Revenue Memorandum Circulars 01-02-80 Revenue Memorandum Circular No. 2-80 January 2, 1980 REVENUE MEMORANDUM CIRCULAR NO.

2-80 Subject : Publishing Pertinent Portions of Central Bank of the Philippines Circular No. 707, Series of 1979 To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned there is published hereunder the provisions of Central Bank Circular No. 707, Series of 1979 applicable to the payment of national internal revenue taxes through the banking system: "The Monetary Board, in its Resolution No. 2063 dated November 23, 1979, approved the following amendments to Circulars No. 640 dated November 20, 1978, 217 February 8, 1966, 313 dated November 26, 1970 and 426 dated August 21, 1974 on the rules and regulations governing the collection of internal revenue taxes and customs duties, taxes and other levies: "Sec. 1. Section 2 of Circular No. 640 is hereby amended to read as follows: "Authorized agent banks which include head offices, branches and agencies of commercial banks, savings and mortgage banks, stock savings and loan associations, development banks, the Development Bank of the Philippines and the Land Bank of the Philippines shall accept payment from the taxpayer the full amount of internal revenue taxes stated in space number 9 of the Revenue Tax Receipt (RTR) issued by the Commissioner of Internal Revenue or his authorized deputy, in the form of cash, cashier's, treasurer's manager's or certified checks, and checks drawn by the taxpayers or advice by the taxpayer to its bank to debit its account and shall issue and validate the corresponding Confirmation Receipt (CR) on forms prescribed for this purpose. However, payments made through a debit to the account of the taxpayer shall involve amounts of P20,000.00 and above only and accordingly, in the preparation of the Revenue Tax Receipt (RTR), the Commissioner of Internal Revenue or his authorized deputy, shall, upon inquiry from the taxpayer, indicate thereon the name of the authorized agent bank to whom the "taxpayer shall pay. In turn, the authorized agent bank shall indicate in space number 12 of the Confirmation Receipt the remarks "Account debited." Such Confirmation Receipt forms shall be supplied to the Authorized Agent Banks by the Revenue Collection Office, Central Bank, and shall be treated as accountable forms by the Authorized Agent Banks. In the cities of Cebu, Davao, Bacolod, Iloilo and Cagayan de Oro, Confirmation Receipt forms (CR) shall be supplied to the branch offices of the Authorized Agent Banks by the Central Bank's Revenue Collection Regional Units in the said cities and shall be treated as accountable forms by said branches of Authorized Agent Banks. Authorized Agent Banks shall be required to submit a monthly Inventory Report of Confirmation Receipt (CR) to the Revenue Collection Office, Central Bank or its Revenue Collection Regional Units, not later than the 15th day of the succeeding month. However, in case of documentary, science and strip stamps, payment thereof shall be in the form of cash or cashier's manager's, treasurer's or certified checks. A check accepted for payment of taxes shall apply to only one Confirmation Receipt (CR). The Bureau of Internal Revenue shall be the sole agency to issue Revenue Tax Receipts (RTRs) to taxpayers and shall be fully accountable to the Central Bank for all Revenue Tax Receipt forms issued by them." aisa dc

All Internal Revenue Officers are enjoined to give these provisions of CB Circular No. 707 as wide a publicity as possible. EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-80 Revenue Memorandum Circular No. 3-80 January 23, 1980 REVENUE MEMORANDUM CIRCULAR NO. 3-80 Subject : Publishing the National Housing Authority RULES AND REGULATIONS IMPLEMENTING P.D. 1217, the subject matter of which is the grant of tax exemption benefits to domestic corporations, partnerships or landowners who invest funds in housing for the low-income groups. To : All Internal Revenue Officers and Others Concerned. "RULES AND REGULATIONS IMPLEMENTING PD - 1217 "WHEREAS, Presidential Decree 757 mandated the National Housing Authority, hereinafter referred to as the Authority, to harness and promote the participation of the private sector in housing; "WHEREAS, in support of this objective, encouragement and incentives have been granted by Presidential Decree 1217 to broaden the participation of the private sector; "WHEREAS, these incentives have been conceived to help the mass of the people to afford decent shelter and secure tenure; cdt "WHEREAS, Section 4 of Presidential Decree 1217 requires the Authority to define the low-income groups who shall through incentives granted to domestic corporations, partnerships and landowners, be the end-beneficiaries for the Decree; "WHEREAS, Section 5 of Presidential Decree 1217 specifies that the Authority certifies and approves projects eligible for benefits under the said Decree and therefore, consequently a need to define rules and regulations pertinent to such certification and approval; "NOW, THEREFORE, pursuant to the provisions of Presidential Decree 1217, the National Housing Authority hereby promulgates the following procedures, rules and regulations: "ARTICLE I DEFINITION OF TERMS "Sec. 1. Low Income Family. - For purpose of Presidential Decree 1217, the lowincome family is hereby defined as that family who, under the prevailing normal market conditions of construction and of money costs, needs government assistance and subsidy in the form of capital and/or interest in order to avail of housing opportunities. cdtai "By reason of the foregoing, until further revised by the Authority, a low-income family shall be understood to mean and to include that family whose average gross income, as evidenced by the joint income tax returns of the head and spouse for the last immediately preceding two (2) years, does not exceed P1,500 a month. Notwithstanding the above income categorization, the low-income family with networth of more than P100,000 shall not be eligible for the benefit under PD 1217. Income and networth for the purposes of eligibility under this Decree shall be determined at the time of application.

