BIR says tax refund backlog hits P24 billion

THE BACKLOG of tax refund claims hit P24 billion at the end of July, the Bureau of Internal Revenue (BIR) said.

During a hearing of the Senate committee on Finance, the BIR said pending and unpaid tax refund claims by businesses reached P24.42 billion, representing over 4,500 separate claims.

Claims for refunds on value- added tax ( VAT) and income tax accounted for P9.62 billion and P9.12 billion, respectively.

BIR Commissioner Caesar R. Dulay said the VAT refund total covers claims made over the past two years.

Under its budget, the BIR has proposed funding to cover about a third of the backlog.

“We have budgeted P8.5 billion for tax refunds,” Mr. Dulay said during the hearing.

Sen. Loren B. Legarda, chair of the Committee on Finance, said that the BIR should submit a budget that would allow for clearing the backlog by 2019.

“Put it in your budget proposal in 2019, so that the BIR can have a clean slate by 2019, and we will approve it,” she said.

“I’m looking at it from the private sector perspective that they need these funds badly, especially small and medium enterprises,” added Ms. Legarda.

Mr. Dulay meanwhile said the proposed tax reform legislation may make a full refund possible by then because of the removal of certain VAT exemptions, while simplifying the tax system.

“We hope with the passage of the tax reform, maybe the claims for refunds would be reduced,” Mr. Dulay said.

The Finance committee is also considering the Department of Finance’s (DoF) budget for 2018.

The DoF is seeking a P19.73 billion budget, down from P21.30 billion appropriated in 2017, when spending items included the renovation of its headquarters.

The House of Representatives approved the 2018 General Appropriations Bill on second reading last week, after it was certified as urgent by President Rodrigo R. Duterte that day. —