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Friday, March 29, 2024

DOF’s tax center abolished after huge credit scams

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President Ferdinand Marcos Jr. has ordered the abolition of the Department of Finance’s One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS Center), whose officials and employees were found to have committed a series of tax credit scams involving billions of pesos over the years.

The abolition is also in line with the administration’s rightsizingpolicy, said Finance Secretary Benjamin Diokno, who recommended the move to the President.

The OSS Center has not processed and issued any tax credit certificates since 2016, Diokno also pointed out.

“It is not practical for the government to provide for its budget every year since it does not perform its functions anymore,” he said.

The agency has about 40 officers and staff who may apply for any available positions in the DOF or any of its attached agencies, or those in other government agencies, Diokno told the Standard.

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“Others may choose to retire or avail of benefits given to those reorganized out of government,” the Finance chief said of the workers of the OSS Center, which is headed by an Executive Director.

It was not immediately known which officials of the center wereinvolved in the scams, or how much they had scammed out of government coffers.

Under Administrative Order No. 4 which was signed by ExecutiveSecretary Lucas Bersamin on February 20 and released on Wednesday, the OSS Center’s functions of processing and issuing tax clearance certificates (TCCs) and duty drawbacks will be transferred to the Bureau of Internal Revenue and Bureau of Customs, respectively.

“All other assets and liabilities of the OSS Center shall be transferred to the Department of Finance in accordance with pertinent auditing laws, rules, and regulations except all cash separately held in trust or otherwise by the OSS Center, which shall be directly remitted to the National Treasury,” the order read.

In a statement from the Presidential Communications Office, Diokno said: “Among the two main reasons for the abolition of the OSS Center were: First, some OSS Center officials and employees have been found to have committed a series of several tax credit scams involving billions of pesos over the years.”

“Second, its abolition and transfer of functions under the BIR and the BOC are in line with the Marcos Jr. administration’s push to right-size government. This will streamline revenue operations and reduce administrative expenses,” he added.

AO No. 4 provides that OSS Center personnel who would be affected by the move will “receive separation benefits… unless they are appointed to other positions in the government.”

The OSS Center was created under Administrative Order No. 266 issued in 1992 for the orderly and expeditious processing of tax credits and duty drawbacks under various laws.

“[It] is the policy of the National Government to rationalize the functional structures of agencies with complementary mandates andpromote coordination efficiency and organization coherence in the bureaucracy,” the AO issued by Bersamin said.

Within 90 working days upon the effectivity of the order, the Finance Secretary “shall fully implement the abolition, including the disposition and transfer of the OSS Center’s functions, personnel and assets as may be necessary.”

“Subject to the approval of the DOF, the BIR, and the BOC shall
prescribe procedures to ensure that necessary control measures are
established to safeguard against fraudulent claims in the processing
and issuance of tax credits and duty drawbacks,” the order read.

All relevant files, documents, and records under the custody of the
OSS Center will be transferred to the BIR and BOC, according to AO 4.
Julito Rada, Vito Barcelo and Vince Lopez

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