Implementation of Executive Order No. 937 Dated March 1, 1984 Vesting in the Bureau of Internal Revenue the Primary Responsibility of Enforcing the Collection of National Internal Revenue Taxes Through the Banking System

1984 REVENUE REGULATIONS NO. 05-84 SUBJECT : Implementation of Executive Order No. 937 Dated March 1, 1984 Vesting in the Bureau of Internal Revenue the Primary Responsibility of Enforcing the Collection of National Internal Revenue Taxes Through the Banking System TO : All Officials Concerned of the Central Bank of the Philippines, Bureau of the Treasury, Bureau of Internal Revenue and Accredited Banks SECTION 1 . Scope . Pursuant to the provisions of E.O. 937, dated March 1, 1984, these regulations are promulgated to prescribe the rules, guidelines and procedures to effectively implement the utilization of the banking system in receiving and accounting for internal revenue tax payments. SECTION 2 . Criteria for the selection of banks and the conditions under which they may be accredited or authorized to collect internal revenue taxes . In general, all commercial and specialized government banks (DBP, Land Bank, Amanah Bank) may be accredited or authorized to collect internal revenue taxes, provided they qualify under the criteria and the conditions stated hereunder. Thrift banks, private development and/or rural banks may be authorized to collect internal revenue taxes only in places where there are no commercial, and specialized government banks serving in such places. However, those thrift banks, private development banks and stock savings and loan associations which were previously authorized to collect internal revenue taxes and have not committed any infractions of CB Circulars 844 and 904 and other pertinent issuances, may apply for accreditation under these regulations. cd The Bureau of Internal Revenue shall accredit or authorize any bank to collect internal revenue taxes under the following conditions: 1. The Bank shall file an application for accreditation. Banks applying for accreditation as authorized bank for the collection of internal revenue taxes may file their applications with the Collection Office of the Bureau of Internal Revenue or through the Revenue Regional Director of the regional offices of the Bureau. 2. The application shall be in writing and shall contain the following information: a. Kind of bank, capitalization, and list of officers and members of the Board of Directors. b. List of addresses of the Head Office/Branches/ Extension Offices/Agencies which the bank wish to include in the accreditation. The Office/Branch/Extension Office/Agency that can put up a tellering booth where space can be provided for by revenue offices, or which Head Office/Branch/Extension Office/Agency can provide office space in their respective offices for which internal revenue officers may hold office, free of charges, shall be indicated in the list. c. Sample specimen of the signature of the bank officials authorized to requisition Confirmation Receipts from the Bureau of Internal Revenue. d. Sample specimen signature of the bank officials authorized to sign collection reports (BIR Forms 12.55 to 12.58). e. The names of bank officials duly authorized to deal with the officials and employees of the Bureau of Internal Revenue on problems relevant to its collection of internal revenue taxes. casia 3. The bank shall, upon approval of its application, execute an agreement with the Bureau of Internal Revenue in the prescribed format attached as Annex "A" and which forms an integral part hereof. SECTION 3 . Records to be kept by banks . Accredited Banks shall keep and maintain the following records which shall be made available for inspection and audit by duly authorized BIR officers and agents: A. COLLECTING BANK OFFICES (head office/Branches/agencies/ extension offices) A. "Special Cash Book" which shall indicate the following: a. Date of collection b. Inclusive serial numbers of CRs issued c. Report name and control number (BIR Form No. 12.56/BIR Form No. 12.58) d. Amount of collection (Due the Central Bank - BIR Collections) e. Amount of dishonored checks f. Date report was submitted to BIR B. BANK HEAD OFFICES In addition to the "Special Cash Book" required above, head offices of accredited banks shall keep and maintain a "Record of Consolidated Collections and Remittances" showing the following: a. Date of collection b. Name/Location of Collecting Offices (including H.O.) c. BIR Form 12.56 Control Number d. Inclusive CR Numbers e. Amount Due the Central Bank (amount indicated in Form 12.56) f. Amount reported per BIR Form No. 12.55 g. Difference between 12.56 and 12.55 h. Date of CB-Debit Advice (regular