Commission on Audit

COA affirms lifting of P846-M notices of charge vs ex-Customs officials


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COA affirms lifting of P846-M notices of charge vs ex-Customs officials
The COA Commission Proper upholds a 2014 ruling that the Customs officials were duly authorized by the BIR to grant VAT refunds through the issuance of tax credit certificates

MANILA, Philippines – The Commission on Audit has affirmed the decision of the COA-National Government Sector (NGS) Cluster 2 to lift the notices of charge (NCs) against former Bureau of Customs officials amounting to P846.26 million in tax credits.

The COA Commission Proper, in a decision released on Wednesday, September 13, ruled that the former BOC officials were duly authorized by the Bureau of Internal Revenue (BIR) to grant value-added tax (VAT) refunds through the issuance of tax credit certificates (TCCs).

“Wherefore, premises considered, COA-NGS Decision No. 2014-04 dated July 15, 2014 is hereby approved. Accordingly, the following 94 Notices of Charge, all dated May 18, 2012…in the total amount of P846,264,032.57, are hereby lifted,” the COA CP declared.

COA chairperson Gamaliel Cordoba and commissioners Roland Café Pondoc and Mario Lipana signed the decision.

With this ruling, COA upheld the position of the COA-NGS Cluster 2 to lift the 94 notices of charge.

A notice of charge is issued issued by state auditors against officials of an agency for non-collection, undercollection, non-remittance, or underremittance of collections.

On May 18, 2012, state auditors issued 94 NCs against the BOC for Tax Refunds Payable from 2001 to 2008. They based this on the ground that the BOC-issued TCCs for VAT refund constituted “illegal drawbacks.”

Former BOC commissioners Ruffy Biazon and Napoleon Morales, along with former deputy commissioners Reynaldo Umali and Felipe Bartolome, appealed the findings before the COA-NGS2.

They argued that sections 106 and 1708 of the Tariffs and Customs Code authorized the BOC commissioner to grant refund trough tax credit of internal revenue taxes.

They also noted that the issuance of the TCCs was evaluated by the Department of Finance (DOF) Tax Revenue Group and had the approval of the Bureau of Internal Revenue.

The former Customs officials also cited BOC-BIR Agreement dated April 8, 1988, designating the Customs commissioners to act as the duly authorized representatives of the BIR commissioner. –

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