MANILA, Philippines - The European Chamber of Commerce of the Philippines (ECCP) aims to complete by next week its proposed legislation for the set-up of an Office for Investor Facilitation and Protection.
“We are in the final stage of drafting the bill. I expect that we will be ready to submit the draft bill to both houses of Congress at the end of next week,†ECCP vice president for external affairs Henry Schumacher said in a text message.
The Office for Investor Facilitation and Protection would have a cabinet level official investors could turn to for their concerns with government bureaucracy, particularly when there is a change in the rules in the middle of the game.
Schumacher said the ECCP is pushing for the creation of the Office for Investor Facilitation and Protection, citing the case of San Roque Power Corp. (SRPC) which was promised by the government incentives for their investments made here but has not received what is due.
In the late 1990s, SRPC which is jointly owned by Marubeni Corp. and Kansai Power International Corp. was invited by government to invest in a hydro power plant and was provided with the incentive that all capital goods could be imported without duty and tax.
As SRPC was offered incentives, it brought in the equipment in the early 2000s and paid the value-added taxes (VAT) on its imports in advance, with the promise that it would be refunded once all documents are provided to the Bureau of Internal Revenue (BIR).
In February of last year, the Supreme Court ruled, however, that SRPC is not eligible to claim the VAT refund amounting to P483.80 million based on technicalities.
The High Court said the firm lost its right for refund as it filed the claims with the Court of Tax Appeals before the BIR gave its decision on the tax refund.
“The refund of VAT is so complicated that 10 years after your investment and after treats of court cases, you are denied the
refund,†Schumacher said, adding that investors are now more confused with the rules.
He also cited the more than 120 permits firms have to secure to get their base load power generation plant projects going is another concern for investors which the Office for Investor Facilitation and Protection could help address.
In the past, the Department of Trade and Industry (DTI) had an ‘Ombudsman for Investors’, who really fought for investors and focused on complaints against officials who are perceived to be hindering investment activities.
This, however, lasted only for a few years and was never replaced.
As the ECCP is still finalizing its draft bill, it welcomed the decision of the Office of the Ombudsman to put in place an Investment Ombudsman (IO) Team, a move seen to address corruption in the country.
The ECCP met with the Office of the Ombudsman earlier this month to discuss the conceptual framework for the IO Team.
The IO Team, which would be in place by June 1, would work in partnership with the DTI, Board of Investments and business community.
In particular, the IO Team would act on grievances involving delays committed by any of the Investment Promotion Unit agencies in the delivery of frontline services relating to the establishment or conduct of business; complaints in relation to solicitation, demand or request by a government official in exchange for issuance of licenses or permits and release of shipments; complaints on issuance of license or permits to a person not entitled to such; and delays or refusal to comply with directive of the Investment Ombudsman following grievance
proceedings.