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More TCC scams probed



Anomaly goes back to 1998 — source

The government is expected to unearth more anomalies in the issuance of tax credit certificates (TCC) going back to 1998, a day after the Department of Finance (DoF) said it will file charges against public officials and private individuals involved in issuance of P11 billion worth of certificates from 2008 to 2014.

A Daily Tribune source said investigations now being undertaken on the anomaly will also be based on a Commission on Audit (CoA) report. That also triggered the order of Finance Secretary Carlos Dominguez III for a high-level DoF task force to recover government losses through the TCC issuances by the One-Stop-Shop Inter-Agency and Duty Drawback Center (OSS).

The high-level task force is composed of Finance Undersecretaries Antonette Tionko, who heads the DoF’s Revenue Operations Group; Bayani Agabin, who heads the Legal Affairs Group and Gil Beltran, who heads the Policy Development and Management Services Group.

The source said under probe are the same companies which were identified in the CoA report responsible for the erroneous issuance of 3,231 TCC by the OSS from 2008 to 2014.

Some P8.85 billion in tax credits were overstated and supported by spurious documents, and another P2.34 billion in TCCs were granted to claimants whose fiscal incentives had already expired, the CoA audit found.

BoI to hunt TCC users

A copy of the CoA report, Dominguez said, has been turned over to the Board of Investments (BoI) “for appropriate action against the accredited enterprises.”

The BoI issued the TCC as an investments break for new companies.

Administrative Order 266 issued on February 7, 1992 created the OSS to speed up the processing of tax credit and duty drawback claims of exporters.

The TCC anomaly was first discovered by the DoF in July 1998 that resulted in a 25 February 1999 order of then Ombudsman Aniano Desierto for a six-month preventive suspension of 17 DoF officials allegedly involved in the tax scam including former Finance Deputy Executive Director Uldarico Andutan, former Acting Deputy Executive Director Raul de Vera and former Undersecretary Antonio Belicena.

All certificates canceled

The source said the DoF Task Force will seek the cancellation of all TCC still in circulation and the coordination with the Bureau of Internal Revenue and the Bureau of Customs in the assessing of taxpayers who used TCC against tax liabilities.

Investigation and administrative sanctions against OSS personnel are also ongoing, the source said.

Scam starts 1998

The DoF found in 1998 that 11 companies of the Chingkoe Group owned and controlled by businessman Faustino Chingkoe and his wife, Gloria, obtained 533 TCC from the OSS worth P2.5 billion.

It was then found that the Chingkoe companies reported sales of only P349.72 million and TCC were issued even during years when the Chingkoe Group companies did not report any sales.

In 2001, the Sandiganbayan’s Fourth Division dismissed the 62 cases filed against former DoF officials in connection with the scam after the Ombudsman’s failure to submit results of the reinvestigation of the cases.

In 2001, the Ombudsman filed a motion for reconsideration asking the Sandiganbayan to reverse its “untimely and hasty dismissal” of the 62 graft cases.

In 2002, the Sandiganbayan reversed its earlier ruling and revived the 62 cases. On the same year, the Ombudsman filed charges in the Sandiganbayan but downgraded the recommended charges of plunder to violation of the anti-graft law due to insufficiency of evidence.

In 2002, Faustino, one of the principal suspects, was arrested at the Quezon City Hall compound by NBI agents, nine months after he reportedly fled the country.

In July, 2006, however, the Manila RTC dismisses the civil charges filed by the BOC against the Chingkoe couple after the BOC lawyers failed to attend hearings on the pretrial of the case.

Court reversals

In March, 2011. the Sandiganbayan first division dismissed the plunder case filed against former DOF officials in connection with the tax credit scam involving executives of a textile firm, Filstar Textile Industrial Corp., saying that the charge sheet filed by the Ombudsman failed to show that the officials had pocketed ill-gotten wealth.

The Sandiganbayan ruled that there is no probable cause for plunder and dismisses the charges against Belicena, Andutan, Malonzo, the Chingkoe couple, Bautista and Filstar corporate secretary Grace Chingkoe.

The Supreme Court in a ruling in 2013 affirmed the Manila regional trial court’s dismissal of civil charges against the Chingkoe couple and faulted the Bureau of Customs and the Office of the Solicitor General for their lawyers’ nonappearance at six hearings on the pretrial of the Chingkoe couple.