COA disallows again TCCS of textile firms worth ₧424M

THE Commission on Audit (COA) disallowed another set of tax credit certificates (TCCS) previously granted to textile firms worth P424.26 million, bringing the current total to P3.83 billion.

In a statement on Monday, the Department of Finance said the latest set of TCCS that were disallowed by the audit body covered those that were illegally issued between 2012 and 2014 to two textile companies, according to the March 28 letter sent by COA-SAO Officer-incharge Gloria Silverio to Finance

Secretary Carlos G. Dominguez III.

The newly disallowed TCCS include those that were granted to Tai-cheng Integrated Resources Inc. (TICIRI) and Uni-glory’s Knitting Corp. (UKC), amounting to P366.63 million and P57.63 million, respectively.

These were on top of the previous batches of TCCS received by these textile firms and others worth P3.41 billion that the COA had invalidated.

The illegal TCCS were secured from the One-stop Shop Interagency Tax Credit and Duty Drawback Center (OSS) in the past.

The total number of invalidated TCCS issued to TICIRI and UKC have now reached P741.1 million and P299.31 million, respectively.

The previously disallowed TCCS of the other textile firms were worth P906.8 million for Silvertex Weaving Corp. (SWC), P114.2 million for Knitech Manufacturing Inc. (KMI), P452 million for Miskhu Industrial CORP.(MIC); P127.81 million for Universal Pacific Knitting Mills Inc. (UPKM); P664.9 million for Capital-roll Knit Corp. (CRC); and P526.5 million for Primeknit Manufacturing Corp. (PMC).

Several 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 2008-2014 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 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. The latter would then use the TCCS to settle their own tax liabilities.

The COA found out that the OSS had issued TCCS to either ghost exporters or to real companies that were not in the export trade or who were nonetheless not qualified for the tax credits issued to them, such as these six textile companies.