DoF seen handling VAT claims in more ‘taxpayer-friendly’ way

By John Victor D. Ordonez, Reporter

THE Department of Finance (DoF) Revenue Operations Group taking responsibility to handle value-added tax (VAT) refund claims may result in quicker processing and address delays under the Bureau of Internal Revenue (BIR), according to a tax professional.

“The experience of the taxpayers right now is that the BIR process is slow or tilted in favor of denying the tax refunds,” Eleanor L. Roque, tax principal of P&A Grant Thornton, said in a Viber message.

She said the DoF may employ more efficient and taxpayer-friendly measures in processing VAT claims, cutting down delays previously seen with the BIR.

Senator Sherwin T. Gatchalian has filed a bill proposing to transfer the responsibility of processing VAT refunds to the Revenue Operations Group from the BIR, which has fielded many complaints from companies with stalled refund claims.

Senate President Juan Miguel F. Zubiri has said the Japanese companies threatened to leave the Philippines after finding it difficult to secure refunds.

The American Chamber of Commerce of the Philippines, Inc. has said VAT refunds for jet fuel purchases take as long as five years to resolve.

Under the Senate bill, the Finance Secretary will be in charge of approving refund claims for creditable input taxes, instead of the internal revenue commissioner.

The measure also ensures businesses are entitled to a VAT zero-rating on local purchases, provided they operate at 70% capacity.

Registered export enterprises are also given duty exemptions on imports of raw materials and spare parts for capital equipment.

“The BIR’s task is to collect taxes so processing refunds or approving refunds is not ingrained in the BIR DNA,” Ms. Roque said. “It’s just against their interests to approve refunds.”