The Joint Foreign Chambers of the Philippines (JFC) has asked Secretary Cesar V. Purisima, as head of the Cabinet’s economic cluster and the Finance department, to ensure that investors receive its value added tax (VAT) refunds.

The JFC sent a letter to Mr. Purisima on May 7 seeking assistance to get the Supreme Court (SC) and the Bureau of Internal Revenue (BIR) to rule prospectively on VAT refund issues, and not to change guidelines midstream. "We seek your assistance in addressing the unfairness in treating investors, both by the BIR and the Supreme Court. If the country wants productive investments and makes fiscal incentives available to attract investors then the government is also obliged to provide business friendly rules and consistent procedures that will allow the investors to enjoy what has been offered as incentives," the JFC said in its letter.

Companies who are eligible for duty-free importation of capital equipment are allowed to seek refunds from taxes they paid. 

But the group claimed that the process to get the tax refunds is "complicated and overly bureaucratic".

The JFC noted there are several cases that are currently in court relating to the issue of VAT refunds and some cases that have already been resolved are going to be implemented retroactively which will not be attractive to investors.

"The rule established by the Supreme Court should only be given a prospective effect. Otherwise, it will result to grave damage and prejudice sanctioned by the BIR and accepted by the courts," the JFC said.

JFC said the BIR has also released "conflicting and difficult to understand revenue memorandum circulars and revenue memorandum orders over the years."

Henry J. Schumacher, external vice-president of the European Chamber of Commerce of the Philippines, said in a telephone interview with BusinessWorld that the JFC wants Mr. Purisima to "ask the BIR to withdraw its motions for reconsideration blocking VAT refund decisions in the court and seek support from the economic cluster to prevent rules changing midstream."

He added the JFC hopes to meet with members of the economic cluster.

The Finance department could not be immediately reached for comment yesterday.

"The only way to enforce rulings is prospectively. Otherwise, long-term investors will all the more be scared. The aim for short-term gains that truly belong to the investors does augur well for a government that values and heralds good governance and good economics," the group said. -- Emilia Narni J. David