The Commission on Audit (CoA) recently flagged the Bohol provincial government for overpaying over P5 million due to incorrect tax treatment in procuring agricultural products, drugs and medicines.

In its 2022 report, CoA discovered that the government erroneously purchased goods subject to value-added tax, contrary to the VAT exemption stipulated in Section 109 of the National Internal Revenue Code.

The audit findings indicated that the initial cost of corn seeds, drugs, and medicines should have totaled only P48,908,964, resulting in an overpayment of P5,240,246.13 by the Bohol provincial government (PGBh).

“Not only did the incorrect tax treatment result in the overpayment of P5,240,246.13 by PGBh, it also caused complications in the tax administration, particularly with respect to VAT,” CoA said.

It added, “This is considering that additional processes and procedures may need to be performed and remedies to be availed of pursuant to the provisions of the NIRC upon the instance of the Bureau of Internal Revenue pursuant to a tax assessment process.”