P1.2 BILLION TAX CREDIT CERTIFICATES DISALLOWED

The Notices of Disallowance (NDs) on the tax credit certificates (TCCs) issued to several textile companies over a decade ago continue to pile up, with the Commission on Audit (COA) having invalidated so far close to P1.2 billion-worth of these illegal tax perks issued from 2008 to 2014.

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) were among the textile firms found to have secured illegal TCCs from the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) in the past.

Last year, the COA-Special Audits Office (COA-SAO) issued NDs to these textile companies amounting to a combined P818.6 million.

A new set of NDs involving P376.63 million was issued by the COA last month to these same textile firms, bringing the total of their disallowed TCCs to P1.195 billion, based on a Feb. 23 letter sent by the audit body to Finance Secretary Carlos Dominguez III.

This latest set of NDs covered TCCs that were issued between 2009 and 2013, according to the letter sent by COA-SAO Officer-in-Charge (OIC) Gloria Silverio. MIC, which was earlier found to have been issued illegal TCCs worth P31.17 million, was issued a new set of NDs totaling P48.94 million, which brings the total of its illegal tax credits to P80.11 million.

The illegal tax credits of UPKM, Inc. grew to P81.59 million after the COA found a new set of spurious TCCs issued to the firm worth P53.26 million. This is on top of the firm’s NDs worth P28.33 million that were issued last year. The COA-SAO also said that on top of the earlier disallowed TCCs granted to CRC in the sum of P455.91 million, a new set of NDs was issued to the firm totaling P111.30 million.

This brings the total amount of NDs on CRC’s tax credits to P567.20 million.

UKC, with TCCs totaling P115.32 that were earlier disallowed by COA, also received NDs for a separate set of TCCs amounting to P55.48 million, according to the latest audit done by the COA-SAO. Its disallowed TCCs now amount to P170.80 million.

PMC’s disallowed TCCs of P93.44 million increased to P154.27 million after the COA-SAO determined a new set of TCCs worth P60.83 million was illegally issued to the company. The COA-SAO also found that P46.83 million of TCCs granted to TICIRI should also be disallowed, on top of the earlier NDs that the audit body issued against the firm worth P94.44 million combined.

The total value of TICIRI’s disallowed TCCs is P141.27 million.

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