Creation of a Gasoline and Miscellaneous Specific Tax Division; Amendment to Revenue Administrative Order No. 1-67

December 14, 1970 REVENUE ADMINISTRATIVE ORDER NO. 14-70 SUBJECT : Creation of a Gasoline and Miscellaneous Specific Tax Division; Amendment to Revenue Administrative Order No . 1-67 In order to cope with the increasing volume of transactions in the manufacture, importation and/or distribution of articles subject to specific tax, other than manufactured products of tobacco and alcohol and to achieve maximum efficiency in the inspection and control of the operations of establishments concerned therein, there is hereby created a Gasoline and Miscellaneous Specific Tax Division in the Specific Tax Department. For this purpose the pertinent provisions of Revenue Administrative Order No. 1-67 are hereby amended as follows: Office of the Revenue Operations Head (Specific Tax) Performs staff, advisory and supervisory functions related to the administration and enforcement of specific taxes and tobacco inspection fees; formulates, coordinates and implements policies, plans and programs relating to the administration and enforcement of specific taxes and the collection of tobacco inspection fees; supervises the processing of applications for permits to operate establishments for the manufacture of and dealing in articles subject to specific tax; administers and directs the assessment functions insofar as specific taxes are concerned and reviews and evaluates reports and other papers thereof; supervises the processing of requests for releases from the Bureau of Customs of imported articles to be used in the manufacture of articles subject to specific tax, and of requests for tax clearance of cinematographic films; may initiate and/or undertake the investigation of specific tax cases with definite indications of frauds; develops and recommends training guides for revenue personnel engaged in the administration and enforcement of specific taxes and tobacco inspection fees; plans and recommends the assignment, transfer and promotion of all personnel performing specific tax administration and enforcement work. Is responsible for and supervises four (4) divisions in the National Office: Tobacco Tax Division, Alcohol Tax Division, Gasoline and Miscellaneous Specific Tax Division and Tobacco Inspection Service; has technical supervision over specific tax branches in regional offices; performs such other related functions as may be assigned from time to time by the Commissioner. a. Tobacco Tax Division Administers the tobacco tax administration program of the Bureau. Formulates and recommends policies, develops projects and procedures for the administration of specific taxes on cigars, cigarettes, and other manufactured products of tobacco; develops techniques and methods for the effective control of all establishments manufacturing or dealing in the articles enumerated above; passes upon protested cases involving all manufactured products from tobacco which are subject to specific tax prior to action by the Appellate Division; processes all requests for the operation of establishments manufacturing or dealing in the articles mentioned above, all requests for the release of imported tobacco articles from the Bureau of Customs either as finished products or as raw materials to be used in the manufacture of the abovementioned articles; processes and recommends for approval all bonds filed by taxpayers relating to specific taxes administered by the division; maintains records and data necessary for the divisions activities and functions; develops methods to promote efficiency of division's personnel. Performs such other related functions as may be assigned from time to time by the Revenue Operations Head (Specific Tax). 1. Tobacco Tax Section Receives, examines all applications and supporting documents for basic permits to establish and operate factories producing cigars, cigarettes and other tobacco products, as well as basic permits to import or export said articles; processes applications to register brands of articles from tobacco and permits to manufacture the same. Processes applications and prepares permits/authorities to release imported articles from customs custody and under special cases, accompany shipments of the importer; conducts ocular inspection of proposed premises as depicted in the plat and plan submitted by applicants for basic permit to operate any tobacco factory establishment and to submit the required report and recommendations thereon; take action on all legal queries, prepares ruling and opinions in line with established precedents based on court decisions, opinion of the Secretary of Justice and/or existing BIR rulings. 2. Tobacco Tax Enforcement Section Directs, coordinates and evaluates all activities relating to the administration of the specific tax enforcement programs of the Bureau within its jurisdiction at section level; initiates the preparation of authorities or instructions for the approval and signature of the Chief of Division for the purpose of conducting spot-checks, inspection, surveillance and investigation of persons, firms and establishments manufacturing, producing, processing, dealing in or handling articles subject to specific taxes within the factory premises for the purpose of determining compliance with the requirements and regulations of the Bureau; initiates the preparation of authorities and instructions for the approval and signature of higher authorities for the purpose of conducting stocktaking, verification, audit and examination of books of accounts and other records of all persons, firms and establishments manufacturing, producing and dealing in or handling articles subject to specific taxes, as well as other articles or raw materials used in the production of articles subject to specific taxes, insofar as they relate to the enforcement of specific tax regulations on tobacco products; undertakes fact-finding investigations and submits reports on suspected frauds of tobacco cases; initiates the preparation of authorities or instructions for the approval and signature for the seizure through legal processes of evidence which may support demands for deficiency specific taxes or those which may support court action for criminal or civil liabilities; prepares authorities or instructions to witness the chemical processing of native tobacco, the destruction or disposal of cigarette papers in bobbins or tobacco raw materials found unfit for the manufacture of cigarettes or other tobacco products; and performs such other related functions as may be assigned from time to time by the Chief of Division. 