1.

120 DAYS REDUCED TO 90 DAYS

Comparing the old provisions of the Tax Code and the TRAIN law, the period
within which the BIR should decide on a VAT refund application was reduced
from 120 days to 90 days. This is a welcome development, as VAT refund
applications will now be processed at a faster pace.

In line with the reduced period, the BIR could consider revisiting the long list of
documentary requirements for applying for a VAT refund. An evaluation could
be made whether there are superfluous documentary requirements that may
be removed. This action of reducing requirements will definitely make the VAT
refund evaluation faster for the BIR.

2. NO MORE ‘DEEMED DENIAL’ RULE

The old rule included a “deemed denial” provision. This means that when no
decision is issued by the BIR within 120 days, the application is deemed
denied, and the taxpayer may seek relief with CTA within 30 days after the
BIR’s 120-day period to review the application. In other words, there is no
more need to wait for the BIR’s decision if the 120-day has lapsed, in order for
the taxpayer to go to court.

This is not the case under the TRAIN law. An appeal to the CTA may only
ripen after the taxpayer’s receipt of the BIR’s decision denying the claim for
VAT refund. Should the BIR find that granting a refund is not proper, the BIR
Commissioner must state in writing the legal and factual basis for such denial.
The receipt of the decision has become a necessary requirement before
judicial relief may be availed.

Hopefully, the taxpayers will get equitable resolutions from the BIR as fully and
categorically explained by the Bureau in the decisions it will make. There will
be no more “implied” decision of denying the taxpayer’s application.
3. PERSONAL ACCOUNTABILITY OF BIR OFFICERS
An interesting provision in the TRAIN law empowers the taxpayer to file a
criminal complaint against a BIR officer who deliberately fails to act on the
application for refund within the prescribed period. The imposition of criminal
liability is a heavy sanction for an erring BIR officer, in addition to the penalties
of perpetual disqualification to hold public office, to vote, and to participate in
any public election.

Many are hopeful that this personal accountability of BIR officers will make the
review process of VAT refund applications more efficient. Others say that the
addition of the above provision may be seen as a wake-up call. Some fear,
though, that there might be a risk that, because of the inclusion of criminal
liability provisions, the BIR could just render haphazard reviews and decisions
on VAT refund application just to get away with the imposition of the said
penalty.

It has been the sentiment of taxpayers that there is a lot to be improved in the
VAT refund process. The above changes under the TRAIN law could be a big
leap. In the days to come, the implementing rules and regulations of the
TRAIN law shall be released. We hope that the rules of VAT refund provide for
a more expedient and simple process equitable in every way.

We wish that the VAT refund application procedures are streamlined and the
list of requirements is significantly reduced. More important, the BIR must be
fair and reasonable in deciding every claim for refund. Taxpayers expect
nothing less than good regulations and proper implementation. This will
likewise help businesses achieve global competitiveness. By moving a
company’s assets from a mere paper asset to an asset which can be
reinvested, we are definite that its ultimate effect will trickle down from the
growth of businesses to the increase in government revenues.

The amended provisions discussed above are promising developments as

intended by legislators. It is not only the duty of the business to grow its
enterprise. The government also has a responsibility of making sure that
businesses thrive in the domestic and global market. Let’s start by unlocking
trapped assets and making them as useful as they were meant to be.