THE Commission on Audit (CoA) rejected another P376.6 million worth of tax incentives illegally granted to six textile firms by the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) between 2008 and 2014, the Department of Finance (DoF) said.
The DoF said in a statement Wednesday that CoA issued notices of disallowances to 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 Pacific Knitting Mills, Inc. (UPKM). The companies were earlier found to have been issued tax credit certificates (TCCs), illegally.
According to a Feb. 23 report to the DoF, CoA’s findings add to the P818.6 million worth of rejected TCCs last year, bringing the total disallowances to P1.195 billion.
The DoF has been releasing CoA findings on textile incentives since July, when evidence started emerging that the tax credits were unwarranted.
CoA disallowed TCCs issued to CRC worth P111.3 million. The company now has P455.9 million worth of rejected tax credits to date.
The government is set to void P55.48 million in further tax perks previously issued to UKC, bringing the total to P115.32 million so far.
Disallowed tax credits to PMC were worth P60.83 million, bringing the company’s total to P154.3 million.
Tax credits to TICIRI worth P46.83 million have also been rejected, taking the company’s overall disallowed TCCs to P141.3 million.
UPKM accounted for another P53.26 million worth of cancelled tax perks, bringing its total to P81.59 million, while the MIC racked up P48.94 million worth of new disallowances, raising its overall tally to P80.11 million.
The OSS is an inter-agency body run by the DoF, Board of Investments (BoI), Bureau of Internal Revenue and Customs, to process applications for TCCs and duty drawbacks.
Tax credits are given to exporters and manufacturers of products for export, which are registered with BoI. Proof of duties and taxes on raw materials and supplies are a prerequisite for a TCC; approved applications will trigger refunds of these taxes.
The DoF formed a task force in 2018 to investigate and go after officials and firms involved in the illegal grant of tax credits.
In July 2018, the DoF also flagged P11.18 billion worth of TCCs that the OSS granted to 33 textile companies between 2008 and 2014 which were either not eligible for the benefit or allegedly non-existent. These were based on CoA findings as well. — Beatrice M. Laforga