By Louella D.
Desiderio (The Philippine Star) | Updated April 22, 2013 - 12:00am
MANILA,
Philippines - Foreign businessmen are concerned over a recent Supreme Court
(SC) ruling denying tax refund claims of foreign firms in the country, warning
that the move weakens efforts to encourage more investments to be made here.
In a
statement, Henry Schumacher, European Chamber of Commerce of the Philippines
(ECCP) vice president for external affairs, said the action taken by the SC to
deny tax refund claims is undermining the efforts of the government and the
Joint Foreign Chambers (JFC) to bring more investments into the country.
The SC ruling
involves San Roque Power Corp. (SRPC), jointly owned by Marubeni Corp. and
Kansai Power International Corp., which poured in $1.20 billion worth of
investments to build a hydroelectric power plant with a capacity of 411
megawatts in Pangasinan.
“The decision
of the SC concerns us, as there are more than 100 other companies that are in
the same position as them.
In other
countries, refunds are given to companies after several weeks.
Here in the
Philippines, holding them for more than 10 years has been the trend,”
Schumacher said.
In February,
the SC en banc ruled SRPC is not eligible to claim the value-added tax refund
amounting to P483.80 million based on technicalities.
The High
Court said the firm lost its right for refund as it filed the claims with the
Court of Tax Appeals (CTA) before the Bureau of Internal Revenue (BIR) gave its
decision on the tax refund.
Under Section
112 of the 1997 National Internal Revenue Code, the BIR Commissioner is given
120 days from the date of submission of documents by the claimant to decide if
it will grant a refund or issue the tax credit certificate for creditable input
taxes.
The claimant
could file an appeal with the CTA within 30 days upon receipt of unfavorable
ruling from the BIR.
“As a
business community, we are worried as technicalities have overruled the
justified refund of the VAT and because the ruling was made retroactive. This
is unfair. If the Supreme Court feels that new rules have to be established
then, we appeal they do it prospectively,” Schumacher said.
He said the
JFC is set to discuss their concerns on the SC ruling on Friday and bring the
issues to the attention of the economic cluster of the Cabinet and the National
Competitiveness Council.
Aside from
the ECCP, the JFC counts the American, Australia-New Zealand, Canadian,
Japanese and Korean foreign chambers along with the Philippine Association of
Multinational Companies Regional Headquarters as its core members.
Schumacher said that as the government wants
to attract more investments, it is important to recognize that foreign
companies which have already placed funds in the country serve as ambassadors
for other companies planning to establish operations here.
“The business
environment remains super bureaucratic, business unfriendly, and investment
incentives are often not delivered,” he said.
“Emphasis is
always put on convincing new investors to invest here. Unfortunately, it is
often forgotten that you have to treat ‘old’ investors well too,” he added.
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