Extension of Deadline for Voluntary Additional Payment of Value-Added Taxes and Other Percentage Taxes

June 6, 1989 REVENUE MEMORANDUM CIRCULAR NO. 36-89 SUBJECT : Extension of Deadline for Voluntary Additional Payment of Value-Added Taxes and Other Percentage Taxes TO : All Internal Revenue Officers and Others Concerned 1. Purpose To manifest a sincere desire to start clean in paying their tax liabilities and to support the government's campaign for more taxes, the privilege to pay additional value-added tax and other percentage taxes may be availed of up to June 30, 1989. 2. Coverage The privilege to pay additional VAT and other percentage taxes shall be limited to tax year 1988, more specifically: A. Value-added tax Group A, January 1 to December 31, 1988 Group B, January 1, 1988 to January 31, 1989 Group C, January 1, 1988 to February 28, 1989 B. Other percentage taxes calendar year basis, January 1 to December 31, 1988 fiscal year basis 12 months period beginning with the months of February 1 until June 1, 1988. cd i 3. Deadline The voluntary payment privilege shall end on June 30, 1989. Taxpayers amending their earlier availment are covered by this deadline. 4. Basis of Voluntary Additional Payment The minimum availment with respect to value-added tax shall be two per cent (2%) of gross sales or receipts for the period, without the benefit of deduction of VAT paid/input tax credits per return and per audit investigation, or P20,000, whichever is higher. Thus, if the gross sale in 1988 was P300,000, the availment amount shall be P20,000 computed as follows: cdt Example: Gross sales/receipts P300,000 2% thereon 6,000 Amount of availment 20,000 For other percentage taxes, the basis shall be 50 per cent of tax due or paid per return in 1988, including tax paid per investigation without the benefit of credits, or P20,000, whichever is higher. Thus, if the gross receipts of a caterer in 1988 was P500,000, the availment shall not be less than P20,000. Example: Gross receipts P500,000 4% tax due thereon (per return) 20,000 50% thereof 10,000 Amount of availment (whichever is higher) 20,000 The amount of availment may be reduced by whatever amount the taxpayer has already paid in availing RMC Nos. 23-89 and 29-89 for VAT or other percentage tax purposes. However, any resulting computation shall not entitle the taxpayer to any refund. 5. Nature and Tax Consequence of Payment The additional tax paid in accordance with this Circular and RMC Nos. 23-89 and 29-89 shall neither be creditable against VAT output tax or percentage tax liability nor deductible from the gross income for income tax purposes. 6. Form and Manner of Payment In order to avail of the privilege, the taxpayer shall accomplish and present the prescribed form (Annex A) in triplicate to the Revenue District Officer or his authorized agent of the city or municipality where his principal place of business is located. The receiving officer after ascertaining the correctness of the amount to be paid in accordance with paragraph 4 hereof, shall issue the Payment Order (PO) for payment thru accredited agent bank. In places where there is no accredited bank, the payment may be received under revenue official receipt. In either case, the confirmation receipt number and official receipt number, date and amount shall be indicated on the prescribed form which shall be distributed as follows: acd Original Copy CIR Duplicate Copy Taxpayer Triplicate Copy RDO 7. Effect of Earlier Availment Taxpayers who have erroneously computed and paid the additional VAT different from that provided for in RMC 29-89 (basis of which is the output tax, without the benefit of credits), may amend their computation by complying with the procedures provided for in paragraph 6, and offset/credit their earlier payment against the computed amount to determine the final amount payable. If a taxpayer decides otherwise and prefers not to avail of the provisions of this circular, he forfeits the benefit of the "sympathetic and case-to-case treatment" of his tax case(s), and any amount paid previously may be credited against deficiency VAT that may be assessed in the future. 8. Investigation of VAT and other Percentage Tax Returns No letter of authority may be issued by any investigating unit in the National or the Regional Offices to any taxpayer who has availed of this privilege. It will only be the Commissioner of Internal Revenue who will issue such letter of authority on a case to case basis. 9. Processing by the BIR Upon receipt of the documents prescribed in paragraph 6, the Revenue District Officer shall pre-audit the papers to verify if the conditions and requirements of this circular are complied with. If defects or omissions are ascertained, the same should immediately be communicated to the concerned taxpayer to effect the necessary corrective action not later than July 5, 1989. The Revenue District Officer shall then transmit all documents to their respective Chief, Assessment Branch, not later than July 10, 1989. The Chief of the Assessment Branch shall then locate all copies of the VAT/percentage tax returns for each taxpayer availing of this program. The Regional Director shall then transmit these returns and all other documents to the Commissioner of Internal Revenue, Attention: The Chief, Tax Information and Assistance Division, not later than July 31, 1989. The returns shall be bundled in batches of 100 together with the transmittal list with the following information: 1. Name of taxpayer 2. Address of taxpayer 3. Amount paid 10. Effectivity This Order shall take effect immediately and shall be given the widest publicity by all concerned . JOSE U. ONG Commissioner of Internal Revenue ANNEX A The Revenue District Officer Revenue District No. _____ ______________________ S i r : In accordance with Revenue Memorandum Circular No. _______ , please accept the voluntary payment of additional value-added tax or other percentage tax in the amount of P _______________________ for 1988, computed as follows: acd A. Value-Added Tax Gross sales/receipts from ________________, 1988 to ______________________ 1988/1989 P ___________ x 2% thereon or P20,000, whichever is higher P ____________ Less: Amount paid under RMC 23/29-89, if any P ____________ x Amount required to be paid P ____________ x B. Other Percentage tax Total percentage tax due per return for the period from __________________, 1988 to ____________________ 1988/1989 (4 Qtrs.) P ___________ x 50% thereof or P20,000, whichever is higher P ___________ x Very truly yours, ______________________________ Name of Taxpayer/President/Treasurer Attachments: [ ] photo copies of 4 VAT Quarterly returns and OR/CR of tax payments for the period availed of. [ ] photo copies of 4 percentage returns and OR/CR of tax payments for the period availed of. [ ] photo copies of additional tax payment under RMC Nos. 23/29-89. cdt ABSTRACT OF PAYMENT ------------------------------ CR/ROR No. : Amount : Date ------------------------------ : : : : : : ------------------------------