collection) i. Amount of CB-Debit Advice (regular collection) j. Date of CB-Debit Advice other than Remittance of Collections k. Among of CB-Debit Advice other than Remittance of Collections l. BIR Form 12.58 Control Number m. Amount of Returned/Dishonored Checks (amount indicated in 12.58) n. Date of CB-Credit Advice on adjustments o. Amount of CB-Credit Advice on adjustments SECTION 4 . Refund . Banks shall not refund to any taxpayer amounts collected for which a confirmation receipt has been issued. Overpayment and/or erroneous payment of internal revenue taxes shall be determined and refunded by the Commissioner of Internal Revenue in accordance with existing laws, rules and regulations. aisa dc SECTION 5 . Responsibilities of offices involved in the collection of national internal revenue taxes thru the banking system . Pursuant to Executive Order No. 937, Series of 1984, the Central Bank of the Philippines, the Bureau of Internal Revenue and the Bureau of the Treasury shall assume the responsibilities indicated hereunder to insure the effectiveness of the collection system. A. The Central Bank of the Philippines shall Act as a clearing house for accredited banks, the Bureau of the Treasury and the Bureau of Internal Revenue in the implementation of the collection of internal revenue taxes through the banking system. As such it shall: 1. accept remittances of any accredited bank by debiting its demand deposit account upon proper advice of said bank, and credit the Special Account of the Treasurer of the Philippines-BIR Collections. In no case shall amounts earmarked by accredited banks for remittance of tax collections be used for any other purpose; 2. debit the demand deposit account of an accredited bank for the amount of its unremitted collections or adjustments upon advise of the Commissioner of Internal Revenue and credit the Special Account of the Treasurer of the Philippines-BIR Collections, upon advise of the Commissioner of Internal Revenue ; 3. debit the demand deposit account of an accredited bank for penalties, surcharges and interest due on delayed remittance of tax collection upon advise by the Commissioner. Penalties, surcharges and interest debited shall be properly identified and segregated from other BIR Collections when credited to the Special Account of the Treasurer; 4. debit or credit the demand deposit account of accredited banks for adjustments of remittances also upon advise by the Commissioner and correspondingly debit or credit the Special Account of the Treasurer of the Philippines-BIR Collections; 5. furnish the Bureau of Internal Revenue and the Bureau of the Treasury with copies of the debit/credit advice the day following the debit/credit to the accredited banks' demand deposit-account; 6. send the debit/credit advice to the affected accredited bank the day following the debit/credit to the bank's demand deposit account where the debit or credit was made upon the advise of the Commissioner. B. The Bureau of Internal Revenue shall 1. furnish CB and BTR with a list of accredited banks (including their branches, agencies and extension office) with their respective code numbers; aisa dc 2. provide confirmation receipts for the use of accredited banks; printing costs of confirmation receipts and payment orders shall be assumed by the BIR upon full utilization of the present stock of these forms including those that have been ordered as of June 30, 1984; 3. account for and monitor tax collections and remittances of accredited banks; 4. furnish BIR with monthly reports of collection and remittances as recorded in the books of BIR, the statement of monthly collections shall be classified by revenue source in accordance with the GPS Classification; 5. communicate to accredited banks their delayed or unremitted collections, delayed or erroneous reports, penalties, surcharges and interest due, and discrepancies discovered including the resulting adjustments made; 6. furnish the BIR with copies of communications to banks on adjustments, delayed remittances, penalties, surcharges and interest imposed; 7. advise the Central Bank thru its Accounting Department to debit the accredited bank's demand deposit account for the amounts of unremitted collections, adjustments, penalties, surcharges and interests; 8. advise CB to debit or credit the Demand Deposit Account of the accredited bank with any necessary adjustments such as erroneous or double reporting of remittance on internal revenue collections and correspondingly debit or credit the account of the Treasurer of the Philippines for the same amounts; 9. furnish Bureau of the Treasury with advices to CB on adjustments to the demand deposit accounts of accredited banks which shall