Japanese companies threatening to pull out due to VAT refund issues

Metro Manila (CNN Philippines, November 8) — Some Japanese companies are threatening to pull out from the Philippines because of tax refund issues, Senate President Juan Miguel Zubiri said on Wednesday.

During the plenary debates of the Senate for the proposed 2024 budget, Zubiri said this was an issue he discussed with Japanese Prime Minister Fumio Kishida when the foreign leader visited the country last week.

Zubiri said he promised Kishida that the government will fix the system of the Value-Added Tax (VAT) refund.

“Pero ang problema [The problem is] companies like Itochu, which run Dole Philippines — Dole in Bukidnon has about 15,000 employees — if Itochu pulls out of the country, what will happen to the Dole Philippines and 42,000 employees? Because they cannot get their VAT refund,” the senator said.

“We owe them billions of pesos already and they’ve already — there are threats they might move shop to other countries,” he added.

Sen. Sonny Angara, the budget bill sponsor, said the Bureau of Internal Revenue (BIR) is set to pay within 90 days.

But Angara said there are cases that have been filed already before the court.

“As long as the documents are complete, your honor, they will pay,” Angara said. “But in certain cases, I think, the documentation is not complete, that’s what the commissioner (Romeo D. Lumagui, Jr.) is telling us.”

Zubiri urged the BIR to address the issue as the government tries to ‘sell” the Philippines to investors.

Finance Secretary Benjamin Diokno earlier said he is backing the proposed amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act as this would bolster the Philippines’ position as an investment destination.

CNN Philippines correspondent Eimor Santos contributed to this report.