"Sec. 2. Housing Improvement. - A housing improvement is a physical development on land which is being utilized for residential purposes and which may take the form of among others, an apartment, a condominium unit, a house, a building, or parts thereof, the value of which improvement proportionately increases the valuation of the land on which the improvement is made. Further, it also includes all other structures necessary and incidental to the housing development undertaken in order to enhance the quality of housing the low income family as defined in Section 1. "Housing improvements shall also include improvement on land undertaken to make the area habitable such as water system, drainage, pipelines, roads, community facilities and open space development. casia "Sec. 3. Income. - Income for the purposes of Section 3 of Presidential Decree 1217 is defined as the gross income received and/or accrued by the domestic corporation, partnership or landowner as a result of undertaking a housing development which shall be rented, or sold under installment basis, less allowable deductions. "Such income shall be arrived upon after an adequate accounting system shall have been installed for every low-income housing development which shall be clearly separated from other taxable transactions in the books of account of the taxpayer. The accounting system intended for housing projects and development for the low-income families shall be in accordance with generally accepted accounting principle as it applies to transactions peculiar to the construction and housing industry, taking into consideration the following revenues and costs incurred in the pursuance of the project development as a whole: 'a. Land development costs such as roads, water, drainage, power and including common facilities; 'b. Direct housing costs such as the cost of construction of the dwelling unit; cd 'c. Indirect costs such as marketing, promotion overhead, fees and interests. "Such income or profit shall be exempt from income taxes upon the certification of the Authority that said income was derived from installment sales or from rentals to low income families. "In case the housing development shall be undertaken jointly by several proponents, income shall be distributed pro-rata according to the equity contributed by each proponent as expressly quantified in the project proposal and in the project accounting. The same pro-rata share in the income shall be exempt from income taxes upon the certification of the Authority to the extent that income was derived from installment sales or from rentals to low-income groups. "Income as above determined from projects eligible under this Decree and certified to as serving the low-income group by the Authority shall cover those income recognized during taxable years over the project life. casia "Sec. 4. Interests. - Interests earned due to the financing of houses for the lowincome groups shall be exempt from business and miscellaneous taxes as enumerated below, insofar as their gross receipts from such business are concerned: '4.1 Percentage tax of 3% on gross receipts earned due to financing houses for the low-income group and the corresponding privilege tax imposed by Secs. 209 and 192 (3) (dd) of the Tax Code, respectively, if a lending investors; '4.2 Percentage tax of 5% on gross receipts earned due to financing houses for the low-income group and the corresponding privilege tax imposed by Secs. 261 and 192 (3) (gg) of the Tax Code, respectively, if a financing company;

'4.3 Percentage tax of 5% on gross receipts earned due to financing houses for the low-income group and the corresponding privilege tax levied by Secs. 260 and 192 (3) (gg) of the Tax Code, respectively, if a banking institution. cdt "The foregoing exemptions from business and miscellaneous taxes may be availed of insofar as the receipts of the entities concerned arise from the business of financing or lending money or capital for housing projects and developments for the low-income group. In addition, the interest income earned on the credit extended by the entities concerned would also be exempt from income tax. "Sec. 5. Housing Project/Housing Development. - For purposes of Presidential Decree 1217, a housing project or a housing development refers to the provision of housing and facilities towards the development of new communities under the concepts of the Authority. The project may take the form of a single dwelling unit, an apartment, condominium, dormitory or subdivision development. "ARTICLE II PROCEDURE FOR ELIGIBILITY FOR THE EXEMPTIONS "Sec. 1. Coverage. - All housing projects, in order to avail of the benefits and incentives under Presidential Decree 1217 shall be certified to by the Authority as to its eligibility. Projects, developments and loans undertaken and/or obtained after the promulgation of PD 1217 shall be eligible for approval by the Authority for purposes of availing of the tax exemptions from the date of such approval. cda "Sec. 2. Certification. - A certification for service to the low-income groups to be used for tax exemptions purposes shall be issued by the Authority to the participant taxpayer. "The certificate shall clearly state the amount of housing improvement, income, or interest that is for the service of low-income groups and consequently eligible for the benefits of PD 1217. However, such amounts shall be subjects to the final verification of duly authorized representative of the BIR. "Prior to undertaking projects to be covered by the incentives and tax exemptions, a project study prepared in the preferred format set by the Authority shall be submitted for approval. "The certification shall be based on the duly approved project study and shall incorporate prior approval of the identified target market from the low-income group intended for the project. "The certification of the eligibility for tax exemption shall be issued to cover housing projects and development whose residential beneficiaries are solely the low-income families. casia "Sec. 3. Documents Required. - For the issuance of the certification, the following documents in standard 8-1/2 x 11 form shall be submitted to the Authority, appropriately covered by a letter of intent to qualify for the benefits under PD 1217. "A. For exemption from taxes on housing improvements '(1) TCT on property which was the subject of housing as defined in Section 2. '(2) Tax Declaration which covers the housing improvement for exemptions.

