Business & Economy

Groups dismayed over gov’t policy on incentives to foreign investors

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MANILA -- Business groups on Tuesday expressed dismay over the government’s inconsistent policy with regards to incentives given to foreign investors in the country.

 

In a statement, European Chamber of Commerce of the Philippines vice president for external affairs Henry Schumacher speaking on behalf of the Joint Foreign Chambers (JFC), said investors are having difficulty trying to refund the Value Added Tax they paid in advance during the import of capital equipment.

“While the Aquino administration is claiming that it will honor existing tax free incentives, the reality shows a different picture. Investors find themselves in court…to get the incentives promised by the government,” he said.

Schumacher noted discrepancies in the manner the executive and judiciary have dealt with the VAT refunds. He cited the case of San Roque Power Corp. (SRPC), which has P483.80 million in refunds pending after it started the operations of its $1.20-billion hydro-electric power plant in Pangasinan more than 10 years ago.

He said the San Roque case, while having similar cases in the past have different rulings.

“When studying the pending VAT refund case of San Roque Power Corporation (SRPC) before the Supreme Court and comparing that case with many others decided by the BIR (Bureau of Internal Revenue), Court of Tax Appeals (CTA) and the Supreme Court, then there is sufficient evidence that all three decided on the basis of different criteria, confusing the private sector and depriving some investors of the promised VAT refund,” he said.

“There should be equal protection under the law.  San Roque Power Corp. is just the tip of the iceberg.  There are a lot of companies out there with pending VAT refund claims,” Schumacher said.

San Roque sought filed a motion with the Supreme Court to clarify its ruling.

“The Supreme Court has the chance now to finally come up with a coherent, conclusive, definite decision…That is precisely the reason why San Roque Power Corporation filed a second Motion for Reconsideration to provide the lower courts and the investors with a clear guidance on tax incentives. The business community would more than welcome for such a clear guidance.” Schumacher said.

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