Export Groups Call on DOF to Repeal the 12% VAT Policy

The recent policy that charges exporters 12% value-added tax (VAT) when buying local supplies and services is currently being reviewed by the Department of Finance.

During Wednesday’s Financial Executives Institute of the Philippines (Finex) general meeting, Finance Secretary Carlos Dominguez III expressed that Revenue Regulation No. 9-2021 was still being reviewed. The regulation only took effect over the past month, and Dominguez did not necessarily state if the tax would be suspended.

However, Albay Rep. Joey Salceda said “the DOF agreed [Monday] to suspend RR 9-2021 pending new legislation that will correct the rule from the [Tax Reform for Acceleration and Inclusion Law or TRAIN Law].”

Salceda further explained that he had already held discussions with both the DOF and Bureau of Internal Revenue (BIR) over the weekend regarding the policy.

“We were supposed to have a hearing on Monday, but we deferred the briefing to Wednesday out of deference to [Dominguez], whose decision was to suspend the regulation first pending corrective legislation,” he added.

The 12% VAT policy for exporters was enabled under the TRAIN Law, the Duterte Administration’s first tax reform package. The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which is the second tax package, exempted exporters from the tax in question only to be brought back in the implementing rules and regulations.

Exporter groups that represent the affected companies have since urged for the withdrawal of the policy. Dominguez has affirmed that a review will be conducted within the month.

Source: Inquirer