'(3) Tax Declaration which covers the period immediately preceding the improvements. '(4) Certificate of Acceptance and Occupancy indicating the households and their income groups together with Contract of Lease, Contract of Sale or Mortgage, whichever shall be applicable. Provided, however, that a certified xerox copy of the ITR of the households the last immediately preceding two (2) years and a Statement of Assets and Liabilities duly subscribed and under oath for the current year, shall be submitted and attached to the contracts. Provided, further, that the low-income beneficiary and/or the participant taxpayer shall not sublet, transfer, resell or dispose of in any mode the residential lot and housing unit, whether to another low-income family or otherwise, without prior approval of the Authority and the same will be provided for by the Contract of Lease or Sale. acd '(5) An Inspection Report on such improvements and beneficiaries to be submitted by a designated representative of the Authority based on compliance with the duly approved project study. "B. For exemption from taxes on income. '(1) Project study prepared in accordance with the guidelines and format set by the Authority. '(2) Project financial statements which shall indicate all project receipts including grants and equities, all applicable project costs and related expenditures, and cost allocation to reflect pro-rata distribution of costs and expenditures according to the provisions of Section 3 of this body of rules and regulations. Such project financial statements shall be based on a duly approved accounting system for the project and duly certified to and audited by an independent CPA acceptable to the Authority. '(3) Certificate of Acceptance and Occupancy indicating the names of households and their income groupings as evidenced by the following documents which shall be attached to the Certificate of Acceptance and Occupancy: Income Tax Returns of the family head of the occupants for the last immediately preceding two (2) years; Contract of Sale or Contract of Mortgage, whichever shall be applicable, and a Statement of Assets and Liabilities for the current year, duly subscribed and under oath. Provided, however, that the low-income beneficiary shall not sublet, transfer, resell or dispose of in any mode the residential lot and housing unit, whether to another low-income family or otherwise within the duration of the loan without prior approval of the Authority and the same will be provided for by the Contract of Lease or Sale. cdasia '(4) Income Tax Returns of the family head shall be filed at NHA every year thereafter after the approval of the application. "C. For exemption from taxes on interest earned '(1) Certification by an independent CPA of the amount of interests earned by the creditor in financing projects duly certified to by the Authority for purposes of this Decree or in extending loans directly to the low income groups to finance their long-term mortgages, based on the duly approved project study. '(2) Contract of Sales, Lease or Mortgage which is the subject of financing by the creditor supported by the Income Tax Returns of the low-income debtors for the last immediately preceding two years who benefited from the financing and the households Statement of Assets and Liabilities for the current year, duly subscribed and under oath.

"Sec. 4. Consideration in Housing Benefits. - All projects to avail of the benefits under the Decree shall serve the low-income groups, giving consideration to the following: cdasia 'a. Housing designs shall be oriented to the low-income groups, utilizing low-cost materials for its construction. 'b. Housing benefits shall be within the affordable level of expenditure for housing of the income groups benefitted. 'c. Sale or lease of the housing units shall only be made to eligible income groups as defined in Article I, Section 1. "Sec. 5. Validity of the Certification. - The tax exemption certification by the Authority shall be valid for taxable years covering the entire project life as described in the project study. "Applications for exemption certification shall be filed with the Authority within 45 days from the completion date of the construction period for tax exemptions on housing improvements and for project income. "Applications for exemption certification for interests shall be filed with the Authority within 45 days after the grant of the financing. "Sec. 6. Filing Fee. - Every application for tax exemption certification shall be accompanied by a processing fee made in favor of the Authority, according to the following schedule: aisa dc SCHEDULE OF FEES Description of Exemption Size of Project Fee

Real Estate Taxes on 250 units and below P250.00 Housing Improvement 251 - 750 units 1,000.00 751 units and above 3,000.00 Income Tax 250 units and below P500.00 251 - 750 units 2,500.00 751 units and above 5,000.00 Business and 250 units and below P250.00 Miscellaneous Taxes 251 - 750 units 350.00 751 units and above 500.00 "ARTICLE III BOOKS OF ACCOUNTS "An adequate accounting system shall be installed by the participating taxpayer and approved by the Authority to segregate the investments, service, sales, receipts, purchases, costs, expenses and profits or loss of taxable business from those of the taxexempt operations under the Decree. The accounting system shall be in accordance with generally accepted accounting principles as they apply to transactions peculiar to the construction and housing industry. aisa dc "Such books and records shall be subject to examination by the Authority and/or any authorized representative of the Bureau of Internal Revenue (BIR) at any time it may

deem proper to do so to determine proper compliance with the provisions of the Decree and the implementing regulations. "ARTICLE IV VIOLATIONS "Any violation or infraction of these rules and regulations, including misrepresentation in the development and implementation of the subdivision plans and project agreement will serve as sufficient basis for the suspension or the cancellation of the Certification for Tax Exemption. The Authority reserves the right to demand additional documents in order to clarify issues that may be brought up by applications. Inaccuracy or misleading statements in any of the documents submitted in the applications shall give the Authority the right to deny the application for certification of service to low-income groups. "This shall further be without prejudice to the rights of the Authority to institute under the existing laws, any civil or criminal action against the erring applicant/participant or beneficiary of PD 1217 arising from misrepresentation, tax evasion or defrauding the government of any taxes due. "ARTICLE V SUPPLEMENTARY RULES "Sec. 1. The Authority reserves the right to inspect the project records and other pertinent books and records of the participating taxpayer at any time it may deem proper to do so. This examination shall, however, be without prejudice to the inherent authority vested upon the Bureau of Internal Revenue to investigate the taxpayers concerned for internal revenue tax purposes. "Sec. 2. The Authority shall from time to time issue additional rules and regulations to supplement, complement or amend these rules and regulations. "ARTICLE VI EFFECTIVITY "These rules and regulations shall take effect immediately and any order, memorandum, or circular inconsistent herewith shall be deemed amended or revoked. cdasia "PROMULGATED, 20 March 1979." (SGD.) G.V. TOBIAS Maj. Gen. AFP (Ret.) General Manager "ATTESTED:" (SGD.) ALFREDO L. JUINIO Presiding Officer NHA Board of Directors "CONCURRED:" (SGD.) EFREN I. PLANA Acting Commissioner Bureau of Internal Revenue All Internal revenue officers and others charged with the enforcement of internal revenue laws are hereby enjoined to enforce the provisions of herein National Housing Authority Rules and Regulations accordingly and to give it a wide a publicity as possible. EFREN I. PLANA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-04-80 Revenue Memorandum Circular No. 4-80 February 4, 1980 REVENUE MEMORANDUM CIRCULAR NO. 4-80 Subject : Publishing Proclamation No. 1861 Announcing the Effectivity of the Revised Minimum Quarterly Gross Receipts for Purposes of the Percentage Tax on Common Carriers and Keepers of Garages. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is quoted hereunder Proclamation No. 1861, issued by the President on June 5, 1979, viz: "MALACAANG Manila "BY THE PRESIDENT "PROCLAMATION NO. 1861 "ANNOUNCING THE EFFECTIVITY OF THE REVISED MINIMUM QUARTERLY GROSS RECEIPTS FOR PURPOSES OF THE PERCENTAGE TAX ON COMMON CARRIERS AND KEEPERS OF GARAGES UNDER SECTION 207 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. "WHEREAS, Section 26 of Presidential Decree No. 1457 amending Section 207 of the National Internal Revenue Code by revising the minimum quarterly gross receipts for purposes of computing the two per centum percentage tax on common carriers; acd "WHEREAS, under Section 26 thereof, the amendment shall become effective only upon the order of the President taking into account the authorized increased rates of transportation fares collective by common carriers; "WHEREAS, considering the general transportation increase by common carriers as authorized since March 24, 1979 has rendered obsolete the present minimum gross receipts for common carrier's tax purposes and therefore necessitates the adjustment of the level of the said presumptive minimum gross receipts commensurate with the latest authorized increases in transportation fares; "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by Section 26, Presidential Decree No. 1457, do hereby proclaim the applicability of the minimum quarterly gross receipts prescribed under Section 207, as amended by the said Presidential Decree, for purposes of computing the two per centum tax on common carriers and keepers of garages. cd i "IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. "DONE in the City of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and seventy-nine. (SGD.) FERDINAND E. MARCOS President of the Philippines