3. Audit and Review Section Evaluates stock taking or investigation reports of fieldmen and prepares letters of demand for signature of the Revenue Operations Head, Deputy Commissioner of Internal Revenue or the Commissioner of Internal Revenue in appropriate cases; reviews and verifies transcript of official register books; develops appropriate audit and review techniques for effective control and inspection of establishments within the jurisdiction of the division; recommends appropriate action on findings of investigation and inspection; prepares permits or authority to dispose of cigarette paper waste and tobacco dust. 4. Statistics and Reports Section Reviews and verifies duplicates of the official tax receipts, reports on shipments, comparative statements of specific tax collections, and keeps adequate statistical records of all material data reported or contained therein necessary for a comprehensive knowledge of the raw materials used in production and specific tax collection; prepares the bi-monthly and monthly reports on specific tax collections and such other special statistical reports desired from time to time; prepares the contributions of the Tobacco Tax Division to the Annual Report of the Commissioner of Internal Revenue; keeps a master list of personnel and prepares monthly reports on office staff and personnel force, as well as list of the different holders of basic permits to establish and operate tobacco factories; keeps a systematic listing of holders of privilege tax receipts under Schedule D as reported by collection agents all over the country; and keeps a register of all commercial labels used on the production of different tobacco factories. b. Alcohol Tax Division Administers the alcohol tax administration program of the Bureau. Formulates and recommends policies and develops projects and procedures for the administration of specific taxes on alcohol products; develops techniques and methods for the effective control of the establishments manufacturing or dealing in alcoholic products; passes upon protested cases involving specific taxes on alcoholic products prior to action by the Appellate Division; processes all requests for the operation of establishments manufacturing or dealing in alcoholic products, and all requests for the release of imported articles from the Bureau of Customs either as finished products or raw materials to be used in the manufacture of alcoholic products; processes and recommends for approval all bonds filed by taxpayers relating to specific taxes administered by the division; maintains records and data necessary for the division's activities and functions; develops methods to promote efficiency of division's personnel. Performs such other related functions as may be assigned from time to time by the Revenue Operations Head (Specific Tax). cdt 1. Alcohol Tax Section Directs, evaluates and coordinates all activities relating to the administration of alcohol taxes to assure proper and uniform execution of policies and programs established by the National Office; executes policies, standard procedures and all other measures formulated by the National Office necessary to implement most effectively the control and inspection of duly registered alcohol and liquor manufacturers; reviews, evaluates and acts on all correspondence and papers referred to and received by, the Section; reviews, examines and processes all applications and supporting qualifying documents for the establishment of distilleries, breweries, rectifying establishments, compounders of liquors and wines, and denaturing plants; prepares the required permits in connection with the productions, storage, removals and distribution of distilled spirits, fermented liquors, wines and other alcoholic products; conducts inspections of premises of the applicants prior to the issuance of products; conducts inspections of premises of the applicants prior to the issuance of permits; prepares reports of the Division; keeps adequate and up-to-date statistical records; gathers the required data for comprehensive knowledge of the activities of legitimate alcohol industry; maintains systematic tabulation and compilation of all statistical data relating to the production, removal and tax payments on alcohol, wines and fermented liquors by the manufacturers thereof; conducts stocktaking of all establishments, producing, manufacturing and repacking alcohol and other alcoholic products; undertakes routinary inspections of all the above-named establishments so that proper measures may be taken wherever and whenever corrective steps are necessary; conducts surveillance and apprehends any person or entity from dealing in, and/or possessing untaxed imported distilled spirits and wine and takes appropriate action thereon; receives checks and verifies all monthly transcript sheets and compiles them. 2. Denatured Alcohol Section Directs, coordinates and evaluates all activities relating to the administration and operations of denaturing plants and repackers of denatured alcohol; receives, checks and verifies all monthly transcript sheets and reports on denaturing and compiles the same; recommends a representative to act as member of the Denaturing Committee for the signature of the Chief of the Division; keeps adequate statistical records, gathers data required for a comprehensive knowledge of activities of legitimate denaturing plants and maintains a systematic tabulation and compilation of all statistical data relating to the production, removals and tax payments on denatured alcohol. 