Amendment of RMO No. 73-94 Dated Dec. 26, 1994, Revising the Format and Procedures in the Preparation of the "Report on Drastic Changes in Collection Performance" (BIR Form No. 1771)

March 19, 1998 REVENUE MEMORANDUM ORDER NO. 46-98 SUBJECT : Amendment of RMO No. 73-94 Dated Dec. 26, 1994, Revising the Format and Procedures in the Preparation of the "Report on Drastic Changes in Collection Performance" (BIR Form No. 1771) TO : All Internal Revenue Officers and Others Concerned I. OBJECTIVE: This order is issued to: 1. Institutionalize an improved reporting process and prescribe the revised BIR Form No. 1771 for the purpose of presenting drastic changes in collections and the reasons therefor. 2. Make the revised BIR Form No. 1771 an effective tool for evaluating the behavior of collection by type of tax, to be used by the Regional Director and the top management, as well. 3. Utilize the results of evaluation of the drastic changes in collection by type of tax to explain the BIR's collection performance as required by the Department of Finance. II. POLICIES AND GUIDELINES: For the purpose of this Order, the following policies and guidelines should be observed: 1. The Revenue District Officer (RDO) shall accomplish revised BIR Form No. 1771 (refer to Annex A) on a monthly basis. A. Drastic changes is defined as follows: i. When collection versus goal for particular type of tax(es) results in: a) shortfall in collection and/or; b) excess in collections where percentage increase is 20% or more for the month. ii. When current collection compared to previous year's collection of a particular type of tax(es) results in: a) decrease in collection and/or; b) increase in collections where percentage increase is more than the expected growth of Gross Domestic Product for the year, which is 9.68% for 1998. In the event that there are no drastic changes of collection performance for particular type of tax(es), the phrase "NO DRASTIC CHANGES" shall be indicated in the explanation column of BIR Form No. 1771. B. The reasons for the drastic change may refer to any of the following: i. Implementation of legislative measures: a) New measures e.g. CTRP changes resulting in increase or decrease in tax rates an/or taxpayer base. b) Tax incentives e.g. non-cash payment through Tax debit memo or incentives administered by the Board of Investments, the Department of Finance, and other authorized government agencies. The specific incentive and government agency must be indicated. ii. BIR Administrative measures Pertains to tax campaigns, issuances enhancing collection, etc. The specific RMO or issuances must be cited/indicated. iii. External Economic Factors Pertains to growth in sales, volume of transactions, cease operations, among others. The specific reasons should be indicated. dctai iv. Transfer of Taxpayers The new "Home RDO" of transferred taxpayers must be specified. C. Specific industries/sectors contributing to the drastic changes must be reported together with a list of specific taxpayers contributing to the drastic changes. 2. The RDO shall submit the accomplished BIR Form No. 1771 not later than the tenth working day of each month to the Regional Director. 3. The Regional Director shall prepare the regional analysis of the drastic change in collection of his/her region, based on BIR Form No. 1771 submitted by the RDOs. 4. The Regional Director shall submit the regional analysis of the drastic change in collection with the accomplished BIR Form No. 1771 submitted by the RDOs to the Statistics Division not later than the fifteenth working day of each month. 5. The Statistics Division shall prepare an overall analysis of the drastic change in collection by major type of tax based on the report of the Regional Director and the BIR Form No. 1771 submitted by the RDOs. This report shall be submitted to the Commissioner, Deputy Commissioner for the Operations Group, and ACIR Collection Service not later than the end of each month through the Assistant Commissioner, Policy and Planning Service. III. REPEALING CLAUSE: This Order supercedes Revenue Memorandum Order 73-94. IV. EFFECTIVITY: This Order shall take effect beginning April, 1998 collection report. LIWAYWAY VINZONS-CHATO Commissioner ANNEX A QUARTERLY UPDATED REPORT ON THE NUMBER OF REGISTERED TAXPAYERS AND STOP FILERS