Publishing the Amendments Effected by Presidential Decree No. 69 to Title I of the National Internal Revenue Code

January 9, 1973 REVENUE MEMORANDUM CIRCULAR NO. 01-73 SUBJECT : Publishing the Amendments Effected by Presidential Decree No. 69 to Title I of the National Internal Revenue Code TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published below certain sections of Title I of the National Internal Revenue Code, as amended by Presidential Decree No. 69, viz.: TITLE I ORGANIZATION OF THE BUREAU SEC. 3. Powers and Duties of Bureau . The powers and duties of the Bureau of Internal Revenue shall comprehend the assessment and collection of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and fines connected therewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. Said Bureau shall also give effect to and administer the supervisory and police power conferred to it by this Code or other laws. SEC. 4. Specific Provisions to be Contained in Regulations . The regulations of the Bureau of Internal Revenue shall, among other things, contain provisions specifying, prescribing, or defining: (a)The time and manner in which provincial treasurers shall canvass their provinces for the purpose of discovering persons and property liable to national internal revenue taxes, and the manner in which their lists and records of taxable persons and taxable objects shall be made and kept. (b)The forms of labels, brands, or marks to be required on goods subject to a specific tax, and the manner in which the labeling, branding, or marking shall be effected. (c)The conditions under which and the manner in which goods intended for export, which if not exported would be subject to a specific tax, shall be labeled, branded, or marked. (d)The conditions to be observed by revenue officers, provincial fiscals, and other officials respecting the institution and conduct of legal actions and proceedings. (e)The manner in which persons authorized to have and keep prohibited drugs shall keep their records relating to the same. (f)The conditions under which opium may be imported, the manner of its storage and removal for use, as well as the manner in which the same shall be marked or labeled prior to removal. (g)The conditions under which prohibited drugs may be transferred from the possession of persons authorized to have and keep the same to the possession of other persons similarly authorized. (h)The conditions under which goods intended for storage in bonded warehouses shall be conveyed thither, their manner of storage, and the method of keeping the entries and records in connection therewith, also the books to be kept by storekeepers and the reports to be made by them in connection with their supervision of such houses. (i)The conditions under which alcohol intended for use in the arts and industries may be removed and dealt in, the character and quantity of the denaturing material to be used, the manner in which the process of denaturing shall be effected, the bonds to be given, the books and records to be kept, the entries to be made therein, the reports to be made to the Commissioner of Internal Revenue, and the signs to be displayed in the business or by the person for whom such denaturing is done or by whom such alcohol is dealt in. (j)The manner in which revenue shall be collected and paid, the instrument, document, or object to which revenue and science stamps shall be affixed, any provision of Republic Act Numbered 5448 to the contrary notwithstanding, the mode of cancellation of the same, the manner in which the proper books, records, invoices, and other papers shall be kept and entries therein made by the person subject to the tax, as well as the manner in which licenses and stamps shall be gathered up and returned after serving their purposes. (k)The conditions to be observed by revenue officers, provincial fiscals, and other officials respecting the enforcement of Title III imposing a tax on estate, inheritances, legacies, and other acquisitions mortis causa as well as on gifts and such other rules and prohibition which the Commissioner of Internal Revenue may consider suitable for the enforcement of the said Title III. (l)The manner in which income tax returns, information, and reports shall be prepared and reported and the tax collected and paid, as well as the conditions under which evidence of payment shall be furnished the taxpayer, and the preparation and publication of income tax statistics. (m)The manner in which internal revenue taxes such as income tax, estate and gift taxes, specific taxes, percentage taxes, mining taxes, taxes on banks, finance companies, insurance companies, franchise taxes, taxes on amusements, charges on forest products and such other taxes as may be added thereto shall be paid through the collection agents of the Bureau of Internal Revenue or through authorized agent commercial banks who are hereby deputized to receive payments of such taxes and the returns, papers and statements that may be filed by the taxpayers in connection with the payment of the tax. SEC. 8. Internal Revenue Districts . With the approval of the Secretary of Finance, the Commissioner of Internal Revenue shall divide the Philippines into such number of revenue districts as may from time to time be required for administrative purposes. Each of these districts shall be under the supervision of a Revenue District Officer. SEC. 8-A. Revenue Regional Director . Under rules and regulations, policies and standards formulated by the Commissioner of Internal Revenue, the Regional Director shall, within the region and district offices under his jurisdiction, among others: (1)Implement laws, policies, plans, programs, rules and regulations of the department or agencies in the regional area; (2)Administer and enforce internal revenue laws and regulations, including the assessment and collection of all internal revenue taxes, charges and fees; (3)Provide economical, efficient and effective service to the people in the area; (4)Coordinate with regional offices of other departments, bureaus, and agencies in the