Foreign chambers press govt on VAT

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European and Japanese businessmen urged the government and the Supreme Court (SC) to “have a “prospective ruling” on the value-added tax (VAT) refunds for foreign investors in the country.

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Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines, said in a press briefing on Wednesday that with High Tribunal declaring the Priority Assistance Development Fund, or “pork barrel,” as unconstitutional, the court won’t have a “reason why it cannot do the same on the VAT refunds.”

“The business and investor community is watching the pending VAT refund case of the San Roque Power Corp. [SRCP] before the SC with anxiety as it will set new rules for investors seeking refund of advanced VAT,” Schumacher said.

He was referring to the SRPC’s P483.8-million tax refund case, which has been pending for more than 10 years.

“Compliance comes to understanding the rules. The more difficult the rules are, the more difficult it is to comply,” Schumacher added, noting that the changing of rules midstream concerning VAT refunds would only attract short-term business and not long-term enterprises into the country.

For his part, Takashi Ishigami, president of the Japanese Chamber of Commerce and Industries of the Philippines Inc. (JCCIPI), told reporters that Japanese companies are in “confusion” on whether they will invest or not in the Philippines, because of tax and incentives issues.

In a letter to Bureau of Internal Revenue Commissioner Kim Henares, the JCCIPI said that it is concerned over the “lengthy procedure” in filing VAT refund claims and the BIR’s inaction to the claims. This has caused the filing of tax cases before the courts.

“With the prospective ruling, the SC would provide guidance not only for investors but for the lower courts and the BIR as well,” Schumacher said.

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