By the President: (SGD.) JACOBO C. CLAVE Presidential Executive Assistant" The following is the schedule of revised minimum quarterly gross receipts for each particular kind of carriers as provided for under Section 207 of the Tax Code, as amended. acd Autocalesa 1. Manila and other cities P1,200.00 2. Provincial 600.00 Jeepney for hire 1. Manila and other cities P2,400.00 2. Provincial 1,200.00 Public Utility Bus Not exceeding 30 passengers P3,600.00 Exceeding 30 but not exceeding 50 passengers 6,000.00 Exceeding 50 passengers 7,200.00 Taxis 1. Manila and other cities P3,600.00 2. Provincial 2,400.00 Car for hire (with chauffeur) 3,000.00 Car for hire (without chauffeur) 1,800.00 EFFECTIVITY Proclamation No. 1861 took effect upon its promulgation on June 5, 1979. ENFORCEMENT All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-14-80 Revenue Memorandum Circular No. 5-80 February 14, 1980 REVENUE MEMORANDUM CIRCULAR NO. 5-80 Subject : Seminar-Workshop on Zero-Base Budgeting To : Regional Directors, RR 4-A, 4-B, 4-C, All Service Chiefs, Chiefs of Divisions and Others Concerned. The adoption of Zero-Base Budgeting in the Philippine Budget System has placed equal responsibility for budget preparation on heads of major operating units and budget and planning officers in both the central office and regional offices. National Budget Memorandum No. 8, otherwise known as the "Budget Call for CY 1981" requires the heads of all major operating units responsible for a major activity as

indicated in the General Appropriations Act to prepare the ZBB forms for submission to the Ministry of the Budget. aisa dc To cope with these changes, the Training and Information Service of the Ministry of the Budget will hold a Seminar-Workshop on Zero-Base Budgeting for Service Chiefs and Chiefs of Divisions of the Bureau on February 26-27, 1980 at the Training Room, 11th Floor, BIR Bldg. Your attendance to the said seminar-workshop is enjoined. aisa dc RUBEN B. ANCHETA Deputy Commissioner TAN-A5239-J1139-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-14-80 Revenue Memorandum Circular No. 6-80 February 14, 1980 REVENUE MEMORANDUM CIRCULAR NO. 6-80 Subject : Publication of Sections 45(b) and 86 (as amended by Batas Pambansa Blg. 41) and Section 72 (amended by Batas Pambansa Blg. 37) of the Tax Code. To : All internal revenue officers and others concerned. For the information and guidance of all concerned, Sections 45(b) and Section 86 of the National Internal Revenue Code as amended by Batas Pambansa Blg. 41 and Section 72 of the same Code as amended by Batas Pambansa Blg. 37 are reproduced below: "Sec. 45. Individual returns. . . . xxx xxx xxx "(b) Where to file. - Except in cases where the Commissioner otherwise permits, the return shall be filed with the Revenue District Officer, Collection Agent, or duly authorized Treasurer of the municipality in which such person has his legal residence or principal place of business in the Philippines, or if there be no legal residence or place of business in the Philippines, then with the Office of the Commissioner of Internal Revenue." cd "Sec. 86. Place of filing declaration and paying quarterly income tax. - Except in cases where the Commissioner otherwise permits, the declaration shall be filed with, and the tax thereon paid to, the Revenue District Officer, or the Collection Agent, or duly authorized Treasurer of the municipality where the individual is residing or in case of a corporation, in which is located its principal office and where its books of accounts and other data from which the return is prepared are kept; in case of an individual who has no legal residence in the Philippines, or a corporation that has no office of any kind or agency in the Philippines, then the returns shall be filed and the tax thereon paid with the Office of the Commissioner of Internal Revenue." "Sec. 72. Surcharge for failure to render returns; for rendering false and fraudulent returns; and for failure to file income tax returns in the proper revenue office. - cda In case of willful neglect to file the return or list required under this Title within the time prescribed by law, or in case a false or fraudulent return or list is willfully made, the Commissioner of Internal Revenue shall add to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity

