Senate President Juan Miguel "Migz" Zubiri told the Bureau of Internal Revenue (BIR) to settle the issue regarding delays in refunds on the value-added tax which may prompt foreign investors to pull the plug and move shop to other countries.

Zubiri raised the issue during the first day of the plenary debates on the proposed P5.768-trillion national budget for 2024 after he spoke with an official from the Japanese delegation when Japanese Prime Minister Kishida Fumio. 

He explained that under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, if for example, a foreign investor produces bananas locally and buys local boxes that will be used for export, they have to pay the VAT when they buy the boxes which is supposed to be refunded once it is exported.

"Ang problema, hindi nagba-VAT refund ang gobyerno natin (The problem is, our government is not making VAT refunds) and we owe them billions of pesos already and they've already, there are threats that they might move shop to other countries," Zubiri added.

Senate Committee on Finance chief Senator Juan Edgardo “Sonny” Angara said that as per Finance Secretary Benjamin Diokno, BIR has 90 days to pay and that the agency said they will pay it.

Yet according to the BIR Commissioner Romeo Lumagui, Jr., there are some instances where it's already in the court. 

"So in that case, they have to wait for the final decision for those in the courts. But for those that are due and demandable, they have 90 days to pay that they promise to pay by the end of the year," Angara said.

"As long as the documents are complete, your honor, they will pay, but in certain cases, I think the documentation is not complete, your honor. That's what the commissioner is telling us," he added.

Zubiri recalled that the BIR's policy, although he was unsure if it was the past administration or the current one, was "take us to court.”

"Imagine telling a billion-dollar investor, take us to court...So now these poor Japanese companies we're hiring thousands of people in our country are suffering because they have court cases, and they would rather settle out of court," he added.

He urged Lumagui to work on the issue, stating that such a policy is a "black eye.” He also hopes that the Court of Tax Appeals can act on this quickly so that a settlement can be made.

"We're trying to sell the country to investors. But this is a recurring theme. Each and every country will discuss this because the Japanese Chamber of Commerce is a foreign chamber and is very influential," he said.

Zubiri said he will be going with the President to attend the ASEAN-Japan Friendship Summit in December to confirm that they will be amending the CREATE Law. He mentioned that they turn it to CREATE MORE and will zero in particularly on VAT refunds by removing it.