DOF probes another tax credit controversy in textile industry

He said 29 claimants were not registered but were able to get tax credits amounting to PHP8.85 billion while four claimants had expired registrations but were able to get tax grants amounting to PHP2.34 billion. (File Photo: KING RODRIGUEZ/ Presidential Photo)

MANILA — Finance Secretary Carlos Dominguez III has ordered the creation of a task force that will investigate individuals involved in the alleged issuance and use of erroneous Tax Credit Certificates (TCCs) from 2008 to 2014, which reportedly allowed holders to get incentives amounting to PHP11.18 billion.

Citing a Commission on Audit (COA) report dated last July 6, Dominguez, in a briefing Friday, said it was discovered that the One-Stop Shop Inter-Agency and Duty Drawback Center (OSS), an agency under the Department of Finance (DOF), issued about 3,231 TCCs to 33 textile companies that are either not registered or with lapsed registration during the six-year period.

He said 29 claimants were not registered but were able to get tax credits amounting to PHP8.85 billion while four claimants had expired registrations but were able to get tax grants amounting to PHP2.34 billion.

The finance department will be coordinating with the National Bureau of Investigation (NBI) and the Office of the Ombudsman to look deeper into the issue and charge people involved, he said. “We are determined to get to the bottom of this and really identify those who are responsible and collect back what we can. And, of course, charge those we find evidence that they are guilty,” he added.

Members of the task force formed to investigate the issue include Finance Undersecretary Antonette Tionko, who heads the agency’s Revenue Operations Group; Undersecretary Bayani Agabin, who heads the Legal Affairs Group; and Undersecretary Gil Beltran, who heads the Policy Development and Management Services Group.

Some years back, several DOF officials were charged for their involvement in the alleged tax credit scam involving TCC issuances to textile industry players.

The country’s textile industry has seen its heyday and because of the large number of companies involved here, Dominguez said it also employed lots of people. “I guess (with) the number of transactions of companies could be used by people who have bad intentions,” he added.

During the same briefing, Finance Undersecretary Antonette Tionko said 29 of the parties involved in the questionable TCC issuance got it without showing proof that they have actual importation. She added that of the PHP11 billion worth of TCCs, more than 80 percent have been used to pay taxes dues to the government.