The Department of Finance (DOF) has withheld the release of the tax refund and credit claims by a Bulacan-based textile company owing to the investigation of the Commission on Audit (COA).
The DOF, through its One-Stop Inter-agency Tax Credit and Duty Drawback Center (OSS), said yesterday that it held back a P57-million refund and another P262 million in tax credits claimed by Indo Phil Group of Companies (IPGC).
According to the DOF, OSS stopped the release of funds due to the ongoing investigation of COA on alleged “irregular” tax credit certificates (TCCs) issued during the past administrations.
The DOF already informed the Department of Labor and Employment (DOLE) of its the decision to put on hold the request of IPGC pending the final results of the COA special audit on TCCs issued from 2008 to 2014.
OSS said in letter to DOLE that Indo Phil Acrylic Manufacturing Corp. (IPAMC), Indo Phil Cotton Mills Inc. (IPCMI), and Indo Phil Textile Mills Inc. (IPTMI) are covered by the COA special audits office report for 2018-06 “with findings of irregularities on the TCCs issued to each company.”
The Indo-Phil Group, a Filipino-Indian joint venture based in Marilao, Bulacan, include IPTMI, IPAMC and IPCMI.
Earlier, Labor Secretary Silvestre Bello III wrote the OSS requesting the agency process IPGC’s P57-million tax refund and TCCs amounting to P262 million.
But Emee Macabeles, OSS Executive Director said in a response to Bello that they cannot process IPGC’s request pending the COA audits.
Macabales explained the COA issued Notices of Disallowance to the companies for TCCs that were found to be “tainted with irregularities.”
“Due to these developments and the enormity of the amount involved, the Department of Finance and OSS Center (are) taking precaution(s) before any request for TCCs, Tax Debit Memos (TDMs) or duty drawbacks are acted upon,” Macabales said in her letter to Bello.
Macabales assured Bello that the OSS will update his office “on any developments in the circumstances of the OSS Center.”
Created under Administrative Order (AO) 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, Bureau of Customs and the Board of Investments.