or fraud, a surcharge of fifty per centum of the amount of such tax or deficiency tax. The Commissioner shall add to the tax twenty-five per centum of its amount: "(a) In case of any failure to make and file a return or list within the time prescribed by law or by the Commissioner or other internal revenue officer, not due to willful neglect, except that, when a return is voluntarily and without notice from the Commissioner or other officer filed after such time, and it is shown that the failure to file it was due to a reasonable cause, no such addition shall be made to the tax; cd i "(b) In case the return is filed with a person other than that mentioned in Sections 45(b) and 86 of this Code; and "(c) In case the tax imposed under Section 34(h) on capital gains realized from a deferred-payment sale where the vendor retained title to the property, or on gains on any installment payments, is not paid within the time prescribed in Section 51(a)(4) of this Code. "The amount so added to any tax shall be collected at the same time in the same manner and as part of the tax unless the tax has been paid before the discovery of the neglect, falsity, or fraud, in which case the amount so added shall be collected in the same manner as the tax." FEATURES OF THE AMENDMENT Before the amendment of the aforesaid sections of the Code, an individual taxpayer may file his income tax return with the Commissioner, the Regional Director, Revenue District Officer, Collection Agent, duly authorized treasurer of the province, city, municipality or authorized agent banks in the locality where the taxpayer resides or where he holds his principal office or place of business. cdt Under the amendment, an individual taxpayer is required to file his income tax return only with the Revenue District Officer, Collection Agent, or duly authorized municipal treasurer having jurisdiction over the individual taxpayer's legal residence or principal place of business. If the taxpayer has no legal residence or place of business in the Philippines, then his return may be filed with the Office of the Commissioner of Internal Revenue. Legal residence. The legal residence of an individual taxpayer shall be understood as the address where the taxpayer normally resides. Principal place of business. This term shall be understood to mean the place where the main business activity of the taxpayer is conducted. a) For individuals practicing their profession, this will mean the place where his main office is located; and b) For employees - the principal place of business will be their place of work. cdasia In the case of corporations, the adjustment income tax return, as well as the corporate quarterly income tax return, shall be filed with the Revenue District Officer, or Collection Agent, or duly authorized Municipal Treasurer having jurisdiction over the principal office and place where the books of accounts and other data of the corporation are kept. The filing of the income tax return in a place outside the jurisdiction of the internal revenue officer or municipal treasurers mentioned above is subject to the ad valorem penalty of 25% based on the tax due per return. As an exception to the foregoing rules, the following individuals may, under any of the conditions hereunder stated, file their income tax returns in places other than those indicated in Section 45(b) of the Tax Code.

1. Nonresident Filipino citizens as well as Filipino officials and employees of the Philippine Government assigned abroad, and Filipino citizens who are employed by United Nations and similar international organizations abroad may file their returns with the nearest BIR Attache or representative or with the nearest consular officer in the country in which they reside, or in which their place of assignment is located. Alternatively, they may mail their income tax returns and remit the tax due thereon directly to the Commissioner of Internal Revenue, Diliman, Quezon City, Philippines; casia 2. Members of the Armed Forces of the Philippines who are temporarily assigned in places other than their legal residence may file their income tax returns with the Revenue District Officer or Municipal Treasurer nearest their current place of assignment. All internal revenue officers and others charged with the enforcement of internal revenue laws are enjoined to be guided accordingly and to give this circular as a wide publicity as possible. aisa dc EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-80 Revenue Memorandum Circular No. 7-80 January 23, 1980 REVENUE MEMORANDUM CIRCULAR NO. 7-80 Subject : Treatment of receipts of operators of amusement apparatus. To : All Internal Revenue Officers and Others Concerned. It has been observed that there is at present a proliferation of places and/or establishments maintained by operators of amusement apparatus. For the privilege of using these apparatus, tickets are sold to patrons or sometimes they are simply coin-operated. While the owners and/or operators of such establishments are lessors of personal properties and, therefore, subject to the contractor's fixed and percentage taxes under Sections 192(1) and 205(17), respectively, of the National Internal Revenue Code, as amended, it has been noted that they have not been complying with applicable internal revenue laws and regulations. cdasia In order to maximize the collection of lawful taxes from this source, internal revenue officers and others concerned should see to it that the aforesaid taxes are paid and that the receipts and/or tickets issued by the aforesaid operators and/or owners are duly registered with this Bureau. It is desired that this circular be given as wide a publicity as possible. cda EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-26-80 Revenue Memorandum Circular No. 8-80 February 26, 1980 REVENUE MEMORANDUM CIRCULAR NO. 8-80

Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 2700570. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 2700570 : One (1) Set The above Revenue Tax Receipt was reported missing or lost sometime on December 5, 1979 while in the custody of Mrs. AMELIA M. SAAVEDRA, a Revenue Cash Clerk in the Office of the Collection Agent, Makati, Metro Manila. cdasia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-04-80 Revenue Memorandum Circular No. 9-80 March 4, 1980 March 4, 1980 REVENUE MEMORANDUM CIRCULAR NO. 9-80 Subject : Allowable Expenditures Out of the Tax Information Campaign Funds Allocated to the Revenue Regional and District Offices. To : All Regional Directors, Revenue District Officers, and Others Concerned. For the information and guidance of all concerned and to provide uniformity, for liquidation purposes, in determining what kind of expenses can be made out of tax information campaign funds given to revenue regional and district offices, there is quoted hereunder the Memorandum dated February 29, 1980 of the Revenue Regional Director, Revenue Region No. 4-A, Manila, duly approved by this Office: cda "MEMORANDUM for The Commissioner "In connection with the tax campaign, we would like to propose that the following expenses be allowed in the liquidation of the amount of campaign funds allocated to the region and to the revenue districts: "1. The cost of streamers, posters, and other campaign materials that may be developed by our district officers; "2. Rentals of chairs, vehicles, sound system, and other advertising materials that will be utilized in campaign meetings and in the different tax centers that we have established; "3. Snacks and merienda that may be served in tax information meetings with associations, or groups of teachers, professionals, and other taxpayers; and

