One-stop shop for tax credit, duty drawback abolished

OSS Center abolished
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  • President Ferdinand Marcos Jr. issued Administrative Order No. 4 abolishing the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center
  • The abolition aims to streamline processing of the department’s public services and prevent scams
  • The Bureau of Internal Revenue will now handle processing and issuance of tax credits, and the Bureau of Customs duty drawbacks

The One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS Center) has been abolished in the interest of rightsizing and rationalization of government functions.

Under Administrative Order No. 4, President Ferdinand Marcos, Jr. ordered the Secretary of Finance to “fully implement the abolition, including the disposition and transfer of OSS functions, personnel and assets…” within 90 days from effectivity of the AO.

Signed on February 20, the order takes effect upon publication in the Official Gazette or a newspaper of general circulation.

Under AO No. 4, the OSS Center’s function of processing and issuance of tax credits will be handled by the Bureau of Internal Revenue (BIR), and duty drawbacks by the Bureau of Customs (BOC).

“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 [BIR] and [BOC]. This will streamline revenue operations and reduce administrative expenses,” Finance Secretary Ben Diokno said in a statement.

It was Diokno who recommended to the President in 2022 the abolition of the OSS Center for purposes of institutional strengthening and to promote economy, efficiency, and effectiveness in the delivery of public services.

Under the order, BIR and BOC will craft procedures to ensure “control measures are established to safeguard against fraudulent claims.”

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.

In 1994, the OSS Center was made a permanent unit of the DOF. However, several OSS Center officials and employees have been found to have committed several tax credit frauds 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,” Diokno said.

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