area; (5)Coordinate with local government units in the area; (6)Exercise control and supervision over the officers and employees within the region; and (7)Perform such other functions as may be provided by law and as may be delegated by the Commissioner. SEC. 9. Duties of Revenue District Officers and other Internal Revenue Officers . It shall be the duty of every Revenue District Officer or other internal revenue officers and employees to see that all laws and regulations affecting national internal revenues are faithfully executed and complied with, and to aid in the prevention, detection and punishment of frauds or delinquencies in connection therewith. It shall also be the duty of every Revenue District Officer to examine into the efficiency of all officers and employees of the Bureau of Internal Revenue under his supervision, and to report in writing to the Commissioner of Internal Revenue, through the Regional Director, any neglect of duty, incompetency, delinquency, or malfeasance in office of any internal revenue officer of which he may obtain knowledge, with a statement of all the facts and any evidence sustaining each case. SEC. 11. Assignment of Internal Revenue Officers . The Commissioner of Internal Revenue shall employ and assign internal revenue officers to regional offices and the Regional Director shall assign them to establishments or places where articles subject to specific tax are produced or kept. SEC. 16. Authority of Officers to Administer Oaths and Take Testimony . The Commissioner of Internal Revenue, The Deputy Commissioners of Internal Revenue, chiefs and assistant chiefs of divisions, special deputies of the Commissioner, internal revenue officers, and any other employee of the Bureau thereunto especially deputized by the Commissioner shall have power to administer oaths and to take testimony in any official matter or investigation conducted by them touching any matter within the jurisdiction of the Bureau. FEATURES OF THE AMENDMENTS I Amendment to Section 3 . There is included among the powers of the Bureau the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. Decisions of the Supreme Court shall, however, remain to be executed in accordance with the Rules of Court. II Amendments to Section 4 . Only subsection (j) of this section was amended and a new subsection denominated "m" was added. The amendment to subsection (j) now allows the collection of the science stamp taxes prescribed by R. A. No. 5448 in the same manner that the internal revenue stamp taxes are collected. By virtue of the amendment, a separate science stamp need no longer be affixed to a taxable document. Since the amount of the science stamp, except in few cases hereinafter to be mentioned, is equal to the corresponding internal revenue stamp, the amount of the internal revenue stamp may simply be doubled and affixed to or printed on the taxable document. It will then be understood that one-half of the total collection from the stamp taxes shall correspond to the share of the NSDB. Considering, however, that the science stamp tax on tax clearance certificates is different in amount to the internal revenue stamp tax, the science stamp will have to be separately affixed to or printed on the certificate. Furthermore, no science stamp tax is due on freight tickets covering goods, merchandise, or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers and on certificates issued by a notary public or by any person authorized to administer oath. Under new subsection (m), certain commercial banks as shall be authorized by the regulations are expressly deputized to receive payments of certain specified taxes and the corresponding returns, papers and statements that may be filed by the taxpayers in connection with the payment of the tax. III Amendment to Section 8 . The amendment merely consists of the substitution of "inspection districts" to "revenue districts" and the heads thereof from "provincial revenue agent" to "revenue district officers" conformably with existing organizational set-up which is also carried over by the Reorganization Act. New Section 8-A : This new section provides for the powers and duties of revenue regional directors which is purely an act of incorporating into the law an already existing organizational set-up. IV Amendment to Section 9 . Conformably with the amendment to Section 8, reference to the provincial revenue agent was changed to revenue district officer. Reports of revenue district officers on any neglect of duty, incompetency, delinquency or malfeasance in office of any internal revenue officer which were before made directly in writing to the Commissioner are now required to be caused through the regional director. The power of the revenue district officer to suspend from duty certain internal revenue officers was removed. The provision requiring the submission of report to the Commissioner of discovery of any neglect, incompetency, delinquency, or malfeasance of any provincial or city treasurer was likewise removed, such provision being no longer necessary under existing set-up. V Amendment to Section 11 . The subject of this section was merely changed from "storekeepers or secret service agents" to internal revenue officers conformably to existing staffing pattern and assignment of such officers to specific establishments are now determined by the regional directors and no longer direct by the Commissioner. VI Amendment to Section 16 . The amendment excludes internal revenue agents, agent's assistants and examiners, provincial or city treasurers and their deputies from the coverage of the section and substituted by the term "internal revenue officers" conformably also with existing set-up. EFFECTIVITY Presidential Decree No. 69 shall take effect on January 1, 1973, and, therefore, the amendments to Title I of the National Internal Revenue Code shall take effect on that date. ENFORCEMENT All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide publicity as possible. aisa dc MISAEL P. VERA Commissioner of Internal Revenue APPROVED: CESAR VIRATA Secretary of Finance