The European Chamber of Commerce of the Philippines (ECCP) has echoed the call of the Japanese Chamber of Commerce and Industry of the Philippines for the government to facilitate the refund of advanced value-added tax (VAT) paid by companies importing capital equipment for infrastructure projects.
Henry Schumacher, ECCP vice president for external affairs, warned that companies might lose trust in the government when it fails to abide by its promise to make the importation of capital equipment tax free as incentive for investing in the country’s infrastructure projects.
Schumacher cited the case of San Roque Power Corporation which has yet to recover P482 million in advanced VAT payments for the supposedly tax free importation of capital equipment.
He, moreover, chided the retroactive application of the Bureau of Internal Revenue’s Revenue Memorandum Circular No. 54-2014 which imposed more stringent requirements for claiming refunds for advanced VAT payments.
“Investors see the lack of transparency, predictability and consistency in the government’s behavior. Consequently, it is high time for government to see the big picture rather than relishing in the short-term success of depriving investors of the VAT refunds,” Schumacher said.