Finance Secretary Benjamin Diokno welcomed the issuance of Administrative Order (AO) No. 4, directing the abolition of the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS Center) and transferring its assets, liabilities, and obligations to the Department of Finance (DOF).
“The operations of the OSS Center, which had been plagued by corruption allegations over the years and had been defunct since 2016, is now rightfully under the Bureau of Internal Revenue [BIR] and the Bureau of Customs [BOC]. This will streamline revenue operations and reduce administrative expenses,” Secretary Diokno said of the issuance.
Under AO No. 4, the processing and issuance of tax credits and duty drawbacks shall now be done by the BIR and the BOC.
The OSS Center was originally created on February 7, 1992 through AO No. 266, s. 1992 to simplify and streamline the processing of tax credits and duty drawbacks.
Tax credits are credits against taxes and/or duties equal to those actually paid or would have been paid to evidence which tax credit certificate (TCC) shall be issued by the Secretary of Finance or their duly authorized representative.
Meanwhile, duty drawback refers to the refund or credit of duties, and may include internal revenue taxes actually paid for importation, in whole or in part.
In 1994, the OSS Center was made a permanent unit of the DOF. However, some OSS Center officials and employees have been found to have committed several tax credit scams involving billions of pesos over the years.
“It is also important to note that the OSS Center has not processed and issued any tax credit certificates since 2016. It is not practical for the government to provide for its budget every year since it does not perform its functions anymore,” he added.
In 2022, Diokno recommended to the President the abolition of the OSS Center for purposes of institutional strengthening and to promote economy, efficiency, and effectiveness in the delivery of public services.