Rules, Guidelines, and Procedures Implementing the Tax Expenditure Subsidy Section under the General Provisions of the Annual General Appropriations Act

January 8, 2024 DEPARTMENT OF FINANCE DEPARTMENT OF BUDGET AND MANAGEMENT JOINT CIRCULAR NO. 001-2024 FOR : The Chief Justice and the Judiciary; The Senate President; The Speaker of the House; The Chairperson of Constitutional Commissions; All Heads of Departments, Bureaus, Offices, and Other Commissions; Heads of All Other National Government Agencies, Including Their Regional Offices; Heads of State Universities and Colleges, Schools, Hospitals, and Sanitaria; Heads of Government-Owned and/or -Corporations Including Government Financial Institutions and Other Government Instrumentalities; and All Others Concerned SUBJECT : Rules, Guidelines, and Procedures Implementing the Tax Expenditure Subsidy Section under the General Provisions of the Annual General Appropriations Act 1. PURPOSE This Joint Circular is issued to prescribe the rules, guidelines, and procedures relative to the implementation of the tax expenditure subsidy as provided under the General Provision on "National Internal Revenue Taxes and Import Duties" of the annual General Appropriations Act (GAA). TIADCc 2. DEFINITION OF TERMS For purposes of this Joint Circular, the following terms used herein shall be construed to mean as follows: 2.1 CERTIFICATE OF ENTITLEMENT TO SUBSIDY (CES) shall refer to a document issued by the Fiscal Incentives Review Board (FIRB) certifying the amount of subsidy granted in favor of qualified grantees. 2.2 CUSTOMS DUTIES shall refer to any levy on imported goods under Republic Act (R.A.) No. 10863 or the Customs Modernization and Tariff Act (CMTA), excluding interests, surcharges, and penalties. 2.3 GOVERNMENT-OWNED AND/OR -CONTROLLED CORPORATIONS (GOCCs) shall refer to any government agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock: Provided, That GOCCs may be further categorized by the Governance Commission for GOCCs, Department of Budget and Management (DBM), the Civil Service Commission, and the Commission on Audit (COA) for purposes of the exercise and discharge of their respective powers, functions and responsibilities with respect to such corporations. For purposes of this Circular, the term GOCCs shall also refer to any of the following specialty hospitals: the Philippine Heart Center; the National Kidney and Transplant Institute; the Philippine Children's Medical Center; and the Lung Center of the Philippines. cSEDTC 2.4 GRANTEE shall refer to the concerned GOCCs, Armed Forces of the Philippines Commissary and Exchange Service (AFPCES), Philippine National Police Service Store System (PNPSSS), PX Marts, including those national government agencies (NGAs), state universities and colleges (SUCs), and government instrumentalities (GIs) whose value-added tax (VAT) exemption has been repealed by R.A. No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law, and other qualified government agencies as may be determined by the FIRB, whose tax subsidy has been approved pursuant to Executive Order (E.O.) No. 93, s. 1986, as amended, R.A. No. 11534, and other pertinent laws, rules, and regulations, in accordance with the annual GAA. 2.5 GRANTS/DONATIONS shall refer to assistance, in cash or in kind, received from foreign governments, international and local agencies or organizations, private entities or individuals, covered by grant agreements, Memoranda of Understanding, Exchange of Notes/Deeds of Donation or similar documents between the donor-entity and the donee-government unit to finance specific projects or procurement of goods without any obligation on the part of the recipient to pay. 2.6 IMPORTATIONS shall refer to the bringing into the Philippine territory of goods or commodities in any form acquired from any foreign country by an NGA and GOCC out of its appropriation or financed by a grant, donation, and/or loan. It is understood that the term does not include services performed relative to the grant, donation, and/or loan. 2.7 LOAN shall refer to funds, whether in cash or in kind, received from foreign governments, international and local agencies, private entities, or individuals covered by a loan agreement to finance specific projects or procurement of goods, which must be repaid with interest over a prescribed period. 