Filipino companies warn of job cuts, trade losses as BIR slaps 12% VAT on exports

Export-oriented Filipino companies urged the Bureau of Internal Revenue (BIR) to revoke a new rule that charges a 12% value-added tax on export products and transactions which were previously VAT-free.

In separate letters sent to the finance and trade departments and to the BIR, concerned parties have asked the government to repeal BIR Revenue Regulation 9-2021, issued in June. Under the new policy, raw materials, packaging supplies and services rendered or sold to export firms engaged in manufacturing, processing, packing or repacking are now subject to VAT after years of exemption. Also covered are the sale of services and lease of properties for companies that produce export goods.

"We kindly request the government not to change the game. We have not recovered from the economic impact of the pandemic," CONWEP executive director Maritess Jocson-Agoncillo said in a press briefing on Tuesday. Other business leaders warned that the new rule will scare new investors and take away thousands of jobs. Factories will likely resort to importing their supplies as it would still end up cheaper than the additional tax.


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