affect the account of the Treasurer of the Philippines-BIR Collections such as those mentioned in No. 8 above; 10. institute civil and criminal actions when warranted against accredited banks and/or their officials for infraction of the agreement between BIR and the accredited bank and the attendant rules and regulations; acd 11. take action on the Bank's property assigned to the BIR in case of default in the remittance of internal revenue tax collections if the bank's demand deposit account is not sufficient to satisfy the unremitted collections, accrued penalties, interests and surcharges; and 12. suspend the authority of accredited banks to collect internal revenue taxes, for cause. C. The Bureau of the Treasury shall 1. agree to the automatic credit of its Special Account-BIR Collections with CB for remittances of tax collections by accredited banks and automatic debits of the same account for adjustments such as double remittances by accredited banks and the like as advised by the BIR; 2. record in a Special Account in the General Fund the amount of penalties, surcharges and interest collected from accredited banks for violations of the rules and regulations issued on collection of internal revenue taxes; 3. advise BIR of discrepancies with their records on the following statements and communications furnished them by the BIR: a) statements of collection and remittances; and b) copies of communication to accredited banks on delayed or unremitted tax collection, penalties, surcharges and interests imposed, and any adjustments affecting its Special Account-BIR Collections. SECTION 6 . Disposition of Penalties collected . Penalties including surcharges and interest shall accrue to a Special Account in the General Fund for the use of the Bureau of Internal Revenue in furtherance of its Collection functions. casia SECTION 7 . Transitory Provisions . All banks presently authorized to collect internal revenue taxes may continue to do so up to June 30, 1984, after which they shall automatically cease to collect internal revenue taxes unless accredited thereafter. Likewise, all these banks shall submit an inventory of all CRs in their possession as of May 31, 1984 and a final inventory as of June 30, 1984. These inventories of Confirmation Receipts shall be submitted to the BIR, Collection Office on June 15, 1984 and July 10, 1984 respectively. SECTION 8 . Repealing Clause . All provisions of existing issuances which are inconsistent herewith are hereby revoked. SECTION 9 . Effectivity . These regulations shall take effect upon approval. (SGD.) CESAR E. A. VIRATA Minister of Finance Recommending Approval: (SGD). RUBEN B. ANCHETA Acting Commissioner ANNEX A A G R E E M E N T The BUREAU OF INTERNAL REVENUE, known hereinafter as the BIR, represented by Acting Commissioner Ruben B. Ancheta, Commissioner of Internal Revenue, National Office Building, Diliman, Quezon City and __________ represented by ________________________, President, known hereinafter as the Bank, after having been accredited and authorized to receive and collect internal revenue taxes, do hereby agree on the following: The Bank shall (1) acknowledge receipt of internal revenue tax payments by issuing confirmation receipts; in no case shall the Bank accept payment without the payment order duly issued by the BIR; acd (2) book all such collections and credit same to the Special Account "Due to Central Bank - Bureau of Internal Revenue"; (3) accomplish and submit collection reports as required by the rules and regulations hereto attached as Annex "B" and shoulder the cost of report forms prescribed therein; (4) authorize the Central Bank of the Philippines, Manila, thru its Accounting Department, to debit its demand deposit accounts maintained therein for the total daily collection which is due for remittance on the 11th calendar day after the date of collection, such amount debited shall be credited to the "Special Account - BIR Collections" of the Treasurer of the Philippines; and agree in case of non-remittance, for the BIR to advise the Central Bank to debit the amount of unremitted collections including penalties, surcharge and interests against the bank's demand deposit accounts; (5) maintain adequate balance in their demand deposit account for their daily remittance of tax collections; and inform Central Bank that such balance is earmarked for the remittance of tax collections; (6) keep and maintain records solely for internal revenue collections specified in the regulations which shall be made available for inspection and audit by duly authorized BIR officers and agents; (7) account for all confirmation receipts requisitioned and in case of loss, to submit to the BIR a sworn statement of the fact of loss together with the proof of publication thereof in three (3) newspapers of general circulation for three (3) consecutive weeks; the costs of such publication shall be for the account of the bank; and in the event the lost receipts will surface, the bank will be held responsible to the extent that the government is prejudiced; (8) pay a fine of P100.00 for every day of delay in the submission of each required report or the submission of inaccurate or incomplete report; likewise, a 25% surcharge on late remittance of and/or unremitted collections plus 1 / 10 of 1% interest per day thereon as provided for under paragraph 4 of this Agreement except if the delay or failure to remit on time is due to fortuitous events; (9) transmit returned or dishonored checks to the BIR the amounts of which shall be deducted from the gross collections on the day such checks were received; (10) abide with the rules and regulations promulgated by the BIR in connection with this authority and those that may be promulgated thereafter; (11) construct tellering booths within the BIR premises whenever possible at the Bank's expense; cdt (12) educate and inform the bank's officers and employees charged with tax collection functions on the terms of this Agreement and the rules and regulations relative to the collection of internal revenue taxes; and be responsible pecuniarily for any misdemeanor of its officers and employees committed in connection with this function; (13) communicate to the BIR any changes in the information stated in the application; and (14) assign to the BIR so much of its rights to property, real and personal, in case of default in the remittance of internal revenue collections, if the bank's demand deposit accounts are not sufficient to satisfy the unremitted collections, penalties, interests and surcharges; The BIR shall (1) provide confirmation receipts for the use of the Bank; (2) reconcile the amount collected with that remitted; (3) request the Central Bank thru its Accounting Department to debit the amount of unremitted collections plus penalties; surcharges and interests against the bank's demand deposit accounts; (4) advise CB to debit or credit the demand deposit accounts of the accredited bank with any necessary adjustments such as erroneous or double reporting of remittance of internal revenue collections and correspondingly debit or credit the account of the Treasurer of the Philippines for the same amounts; (5) institute civil and criminal actions arising from the delayed submission or non-submission of reports and non-remittance of collection; (6) take action on the Bank's property assigned to the BIR in case of default in the remittance of internal revenue collections, if the bank's Demand Deposit Accounts are not sufficient to satisfy the unremitted collections, penalties, interests and surcharges; and (7) suspend the authority to collect internal revenue taxes or terminate this Agreement in case of violations thereof and of the rules and regulations pertinent thereto and for any of the grounds provided in the Civil Code. The parties recognize that this Agreement does not extinguish other liabilities under existing laws and that payment of interests, penalties or surcharges on account of delayed remittance of tax collections or acquiescence of BIR on any infraction of these regulations, the Agreement or any other pertinent law or regulation shall not be construed as a waiver of any civil, criminal or administrative liability. This Agreement is effective for a period of one (1) year from the date hereof, renewable annually unless sooner terminated by either party. IN WITNESS WHEREOF, we sign this Agreement this _____ day of _____ 1984 at ________________. RUBEN B. ANCHETA Acting Commissioner _________________________ Bureau of Internal Revenue By: President A C K N O W L E D G M E N T REPUBLIC OF THE PHILIPPINES) CITY OF ____________________ ) S.S. In the Municipality/City of ________, on the _______ day of ______, 1984, personally appeared before me, , who represents that he is the president of the corporation described and named in the foregoing instrument of Agreement, and that he was duly authorized by the board of directors to execute said instrument, known to me to be the same person who executed said instrument on behalf of the corporation named herein, and he acknowledged to me that the same is the free act and deed of said corporation. The Residence Certificate of said ___________ and the Residence Certificate of the ___________ Corporation were exhibited to me, and the same being No. A _________ issued at _______ on ________, 19___, and No. C-____ issued at ________________ on ____________, 