BIR VAT refund system working efficiently - tax experts

The Value Added Tax (VAT) refund system of the Bureau of Internal Review (BIR) is working efficiently with a success rate of 90 to 95 percent, according to tax experts.

This was disclosed by tax experts at the virtual webinar “Tax Talks: BIR Revenue Regulation 09-2021 VAT on Purchases by Philippine Economic Zone Authority Entities” following strong opposition by exporters on the decision by the government to start collection of the 12 percent VAT on PEZA exporters’s purchases from local suppliers and their constructive exports and indirect exports of goods and services.

According to Atty. Jules E. Riego, head of the Private Client Services and Business Tax Leader at Sycip, Gorres and Velayo (SGV) & Co., based on their experience they have seen 90-95 percent success rate in the VAT refund system.

Atty. Jules E. Riego, head of the Private Client Services and Business Tax Leader at Sycip, Gorres and Velayo (SGV) & Co. (Photo credit:

“To the BIR’s credit, we have been experiencing success in refund, 90 to 95 percent are actually getting processed within the 90-day period and probably additional a month or 2 to get the check payment or the actual checks,” said Riego.

But Riego said that BIR is really strict on the invoicing requirements.

The other concern though is that if the RR 09-2021 will be fully implemented and there will be additional 2,000 to 3,000 applicants for the refund process that might cause delays in the process. “Will the process be still as efficient considering those numbers,” he noted.

Atty. Cheryl Ong, tax partner at SyCip Gorres Velayo & Co., also agreed with Riego stating they have extreme experiences of up to 90-95 percent success rate of the BIR VAT refund system.

But Ong also cited of instances of denials because of poor documentation. So, she advised PEZA firms to Antonietestart disciplining their suppliers and to give correct invoices and receipts fully and completely

filled out because the BIR is very strict about it.

Despite strong opposition and calls from PEZA for repeal, the BIR is bent on implementing RR 9-2021.

However, PEZA Director General Charito B. Plaza, said that Finance Undersecretary Antonette C. Tionko assured her that BIR will be coming up with a Revenue Memorandum Circular. Industry officials however, said the RMC is meant only to enhance the VAT refund system, but not repeal or ament the RR 9-2021.

Based on the updated PEZA figures, the BIR will be in for a huge VAT collection from PEZA enterprises.

PEZA data showed that local purchases of goods and services by its registered exporters reached P286.25 billion in 2020, or 17.07 percent from the 2019 figure of P345.187 billion.

In addition, constructive and indirect exports of PEZA enterprises of goods and services reached P446 billion in 2020 or 121.76 percent higher or more than double the 2019 figure of P201.65 billion.