3. Alcohol Tax Enforcement Section Directs, coordinates and evaluates all activities relating to the administration of the specific tax and enforcement programs of the Bureau within its jurisdiction at section level; initiates the preparation of authorities or instructions for the approval and signature of the Chief of Division for the purpose of conducting spot-checks, inspection, surveillance and investigation of persons, firms and establishments manufacturing, producing, processing, dealing in or handling articles subject to specific taxes within the factory premises for the purpose of determining compliance with the requirements and regulations of the Bureau; initiates the preparation of authorities and instructions for the approval and signature of higher authorities for the purpose of conducting stock-taking, verification, audit and examination of books of accounts and other records of all persons, firms and establishments manufacturing, producing and dealing in or handling articles, subject to specific taxes, as well as other articles of raw materials used in the production of articles subject to specific taxes, insofar as they relate to the enforcement of the specific tax regulations; initiates the preparation of authorities or instructions for the approval and signature of the Chief of Division or higher authorities for the seizure through legal processes evidences which may support demands for deficiency specific taxes or those which may support court action for criminal or civil liabilities; prepares authorities or instructions to witness the denaturation of alcohol; and performs such other related functions as may be assigned from time to time by the Chief of Division. c. Gasoline and Miscellaneous Specific Tax Division Directs, coordinates and evaluates all activities relating to the administration of gasoline and miscellaneous specific tax programs of the Bureau to assure proper and uniform execution of policies and programs on articles, other than tobacco and alcohol products, subject to specific taxes; formulates and recommends policies and develops projects and procedures for the administration of specific taxes on articles like manufactured oils and other fuels (coal, bunker fuel oil, diesel fuel oil, etc), cinematographic films, matches, firecrackers, playing cards, saccharine and its derivatives, etc. Develops methods and techniques for the effective control of all establishments manufacturing or dealing in articles enumerated above; inspects the operations of oil refineries and manufactures or importers of articles or products within its jurisdiction; spot-checks, inspects or takes stock of persons, firms or establishments manufacturing, producing, dealing in or handling articles within its jurisdiction for purposes of determining compliance and conformity with requirements and regulations of the Bureau; conducts surveillance work for purposes of administering the permissive functions of the Bureau on articles or products subject to specific taxes other than alcohol and tobacco products; processes all requests for the operation of establishments manufacturing or dealing in the articles mentioned above and all requests for the release of imported articles (other than those of alcohol or tobacco) subject to specific taxes from the Bureau of Customs either as finished product or as raw materials to be used in the manufacture of the above-mentioned articles; processes and recommends for approval bond filed relating to specific taxes administered by the division. Performs such other related functions as may be assigned by the Revenue Operations Head (Specific Tax). 1. Oil Products Section Receives, examines and processes all applications and supporting documents for basic or subsequent/amendatory permits to establish and operate refineries of gasoline, petroleum and other oil products and such other establishments producing articles from oil subject to specific taxes; processes applications and prepares permits or authorities to release imported articles as enumerated above from customs custody and under special cases, accompany shipment from customs premises to the establishments of the importer and, when required, takes sample of the imported articles for appropriate analysis in order to determine accurately the specific tax due thereon; conducts ocular inspection of proposed premises as depicted in the plat and plan submitted by applicant for basic, subsequent/amendatory permits to operate any establishment as aforementioned and to submit the required reports thereon; takes action on legal queries and prepares opinions in line with the establish precedents based on court decisions, opinions of the secretary of justice or existing BIR rulings; evaluates examination, stock taking or investigation reports and prepares letter of demand for the signature of the proper authority concern; receives, examines and processes all applications and supporting documents for the request of the refund of tax exemption involving articles within its jurisdiction either locally produced or those imported which may be under existing revenue laws or treaties with foreign governments are exempt from specific taxes; passes upon protested cases involving specific taxes on articles under its jurisdiction; processes and recommends approval of bonds file by taxpayers relating to the business or person or firms within its jurisdiction; formulates and recommends policies methods and procedures for the effective inspection and control of establishments concerned. 