DOF officials cleared in P73-M tax scam

MANILA, Philippines –  More than a dozen officials of the Department of Finance (DOF) and four private individuals were cleared of plunder charges related to the P73.76-million tax credit scam more than a decade ago.

Among those cleared were former undersecretary Antonio Belicena, who was executive director and administrator of the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center at the time of the alleged anomaly from 1994 to 1996; then deputy executive director Uldarico Andutan Jr.; reviewer Asuncion Magdaet; and Tax Specialist 1 Rowena Malonzo.

Spouses Faustino and Gloria “Eng Eng” Chingkoe, owners of Filstar Textile Industrial Corp. (Filstar); Grace Chingkoe, the company’s corporate secretary; and Catalina Aranas Bautista, a representative of Filstar, were also absolved.

The Sandiganbayan’s first division chaired by Associate Justice Efren de la Cruz found fault in the allegation that private individuals can be charged as principals in a plunder case.

The prosecution failed to establish that DOF officials enriched themselves by at least P50 million because the information alleged that the Chingkoes profited from questionable tax credit certificates (TCC), according to the anti-graft court.

In 2009, the Office of the Ombudsman said the respondents, in conspiracy with private individuals, caused the issuance of the TCCs in favor of Filstar, which was not qualified to receive tax credit incentives under Executive Order 226 or the Omnibus Investment Code of 1987.

The anti-graft agency said a tax credit is a rebate or refund of import taxes and duties which a BOI-registered enterprise, firm or manufacturer has paid beforehand to the government on the raw materials, supplies and semi-manufactured products it had earlier imported to the country for use in the manufacture, processing or production of its finished product to be exported.

Under the tax credit incentive program, the government gives back to the exporter or manufacturer the import duties and taxes earlier paid, not in cash, but in the form of a TCC, which the government guarantees to honor and accept as payment for taxes and duties and other obligations due to the national government.