Business groups mull legal action vs BIR

MANILA, Philippines - Business groups are considering legal action to push for the removal  of a circular covering value-added tax (VAT) refunds which they claim would dampen the country’s competitiveness.     

Tax Management Association of the Philippines (TMAP) internal vice  president Randy Bello said in a press conference yesterday that legal action is among the options being considered by business groups to ask the Bureau of Internal Revenue (BIR) to withdraw Revenue  Memorandum Circular (RMC) No. 54-2014, which sets rules on the filing and  processing of VAT refunds.   

“Legal option is being considered, but the groups have not come up with a collective decision,” he said.   

European Chamber of Commerce of the Philippines (ECCP) vice president  for external affairs Henry Schumacher said that for now, the business groups want to engage the BIR in a dialogue on the matter.   

“We don’t want a fight. What we want to see is constructive dialogue,” he said. In a joint statement issued during the event, the TMAP, ECCP and other  business groups such as the Japanese Chamber of Commerce and Industry  of the Philippines Inc., American Chamber of Commerce of the  Philippines, Philippine Association of Multinational Companies  Regional Headquarters, Inc., Canadian Chamber of Commerce of the  Philippines, Korean Chamber of Commerce of the Philippines,

Australian-New Zealand Chamber of Commerce of the Philippines,  Philippine Exporters Confederation, Inc., Pilipino Banana Growers and  Exporters Association, Philippine Coconut Oil Producers Association,  United Coconut Associations of the Philippines, Philippine Chamber of  Commerce and Industry,  Information Technology and Business Process  Association of the Philippines, Philippine Independent Power Producers  Association, Employers Confederation of the Philippines, Chamber of  Mines of the Philippines, Management Association of the Philippines,  Financial Executives of the Philippines and Association of Certified  Public Accountants in Public Practice said they want the government to  “withdraw RMC 54-2014 and uphold the taxpayer’s right to an  administrative appeal.”   

Under the RMC, which applies to all pending claims for VAT refunds, the  BIR would have a period of 120 days to decide whether to grant or deny  an application.   

If no action is taken by the BIR within the 120-day period, it would be deemed a denial of the application.   

In case of full or partial denial of the claim for tax refund, the RMC  states that the affected taxpayer could file an appeal in two ways: file  the petition with the Court of Tax Appeals (CTA) within 30 days from  the receipt of BIR decision or file the claim within 30 days from the  expiration of the 120-day period, if no action is taken by the BIR.  As an incentive to investors, firms could claim refunds from the  government for the advanced VAT payments made for imports of items  used for goods they will export.   

Previously, taxpayers may elevate the claim to the CTA after the  120+30 day period or continue to wait for the BIR’s final decision  before elevating the claim to the CTA.