Amending Specific Provisions of Revenue Memorandum Order No. 16-2000 re: Prescribing the Policies and Procedures for Processing and Monitoring of Withholding Tax Payments from National Government Agencies (NGAs)

October 22, 2001 REVENUE MEMORANDUM ORDER NO. 27-01 SUBJECT : Amending Specific Provisions of Revenue Memorandum Order No. 16-2000 re: Prescribing the Policies and Procedures for Processing and Monitoring of Withholding Tax Payments from National Government Agencies (NGAs) TO : All Revenue Officials and Employees and Others Concerned I. OBJECTIVES This Order is issued to: A. Implement Department of Finance ( DOF ) Department of Budget and Management (DBM) Joint Circular No. 1-2000A dated July 31, 2001 amending specific guidelines of DOF-DBM-COA Joint Circular 1-2000 dated January 3, 2000 in the use of the revised Tax Remittance Advice (TRA) as a mode of payment for taxes withheld by the NGAs; B. Improve, facilitate and institute appropriate controls in the remittance of all taxes withheld by NGAs; C. Simplify and strengthen the monitoring of withholding tax payments through TRA from the NGAs; and D. Set policies and establish procedures for processing and monitoring of TRAs. II. DEFINITION OF TERMS For purposes of this RMO, the following terms shall be construed to mean: A. Tax Remittance Advice ( TRA ) a serially numbered document to be distributed by the Bureau of Internal Revenue (BIR) to NGAs as shown in Annex "A". It shall be accomplished by the NGAs and attached to every Withholding Tax Return filed for payment of taxes withheld to the BIR and shall be certified by the Chief Accountant and approved by the Head of the NGA or his duly authorized representative. This shall be the basis for the BIR and Bureau of Treasury (BTr) to record the collection and deposit in their respective books of accounts. B. Report on Tax Remittance Advice Used/Cancelled/Lost a report prepared by the NGA as an attachment for the subsequent requisition of blank TRAs from the BIR Office. C. Withholding Tax Returns ( WTRs ) are withholding tax returns required to be filed within a prescribed period of time (i.e. 1601-C, 1601-E, 1601-F, 1600 & 1603). III. POLICIES A. The DBM shall stop/discontinue the issuance of TRAs to NGAs. B. The NGA shall prepare a separate TRA for each Withholding Tax Return (WTR) filed. C. All amounts reflected in the TRAs duly stamped received by the BTr-Regional Office (BTr-RO) shall be taken up as collections by the BIR-Finance Division (FD). D. The NGA shall stop/discontinue the preparation of the Summary of Taxes Withheld (STW). E. The General Services Division (GSD) shall be responsible for the printing of blank TRA forms. F. The Withholding Tax Division (WTD) shall be responsible for the distribution of blank TRA forms to the Regional Administrative Division due for the RDOs and shall strictly monitor the usage of the TRAs. G. The NGA shall requisition blank TRA Forms from the RDO where they are registered. H. All Revenue District Officers (RDOs) must ensure that all NGAs under their respective jurisdictions are registered taxpayers and are strictly complying with the rules and regulations on withholding taxes. I. Only WTRs from NGAs duly supported by TRAs shall be accepted by the RDOs. J. BIR-Finance Division (FD) shall record tax collection based on TRAs duly stamped "Received" by the BTr. K. All WTRs filed by the NGAs under this new system shall still be subject to the regular verification and audit. IV. PROCEDURES A. THE REVENUE DISTRICT OFFICE thru: A.1 The Administrative Section shall : a. Distribute blank pads of TRAs to NGAs, and receive copies of Report on Tax Remittance Advice Used/Cancelled/Lost (Annex "B") attached to RIVs for subsequent requisitions of NGAs: b. Request from RO-Administrative Division the initial blank TRAs based on the number of NGAs registered. For subsequent requisition of blank TRA forms, it must attach The Report on Tax Remittance Advice Used/Cancelled/Lost using Annex "B", copy furnished WTD; c. Inform and provide blank TRAs upon requisition of NGAs under his jurisdiction indicating therein the RDO Number for the proper venue in the filing of their WTRs with the corresponding TRAs; d. Receive from NGAs subsequent requisition of blank TRA forms with the attached Report on Tax Remittance Advice Used/Cancelled/Lost, and issue blank TRA forms; and e. Maintain a log book of blank TRAs and inform in writing the BTR-RO, BIR-FD, Revenue Accounting Division (RAD) and WTD of the serial number of the blank TRA forms issued to NGAs within ten (10) days following the date of issuance. A.2. For Computerized RDO : The Collection Section thru: a. The Receipt and Control Unit shall: 1. Receive from the WTD a list of BTr-RO where the RDOs shall transmit original TRAs received from NGAs; 2. Receive from the NGAs, WTRs with TRAs; 3. Batch the WTRs with TRAs in 50s or less; 4. Prepare in triplicate, BCS-A exclusively for TRAs from NGAs under the new system according to date of receipt, indicating the RCO Code of the Collection Section of the RDO; 5. Forward triplicate BCS-As to the Administrative Division; 6. Write the TRA number on the validation portion of each of the WTR: 7. Transmit to BTr-RO the original TRA and have the duplicate and triplicate copies duly stamped received; 8. Transmit to BIR-FD the duplicate TRA duly stamped received by BTr-RO and have the triplicate copy duly stamped received; 9. Forward WTRs, triplicate TRA and BCS-As to CBR Pre-Processing Data Controller; 10. Post TRA Number, date of receipt by BTr, date received by BIR-FD and amount remitted on the Monthly Compliance and Alphalist of NGAs (Annex "C"); and 11. Submit to the WTD a Monthly Compliance and Alphalist of NGAs who have filed and who have failed to file their WTRs on or before the 15th day of the month in diskette format or thru e-mail ([emailprotected]) using Annex "C". b. The CBR Pre-Processing Data Controller shall: 1. Receive unsegregated original and duplicate WTRs, TRAs duly received by BTr and the corresponding BCS-As from Receipt and Control Unit; 2. Write BCS number in the upper right hand corner of each of the WTRs; 3. Check WTRs against the list of NGAs furnished by the WTD and post corresponding TRA number, amount and date issued. Send reminder letters to those who have failed to file their returns on the 10th day of the following month; 4. Reconcile the total amount shown in the TRA and the amount in each WTR. 5. Reconcile serial number with the serial number of the blank TRA forms issued to NGA and detach TRA from WTR; 6. File in numerical sequence the TRAs duly received by BTr-RO for each month; 7. Provide Assessment Section with the information of concerned NGAs who were late in filing or who have failed to file their WTRs for the preparation of the Preliminary Assessment Notice (PAN), or issuance of Letter of Authority/Tax Verification Notice, whichever is appropriate; and 8. Forward WTRs, TRAs duly received by BTr and BCS-As to CBR Data Verifier. c. The CBR Data Verifier shall: 1. Receive unsegregated original and duplicate WTRs and the corresponding BCS-As from CBR Pre-Processing Data Controller; 2. Encode payment information using the ADD function of ITS-CBR; and 3. Forward BCS-As and WTRs to Document Processing Unit Pre-Processing Data Controllers. The Document Processing Section thru the RPS Pre-processing Data Controller shall: 1. Receive BCS-As & WTRs from the CBR data verifier; and 2. Follow the existing procedures as defined in Annex "A" returns processing manual of RMO No. 32-2000. A.3 For Non-Computerized RDO : The Collection Section shall: a. Receive from the NGAs the WTRs with TRA; b. Batch the WTRs and TRAs in 50s or less; c. Prepare in triplicate, BCS-A exclusively for TRAs from NGAs under the new system according to date of receipt; d. Forward triplicate BCS-As to the Administrative Division, Regional Office; e. Write the TRA number on the validation portion of each of the WTRs; f. Transmit to BTr-RO the original TRA and have the duplicate and triplicate copies duly stamped received; g. Transmit to BIR-FD the duplicate TRA duly stamped received by BTr-RO and have the triplicate copy duly stamped received; h. Post TRA Number, date of receipt by BTr, date received by BIR-FD and amount remitted on the Monthly Compliance and Alphalist of NGAs (Annex "C"); i. Submit to the WTD a Monthly compliance and Alphalist of NGAs who have filed and who have failed to file their WTRs on or before the 15th day of the month in diskette format or thru e-mail ([emailprotected]) using Annex "C"; j. Notify the concerned NGA of any discrepancy noted within five (5) working days from receipt of the TRAs so that timely adjustments can be made; k. Provide Assessment Section with the information of concerned NGAs who were late in filing or who have failed to file their WTRs together with the TRA for the preparation of the Preliminary Assessment Notice (PAN) or issuance of Letter of Authority/Tax Verification Notice, whichever is appropriate; l. Write BCS number in the upper right hand corner of each of the WTRs; m. Encode payment information in LBDES; n. Forward LBDES diskettes to Revenue Data Center for uploading into ITS; and o. Report the amount of collection through