COA disallows new set of TCCs—DOF

Published October 18, 2021, 4:31 PM

by Chino S. Leyco

The Commission on Audit (COA) has disallowed another set of tax credit certificates (TCCs) granted to several textile companies, the Department of Finance (DOF) said.

In a report by the COA Special Audits Office to Finance Secretary Carlos G. Dominguez III, the commission said it has disallowed new set of TCC worth P412.77 million, on top of the previous batches it had invalidated amounting to P2.6 billion combined.

This brings the total value of illegal TCCs issued by the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) to the textile firms from 2008 to 2014 to P3 billion as of Sept. 21, the report by COA-Special Audits Office Director Gloria Silverio revealed.

“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 between 2008 and 2014, as well as the recipients and claimants from the six companies, were held liable by COA,” the DOF said in a statement.

Approved applications referred to tax credits on the duties and taxes that exporters supposedly paid, and they could then use the TCCs to pay other tax liabilities due the government.

DOD said the practice of these alleged exporters who illegally obtained TCCs was to sell the certificates to other companies at a discount.

The buyer-companies would then use the TCCs, which they had acquired at discounted prices, to pay their own tax liabilities, the DOF said.

The COA found that the OSS 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, such as these six textile companies.

 
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