2.8 NATIONAL GOVERNMENT AGENCIES (NGAs) shall refer to the Judiciary, the Senate and the House of Representatives, Constitutional Commissions, departments, bureaus, offices, other commissions, and all other agencies of the national government, including SUCs, schools, hospitals (except specialty hospitals as defined in Section 2.3) and sanitaria. AIDSTE 2.9 NATIONAL INTERNAL REVENUE TAXES shall refer to any form of imposition to which taxpayers are legally and directly liable to pay under the National Internal Revenue Code (NIRC) of 1997, as amended, but shall not include the following: (a) Regular income tax liabilities, unless otherwise approved by the FIRB; (b) Withholding tax liabilities, unless the payment is covered by an/a: (1) exchange of notes between the Philippine government and its foreign counterpart; (2) Executive Order; or (3) Special Presidential Authority; and (c) Interests, surcharges, and penalties. 2.10 NON-PERFORMING ASSETS shall refer to: (a) assets transferred to the Privatization Council for re-development or disposition, or (b) assets transferred to the National Government through the Bureau of the Treasury (BTr), which were intended for future disposition or use that are not generating sufficient revenue or value for the National Government, such that the revenue for selling the same outweighs the cost of maintaining the asset; 2.11 REVENUE COLLECTING AGENCY (RCA) shall refer to either the Bureau of Internal Revenue (BIR) or the Bureau of Customs (BOC). 2.12 STATEMENT OF ACCOUNT (SOA) shall refer to the document issued by the BIR and/or BOC certifying the amount of taxes and customs duties due from the concerned grantees. 2.13 TAX COMPLIANCE CERTIFICATE (TCC)/TAX SUBSIDY AVAILMENT CERTIFICATE (TSAC) shall refer to the document certifying the amount of taxes and duties paid by the concerned grantees to the BIR and/or BOC. 2.14 TAX OBLIGATIONS ASSUMED BY THE NATIONAL GOVERNMENT PURSUANT TO A VALID PUBLIC-PRIVATE PARTNERSHIP (PPP) AGREEMENT shall refer only to national internal revenue taxes and/or duties payable to the BIR and/or BOC. 2.15 WITHHOLDING TAXES shall refer to taxes deducted and withheld at source by the buyer/payor from the payments made to the seller/payee, which shall be remitted by the buyer/payor directly to the BIR. SDAaTC 3. COVERAGE 3.1 This Joint Circular covers the application for processing and approval of tax expenditure subsidies pursuant to the section on "National Internal Revenue Taxes and Import Duties" of the General Provisions of the annual GAA on the following: (a) National internal revenue taxes and import duties payable or assumed by departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs to the Government arising from foreign donations, grants, and loans; (b) Non-cash tax transactions of the following agencies: (i) BTr for documentary stamp taxes on the issuance of foreign and domestic securities, and foreign currency acquisition for payment of debt service; (ii) Department of National Defense (DND) and PNP importations of military hardware, software, munitions, arms and equipment; (iii) Bureau of Fire Protection (BFP) on importations of fire-fighting equipment, rescue equipment, and personal protective gears; (iv) Department of Transportation (DOTr) for the Metro Rail Transit Line 3 System incurred starting FY 1997 in accordance with the provisions of the Build-Lease-Transfer Agreement executed thereon; (v) Philippine Coast Guard (PCG) and National Coast Watch Center (NCWC) of the Office of the President (OP) of the Philippines on importations, grants, and donations of hardware, software, munitions, arms, and equipment for maritime security and law enforcement, marine environmental protection, maritime safety, maritime communications, maritime domain awareness and search and rescue; (vi) special hospitals, specialty hospitals, Department of Health-retained hospitals and SUC hospitals on importation of health equipment; and (vii) other tax obligations assumed by the National Government pursuant to a valid PPP agreement; and (c) Subsidies approved by the FIRB, which include, among others, VAT obligations of GOCCs, SUCs, and other GIs whose VAT exemption have been repealed under R.A. No. 10963, the AFPCES, the PNPSSS, and the PX Marts, in accordance with E.O. No. 93, s. 1986, as amended, R.A. No. 11534, and other pertinent laws, rules, and regulations issued thereon. 3.2 For importations explicitly enumerated in Section 3.1, only those which are made in pursuance of the functions and programs of the concerned government entities, and in the case of regulated importations, only those which are duly authorized by the Bangko Sentral ng Pilipinas (BSP) , the Department of Trade and Industry (DTI) and/or other government entities empowered to regulate said importations are covered by this Circular. AaCTcI 4. GENERAL GUIDELINES 4.1 All NGAs shall be liable to all forms of national internal revenue taxes and customs duties arising out of transactions subject to assessment by the BIR and/or BOC, pursuant to the provisions of Department of Budget and Management-Department of Finance Joint Circular No. 7-2012. 4.2 NGAs, GOCCs, SUCs, and other GIs entitled to tax expenditure subsidy, shall not be required to pay in cash or in kind their obligations for national internal revenue taxes and customs duties covered by this Joint Circular. All other government entities not entitled to tax expenditure subsidy shall pay the amount due in cash to the RCA chargeable against their own funds. The imported goods subject to taxes and customs duties shall not be released unless the taxes and customs duties due thereon have been paid. 4.3 Application for tax subsidy shall not cover the payment of prior years' tax obligations. For this purpose, a tax obligation shall be considered as prior years' tax liability if it became due and demandable for payment in the years preceding the current GAA, as follows: A. Customs duties and taxes shall be due and demandable on the effective date of importation or the withdrawal from the warehouse for consumption, whichever comes later, in accordance with the provision of R.A. No. 10863 or the CMTA. B. VAT liabilities shall be due and demandable on the 25th day following the close of each taxable quarter in accordance with Section 114 of the NIRC of 1997, as amended by the TRAIN Law. C. Excise tax liabilities shall be due and demandable upon removal of the excisable product, or before the release of imported goods from customs custody. D. Capital gains tax shall be due and demandable on the 30th day after the date of the sale, exchange, or disposition of real property. E. All other taxes shall be considered due and demandable in accordance with the provisions of the NIRC of 1997, as amended, and the CMTA. 4.3.1 Notwithstanding the foregoing, the tax liabilities arising from the following may be considered as current year's tax obligation and qualify for tax subsidy upon evaluation by the FIRB: acEHCD A. Final decision on disputed assessment (FDDA) issued by the BIR within the year, provided, that an appeal has not been taken thereon by the aggrieved party; Provided further, that the re-issuance of an FDDA shall not qualify the tax deficiencies as current year tax obligation; and final decisions of the Court of Tax Appeals or the Supreme Court enforced by a corresponding writ of execution issued within the year; B. Acquisition, reconveyance, and disposition of the following assets (even still under the name of private individual or entity) by the national government: i. Nonperforming assets as defined under 2.10 hereof; ii. Coco levy assets as defined under R.A. No. 11524 and its implementing rules and regulations (IRR); and iii. Property dividends to the National Government as provided under R.A. No. 7656 (the "Dividend Law") and its IRR, without prejudice to the obligation of the GOCC under Section 4 of the dividend law IRR; Provided, that the concerned GOCC has shown evidence to the satisfaction of the FIRB of its financial inability to pay any past tax liabilities limited to capital gains tax and documentary stamp tax relating to the GOCC's acquisition of the said property declared as dividend to the National Government; Provided further, that any property dividends declared on or before the dividend year 2018, the concerned GOCC is not required to show its financial inability as condition for its application for tax subsidy; iv. All other assets