"4. Meals to our employees who may be required to render overtime service on the last days of the filing. cd i "The permission of that office is being sought with respect to the foregoing expenses so that we will not have difficulties in liquidating the cash advances given to this Region. "Respectfully submitted: (SGD.) AQUILINO T. LARIN Regional Director "APPROVED: (SGD.) EFREN I. PLANA Acting Commissioner" Please be guided accordingly. EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-17-80 Revenue Memorandum Circular No. 12-80 March 17, 1980 REVENUE MEMORANDUM CIRCULAR NO. 12-80 Subject : Loss of Four (4) Booklets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 4102651 to 4102750, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of four (4) booklets of Revenue Tax Receipts, to wit: Serial No. : Quantity 4102651-4102750 : Four (4) Booklets The above Revenue Tax Receipts were reported missing or lost sometime on March 15, 1980 while in the custody of MR. ERNESTO A. DOLLENTE Revenue Examiner II, Revenue District No. 25, South Manila. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-10-80 Revenue Memorandum Circular No. 13-80 April 10, 1980 REVENUE MEMORANDUM CIRCULAR NO. 13-80

Subject : Treatment of Tax Refunds and Tax Credits When Received. To : All Internal Revenue Officers and Others Concerned. 1. Refunds/Tax Credits under Section 295 of the Tax Code. Taxes previously claimed and allowed as deductions, but subsequently refunded or granted as tax credit pursuant to Section 295 of the Tax Code, should be declared as part of the gross income of the taxpayer in the year of receipt of the refund or tax credit. However, the following taxes, when refunded or credited, are not declarable for income tax purposes inasmuch as they are not allowable as deductions: a. Income tax imposed in Title III of the Tax Code; b. Income, war-profit and excess profits taxes imposed by authority of a foreign country; but this deduction shall be allowed in the case of a taxpayer who does not signify in his return his desire to have to any extent the benefits of paragraph (3) of this subsection (relating to credit for taxes of foreign countries); aisa dc c. Estate and gift taxes; d. Taxes assessed against local benefits of a kind tending to increase the value of the property assessed; e. Stock transaction tax; f. Energy tax; and g. Taxes which are not allowable as deductions under the law. 2. Special Tax Credits granted under R.A. 5186; R.A. 6135 and P.D. 535. These tax credits and their tax consequences are as follows: a. Sales, compensating and specific taxes are paid on supplies and raw materials imported by a registered export producer. Said taxes are given as tax credit to be used in the payment of taxes, duties, charges and fees due to the national government in connection with its operations. (Sec. 7(a), R.A. No. 6135) The tax credits granted should form part of the gross income to the enterprise in the year of receipt of tax credit as said taxes paid are considered allowable deductions for income taxes purposes. b. In some cases, a registered BOI and tourism enterprise assumes payment of taxes withheld and due from the foreign lender-remittee on interest payments on foreign loans. In such cases, the enterprise is given a tax credit for taxes withheld subject to certain conditions. (Sec. 7(f), R.A. No. 5186; Sec. 8(c), P.D. No. 535) Said taxes assumed by the registered enterprise represent necessary and ordinary expenses incurred by the enterprise; hence, deductible from its gross income. Therefore, the tax credits granted necessarily constitute taxable income of the enterprise. casia It is desired that this Circular be given as wide a publicity as possible. EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-28-80 Revenue Memorandum Circular No. 14-80 March 28, 1980 REVENUE MEMORANDUM CIRCULAR NO. 14-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3660223. To : All Internal Revenue Officers, Employees, and Others Concerned.

Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 3660223 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-A, Manila as missing or lost sometime on March 12, 1980 at the Harrison Plaza Filing Center while in the custody of Revenue Examiner BRENDA BALTAZAR and RTR Typist MARIA FE CAUINIAN. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-28-80 Revenue Memorandum Circular No. 15-80 March 28, 1980 REVENUE MEMORANDUM CIRCULAR NO. 15-80 Subject : Loss of One (1) Pad of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 3762251 to 3742275, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Tax Receipts, to wit: Serial No. : Quantity 3762251-3762275 : One (1) Pad The above Revenue Tax Receipts were reported missing by Mrs. FILIPINA SANTOS, Acting Accountable Forms Custodian of the Revenue Region No. 4-C, San Pablo City. cdasia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-10-80 Revenue Memorandum Circular No. 16-80 April 10, 1980 REVENUE MEMORANDUM CIRCULAR NO. 16-80

