THE value-added tax (VAT) refund process is one ofthe “biggest challenge” confronting ecozone locators, according to a top official of the American Chamber of Commerce of the Philippines (AmCham).
AmCham Executive Director Ebb Hinchliffe told reporters in a recent interview that it takes a while for the Philippine Economic Zone Authority (PEZA) to refund VAT.
“The big problem on the VAT is the refund: It is taking forever. It’s the biggest problem,” Hinchliffe said.
The AmCham executive noted that it takes years for locators to get their refund.
“This is not just because of the pandemic. All had the same issues getting refunds on VAT,” he said.
PEZA officials said last month there’s a need to resolve issues of locators related to the rules of the Bureau of Internal Revenue (BIR) on the zero-VAT rating incentive.
PEZA Officer-in-Charge Tereso O. Panga said his office has been meeting with the BIR regarding the concerns of locators under the Corporate Recovery and Tax Incentives for Enterprises (Create) Law (Republic Act 11534).
“We have been meeting with the BIR and we raised with them the locators’ issues with [revenue memorandum circulars] on Create concerns,” Panga told the BusinessMirror last Thursday.
Simple guidelines
THE PEZA chief said some locators want the government to have uniform, simple and transparent guidelines for the conduct, particularly on tax assessment.
“[The] BIR can be more proactive in assisting the locators in terms of compliance with documentary/audit requirements. This is where the government can enhance the regulatory relief mechanism so locators can bring up their concerns with higher authorities other than the BIR and the CTA [Court of Tax Appeals],” Panga said.
Local business groups including the Philippine Chamber of Commerce and Industry had called on the government to simplify the availment of the VAT refund, one of perks that PEZA offers to locators.
In October, PEZA reported that the Philippines attracted nearly P40 billion in investments for 148 new and expansion projects in January to September.
However, data from the PEZA showed that the amount of investments greenlighted by the investment promotion agency (IPA) was 22.6 percent lower than the P51.202 billion it approved last year. The number of projects was also lower this year compared to the 189 recorded in 2021.
Meanwhile, the PEZA chief said there are 13 pending economic zones as of October which are expected to bring in investments amounting to more than P17 billion.