AUGUST 22, 2011

NR # 2503D

House to scrutinize P6 billion tax refund of BOC to companies next year

A lawmaker today urged the House of Representatives to scrutinize the list of companies covered by tax refunds of the Bureau of Customs (BOC) amounting to almost P6 billion for next year. Rep. Elpidio Barzaga (Lone District, Dasmarias City) raised his concern during the budget hearing of the BOC presided by Rep. Isidoro Ungab (3rd District, Davao City), a Vice Chairman of the Committee on Appropriations. Barzaga asked Customs Commissioner Angelito Alvarez, who defended his budget before the House panel, to submit the list of specific companies covered by the BOC tax refunds for next year totaling P5,976,414,000. Barzaga said Congress will find out if these companies are entitled to tax refund considering that no case has been lodged by these entities against the government asking for tax refund. We want to see the list of entities and the amount for which they are entitled so we can be reasonable in our assessment of the almost P6 billion tax refund, because when we speak of tax refund, it presupposes there is already a liability on the part of the government to refund. We want also to determine if they are entitled to the refund since no case has been filed by the taxpayers asking for a tax refund, said Barzaga. Barzaga said based on the statements of Alvarez during the budget hearing, there has been no final judgment in so far as the Court of Tax Appeals is concerned ordering the payment of tax refunds. In other words, there is no court litigation, and much more there is no final judgment, Barzaga said. Barzaga said if there had been overpayment of taxes, it only showed that BOC personnel were remiss in the performance of their duties. They are demanding something which the government is not entitled to, and for this, the government has to pay P6 billion. I have been attending committee hearings and this is the first time that I came across that P6 billion has to be refunded by the government, Barzaga said. Alvarez explained there are cases with the BOC involving overpayment of duties and taxes by importers.

There are also cases where because of error on the part of importers, double payments are being made. Normally, the matter does not reach the Court of Appeals, Alvarez said. Tax credits are being used as payments for these excess payments, but this time around the intention of the government is that they will no longer be issued Tax Credit Certificates as they will now be cash issuances to the companies, said Alvarez. Alvarez said he has encountered a number of requests from importers about double payments and overpayments. The bulk of these come from the oil companies because in the case of oil companies they are no longer being subjected to duty payments but are now being required to pay the value added tax upon importation. For the year 2010, Alvarez said some of the importers given Tax Credit Certificates were Lepanto Consolidated Mining, Petron Corporation, Philex Mining, among others. Petron was able to get a TCC amounting to close to P8 billion according to Alvarez. Alvarez promised to furnish the House Committee on Appropriations a list of the companies covered by the P6 billion-tax refund for 2012, and the amount they are entitled to. The BOC has a proposed budget of P2.5 billion for next year, which is much higher from its present budget of P1.7 billion. A special provisions section of the BOC proposed budget which pertains to tax refunds provides that an amount of P5,976,414,000 shall be used for the refund of input value-added tax (VAT) on importations attributable to zero-rated transactions pursuant to Section 112 of R.A. No. 8424, as amended, which shall be deemed automatically appropriated and charged against the current years collection, subject to audit by the COA. (30) rbb