TRAs in the Monthly Collection Report (BIR Form 1209). B. FINANCE DIVISION shall: a. Receive from WTD a list of BTr-RO where the RDOs shall transmit original TRAs received from NGAs; b. Receive from RDO the duplicate copy of TRAs duly stamped received by BTr-RO during the week; c. Record TRAs duly stamped received by BTr-RO as tax collection in the Journal of Tax Remittance by Government Agencies (JTRGA) in accordance with the prescribed accounting entries under Section 5.1 of DOF-DBM-COA Joint Circular 1-2000; and d. Prepare a Summary Listing of TRAs recorded during the week and forward every Monday thru E-mail to RAD ([emailprotected]) copy furnished the WTD ([emailprotected]) using Annex "D". C. ADMINISTRATIVE DIVISION shall: a. Receive blank TRAs from the WTD; b. Distribute the initial blank TRAs to RDOs; c. Receive subsequent requisition of blank TRAs from RDOs with the original and duplicate copy of the Report on Tax Remittance Advice Used/Cancelled/Lost attached to RIVs; d. Transmit to the WTD the duplicate copy of the Report on Tax Remittance Advice Used/Cancelled/Lost (Annex "B") attached to RIVs of NGAs on subsequent requisitions; and e. Maintain a logbook of issued Blank TRAs. D. REVENUE ACCOUNTING DIVISION of the COLLECTION SERVICE shall: a. Receive from WTD a list of BTr-RO where the RDOs shall transmit original TRAs received from NGAs; b. Receive from BIR-FD a consolidated list of TRAs transmitted to the BTr-RO during the week thru e-mail; c. Prepare a consolidated list of TRAs received during the week and transmit the same every Wednesday to the BTR-Central Office for reconciliation and effect the necessary adjustments, if any; and d. Furnish RDO and BIR-FD of concerned RO with a list of BTR-RO where the RDOs shall transmit original TRAs received from NGAs. E. INFORMATION SYSTEM DEVELOPMENT SERVICE shall: a. Assist in the training of concerned RDO personnel in the use of Limited Bank Data Entry System (LBDES); and b. Develop such other computer aided tools and enhancements that would be necessary to successfully implement the new system in the remittance of taxes withheld by the NGAs. F. INFORMATION SYSTEM OPERATIONS SERVICE (ISOS) shall: a. Immediately act on the application for the branch codes in the TIN of concerned NGAs upon receipt thereof from the non-computerized RDOs following the procedures set forth in RMO 79-99 dated October 6, 1999. G. WITHHOLDING TAX DIVISION of the COLLECTION SERVICE shall: a. Receive from GSD the serially numbered blank TRA forms printed for distribution to RO-Administrative Division; b. Provide BTr-Central Office with the listing of serial numbers of all TRAs printed; c. Receive from RO-Administrative Division the RIV and the duplicate copy of the Report on Tax Remittance Advice Used/Cancelled/Lost attached to RIVs of NGAs on subsequent requisitions; d. Receive report of the Monthly Compliance and Alpha list of NGAs who have filed and who have failed to file their WTRs on or before the 15th day of the month (Annex "C"); e. Conduct field verification on compliance of RO, RDO and NGAs to the provisions of JC 1-2000A; f. Receive from BIR-FD a Summary Listing of TRAs thru e-mail; and g. Prepare management reports on the collection and compliance of NGAs in the remittance of taxes withheld through TRAs. H. REVENUE DATA CENTER shall: a. Receive LBDES diskettes for uploading to ITS from the non-computerized RDO; and b. Follow the existing procedures as defined in Annex "A" of RMO No. 32-2000. I. HUMAN RESOURCE DEVELOPMENT SERVICE THRU TRAINING MANAGEMENT DIVISION & TRAINING DELIVERY DIVISION shall: a Conduct training of concerned RDO personnel in the use of Limited Bank Data Entry System (LBDES) in coordination with ISDS. V. REPEALING CLAUSE All other issuances and/or portions thereof inconsistent herewith are hereby repealed and amended accordingly. VI. EFFECTIVITY This Order takes effect immediately. (SGD.) RENE G. BAEZ Commissioner of Internal Revenue ANNEX A Tax Remittance Advice INSTRUCTIONS/GUIDELINES WHAT: This Tax Remittance Advice (TRA) shall be filed as payment attached to Withholding Tax Returns (BIR Forms 1601-C, 1601-E, 1601-F, 1600, and 1603). WHO SHALL FILE: All National Government Agencies (NGAs) and offices under them. HOW: Prepare one TRA for every tax type and file the same in 4 copies with the BIR withholding tax returns. WHEN: On or before the 10th day of the following month after the taxes were withheld. ANNEX B Report on Tax Remittance Advice Used/Cancelled/Lost ANNEX C Monthly Compliance & Alphalist of National Government Agencies (NGAs) ANNEX D Summary Listings of Tax Remittance Advice