Subject : Publishing the press release reminding taxpayers of recent changes in our tax laws namely Presidential Decree No. 1351, Batas Pambansa Blg. 37 and Batas Pambansa Blg. 41 To : All Internal Revenue Officers and others concerned. For the information and guidance of all concerned, there is published hereunder the press release reminding taxpayers of the following changes in our tax laws which should be followed in preparing their income tax returns for 1979 on or before April 15. 1. Nondeductibility of net operating loss sustained in one line of business (including practice of profession) from gross income derived from other sources. The law disallows deduction of losses incurred in connection with an individual's business and such losses represent the excess over the business income, of allowable expenses and other deductions directly or proximately attributable to the production or earning of such business income. Thus, if in 1979 an individual derived income from salary and at the same time was engaged in the business of farming but his farming expenses exceeded his farming income, he cannot offset his net loss from farming against his salary income. However, if he commenced his farming business in 1979, he is entitled to carry over his net operating loss from farming in 1979 to the next two years beginning 1980. In other words, he can deduct the net loss incurred in 1979 from his farming income in 1980 and 1981. cdtai 2. Nondeductibility of certain payments if withholding of tax thereon when required is not remitted to the BIR. Under the law, a person making certain payments, including salaries and wages, is required to withhold tax at the prescribed rates. Failure of the payor to withhold the tax and remit the same to the BIR will disqualify him from deducting the payment (as an expense) from his gross income. 3. Documentary substantiation of entertainment expenses. Before the amendment, deductions for entertainment expenses could be allowed even in the absence of receipts or documentary proof. Under previous jurisprudence, if the taxpayer could show that by the nature of his business, he must necessarily incur entertainment expenses although its exact amount could not be determined, the court, as well as the BIR, could make "as close an approximation as it can, bearing heavily if it chooses upon the taxpayer whose inexactitude is of his own making." Under the amendment, an entertainment expense, although ordinary and necessary business expense, is presumed nondeductible unless the taxpayer proves the following elements: (a) the amount of such expenses or other items, (b) the date and place of entertainment, amusement or recreation, (c) the business purpose of the expense or other items, and (d) the business relationship to the taxpayer of the persons entertained or using the facility with official receipts or by adequate records or by sufficient evidence corroborating his own statement. This contemplates that no deduction shall be allowed on the basis of approximations (Cohan rule) of his unsupported claims. 4. Final capital gains tax. The final schedular capital gains tax at reduced rates of 10% on the first P100,000 and 20% on the excess over P100,000 capital gains realized from sales of real property took effect on September 7, 1979. Batas Pambansa Blg. 37 provides that if an individual realized capital gains from sales of real property before September 7, 1979, and has not reported such gain or a portion thereof, he has until

September 7, 1980 within which to declare the same and avail of the low final capital gain tax rates. However, capital gains realized from sales between January 1, 1979 and September 6, 1979 may, at the option of the seller, include the same in his 1979 income tax return if he does not avail of the privilege to have such gain taxed under the new law. If real property is sold to the government or government-owned or controlled corporations, the seller may pay either the final capital gains tax or the regular graduated income tax. In the latter case, he must include his capital gains in the usual manner in his annual income tax returns covering his other income. cd i 5. Place of filing. An individual is now required to file his income tax return only with the Revenue District Officer, Collection Agent, or duly authorized municipal treasurer having jurisdiction over the individual taxpayer's legal residence or principal place of business. If the taxpayer has no legal residence or place of business in the Philippines, then his return may be filed with the Office of the Commissioner of Internal Revenue. Legal residence. The legal residence of an individual taxpayer is the address where the taxpayer normally resides. Principal place of business. This term shall be understood to mean the place where the main business activity of the taxpayer is conducted. (a) For individuals practicing their profession, this is the place where his main office is located, and (b) For employees - the principal place of business is their place of work. In the case of corporations, the adjustment income tax return, as well as the corporate quarterly income tax return, shall be filed with the Revenue District Officer, or Collection Agent, or duly authorized Municipal Treasurer having jurisdiction over the principal office and place where the books of accounts of the corporation are kept. The filing of the income tax return in a place outside the jurisdiction of the internal revenue officer or municipal treasurers mentioned above is subject to a surcharge of 25% based on the tax due per return in addition to the compromise penalty. If there is no tax due per return, only the compromise penalty will be imposed. casia ENFORCEMENT All internal revenue officers and others concerned are enjoined to be guided accordingly and give this circular as wide a publicity as possible. EFREN I. PLANA Acting Commissioner PRESS RELEASE BIR REMINDS TAXPAYERS OF NEW TAX LAWS The Bureau of Internal Revenue is reminding taxpayers of these new changes in the tax laws which should be followed in preparing income tax returns for 1979 on or before April 15. 1. Nondeductibility of net operating loss sustained in one line of business (including practice of profession) from gross income derived from other sources. The law disallows deduction of losses incurred in connection with an individual's business and such losses represent the excess over the business income, of allowable expenses and other deductions directly or proximately attributable to the production or earning of such business income. Thus, if in 1979 an individual derived income from salary and at the same time was engaged in the business of farming but his farming expenses exceeded his

