Publishing the MOA entered into by and among the DOF, BIR, DILG, etc.

March 16, 2001 REVENUEMEMORANDUM CIRCULAR NO. 21-01 SUBJECT : Publishing the Memorandum of Agreement Entered Into by and Among the Department of Finance, Bureau of Internal Revenue, Department of the Interior and Local Government, League of Provinces of the Philippines, League of Cities of the Philippines, League of Municipalities of the Philippines and the Liga ng mga Barangay sa Pilipinas re: Commitment of All Parties to Help One Another in the Implementation of Strategies to Enhance Their Tax Enforcement and Collection Efforts by Utilizing All Available Resources Necessary in the Pursuit of These Objectives TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is the full text of the Memorandum of Agreement: "MEMORANDUM OF AGREEMENT KNOW ALL MEN BY THESE PRESENTS; This AGREEMENT, made and entered into by and among: The DEPARTMENT OF FINANCE, with principal office at Central Bank Complex, Roxas Blvd., Manila, represented herein by SECRETARY ALBERTO G. ROMULO herein referred to as DOF; The BUREAU OF INTERNAL REVENUE, with principal office at BIR Bldg., BIR Road, Diliman, Quezon City, represented herein by COMMISSIONER RENE G. BAEZ, hereinafter referred to as the BIR; The DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, with principal office at Gold Condominium, EDSA, Quezon City, represented by its Secretary JOSE D. LINA; herein referred to as the DILG; The LEAGUE OF PROVINCES OF THE PHILIPPINES, with office address at Unit 2803 Summit I, Office Tower Bldg., 530 Shaw Blvd., Mandaluyong City, represented herein by its president, GOVERNOR HILARIO L. DE PEDRO III after referred to as LPP; The LEAGUE OF CITIES OF THE PHILIPPINES, with office address at Suite 1209 Cityland 10 Tower II corner Valero and H.V. Dela Costa Streets, Salcedo Village Makati City, represented herein by its president, MAYOR ALIPIO F. FERNANDEZ, JR. hereinafter referred to as LCP; The LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES, with office address at 365 LMP Bldg., Ermin Garcia St., Cuba, Quezon City, represented herein by its president, MAYOR JINGOY P. ESTRADA, hereinafter referred to as LMP; The LIGA NG MGA BARANGAY SA PILIPINAS, with office address at Unit 208, CRM II, 116 Kamias Road, Quezon City, represented herein by its President, BM JAMES MARTY LAO LIM, hereinafter referred to as LnB. WITNESSETH THAT: Whereas, all the parties enumerated above support the government's thrust of invigorating the Bureaucracy by enhancing the delivery of public service in all government agencies through an increased tax collection; Whereas, the BIR is implementing its continuing Tax Campaign Program with the objective of delivering fast, efficient and courteous service and enhancing the dissemination of information to the taxpaying public to ensure the efficient collection of taxes; Whereas, the BIR recognizes the importance of a collaboration effort of concerned groups enumerated herein in the implementation of this program and in meeting the national and local tax collection targets; Whereas, the Department of the Interior and Local Government being the office which exercises the power of general supervision over Local Government Units, on behalf of the President, has the capability to assist the BIR in ensuring local government's compliance with internal revenue tax laws, rules and regulations; Whereas, all the LGUs, through their leagues, have expressed their commitment to assist the BIR in its tax collection efforts; Whereas, it is to the mutual interest of the parties to expedite the delivery of services to the public and promptly collect the correct taxes due the government; Whereas, all these parties have a nationwide membership and/or office network that can effectively coordinate and assist in the activities of the BIR throughout the Philippines; NOW THEREFORE, for and in consideration of the above premises, all the parties enumerated above hereby commit to help one another in the implementation of strategies to enhance their tax enforcement and collection efforts by utilizing all available resources necessary in the pursuit of these objectives; More specifically, the following are the responsibilities of the parties involved therein: A. Local Government Units (LGUs) shall: 1. Provide the BIR with an updated annual alphabetical list of taxpayers (Individuals/Corporations) who were issued Provincial/City/Municipal/Barangay Permits to engage in business which shall be submitted every March 1 beginning CY 2001 to the Revenue District Office (RDO) showing the following information: Taxpayer Identification Name Type Annual Permit Date Number of of Gross Number Issued (TIN) Taxpayer/Trade Business Address Receipts Remarks Name 2. Require the presentation of the following documents prior to the renewal of the Business Permits: a. Income Tax Returns of the preceding quarter/s and/or year; b. VAT/Percentage tax returns; c. BIR Registration Certificate (BIR Form 2303); and d. Annual Registration Fee payment (BIR Form 0605). aTEADI 3. Furnish the respective RDO of the BIR a quarterly list of contractors of the respective government contracts entered into by the provinces/cities/municipalities/ barangays in the following manner every 15th day after the end of the calendar quarter using the following format; TIN Name of Address Project Date Amount of Contractor Awarded Contract 4. Include TIN as part of the essential requirements in all applications for government permits, licenses, clearances, official papers and document and Community Tax Certificates; 5. Ensure that concerned Local Chief Executives with their respective Treasurers and Accountants (pursuant to the provisions of Revenue Memorandum Order No. 70-98 as amended) withhold the correct taxes and remit the same on or before the date prescribed by law and/or existing regulations; 6. Submit