19 IN WITNESS WHEREOF, I have hereunto set my hand and seal this ______ day of _______ 1984. NOT ARY PUBLIC Until December 31, 19 ___ Doc. No. _________ Page No. _________ Book No. _________ Series of 19 _______ REPUBLIC OF THE PHILIPPINES) CITY OF ____________________ ) S.S. In the Municipality/City of ________, on the _____ day of _________ 1984, personally appeared before me, Ruben B. Ancheta, Acting Commissioner of Internal Revenue, who is the same person named in the foregoing Agreement, known to me to be the same person who executed said instrument on behalf of the Bureau of Internal Revenue and acknowledged to me that the same is his free act and deed. The Residence Certificate of said Acting Commissioner of Internal Revenue was exhibited to me, and the same being No. _______ issued at ________ on _______, 1984. IN WITNESS WHEREOF, I have hereunto set my hand and seal this _____ day of ________, NOTARY PUBLIC Until December 31, 19___ Doc. No. _______ Page No. _______ Book No. _______ Series of 19______ ANNEX A RULES AND REGULATIONS ON THE COLLECTIONS OF INTERNAL REVENUE TAXES THROUGH THE BANKING SYSTEM I. Requisition and Distribution of Confirmation Receipt (CR) Booklets The Head Office of Accredited Banks shall 1. Requisition Confirmation Receipt booklets for the use of all its collecting offices (including head office, branches, agencies, extension offices) from the Accountable Forms Division of the Bureau of Internal Revenue (BIR) using BIR Form 12.59. The requisition shall first be presented to the Collection Office for approval. 2. Distribute these Confirmation Receipt booklets to all its collecting offices according to pre-determined needs. 3. Submit to the BIR a monthly report on BIR Form 12.50 on its requisitions of CR booklets and the distribution of the same to all its collecting offices within three days after the end of each month. 4. Insure that all its collecting offices are amply provided with CR booklets at all times, so that collection of taxes will not be impaired because of lack of confirmation receipts. 5. Report to the BIR Collection Office immediately upon discovery losses of Confirmation Receipts and publish the fact of loss in the manner required under No. 7 of the Bank's commitments in the Agreement. II. Collection and Reporting of Internal Revenue Payments Banks accredited to accept payment of internal revenue taxes shall 1. acknowledge receipt of internal revenue tax payments by issuing Confirmation Receipts. In no case shall a bank accept internal tax payments without the presentation of a duly issued Payment Order by the BIR. 2. install a "Special Cash Book" exclusively for Internal Revenue collections where their daily collections shall be recorded. 3. The Collecting Office (Branch/Extension Office/Agency) shall a) report by telephone, telex or other means to its Head Office, at the end of each day, total collections for the day and the inclusive serial numbers of CRs issued, to be used as basis for the preparation by their respective Head Office of Consolidated Report on Daily Collections of Internal Revenue Taxes (formerly RC Form No. 82-001 now BIR Form No. 12.55) b) accomplish the Abstract of Daily Collections of Internal Revenue Taxes (formerly RC Form No. 82-002, now BIR Form No. 12.56) and submit the same duly supported with copies of Payment Orders (PO) and Confirmation Receipts (CRs) within ten (10) days from the date of collection to the offices indicated in the form. The abstract of daily collections of Internal Revenue Taxes shall show in numerical sequence the serial numbers of CRs issued, including those which were cancelled or missing. All CRs in a booklet must be accounted for as issued, cancelled or missing. All copies of CRs issued and cancelled, shall be attached to this report, not in a separate report. c) report and transmit immediately to their respective Head Offices returned/dishonored checks which shall be the basis in the preparation of the report on dishonored checks (formerly RC Form No. 82-004 now BIR Form No. 12.58) 4. The Head Office of the Collecting Bank shall a) consolidate its report of collection with those of the branches/extension offices/agencies and submit to the BIR Receiving Unit, CB Complex, the Consolidated Report of Daily Collection of Internal Revenue Taxes (formerly RC Form No. 82-001 now BIR Form No. 12.55) within three (3) days following the date of collection. The consolidated report of Daily Collections of Internal Revenue Taxes shall list all its authorized collecting offices to insure that every such office is included in the report, whether or not it has received tax payments for that date. b) submit directly to the Revenue Accounting Division, BIR, Diliman, Quezon City, all returned or dishonored checks the day following receipt of such checks. Prepare the Report on Returned/Dishonored Checks (formerly RC Form No. 82-004 now BIR Form No. 12.58) in time for acknowledgment of receipt by the Revenue Accounting Division of BIR of the returned/dishonored checks on the report itself. cd i c) consolidate the Abstract of Daily Collection of Internal Revenue Taxes (formerly RC Form No. 82-002 now BIR Form No. 12.56) with those received from branches/extension offices/agencies in the Consolidated Abstract of Collection of Internal Revenue Taxes (formerly RC Form No. 82-003 now BIR Form No. 12.57). Copies of the consolidated abstract shall be attached to the corresponding copy of the Authority To Debit Demand Deposit Account (BIR Form 12.57A). The original copies of BIR Forms 12.57 and 12.57A shall be submitted to the Accounting Department, Central Bank of the Philippines, Manila, on the eleventh (11th) Calendar day following the date of collection. Simultaneously the remaining copies of both forms, with the supporting POs and CRs shall be submitted to the Offices indicated in the forms. d) report on BIR Form 12.57 total gross collection for the day without deducting the following: 1. the amount of dishonored checks, as the same shall be reflected as a deduction from the collections of the day, in the Authority issued by Accredited Banks on BIR Form No. 12.57A. Such deduction shall be allowed only when BIR has acknowledged receipt of dishonored checks as required in (b) above. 2. any adjustment on the amount reported in BIR Forms 12.55, 12.56 and 12.57 as the same shall be credited to or debited against their Demand Deposit Account upon the advice by the BIR after proper verification of the pertinent reports. e. submit only one supplementary report on BIR Forms No. 12.55 or 12.57 (formerly RC Form No. 82-001 and 92-003) for each date of collection for reports of branches or extension offices received by Head Office after the corresponding Consolidated Report for any date of actual collection has been submitted. The word "SUPPLEMENTAL" shall be indicated in bold letters to wit: April 15, 1984 SUPPLEMENTAL ________________ Date of Collection The reason or reasons for the delay in the submission of the report shall likewise be stated in the supplemental report for the purpose of determining appropriate action on the matter. casia f) inform the Bureau if there is no collection on any given date by stating in the next subsequent report of collection that no tax payments were received on such specified date's. g) provide control numbers to all collection reports (BIR Form 12.55 to 12.60) prior to submission to the BIR. III. Recording and Maintenance of "Special Cash Book-BIR" and Record of Consolidated Collections and Remittances" Bank Collecting Offices, including the Head Office shall 1. record daily in its "Special Cash Book" the total daily collection using as basis BIR Form No. 12.56, as required in Sec. 3A of Revenue Regulations No. 5-84 2. record daily or as necessary in its "Special Cash Book" the total amount of dishonored checks; 3. foot the "Special Cash Book" monthly. The Bank Head Office shall 1. record daily in its "Record of Consolidated Collections and Remittances" as required in Sec. 3B of Revenue Regulations No. 5-84: a) its total daily collection and that of each of its collecting offices as reported in BIR Form 12.56; b) the total amount of collection of each of its collecting offices, as reported in BIR Form No. 12.55; c) the total amount of its dishonored checks and that of each of its collecting offices; d) the total amount debited by the Central Bank against its Demand Deposit Account as evidenced by CB-Debit Advice; e) the total amount credited by the Central Bank to its Demand Deposit Account as evidenced by CB-Credit Advice. 2. indicate the causes of the discrepancies between 12.56 and 12.55 with a footnote. 3. foot the pertinent columns of "Record of Consolidated Collections and Remittances" daily. 4. indicate on the last page of the daily record, right below the total of 12.56, the control number of BIR Form 12.57 where subject collection was reported and the date when such report was submitted to the BIR and the Central Bank . 5. add the daily totals of the pertinent columns of the "Record of Consolidated Collections and Remittances" at the end of each month. 6. indicate the totals arrived at on the second line immediately after the date when the last 12.57 report was submitted to the BIR. 7. double rule the totals indicated in No. 6 above. BIR Form No. 12.55 BIR Form No. 12.56 BIR Form No. 12.57 BIR Form No. 12.57A BIR Form No. 12.58 BIR Form No. 12.59 BIR Form No. 12.60