assigned, donated, conveyed, forfeited, and transferred to the national government and endorsed to the Privatization and Management Office by the BTr, which may include, but is not limited to, those received from former Central Bank Board of Liquidators, BSP , Al Amanah Bank, Philippine Deposit Insurance Corporation, Anti-Money Laundering Council, Office of the Ombudsman, and the Sandiganbayan. C. Transactions under 3.1 (a) and (b) of this Joint Circular. D. Tax liabilities that became due and demandable from October 16 to December 31 of the current year, provided that the same is applied during the 1st quarter of the immediately following year. 4.4 The BIR and the BOC shall include in their monthly reports of actual income, the internal revenue taxes and customs duties paid out of tax expenditure subsidy based on the Special Allotment Release Orders (SARO) issued by the DBM, pursuant to the pertinent provisions of the Annual GAA. The Cash Operations Report (COR) of the BTr shall henceforth reflect the taxes and duties paid out of the SARO of the DBM under revenues with an equivalent amount recorded under disbursements. EcTCAD 4.5 All importations done through grants or donations shall be supported by a Deed of Donation from the donor entity to be coursed through and authenticated by the Philippine Embassy/Consulate of the donor's country, and a Deed of Acceptance from the recipient agency. In the instance that authentication by the Philippine Embassy/Consulate in the donor's country cannot be secured for safety reasons, the notarized Deed of Acceptance of the recipient agency shall be sufficient. 4.6 The deadline for submission of agency requests for tax subsidies shall be in accordance with the deadline set in the fund release system guidelines for a calendar year. 5. SPECIFIC PROCEDURAL GUIDELINES 5.1 Application for Approval and Processing of Tax Expenditure Subsidy. (See Annex "A" for the process flow) 5.1.1 For importations of NGAs, including Constitutional Offices enjoying fiscal autonomy, and SUCs arising from foreign donations, grants, and loans. 5.1.1.1 At least ten (10) working days prior to the arrival of the non-commercially imported goods, the importing agency (IA) shall submit to the BOC-Collection Service the original copy of the Certification of Official Importation. This shall be supported by the authenticated copy of the Bill of Lading (B/L) or Airway Bill (AWB), Parcel Notice, Other Shipping Documents; Packing List, Commercial Invoice, Inventory List; Memorandum of Undertaking; SOA; Deed of Donation and Acceptance (in case of donations); Memorandum of Agreement (in case of loans or grants); Indorsement from the Department of Finance (DOF), if applicable; Clearance from the Presidential Management Staff (PMS) under the OP pursuant to Presidential Memorandum Order No. 36, s. 1992 [in case of donations to the Department of Social Welfare and Development (DSWD)]; Certification of the DTI that the imported articles are not locally available; Clearance from other Government Agencies that may be applicable; and other documentation that may be required by the BOC establishing the authority for and the authenticity of the importation. 5.1.1.2 Upon the arrival of the shipment, the IA shall secure an Authority to Release Imported Goods (ATRIG) for VAT and excise tax purposes from the BIR, if applicable, and upon completion of other documentary requirements by the IA [ e.g. , Commercial Invoice; Consular Invoice; B/L or AWB; Packing List; Import Entry & Internal Revenue Declaration; Copies of Certificates for Registration in the appropriate Revenue District Office (RDO), if the importer/broker is applying for ATRIG for the first time; Duly notarized Certificate of Undertaking (for automobiles, feed ingredients, petroleum additives, etc.); and other documents that may be required to substantiate the application for ATRIG ( e.g. , Certification from Bureau of Animal Industry, Fertilizer and Pesticides Authority, Food and Drug Authority, etc.)], the BOC-Collection Service shall cause the release of the imported goods. SDHTEC 5.1.1.3 The RCA shall issue the SOA/Assessment Notice to the IA, upon release of the goods in four (4) copies to be distributed as follows: Original and Quadruplicate IA Duplicate RCA (Collection