DAVAO CITY -- A party-list representative vowed support for banana growers that have cried foul over new rules that supposedly make it difficult for companies to claim value-added tax (VAT) refunds.
Trade Union Congress Party (TUCP) Rep. Raymond Democrito C. Mendoza said his office will also discuss the matter with the Department of Labor and Employment (DoLE) as delay in tax refunds may prompt banana growers to lay off workers.
Speaking before members and newly inducted officers of the Pilipino Banana Growers and Exporters Association, Inc. (PBGEA) and the Banana Export Industry Foundation (BEIF), Mr. Mendoza said that Revenue Memorandum Circular (RMC) 54-2014 is not just a “private industry issue alone.”
Unremitted VAT refunds “create momentum to retrench banana workers” and the Bureau of Internal Revenue’s (BIR) unfair confiscatory treatment dissuades banana growers from making additional investments, he said.
“Indeed it is a matter of perspective and just as in our campaign to counter the scaremongering against aerial spraying, what is necessary is for the industry and labor to come together to tell our story well,” the party-list representative said.
Earlier, it was reported that the new VAT refund regulations give the Commissioner of Internal Revenue to grant or deny a refund claim 120 days from the date of submission. If the tax chief fails to act within the given period, the claim is “deemed denied” and the taxpayer has 30 days to elevate its refund request before the Court of Tax Appeals (CTA). The circular likewise applies retroactively.
Failure to comply with the 120+30 day rule, the BIR said, means the denial has become “final and unappealable.”
As a general rule, the Supreme Court ruled Section 112 (C) of the tax code gives 120 days to the Commissioner of Internal Revenue to act on a refund request. If the tax chief fails to act within the given time period, a taxpayer is given 30 days to raise its tax claim before the CTA.
In September, business groups wrote a letter to BIR Commissioner Kim S. Jacinto-Henares and Finance Secretary Cesar V. Purisima that said RMC 54-2014 “effectively created new rules and interpretation” which gave taxpayers a hard time to recover VAT refunds owed by the government.
Similarly, banana growers have cried foul over the new VAT refund rules, saying that they have yet to recover from the impact of typhoon Pablo that devastated 25% of the country’s banana plantations in December 2012.
PBGEA President Alexander Valoria earlier said that a total of 14,000 hectares of banana plantations in Mindanao were devastated by typhoon Pablo, mostly in Compostela Valley, with an estimated damage cost of P7 billion.
About 10,000 hectares has already recovered, he added.
Mr. Valoria reiterated the call of stakeholders in the banana industry that there should be more support from government, especially to small banana growers.
Banana is the second biggest agricultural export product of the Philippines, next to coconut, and the country ranked second only to Ecuador as the world’s biggest exporter of bananas, based on data from the United Nations Food and Agriculture Organization. -- Maya M. Padillo and Mikhail Franz E. Flores, BusinessWorld
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