Textile-firm TCCs voided by COA in 6 years now ₧3B


THE Commission on Audit (COA) has so far invalidated P3 billion in tax credits that were found to have been illegally issued to several textile companies from 2008 to 2014.

Citing a report from COA Special Audits Office, the Department of Finance (DOF) said another set of tax credit certificates (TCCs) worth P412.77 million was disallowed. This is on top of the previous batches of TCCs that COA has invalidated, amounting to P2.6 billion.

This brings the total value of illegal TCCs issued by the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) to these textile firms to P3 billion as of September 21.

The new batch of invalidated TCCs was issued to “errant” textile firms Silvertex Weaving Corp. (SWC), Knitech Manufacturing Inc. (KMI), Capital-Roll Knit Corp. (CRC), Uni-Glory’s Knitting Corp. (UKC), Primeknit Manufacturing Corp. (PMC), Tai-Cheng Integrated Resources Inc. (TICIRI), Miskhu Industrial Corp. (MIC), and Universal Pacific Knitting Mills Inc. (UPKM).

Still leading the list with the largest amount of illegal TCCs is SWC with P906.80 million.

This is followed by CRC with P664.92 million worth of illegally issued TCCs, MIC (P451.98 million), PMC (P312.08 million), UKC (P241.68 million); TICIRI (P198.81 million), UPKM (P127.81 million); and KMI (P114.20 million).

COA has held liable 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.

Approved applications meant tax credits on the duties and taxes that exporters supposedly paid. They could then use the amount to pay other tax liabilities due to the government. The practice of these alleged exporters who illegally obtained TCCs was to sell the certificates to other companies at a discount. The latter would then use the TCCs to pay their own tax liabilities.

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.

Read full article on BusinessMirror

Leave a Reply