Guidelines for the Implementation of Revenue Regulations No. 7-89 Pertaining to the Advance Payment of Value-Added Tax on Sale of Refined Sugar

November 14, 1989 REVENUE MEMORANDUM ORDER NO. 46-89 SUBJECT : Guidelines for the Implementation of Revenue Regulations No. 7-89 Pertaining to the Advance Payment of Value-Added Tax on Sale of Refined Sugar TO : All Internal Revenue Officers and Others Concerned BACKGROUND Revenue Regulations (RR) No. 7-89 requires that the value-added tax (VAT) shall be paid in advance by the owner/seller of refined sugar to the Bureau of Internal Revenue prior to the issuance of the refined sugar release order (RSRO) or similar instrument by the sugar refinery. MANNER OF PAYMENT The VAT advance payment shall be covered by the declaration issued by the sugar refinery/miller. If the payment shall be made in the form of a check, it shall be issued to the order of the Commissioner of Internal Revenue. cd i The details of this check payment shall be indicated prominently on the corresponding refined sugar release order. The information to be indicated are the check number, the name and address of the bank from which the check is drawn, the amount and the date of the check. COLLECTION OF PAYMENTS The Regional Director and/or Revenue District Officer shall ensure that the payments representing the VAT advance payments are collected daily from all sugar refineries falling under their respective jurisdiction. Arrangements shall be made with the individual sugar refinery in the manner these can be instituted, taking into consideration the convenience of all parties concerned and the available resources of the revenue office. The collection of these payments can be done through any of the following methods: (1) Assignment of a Collection Agent in the premises of the sugar refinery to accept immediately the advance payments, or, (2) Pick up of all payments accumulated by the sugar refinery at the end of each business day by a Collection Agent, or, (3) Any other appropriate arrangements. The provision of Section 8 of RR 7-89 regarding the issuance by the BIR of individual official receipts/confirmation receipts as evidence of advance payments must be complied with. Furthermore, the RDO or Collection Agent receiving the advance payment shall accomplish and issue individual Certificate of Advance Payment to each payor. MONITORING The Regional Director and/or Revenue District Officer (RDO) shall institute a system of regular spot checkings in order that the provision of Section 4 of RR 7-89 regarding the prohibition of withdrawal without the advance payment of VAT is complied with by all sugar refineries. Furthermore, the Regional Director and/or RDO shall obtain information from all sugar refineries within their jurisdiction of withdrawals of refined sugar from September 1, 1989 (date of effectivity of revocation of VAT Ruling No. 80-88 exempting refined sugar from VAT) up to the date of effectivity of Revenue Regulations No. 7-89 and adopt and implement an audit program to ascertain that the identified sugar owners/sellers have paid the corresponding VAT on these withdrawals/sales. cd The RDO shall submit monthly reports of the amount of collection of advance payments to the Chief, VAT Division, not later than the 10th day of the following month. The RDO shall transmit the original copy of the quarterly information of VAT advance payment to the Chief, VAT Division, within five days from receipt thereof. Any observations and/or recommendations regarding improvements in the implementation of RR 7-89, including proposals for subsequent base price adjustments pursuant to Section 6(b) of RR 7-89 shall be communicated to the Chief, VAT Division, for evaluation thereof. casia EFFECTIVITY This Order takes effect immediately. (SGD.) VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-charge)