PCCI cheers move to relax VAT refund requirements
MANILA -The Philippine Chamber of Commerce and Industry (PCCI) has cheered the latest move of the government to relax documentary requirements to refund value-added taxes (VAT) from purchased goods, saying the measure improves the business environment in the country.
PCCI president George Barcelon told the Inquirer that lengthy processes for these tax refunds are a huge consideration for both Filipino-owned and foreign-owned businesses, especially for export enterprises.
“This will lighten the burden on taxpayers, especially now that the BIR (Bureau of Internal Revenue) has limited the number of documentary requirements,” he said in a phone interview.
Last week, the BIR announced that they had cut down the number of documentary requirements from 30 to a minimum of nine and a maximum of 17.
The tax agency said that it also streamlined the verification procedures in the process.
Barcelon, whose business group touts itself as the biggest in the Philippines, said that BIR Commissioner Romeo Lumagui Jr. inherited cumbersome procedures from the Duterte administration, which made the process more complex for firms seeking the refunds.
To recall, the PCCI urged the government in December of last year to revisit the Philippine Economic Zone Authority‘s VAT refund policies, citing complications arising from the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act in 2021.
The CREATE Act limited the application of the tax perk to local purchases of goods that are exclusively and directly used in the registered project or activity of the registered firms.
This meant that registered firms which used to enjoy the tax incentives were then required to submit a number of documents proving that they satisfy the conditions provided for under the tax reform.
The American Chamber of Commerce of the Philippines (AmCham Philippines) also cited the inordinate amount of time to process these refunds, thereby messing with the cash flows of businesses.
AmCham Philippines executive director Ebb Hinchcliffe said that for some companies, it took two to five years to get their refund.