Accessibility of Information on Taxpayers Between the Bureau of Internal Revenue and the Local Government Units for Tax Collection Purposes

September 6, 2007 DILG MEMORANDUM CIRCULAR NO. 115-07 TO : All Provincial Governors, City and Municipal Mayors, DILG Regional Directors and Others Concerned SUBJECT : Accessibility of Information on Taxpayers Between the Bureau of Internal Revenue and the Local Government Units for Tax Collection Purposes Executive Order No. 646 dated August 3, 2007 entitled, Accessibility of Information on Taxpayers Between the Bureau of Internal Revenue and the Local Government Units for Tax Collection Purposes ,mandates LGUs and the BIR to establish cooperation and coordination as one of the government near-term steps in the consolidation and technological integration efforts towards improving information and data collection and exchange, and thereby aid in tax enforcement and compliance. Section 2 of this Executive Order provides that, for purposes of ascertaining the correctness of any return, or in making a return when none has been made, or in determining the liability of any person of any internal revenue tax, or in collecting any such liability, or in evaluating tax compliance, the LGUs, upon proper request of the Commissioner of Internal Revenue or his duly authorized representative shall provide the BIR with any information such as, but not limited to, costs and volume of production, receipts or sales, and gross incomes of taxpayers. Reciprocally, the EO highlights Section 171 of the Local Government Code of 1991 and its implementing rules and regulations, providing for the accessibility of records of the revenue district office of the BIR to the local treasurer, his deputy or duly authorized representative for the purpose of ascertaining, assessing, and collecting the correct amount of local taxes, fees and charges. The Department of Finance shall prepare and issue the necessary guidelines for the effective implementation of this Executive Order, taking cognizance of Section 3 thereof, regarding the security of taxpayers information, which states as follows: Section 3. Utilization of Records/Information. The LGUs' access to records of, or information provided for by, BIR and vice versa shall be utilized for the aforementioned purposes only, and shall not be used for any other purpose, or disclosed to unauthorized persons. Relative thereto, local government units are hereby encouraged to establish proper coordination and cooperation with the BIR in data accessibility and in any other tax-related information systems, as provided for in the above-said Executive Order, taking into account its punitive provision that failure on the part of the BIR and LGUs to comply with the directives shall make them liable for administrative sanction pursuant to existing laws, rules and regulations. Likewise, DILG Regional Directors are hereby encouraged to support this effort through the widest dissemination of this Memorandum Circular, monitor compliance thereof, and provide assistance to the local government units, where necessary. (SGD.) RONALDO V. PUNO Secretary Department of Interior and Local Government