Service) Triplicate RCA, file copy with entry 5.1.1.4 Within ten (10) working days after the end of each quarter, the IA shall prepare a Quarterly Report of Taxes and Duties Availments (QRTDA), based on the SOAs/Assessment Notices issued by RCAs, in three (3) copies to be distributed as follows: Original and Triplicate DBM Budget Operations Bureau Duplicate RCA 5.1.1.5 Upon completion of the QRTDA, the IA shall submit to the DBM within fifteen (15) days the request for the issuance of SARO supported by the original and triplicate copies of the QRTDA and the compilation of original copies of SOA/Assessment Notice issued by the BIR or BOC. 5.1.1.6 The SARO that the DBM will issue shall serve as the basis for recording both the obligation and liquidation of the tax expenditure. The amount of the SARO shall correspond to the verified amount indicated in the QRTDA. The DBM shall accomplish the appropriate portion of the QRTDA indicating the SARO number and date thereof. Upon receipt of the SARO, the IA shall forward a copy of the same to the BOC or BIR. 5.1.1.7 The IA, based on the DBM SARO, shall prepare the Journal Voucher (JV) to liquidate the obligation within ten (10) working days, copy furnished the BTr-National Cash Accounting Division (NCAD). HSAcaE 5.1.1.8 Within ten (10) working days upon receipt of a copy of the agency JV, the BTr-NCAD shall issue a JV debiting the IA account and crediting the RCA account. 5.1.1.9 Upon receipt of the NCAD JV, the RCA Chief Accountant shall record the income in the RCA's books. 5.1.2 For certain importations by the DND, PNP, and the BFP 5.1.2.1 In case of importations of military hardware, software, munitions, arms, and equipment by the DND and PNP, and in case of importations of firefighting equipment, rescue equipment, and personal protective gears by the BFP, the procedures set forth in Section 5.1.1 of this Joint Circular shall apply. 5.1.3 For issuance of foreign and domestic securities, and foreign currency acquisition for payment of debt service by the BTr 5.1.3.1 On the liability of the BTr for documentary stamp taxes on foreign and domestic securities issued by it, the following procedures shall be observed, subject to the submission by the BTr of pertinent documents relative thereto as may be required: 5.1.3.1.1 At the end of every month, the BTr shall submit to the DBM its request for the issuance of SARO pertaining to its documentary stamp taxes on foreign and domestic securities issued by it and supported by the monthly summary of government securities issued. 5.1.3.1.2 The SARO that the DBM will issue shall serve as the basis for recording both the obligation and liquidation of the expenditure. The amount of the SARO shall correspond to the verified amount of documentary stamp taxes indicated in the government securities issuance report. The BTr, upon receipt of the SARO, shall forward a copy of the same to the BIR. 5.1.3.1.3 The BTr, based on the DBM SARO, shall prepare the JV to liquidate the obligation within ten (10) working days, copy furnished its National Government Debt Accounting Division (NGDAD). 5.1.3.1.4 The NGDAD, in turn, shall issue a JV debiting the BTR's account and crediting the RCA account. 5.1.3.1.5 Upon receipt of the NGDAD JV, the RCA Chief Accountant shall record the income in the RCA's books. AScHCD 5.1.4 For certain transactions of the DOTr 5.1.4.1 On customs duties and national internal revenue taxes payable by the DOTr for the Metro Rail Transit Line 3 System, incurred starting FY 1997 in accordance with the provisions of the Build-Lease-Transfer Agreement executed thereon, the procedures set forth in Section 5.1.1 of this Joint Circular as may be deemed applicable shall be observed. 5.1.5 For certain transactions of the PCG and NCWC 5.1.5.1 On customs duties and national internal revenue taxes payable by the PCG and NCWC, the procedures set forth in Section 5.1.1 of this Joint Circular as may be deemed applicable shall be observed. 5.1.6 For certain transactions of the National Government 5.1.6.1 On customs duties and national internal revenue taxes assumed by the National Government pursuant to a valid PPP agreement, the procedures set forth in Section 5.1.1 of this Joint Circular as may be deemed applicable shall be observed. 