Jilted businessmen seek VAT refund via legislation

With judicial remedies clearly unavailable for businesses seeking refunds on their input value-added tax (VAT) payments, corporate taxpayers propose new legislation in Congress to get back what the government has denied them.

PricewaterhouseCoopers Chairman and Senior Partner Alexander Cabrera, who conducted this year’s Asia-Pacific Economic Cooperation (Apec) CEO survey, said the lack of judicial remedy to enforce a VAT refund from the government has prompted corporations to lobby for a covering legislation in Congress.

Earlier, the Department of Trade and Industry (DTI) issued a statement alluding to a “VAT refund facilitation bill” now pending in Congress, apparently in response to a reported discussion between Japanese Prime Minister Shinzo Abe, who visited the country this week at the Apec Leaders’ Meeting, and President Aquino.

Japanese firms were hit hard by Internal Revenue Commissioner Kim Jacinto-Henares’s Revenue Memorandum Circular 54-2014, which “deemed denied” all applications for VAT refund as of June 11, 2014.

The denial of the applications for VAT refund meant that taxpayers seeking them within 30 days from the date of the effectivity of the circular.

Henares issued the circular because she was particularly sore at taxpayers fraudulently seeking VAT refunds on their input VAT payments made in the conduct of their businesses.

Cabrera said the proposed legislation imposing the VAT refund seemed the only way for taxpayers whose applications have been denied, because even the Court of Tax Appeals (CTA) had denied them the judicial relief on the ground of lack of jurisdiction.

It used to be that taxpayers seeking VAT refund wait for actual denial of their petition, 30 days from which they file a petition before the court to get them. But with the denial of all pending applications at the administrative level, the taxpayers are now forced to go to the CTA because it takes forever for the Bureau of Internal Revenue to actually deny their applications for VAT refund.

Cabrera said the business entities have noted the CTA has, likewise, dismissed their petitions for a refund on the ground of lack of jurisdiction mainly because those were filed beyond the period that the taxpayer should have filed for judicial relief.

source:  Business Mirror