued to the rm worth P53.26 million.

The illegal tax perks granted to MIC that COA has invalidated so far reached P80.11 million, including the new set of NDS totaling P48.94 million.

Tax credit body

CREATED under Administrative Order (AO) 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 (BIR), Bureau of Customs (BOC) and the

Board of Investments (BOI).

Tax credits were o ered as incentives under the Omnibus Investments Code (Executive Order or EO 226) 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 products.

Approved applications meant refunds on the duties and taxes that were supposedly used later 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 in the export trade or did not deserve the tax credits issued to them.

Several past o cials and employees of the DOF, BOI, BOC and OSS who were responsible for processing and approving the illegal TCCS between 2008 and 2014, as well as their recipients and claimants from the six companies, were held liable by COA in various instances when the TCCS were issued.