Reorganization of the Anti-Smuggling Division

September 5, 1968 REVENUE ADMINISTRATIVE ORDER NO. 01-68 SUBJECT : Reorganization of the Anti-Smuggling Division TO : All Internal Revenue Officers and Others Concerned I. PURPOSE : In order to provide an adequate and effective system of detection, surveillance, apprehension and investigation of cases involving smuggling, fraudulent practices and manipulations in violation of tax exemptions and privileges, whole or partial under the National Internal Revenue Code, as amended, and other special laws administered by the Bureau of Internal Revenue, and pursuant to the provision of Section 79(B) of the Revised Administrative Code, the Anti-Smuggling Division is hereby reorganized and shall hereinafter be known as the "Special Laws Enforcement Division", under the Special Operations Department. The reorganization of the division is an answer to the need for a centralized investigating unit for the processing of applications, follow-through system relative to special laws affecting revenue matters, and to provide for a permanent fact-finding investigative body composed of personnel having specialized training and experience, as well as to insure a uniform application and interpretation of tax exemptions and tax privileges under the provisions of the National Internal Revenue Code and other special laws administered by the Bureau of Internal Revenue. II. ORGANIZATION : A. Organizational Structure The Special Laws Enforcement Division shall be headed by a Chief of Division who shall be responsible to carry out the duties and functions thereof. He shall be assisted by an Assistant Chief of Division who shall also act in his place in case of absence or his inability to perform his duties and functions. The division shall be divided into the following sections: 1. Investigation Section This section shall be the field force of the division. It shall be responsible for conducting actual investigation of tax cases under the jurisdiction of the Special Laws Enforcement Division. 2. Analysis and Evaluation Section This section shall be responsible in determining cases to be investigated by the Audit Section. It shall also be responsible for the review of field audit reports submitted by the examiners of the Investigation Section. 3. Administrative Section This section shall provide administrative support to the other two sections of the division. It shall be responsible for providing the clerical force, keeping records, compiling of investigation manuals and techniques, and planning and recommending investigation programs for tax cases falling within the jurisdiction of the division. B. Records and Equipment All records, documents, papers, pending cases and investigations which are in the Anti-Smuggling Division shall be turned over to the Special Laws Enforcement Division. III. FUNCTIONS AND RESPONSIBILITIES : The Special Laws Enforcement Division shall administer and enforce the provisions of the National Internal Revenue Code and other special laws administered by the Bureau of Internal Revenue insofar as it affects tax cases falling within the jurisdiction of the division. cdta IV. JURISDICTION : To avoid jurisdictional conflict and to fix the responsibilities for planning and directing the audit program of the Special Laws Enforcement Division, the division shall have jurisdiction over the following cases: A. Case involving fraudulent practices and manipulations in violation of tax exemptions, whole or partial, granted under the provisions of the National Internal Revenue Code and other special laws administered by the Bureau of Internal Revenue, such as the following cases : 1. Taxpayers engaged in basic industries as provided for in Republic Act No. 3127; 2. Taxpayers engaged in the manufacture of integrated and non-integrated manufactured products as provided for under Republic Act No. 3029; 3. Taxpayers engaged in industries subject to the provisions of Republic Act No. 4122; 4. Textile industries operating under Republic Act No. 4086; 5. Taxpayers falling under the provisions of the Investment Incentives Act (Republic Act No. 5186); and 6. Violations of tax-exempt importations such as importations by Veterans Federation, religious and charitable institutions, donations and such other importations which pay no tax or a lower rate of tax other than as provided for in the National Internal Revenue Code. B. Smuggling 1. Real or pure smuggling Those involving untaxed goods and/or articles of foreign origin illegally imported, transferred or acquired into the country but not including articles subject to specific tax. 2. Technical Smuggling As differentiated from real or pure smuggling, technical smuggling shall include the fraudulent practice of misdeclaration, misclassification and/or undervaluation of imports or by paying of less than the amount legally due. 3. Assist the Internal Audit Department and such other units of the bureau which may seek assistance in the apprehension of activities in the printing and/or use of fake receipts, fake documentary stamps and other accountable forms of the bureau which may be falsified or copied. V. REPEALING CLAUSE : Revenue Administrative Orders, Revenue Memorandum Circulars, Revenue Memorandum Orders and Revenue Special Orders and/or portions thereof which are inconsistent with the provisions of this Revenue Memorandum Order are hereby repealed or revoked accordingly. VI. EFFECTIVITY : This Order shall take effect upon approval. LLjur (SGD.) MISAEL P. VERA Commissioner of Internal Revenue APPROVED: (SGD.) EDUARDO Z. ROMUALDEZ Secretary of Finance