MANILA, Philippines - The Department of Trade and Industry (DTI) expressed support yesterday for the value-added-tax (VAT) refund facilitation bill pending approval in Congress, saying the proposal forms part of efforts to ease the process of doing business in the country.
The DTI said the bill would facilitate the processing of VAT refunds for registered persons or taxpayers who, when their VAT refund claims were deemed denied, may not have been given the appropriate chance for appeal from July 2010 to July 2014 when the appropriate rules were clarified by the Bureau of Internal Revenue (BIR).
“Facilitating the processing of VAT refunds is in line with the country’s ease of doing business agenda. We will continue to work proactively on these issues moving forward,” Trade Undersecretary Ponciano Manalo Jr. said.
The DTI said P27 billion is proposed to be appropriated when the bill is passed.
The agency said such amount is not considered revenue foregone, but money that in the regular course of the VAT chain is given back to businesses as input VAT for zero-rated or effectively zero-rated transactions.
“From the filing of their VAT refund claims, businesses need to wait for 120 days for the BIR to process and decide on their refunds. After the claim is fully, partially, or deemed denied, another 30 days is given to companies to elevate their claims with the Court of Tax Appeals,” the DTI said.
“The Supreme Court prescribed this 120+30 day rule for administrative and judicial claims as mandatory and jurisdictional. The Supreme Court also notably ruled that inaction by the commissioner after the 120-day period for administrative claims means the refund claim is deemed denied,” it added.
The proposed VAT Refund Facilitation Bill covers VAT refund or VAT credit claimants with zero-rated or effectively zero-rated sales who have filed within the statutory period and deemed denied upon the lapse of the 120-day period within July 2010 to July 2014.