THE National Renewable Energy Board of the Department of Energy (DOE-NREB) is pushing for revenue regulation amid clamor that some renewable enery (RE) developers are not availing the mandated tax incentives.
NREB chairman Jose Layug Jr., who was in Bacolod City Monday, said they will work closely with the Bureau of Internal Revenue (BIR) to address the issues hounding the zero-rated tax provision among “green” firms.
Under the guidelines, all local purchases of equipment, goods, and services are subject to zero-rated value-added tax (VAT).
Purchases of imported products and services are not exempted from VAT, Layug said.
“The NREB, including me as the chairman, will talk to the BIR because the law is clear that they (RE firms) should be granted the zero-rated VAT for local purchases of goods and services,” he said, adding that “issues on input and output VAT can be resolved through revenue regulation with the BIR.”
Layug explained that hiring of engineers as consultants, for instance, is subject to zero-rated VAT. Thus, VAT should not be imposed on RE developers.
The National Internal Revenue Code provides the recovery of excess input VAT of tax payers.
Meaning, excess input VAT on zero-rated transactions could be applied for refund or tax credit.
During the public consultation on Green Energy Option Program at L’ Fisher Hotel in Bacolod City Monday, some industry stakeholders also expressed concerns that they cannot avail immediately tax refund for excess input VAT.
Layug said “the process really takes time” thus, the agency will also work on shortening the period of availing the refund.
“We have to make it more dynamic and responsive also to the requirements of our RE investors,” he added, reiterating that under the proposed Tax Reform Bill zero-rated VAT for locally purchased goods and services stays.