an update of the Current/Fair Market Value (FMV) of property from the Assessors Office of the provincial/cities/municipalities to the Assessment Service of the BIR, Attention: Asset Valuation Division when there is revision or upon request; Classification of Property (Agri-Res-Com'l-Gen. Fair Market Purpose) Barangay Subdivision Value (FMV) 7. Submit an annual alphabetical list of professionals who were issued Professional/Occupational Tax Receipts (PTR/OTR) to the RD every January 31st of the following year showing the following information; PTR/OTR Name Tel./Fax Number Date TIN of Number Issued Taxpayer Address Remark 8. Assist in the dissemination of tax reminders through the printing of the following messages in the statement of accounts, communication documents, and packaging materials; "Taxes are the lifeblood of our government . " "Pay taxes honestly and promptly . " 9. Assist the BIR in promoting its programs and other reminders/campaign for the issuance of Official Receipts for every purchase made by the taxpayers; 10. Submit to the BIR Revenue Accounting Division the requirements relative to the computation and issuance of the following Certificates: a. 40% mining taxes collected per RA 7160; b. Franchise Tax paid by the Manila Jockey Club, Inc. (MJCI) and the Philippine Racing Club, Inc. (PRCI) per RA No. 6631 amended by RA No. 8407 and RA No. 6632 amended by 7953; and c. Special privilege tax - 60% of the SPT collection from mini-hydro electric plant under RA 7156. 11. Assist RDOs in locating unregistered taxpayers and delinquent taxpayers; and 12. Allow the BIR to have access to the tax records (assessment collection and remittance records) of all LGUs subject to limitations provided by the Local Government Code. B. The Department of the Interior and Local Government shall: 1. Assist the BIR in facilitating local government compliance with withholding tax laws and regulations as well as in the remittance of the withheld taxes on time; and 2. Assist the BIR in building the capacities of Local Government Units to implement internal revenue laws, rules and regulations, including programs and projects. C. The Bureau of Internal Revenue shall 1. Provide the DBM and the four major leagues of local governments with an annual internal revenue tax collections which will be the basis of computing the internal revenue allotments of LGUs in accordance with the specific provisions of the Local Government Code; 2. Compute, facilitate and furnish copies to the four major league of local governments of the following Certificates: a. Mining Taxes (40% mining taxes collected per RA 7160); b. Value-Added Tax (20% of the 50% increase in collections for the immediate preceding year per RA 7643); c. 2% of the 5% Gross Income earned by all business/enterprises within the Subic/Clark/ Camp John Hay/ Poro Point/ Special Economic Zones per RA 7227; d. Franchise Tax paid by Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. (PRCI) per RA No. 6631 amended by RA No. 8407 and RA No. 6631 amended by RA 8407; e. Special privilege tax - 60% of the SPT collection from mini-hydro electric plant; f. 15% Excise Tax on locally manufactured Virginia type cigarette under RA 7171; and g. All other taxes under special laws. 3. Include the requirement of indicating the Community Tax Certificates number, date and amount in the prescribed tax returns; 4. Make available BIR resource speakers to the tax information conferences/dialogues initiated or hosted by any LGUs through the Union of Local Authorities of the Phils., Inc. (ULAP) or their leagues; 5. Notify the LGUs concerned in advance on the failure to remit withholding taxes on time; and 6. Allow the LGUs to have access to BIR records subject to the limitation required under the National Internal Revenue Code. D. The DOF, BIR, DILG and the Leagues shall 1. Establish an information interchange with the primary objective of enhancing inter-agency cooperation towards a more effective performance of their respective functions. 2. Promulgate and disseminate their respective rules and regulations to implement this MOA. 3. Upon mutual agreement, adopt amendments to this MOA as may be necessary from time to time. This AGREEMENT shall take effect upon signing and shall continue in full force and effect unless otherwise revoked by the parties hereto upon prior notice of sixty (60) days. IN WITNESS WHEREOF, the parties hereunto affixed their signatures this 2nd day of March, 2001 at BIR National Office, Diliman, Quezon City, Philippines. DEPARTMENT OF FINANCE By: (SGD.) ALBERTO G. ROMULO Secretary DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT By: (SGD.) JOSE D. LINA JR. Secretary BUREAU OF INTERNAL REVENUE By: (SGD.) RENE G. BAEZ Commissioner LEAGUE OF PROVINCES OF THE PHILIPPINES By: (SGD.) GOV. HILARIO L. DE PEDRO III President LEAGUE OF CITIES OF THE PHILIPPINES By: (SGD.) MAYOR ALIPIO F. FERNANDEZ, JR. President LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES By: (SGD.) MAYOR JINGOY E. ESTRADA President LIGA NG MGA BARANGAYS SA PILIPINAS By: (SGD.) BM JAMES MARTY LAO LIM President" FEATURES 1. The Memorandum of Agreement is a declaration of all parties of their commitment to help one another in the implementation of strategies to enhance their tax enforcement and collection efforts by utilizing all available resources necessary in the pursuit of these objectives. ATcaHS 2. It specifies the responsibilities of the parties involved necessary to attain the objectives of the Agreement. A Revenue Memorandum Order shall be issued outlining the activities, procedures and other processes necessary to effectively implement or carry out the programs and provisions of the Memorandum of Agreement aimed at achieving its goals and objectives. It is desired that this Circular be given as wide a publicity as possible. (SGD.) RENE G. BAEZ Commissioner of Internal Revenue