Memorandum of Agreement between the Sugar Regulatory Administration (SRA) and the Bureau of Internal Revenue (BIR) to Ensure the Prompt Assessment and Collection of the Correct Internal Revenue Taxes from Sugar Mill Companies, Refineries, Planters, Traders and Exporters

January 26, 1994 REVENUE MEMORANDUM CIRCULAR NO. 05-94 SUBJECT : Memorandum of Agreement between the Sugar Regulatory Administration (SRA) and the Bureau of Internal Revenue (BIR) to Ensure the Prompt Assessment and Collection of the Correct Internal Revenue Taxes from Sugar Mill Companies, Refineries, Planters, Traders and Exporters TO : All Internal Revenue Officials and Employees and Others Concerned For the information of all internal revenue officials and employees and others concerned, quoted hereunder is the Memorandum of Agreement by and between the Sugar Regulatory Administration (SRA) and Bureau of Internal Revenue (BIR) dated September 23, 1993: MEMORANDUM OF AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Agreement, made and entered into by and between: The SUGAR REGULATORY ADMINISTRATION (SRA), represented herein by the Administrator, RODOLFO A. GAMBOA, with principal office at North Avenue, Diliman, Quezon City: casia and The BUREAU OF INTERNAL REVENUE (BIR), represented herein by the Commissioner, LIWAYWAY, VINZON-CHATO, with principal office at the BIR Building, Diliman, Quezon City. WITNESSETH: WHEREAS, Executive Order No. 53 directs all government agencies concerned to provide the BIR with the necessary information to help increase tax collections; WHEREAS, the taxpayer identification number (TIN) is a vital information for tracing a person's taxable transactions under a computerized system of tax administration; WHEREAS, Executive Order No. 52 requires that certain documents like sugar quedan permits, refined sugar release orders or similar instruments shall indicate the TIN of the owner and/or seller of the subject WHEREAS, the Sugar Regulatory Administration (SRA) was created with the objective, among others, of instituting an orderly system in sugarcane production for the stable, sufficient and balanced production of sugar for local consumption, exportation and strategic reserves; WHEREAS, the SRA has the power and function to institute, implement and regulate an orderly system of quedanning, disposition and withdrawals of various forms of sugar from warehouses; WHEREAS, under the provisions of the National Internal Revenue Code (NIRC), as amended, sugar mill companies, refineries, planters, traders and exporters of sugar are subject to value-added tax (VAT)/percentage tax on their gross receipts, and to income tax on their net taxable income; WHEREAS, the Bureau of Internal Revenue (BIR) has, in the course of selective audit conducted on some sugar mill companies, refineries, planters, traders and exporters, discovered that many of these taxpayers have failed to report their correct gross receipts/gross income for percentage and income tax purposes; WHEREAS, it is necessary to develop the BIR's computerized database to contain the necessary and relevant information pertinent to every taxpayer for storage and ready accessibility for correct determination of every taxpayer's tax liability; NOW, THEREFORE, in order to ensure the prompt assessment and collection of the correct internal revenue taxes from sugar mill companies, refineries, planters, traders and exporters, the SRA and the BIR have mutually agreed to coordinate their efforts, by adopting the following procedures: 1. The BIR, through the SRA, shall require the sugar mill companies and refineries to indicate the TIN of the owners and/or sellers of sugar on the quedan permits, refined sugar release orders or similar instruments in accordance with Section 1(a) of Executive Order No. 52; 2. The SRA shall provide the following date of the BIR in prescribed forms on or before the 30th day of each month; 2.1 List of sugar mill companies and refineries with the serial numbers of quedan permits issued and reported to SRA during each crop year for the processing and manufacture of raw and refined sugar; 2.2 Weekly reports by sugar mill companies and refineries required to be submitted in accordance with SRA Circular Letter No. 18, Series of 1987-1988, which includes, among others production reports of sugar centrals; 2.3 List of export clearance issued to exporters of sugar and/or molasses; 3. The BIR shall provide SRA with materials necessary for the proper transmittal of the information needed as prescribed in number 2 above; 4. The BIR shall develop a computerized system whereby the information/data gathered from the SRA can be effectively utilized by comparing against the reported gross receipts/gross income in the percentage/VAT returns and income tax returns filed, by sugar, mill companies, refineries, planters, traders and exporters to enhance the collection of correct internal revenue taxes and maximize tax compliance from/by them. 5. The SRA and the BIR shall create an inter-agency committee to oversee and monitor the proper implementation of this Memorandum of Agreement. cdt Done in Quezon City, Philippines, this September 23, 1993. (Sgd.) RODOLFO A. GAMBOA (Sgd.) LIWAYWAY VINZONS-CHATO Administrator Commissioner Sugar Regulatory Administration Bureau of Internal Revenue Signed in the presence of: (Sgd.) CARMEN P. REYES (Sgd.) VICTOR A. DEOFERIO, JR. Assistant Administrator Deputy Commissioner Sugar Regulatory Administrator Bureau of Internal Revenue" All concerned are hereby enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue