Implementing Rules and Guidelines on the Tax Administration Development Fund

February 13, 1996 REVENUE REGULATIONS NO. 03-96 SUBJECT : Implementing Rules and Guidelines on the Tax Administration Development Fund TO : All Internal Revenue Officials and Others Concerned SECTION 1 . Purpose . These regulations are hereby promulgated to implement the provisions of Section 18 of Republic Act No. 7716 creating a Tax Administration Development Fund (TADF). SECTION 2 . Definition of Terms . For purposes of these regulations, the following definition of words and phrases is hereby adopted: 2.1 VAT Collections refers to the actual internal revenue collections of the BIR from Value Added Taxes (VAT). 2.2 Increase in VAT Collections refers to the actual incremental collections of the BIR between the immediately preceding year (e.g., 1995) and the year prior to it (e.g., 1994), as reflected in the final version of the Cash Operations Report of the Bureau of the Treasury (BTR). SECTION 3 . Source and Expenditures of the TADF 3.1. Source The TADF shall be created out of five (5%) percent of the increase in VAT collections in a given year over that of the immediately preceding year, starting in 1995 and annually thereafter for a period of four (4) years. In case there is no increase in VAT collections, no amount shall accrue to the Fund. The Fund shall be treated as receipts automatically appropriated in 1995. Thereafter, the amount accruing to the Fund shall be incorporated in the General Appropriations Act. 3.2. Expenditures All amounts accruing to this Fund shall be used for the effective implementation of the Expanded VAT Law; provided, however, that no part of the Fund shall be used for the purchase of vehicles, the payment of salaries and incentives, creation of regular positions, and construction of buildings and offices. The unutilized balance of the Fund at the end of the year, if any, shall be retained by the BIR and shall be available for obligation for the purpose specified. SECTION 4 . Availment of the Fund 4.1 Within one hundred twenty (120) days after the end of the calendar year, the BIR shall: 4.1.1 Submit to the Secretary of Finance a VAT Collection Report showing the actual internal revenue collections from VAT for the immediately preceding year and that of the previous year, the increase in VAT collections, and the actual amount accruing to the Fund, supported by a certification from the BTR as to the actual revenue collections of the BIR from VAT for the pertinent years. 4.1.2 Submit a request for a special budget to the Department of Budget & Management (DBM) for the release of funds. This request shall be supported by a certification of the Department of Finance on the actual internal revenue collections of the BIR from VAT for the applicable years as well as the certification cited in Section 4.1.1. 4.2 The BIR shall submit a report to the Secretary of Finance on the utilization and status of the fund, copy furnished the DBM. SECTION 5 . Accounting Entries The accounting entries to be followed in the implementation of these Revenue Regulations shall be in accordance with existing accounting and auditing rules and regulations. SECTION 6 . Effectivity These Regulations shall take effect immediately. ROBERTO F. DE OCAMPO Secretary of Finance Recommended by: LIWAYWAY VINZONS-CHATO Commissioner