MANILA, Philippines - The government’s One Stop Shop Inter-Agency Tax Credit and Duty Drawback center has issued P2.789 billion worth of tax credit certificates (TCCs) from January to September this year, 25.9 percent lower than the P3.767 billion it issued in the same period last year.
Villamor Plan, executive director of the center said the slight drop in the issuance of these certificates – which export firms use to offset tax liabilities – is partly due to a slowdown in economic activities particularly imports, because of the global financial crisis.
“The issuance of TCCs is also an indicator of (economic growth),” Plan said.
He said that imports, particularly oil, has dropped significantly.
Latest data from the Department of Energy (DOE) showed that the country’s oil import bill plunged by 51 percent to $3.2 billion from January to June from $6.6 billion a year ago.
Total imports, meanwhile, continued to decline for the 11th consecutive month with payments for August down by 28.3 percent to $3.617 billion from $5.044 billion in the same period last year.
The One Stop Shop is an agency under the Department of Finance (DOF). A TCC serves as proof of a company’s claim for tax credits, which are granted either to exporting firms that are entitled to duty-free privileges or to those that have tax refunds. Holders may use these certificates in paying taxes. Fraud is committed when companies acquire the certificates illegally.
Plan said the number of TCCs issued stood at an average of roughly P3.5 billion to P4 billion for the last 10 years. In 2008, the amount of TCCs issued stood at P4.654 billion.
This is a significant reduction from a high of P11.94 billion issued by the office at the height of the so-called tax credit scam in the early 1990s.
Plan, who took over the center in 2008, said the DOF has been continuously reengineering the center to prevent the repeat of the tax scam and to better assist the export industry.