Introduce best practices in VAT refund processing to exporters by (i) clearing the stock of late refund claims, while meeting the statutory 90-day processing deadline for all claims filed in 2009; (ii) implementing risk-management approaches;4 (iii) implementing a forecasting system to anticipate refund levels so that funds are available to pay legitimate refund claims as they occur; and (iv) submitting legislation to parliament to strengthen penalties for false refund claims and pay interest on legitimate refunds not paid on time (interest will apply only to new claims filed after December 31, 2009).
Rationale: denied refunds are a tax on exports, and more broadly, undermine the integrity of the VAT and discourage tax compliance. This step is a key element of improving revenue performance.