Procedure to be Followed and/or Imposed to Taxpayers Dealing on PX Goods to Implement the VAT Law

March 3, 1988 REVENUE MEMORANDUM ORDER NO. 12-88 SUBJECT : Procedure to be Followed and/or Imposed to Taxpayers Dealing on PX Goods to Implement the VAT Law TO : All Internal Revenue Officers and Others Concerned OBJECTIVES: To promote and enhance a uniform compliance of the VAT requirements in relation to taxpayers dealing on PX and/or, untaxed goods, the sources of which could not be readily determined for internal revenue tax purposes, the following procedures are hereby prescribed: a. Verification of the VAT registration number if VAT-registrable pursuant to Section 107(a), (b) or (c) of the Tax Code, as amended, and if not yet registered require the taxpayer to do so; b. Require the submission of the inventory of stocks as of December 31, 1987; cdt c. Require the submission of the inventory of unused sales invoices printed prior to January 1, 1988; d. Collect a tax of 10% from the total amount of inventory of goods submitted, the sources of which could not be explained; and the tax paid would be the beginning transitional input tax of the taxpayer for subsequent transfer of the goods identifiable in the inventory list submitted with the BIR; henceforth, succeeding purchases of untaxed goods should likewise be submitted on a monthly bases, the listing of which must be reported not later than the 10th day of the succeeding month from date of purchase, for the imposition of the 10% tax due thereon; e. Require the taxpayers concerned to provide themselves with subsidiary purchase journal and subsidiary sales books for purposes of recording the following: Purchase of: 1) Goods for Sale 2) Supplies 3) Services 4) Capital Goods 5) Purchases from VAT persons 6) Input taxes 7) Input tax deemed paid 8) Export Sales 9) Zero rated sales 10) Taxable sales 11) Input tax on deemed sales 12) Out-put tax Revenue District Officers, under the direction of the respective Revenue Regional Directors, shall organize teams of Revenue Enforcement Officers within their respective jurisdiction for the purpose of implementing this Revenue Memorandum Order. cd EFFECTIVITY: This Order shall take effect immediately. (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue