The Commission on Audit (COA) has disallowed in audit some P318.572 million representing tax refunds that were issued despite alleged violations of the complete documentary requirements and “mandatory and jurisdictional conditions” in its grant by the Bureau of Internal Revenue (BIR) .
In the 2020 BIR Annual Audit Report (AAR) that COA released recently, the audit agency also asked the revenue agency to file appropriate criminal and administrative charges against the administrative section (AO) head of Regional District Office No. 1 in connection with the unaccounted documentary stamps.
State auditors recommended the filing of charges of malversation of public funds against the said AO after audit examination disclosed that 18,000 pieces of documentary stamps tax (DST) equivalent to P270,000 “had been missing and unaccounted."
“Although the missing DSTs were restituted prior to the issuance of demand letter, such act is a clear indication of unauthorized use resulting to misappropriation of taxpayers money which the AO could be held liable,” COA said.
In the same audit report, the state audit agency also slammed the BIR for resorting to direct contracting as a mode of procurement of consumable toners/drugs in which the agency paid P1.474 million.
The audit team flagged Revenue Region 1 (RR !) for directly transacting with Phil Repro/Com Products and Systems Inc. for the procurement “when there are other authorized distributors/channels in the local market.”
This, COA said, deprived BIR of “getting better offers from other potential distributors/partners or who could offer the same items/specifications at a much lower price."
On the other hand, auditors chided RR 5 for failing to impose “appropriate sanctions” to RC Ramos Construction Corporation which was found guilty of incurring slippage in excess of ten percent in its construction of the regional office and RDOs 25A and 25B buildings, including site development work.
The contract awarded to the firm reached P219.44 million.
COA disclosed that tax refunds totaling P401.95 million were granted to taxpayers despite violation of provisions for the submission of complete documentary requirements/ and the mandatory and jurisdictional conditions in the grant of tax credits.
"Out of the P452.416 million balance of disallowances, the amount of P391.615 million is under appeal with the: (a) COA Commission Proper; (b) Clulster 2, National Government Sector; and (c) COA Regional Office," the audit report disclosed.
It will be recalled that last year, COA asked BIR to recover P304.476 million in value added taxes that the revenue agency refunded despite alleged violations of the National Internal Revenue Code of 1997.
COA said BIR has to explain why the refund was granted despite the delayed filing of the claim for refund which has gone beyond the 120-day period time limit provided by the National Internal Revenue Code of 1997.
The audit agency also noted that the BIR had ignored the failure of the claimants to comply withy the NIRC requirements for submission of all documentary and evidentiary requirements mandated by Section 112 of the NIRC. ed The amounts of questioned refunds had apparently varied as state auditors continue its audit examinations on the issue.
COA said the questioned refunds consisted of six claims sought by various taxpayers that were part of the 16 random sampling of tax refunds examined by auditors.