5.2 For those other transactions qualified under the Section on the "National Internal Revenue Tax and Import Duties" of the General Provisions of the GAA, which includes the AFPCES, the PNPSSS, and the PX Marts, in accordance with E.O. No. 93, s. 1986, as amended, R.A. No. 11534, and other pertinent laws, rules, and regulations. (See Annexes "B.1" and "B.2" for the process flow) 5.2.1 Application for tax expenditure subsidies shall be filed with the FIRB together with the following documents, as may be applicable: (a) Letter-request signed by the head of the office or any authorized official; (b) Endorsement from the department/office to which the applicant is attached, if applicable; (c) Backgrounder of the applicant (for first-time applicants); (d) Details of tax subsidy requirements (by type of taxes and duties and corresponding amount), including SOAs/billings, Single Administrative Document, AWB, B/L, Certification of Official Importation, or any of its equivalent from the concerned RCA; (e) Detailed list of importation/purchases and their classification (whether these are for regular operations or project-related); HESIcT (f) Justification of the application; (g) Latest annual performance/accomplishment report; (h) Notarized certification that items for which tax subsidy is sought shall be used exclusively in the pursuit of mandated functions or a specified project; (i) Notarized statement under oath of investment/s and income therefrom; (j) Financial evaluation from the Privatization and Corporate Affairs Group (PCAG) of the DOF for PCAG-Monitored GOCCs or audited financial statements for other GOCCs/Commissaries, if applicable; and (k) Such other documents as may be warranted. The evaluation of the application for tax subsidy shall be made within twelve (12) working days from receipt of the complete documentation requirements. 5.2.2 In case of an importation, at least ten (10) working days prior to its arrival, the applicant shall submit to the BOC-Collection Service the original copy of the Certification of Official Importation. This shall be supported by the authenticated copy of the B/L or AWB, Parcel Notice, Other Shipping Documents; Packing List, Commercial Invoice, Inventory List; Memorandum of Undertaking; SOA; Deed of Donation and Acceptance (in case of donations); Memorandum of Agreement (in case of loans or grants); Indorsement from the DOF, if applicable; Certification of the DTI that the imported articles are not locally available; Clearance from other Government Agencies and other documentations that may be required by the BOC establishing the authority for and the authenticity of the importation, including an undertaking that the applicant has a pending tax subsidy application with the FIRB and in case of non-approval of its application, that it will be the one to assume payment of taxes and duties due on the importation. Upon the arrival of the shipment, the applicant shall secure an ATRIG for VAT and excise tax purposes from the BIR, if applicable, and upon completion of other documentary requirements by the applicant, the BOC-Collection Service shall cause the release of the imported goods. 5.2.3 If the application is approved, the applicant receives a FIRB Resolution and/or CES, as may be applicable. Provided, that, the CES shall only be issued to the applicant if the application includes SOAs or billings, Single Administrative Document, AWB, B/L, Certification of Official Importation, or any equivalent document issued by the concerned RCA that contains a summary of approved invoices/billings. The CES issued by the FIRB shall be valid and effective until December 15 of the current year, and in some special cases, as warranted, the validity may be extended to December 31 of the current year. Provided, however, that filing of request/application for the issuance of FIRB Resolution and CES shall not be later than October 15 of the current year. Applications filed beyond the deadline will be processed in the immediately succeeding year, subject to the provisions of Section 4.3.1 (D). If the application is not approved, the applicant will be correspondingly notified in writing by the FIRB. AcICHD 5.2.4 After the FIRB issues a CES, and copies thereof have been distributed, the RCA