2. Cinematographic Films Section Receives, examines and processes all application and supporting documents for basic permits to engage in the business of producing or importing cinematographic films; processes application and prepares permits or articles to release the imported articles mentioned above from customs custody and when required takes measurements of imported articles in order to determine accurately the specific tax thereon; takes action on legal queries and prepares opinions in line with established precedents based on court decisions, opinions of the secretary of justice, or existing BIR rulings; evaluate examination, stocktaking or investigation reports and prepares the letter of demand for the signature of the proper authority concern; receives, examines and processes all applications and supporting documents for the request of the refund of tax exemption involving articles within its jurisdiction which may be under existing revenue laws or treaties with foreign government are exempt from specific taxes; passes upon protested case involving specific taxes on articles under its jurisdiction; processes and recommends approval of bonds to file by taxpayers relating to the business, person or firms within its jurisdiction; formulates and recommends policies methods on procedures for the effective inspection and control of establishments concern. 3. Miscellaneous Articles Section Receives, examines and processes all applications and supporting documents for basic or subsequent amendatory requests to establish and operate establishments producing or importing playing cards, matches, firecrackers, saccharine, sodium saccharinate and other artificial sweetening agents subject to specific taxes; processes application and prepares permits or articles to release imported articles as enumerated above from customs custody and other special cases accompany shipment from customs premises to the establishments or importer and when required takes sample of the imported articles for appropriate analysis in order to determine accurately the specific tax thereon; conducts ocular inspection of proposed premises as depicted in the plot and plan submitted by applicant for basic, subsequent or amendatory permits to operate any establishments as aforementioned and to submit the required reports thereon; takes action on legal queries and prepares opinions in line with the establish precedents based on court decisions, opinions of the secretary of justice or existing BIR rulings; evaluate examination, stock taking or investigation reports and prepares the letter of demand for the signature of the proper authority concern; receives, examines and processes all applications and supporting documents for the request of the refund of tax exemption involving articles within its jurisdiction locally produce or imported which may be under existing revenue laws or treaties with foreign government are exempt from specific taxes; passes upon protested cases involving specific taxes on articles under its jurisdiction; processes and recommends approval of bonds filed by taxpayers relating to the business, person or firm within its jurisdiction; formulates and recommends policies methods on procedures for the effective inspection and control of establishments concern. d. Tobacco Inspection Service Administers the tobacco inspection program of the Bureau, Implements and enforces the provisions of Section 182(a)(3)(a) and 302 of the National Internal Revenue Code in relation to Act No. 2513, as amended, and Regulations Nos. 17 and 47, Revenue Regulations Nos. V-15, V-52 and V-59 all of the Department of Finance; establishes general and local rules on classification, grading, marketing and packing of leaf tobacco for domestic sales, factory use or for export; establishes adequate rules defining the standard and types of leaf and manufactured tobacco which may be exported; inspects cigars, cigarettes, leaf tobacco, and partially manufactured products of tobacco for export; and supervises the operation of and issuance of L-3 and B-14(a) permits to wholesale and retail leaf tobacco dealers. Performs such other related functions as may be assigned from time to time by the Revenue Operations Head (Specific Tax). 1. Export and Permit Section Receives, examines, processes and recommends for approval or disapproval of applications for permits to engage in business as wholesale leaf tobacco dealer and for inspection of tobacco; performs such other functions as may be assigned by the Chief and Assistant Chief of Division. 2. Field Operations Section Supervises the enforcement of tobacco inspection laws and regulations; inspects and assesses tobacco inspection fees; inventories stock of retiring or closing establishments or those transferring ownership; lifts all guise from L-3; L-3A, L-3E and L-6; investigates all L-3, L-3E, L-3F, L-6 & 1-7 & 7A establishments for Revenue Memorandum Circular No. 3-67; evaluate reports and makes necessary recommendations to the chief or other higher authorities on any given tobacco tax case; performs such other functions as may be assigned by the Chief and Assistant Chief. 3. Review and Statistics Section Receives, reviews, and verifies transcript sheets, record or data; prepares bi-monthly or monthly reports on inspection fees, etc.; keeps master list of personnel and prepares monthly and annual reports on them; performs such other functions as may be assigned by the Chief and the Assistant Chief of Division. The Order amends Revenue Administrative Order No. 1-67 and abolishes the Specific Tax Enforcement Division. All equipment of the latter division shall be transferred to the Gasoline and Miscellaneous Tax Division, while its pertinent records shall be given to the division concerned. The pertinent records of the old Tobacco and Miscellaneous Tax Division on miscellaneous specific tax shall be transferred to the Gasoline and Miscellaneous Tax Division. This Order takes effect on January 15, 1971. cdti MISAEL P. VERA Commissioner of Internal Revenue APPROVED: CESAR VIRATA Secretary of Finance