A SENATOR has filed a resolution seeking to investigate delays associated with value-added tax (VAT) refunds after complaints by foreign companies.
Senate Resolution No. 978, which Senator and Ways and Means Committee Chairman Sherwin T. Gatchalian filed on March 19, seeks an inquiry in aid of legislation into the large volume of denied VAT refunds and to make it easier for companies to apply for refunds.
He cited complaints from Japanese companies that threatened to leave the Philippines after finding it difficult to secure timely VAT refunds.
“The failure of the VAT refund system to timely refund the money of the taxpayers threatens businesses, investments and local employment thus leading to a significant negative impact on the economy as a whole,” according to a copy of the Senate resolution.
The American Chamber of Commerce of the Philippines, Inc. has said VAT refunds for jet fuel take as long as five years to resolve.
Mr. Gatchalian also cited the case of agricultural multinational Dole Sunshine Co. Philippines, which exports bananas from the Philippines, and has not received a VAT refund amounting to $67 million (P3.78 billion).
At a Senate hearing in November, Japanese Chamber of Commerce and Industry of the Philippines, Inc. President Shigeru Shimoda pushed for more tax incentives to attract more Japanese companies to expand their operations to the Philippines.
The House of Representatives on March 18 passed on final reading amendments to the law designed to revive the post-pandemic economy through tax incentives.
The CREATE MORE (CREATE to Maximize Opportunities for Reinvigorating the Economy) measure cuts corporate income tax to 20% from 25%. It also provides duty exemptions and VAT exemptions on imports. — John Victor D. Ordoñez
