More tax credits from textile industry rejected

May 16, 2022

0 Less than a minute

Panorama of a city business district with office buildings and skyscrapers and superimposed data, charts and diagrams related to stock market, currency exchange and global finance. Blue line graphs with numbers and exchange rates, candlestick charts and financial figures fill the image with a glowing light. Sunset light.

REUTERS

THE Commission on Audit (CoA) has disallowed more tax credit certificates (TCCs) issued to textile companies worth a combined P3.83 billion, the Department of Finance (DoF) said in a statement on Monday.

According to a CoA report made to the DoF, the textile companies that illegally obtained TCCs from the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) were Silvertex Weaving Corp., Knitech Manufacturing, Inc., Capital-Roll Knit Corp., Uni-Glory’s Knitting Corp., Primeknit Manufacturing Corp., Tai-Cheng Integrated Resource, Inc., Miskhu Industrial Corp., and Universal Pacific Knitting Mills, Inc.

As of the end of 2021, previous notices of disallowance issued by CoA’s Special Audits Office to the textile industry had totaled P3.41 billion.

These tax-credit certificates were illegally granted between 2008 and 2014.

Tax credit certificates, as authorized by Executive Order 226, are typically given to exporters registered with the Board of Investments (BoI). Through these certificates, exporters can obtain refunds on taxes paid on raw materials by offsetting the tax credits against other taxes due.

DoF, BoI, Bureau of Customs and the OSS were found to have improperly issued TCCs to ghost exporters, or to companies that were not entitled to the tax credits.

The OSS is managed by the DoF, the Bureau of Internal Revenue, and the BoI. — Tobias Jared Tomas