THE GOVERNMENT must push for stricter penalties against internal revenue officers who cause delays in value-added tax (VAT) refund claims, economists and tax experts said at the weekend.

Last week, Senator Sherwin T. Gatchalian filed a bill proposing to transfer the responsibility of processing VAT refunds to the Department of Finance (DoF) Revenue Operations Group from the Bureau of Internal Revenue (BIR) as companies give up on their claims due to delays.

“Transferring the tax refund mandate to the DoF is no assurance that this proposed new VAT refund body will not implement the same inefficiencies as the BIR, in the guise of ensuring maximum government revenues from business activities,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said in a Facebook Messenger chat.

“The Senate should look into stiffer penalties against BIR officials in the event of unreasonable delays in processing VAT refunds and other tax claims.” 

Even foreign companies and investors have been complaining about stalled VAT refund claims.

The American Chamber of Commerce of the Philippines, Inc. has said VAT refunds for jet fuel purchases take as long as five years to resolve.

Benedicta Du-Baladad, founding partner and chief executive officer of Du-Baldad Associates, a law firm that specializes in tax commercial and corporate services, said the BIR should ensure that the 90-day period allowing the taxpayer to challenge a tax assessment is strictly followed.

“Any grant of refund beyond the 90-day period should earn interest at the same rate as that imposed in delayed payment of the government,” she said in a Viber message.

“Likewise, any denial of claim that is without legal and factual basis as found out by the court later on should be a ground for an administrative case against the officers handling the case. That’s equity and fairness.”

Earlier, Senate President Juan Miguel F. Zubiri said Japanese companies had threatened to leave the Philippines after finding it difficult to secure timely VAT refunds.

Mr. Gatchalian’s bill also ensures businesses are entitle to a VAT zero-rating on local purchases, provided they operate at 70% capacity.

“Rather than transferring the mandate, we can also consider equipping BIR with the soft and hard skills and infrastructure to make this mandate possible for them,” John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., said in a Viber message, commenting on the Senate bill. — John Victor D. Ordoñez