Tax expert defends refund reliability

Is it true that many businesses are complaining about slow processing of tax refunds?

This has been popularised by the media. The GDT [General Department of Tax] established and sent inspection groups to local tax departments to support their operations and uncover any violations of tax code.

For businesses, tax refunds should be simple. They need to complete and file their refund documents directly with tax organisations and the remaining procedures will be handled by relevant tax bodies. If firms meet the required conditions, they will get refunds as per existing regulations.

The revised tax law set out to reform taxation and refunds but firms complain of continuing problems. Why is that?

On the first of July the law took effect and businesses that have solid tax performance are eligible to receive their refunds first. The set time for businesses to receive their refunds are six days after the date they submit their complete documents.

In other cases, for example a business applying for a tax refund for the first time, taxes not paid via banks, or businesses that were guilty of tax evasion and/or fraud, tax authorities check more closely before disbursing refunds and even in these cases the deadline is 40 days after receiving records.

The law also stipulates that late refunds at the fault of tax bodies are subject to a 0.05 per cent per day interest rate for the first 90 days and 0.07 per cent after that and tax bodies need to pay that amount to firms.

But firms keep claiming procedures are overly complex and that they are receiving their refunds late. Why?

I want to be clear. Companies that feel they are being treated unfairly can and should report their problems to the tax authority in their business locality. If they are not satisfied with the response, they can alert the GDT.

These claims should provide reasonable evidence for resolution of the case and may also include proposed amendments to tax regulations businesses feel are problematic.