THE Department of Finance (DoF) has suspended the issuance of P262 million in tax credits and P57 million in refunds to a Bulacan textile firm after the Commission on Audit (CoA) cited “irregularities” in its tax credit certificates (TCCs).
The DoF said in a statement Monday that its One-Stop Inter-agency Tax Credit and Duty Drawback Center (OSS) decided to withhold the application of Indo Phil Group of Companies (IPGC) for the tax perks after the CoA audit of TCCs issued between 2008 and 2014.
IPGC is a Filipino-Indian joint venture based in Marilao, Bulacan. It includes Indo Phil Textile Mills, Inc. (IPTMI), Indo Phil Acrylic Manufacturing Corp. (IPAMC) and Indo Phil Cotton Mills, Inc. (IPCMI). The total TCCs applied for each company amounted to P69 million, P102 million, and P91 million for IPCMI, respectively.
The statement was based on the letter of OSS Executive Director Emee I. Macabeles to Labor Secretary Silvestre H. Bello III who referred to the request of the company for a P57-million tax refund and issuance of TCCs worth P262 million. It was Indo Phil Group President Shanti Sipani who made the request, the DoF said.
“We highlight that IPAMC, IPCMI, and IPTMI are covered by the CoA SAO (Special Audits Office) Report 2018-06, with findings of irregularities on the TCCs issued to each company for years 2008-2014,” according to the letter sent by Ms. Macabeles.
Citing the IPGC’s request, the DoF said the tax perks were put on hold because of the CoA report but Mr. Sipani was quoted as saying the company only “followed the government’s directions” in applying for the tax credits.
Ms. Macabeles, however, said CoA has started issuing notices of disallowance to companies that have TCCs that are ”tainted with irregularities.”
“Due to these developments and the enormity of the amount involved, the DoF and OSS Center (are) taking precaution(s) before any request for TCCs, Tax Debit Memos (TDMs) or duty drawbacks are acted upon,” she said, adding that the agency will update the Labor department on developments.
BusinessWorld asked the company for comment but had not received a response at deadline time.
The DoF reported last month that CoA has rejected P377.29 million worth of tax credits granted to four textile firms from 2008 to 2012. — Beatrice M. Laforga