Collection Unit, based on the CES, shall prepare within five (5) working days the TSAC/SOAs for customs duties and taxes payable in five (5) copies to be distributed as follows: Original and Quadruplicate Grantee Duplicate RCA (Collection Service-Revenue Accounting Division) Triplicate RCA (RDO/Issuing Office's copy) Quintuplicate RCA, for transmittal to DOF, when completely utilized For excise tax purposes, the applicant shall submit to the RCA Collection Unit, in addition to the CES, a copy of the supply agreement between the dealer stating that the supply is being purchased exclusively for the applicant. Prior to the issuance of the TSAC, the issuing unit shall update its books to indicate the available balance for future utilization after deducting the latest application for TSAC utilization for excise tax purposes. The name of the dealer and local refiner from whom the petroleum product was purchased shall be indicated in the TSAC to be issued as follows: (Name of Dealer) for the Account of (Name of Supplier/Local Refiner) 5.2.5 Within ten (10) working days after the end of each quarter, the Grantee shall prepare the QRTDA to be distributed as follows: Original and Triplicate DBM Budget Operations Bureau Duplicate Grantee 5.2.6 Upon completion of the QRTDA, the Grantee shall submit to the DBM within fifteen (15) days prior to the lapse of the effectivity date of the CES, the request for the issuance of SARO, supported by the original and triplicate copy of the QRTDA, original copy of CES and the compilation of original copies of Payment Compliance Certificates, SOAs, and Assessment Notices issued by the BOC and/or BIR. caITAC 5.2.7 From the issuance of SARO, the procedures in Sections 5.1.1.6 to 5.1.1.9 of this Joint Circular shall be observed. 6. ACCOUNTING REQUIREMENTS Pertinent accounting entries for transactions relating to the above procedures shall be recorded in accordance with the Circular/Guidelines that may be issued by the COA for this purpose. 7. RESOLUTION OF ISSUES Issues and concerns that may arise in the interpretation and implementation of this Joint Circular shall be filed simultaneously with and resolved jointly by the DBM and DOF. 8. SANCTIONS The head of an NGA, GOCC, AFPCES, PNPSSS, PX MARTS, other Government Commissaries, SUCs, or GIs, who, by fault or negligence, fraudulently misrepresents any transaction or importations as official, shall suffer the appropriate penalties provided by law, either administratively or criminally or both. The concerned tax subsidy applicant shall be responsible for ensuring that all procedural guidelines prescribed in this Joint Circular insofar as these affect their application, are strictly adhered to. In case of a transaction or importation made in the name of another NGA or GOCC, the sanctions referred to herein shall apply to the head of the agency or GOCC primarily responsible for the transaction or importation. Whenever applicable, the sanctions referred to herein shall likewise apply to any private entity involved in the transaction or importation. Provided, that in case of cancellation, suspension, or withdrawal of the CES, the FIRB shall endorse the grantee to the appropriate RCA for the assessment and collection of appropriate taxes, including surcharge, interest, and any applicable penalties thereon. 9. REPEALING PROVISION All pertinent issuances and other existing rules and regulations inconsistent with this Joint Circular are hereby repealed or modified accordingly. 10. EFFECTIVITY This Joint Circular shall take effect immediately. For administrative efficiency, this Joint Circular shall be effective even beyond FY 2023, unless otherwise repealed by another issuance, consistent with the current year's General Provision on tax expenditure subsidies. TAIaHE (SGD.) BENJAMIN E. DIOKNO Secretary Department of Finance (SGD.) AMENAH F. PANGANDAMAN Secretary Department of Budget and Management ANNEX A Tax Subsidy Flowchart for Certain Importations of Qualified Grantees (See Item 5.1 of the DOF-DBM JC) ANNEX B.1 Tax Subsidy Flowchart for Applications with the FIRB (With Return) (See Items 3.1 (c) and 5.2 of the DOF-DBM JC) ANNEX B.2 Tax Subsidy Flowchart for AFPCES Application with FIRB (Without Return) (See Items 3.1 (c) and 5.2 of the DOF-DBM JC)