farming income, he cannot offset his net loss from farming against his salary income. However, if he commenced his farming business in 1979, he is entitled to carry over his net operating loss from farming in 1979 to the next two years beginning 1980. In other words, he can deduct the net loss incurred in 1979 from his farming income in 1980 and 1981. casia 2. Nondeductibility of certain payments if withholding of tax thereon when required is not remitted to the BIR. Under the law, a person making certain payments, including salaries and wages, is required to withhold tax at the prescribed rates. Failure of the payor to withhold the tax and remit the same to the BIR will disqualify him from deducting the payment (as an expense) from his gross income. 3. Documentary substantiation of entertainment expenses. Before the amendment, deductions for entertainment expenses could be allowed even in the absence of receipts or documentary proof. Under previous jurisprudence, if the taxpayer could show that by the nature of his business, he must necessarily incur entertainment expenses although its exact amount could not be determined, the court, as well as the BIR, could make "as close an approximation as it can, bearing heavily if it chooses upon the taxpayer whose inexactitude is of his own making." Under the amendment, an entertainment expense, although ordinary and necessary business expense, is presumed nondeductible unless the taxpayer proves the following elements: (a) the amount of such expenses or other items, (b) the date and place of entertainment, amusement or recreation, cdt (c) the business purpose of the expense or other items, and (d) the business relationship to the taxpayer of the persons entertained or using the facility with official receipts or by adequate records or by sufficient evidence corroborating his own statement. This contemplates that no deduction shall be allowed on the basis of approximations (Cohan rule) of his unsupported claims. 4. Final capital gains tax. The final schedular capital gains tax at reduced rates of 10% on the first P100,000 and 20% on the excess over P100,000 capital gains realized from sales of real property took effect on September 7, 1979. Batas Pambansa Blg. 37 provides that if an individual realized capital gains from sales of real property before September 7, 1979, and has not reported such gain or a portion thereof, he has until September 7, 1980 within which to declare the same and avail of the low final capital gain tax rates. However, capital gains realized from sales between January 1, 1979 and September 6, 1979 may, at the option of the seller, include the same in his 1979 income tax return if he does not avail of the privilege to have such gain taxed under the new law. cda If real property is sold to the government or government-owned or controlled corporations, the seller may pay either the final capital gains tax or the regular graduated income tax. In the latter case, he must include his capital gains in the usual manner in his annual income tax returns covering his other income. 5. Place of filing. An individual is now required to file his income tax return only with the Revenue District Officer, Collection Agent, or duly authorized municipal treasurer having jurisdiction over the individual taxpayer's legal residence or principal place of business. If the taxpayer has no legal residence or place of business in the

Philippines, then his return may be filed with the Office of the Commissioner of Internal Revenue. Legal residence. The legal residence of an individual taxpayer is the address where the taxpayer normally resides. Principal place of business. This term shall be understood to mean the place where the main business activity of the taxpayer is conducted. (a) For individuals practicing their profession, this is the place where his main office is located, and (b) For employees - the principal place of business is their place of work. acd In the case of corporations, the adjustment income tax return, as well as the corporate quarterly income tax return, shall be filed with the Revenue District Officer, or Collection Agent, or duly authorized Municipal Treasurer bearing jurisdiction over the principal office and place where the books of accounts of the corporation are kept. The filing of the income tax return in a place outside the jurisdiction of the internal revenue officer or municipal treasurers mentioned above is subject to a surcharge of 25% based on the tax due per return in addition to the compromise penalty. If there is no tax due per return, only the compromise penalty will be imposed. April 8, 1980 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-02-80 Revenue Memorandum Circular No. 17-80 April 2, 1980 REVENUE MEMORANDUM CIRCULAR NO. 17-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3614904. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 3614904 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on March 11, 1980 by MR. EMELITO L. DIZON, Revenue Examiner I. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EFREN I. PLANA Acting Commissioner By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-16-80 Revenue Memorandum Circular No. 18-80

April 16, 1980 REVENUE MEMORANDUM CIRCULAR NO. 18-80 Subject : Loss of One (1) Set and One (1) BIR Copy of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 2348137 and 3284347 respectively. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set and one (1) BIR copy of Revenue Tax Receipts, to wit: cda -----------------------------------Serial No. : Quantity : Accountable Officer : Date -----------------------------------: : : 2348137 : One (1) Set : CAROLINA L. YSALINA : : : Collection Agent of : : : Mandaue City: 1-21-80 : : : 3284347 : One (1) piece : : : BIR Copy : MELCHORA C. BELLEZA : : : Revenue Collector I : : : Office of the Collection : : : Agent, Cebu City : 3-27-80 : : : -----------------------------------The above Revenue Tax Receipts were reported by the respective accountable officers as missing or lost to the Regional Director, Revenue Region No. 7, Cebu City. Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EFREN I. PLANA Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-22-80 Revenue Memorandum Circular No. 19-80 April 22, 1980 REVENUE MEMORANDUM CIRCULAR NO. 19-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 2453850. To : All Internal Revenue Officers, Employees, And Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity

2453850 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on January, 1980 while in the custody of Mr. VICENTE ROSALES, Assistant Revenue District Officer of Malabon, Metro Manila. casia Internal Revenue Officer, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T5338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-22-80 Revenue Memorandum Circular No. 20-80 April 22, 1980 REVENUE MEMORANDUM CIRCULAR NO. 20-80 Subject : Loss of Two (2) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 2897174 and 2897175. To : All Internal Revenue Officers, Employees, And Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Tax Receipts, to wit: Serial No. : Quantity 2897174 : One (1) Set 2897175 : One (1) Set The above Revenue Tax Receipts were reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on January 23, 1980 while in the custody of Mrs. ANGELITA C. PAAC, Revenue Collection Agent of Pasig, Metro Manila. aisa dc All Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

04-21-80 Revenue Memorandum Circular No. 21-80 April 21, 1980 REVENUE MEMORANDUM CIRCULAR NO. 21-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3614904. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 3614904 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on March 18, 1980 while in the custody of Mr. ABELARDO SANTOS, Collection Agent of Quezon City. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EFREN I. PLANA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-15-80 Revenue Memorandum Circular No. 22-80 April 15, 1980 REVENUE MEMORANDUM CIRCULAR NO. 22-80 Subject : Business Tax Liabilities of Travel Agencies To : All Internal Revenue Officers and Others Concerned: Reports reaching this Office reveal that newly established travel agencies provide themselves only with one privilege tax (PTR) as contractor upon payment of the annual fixed tax of P100 under Section 192(1), in relation to Section 205(16), of the Tax Code of 1977, as amended. cdtai It has been observed however, that these travel agencies, aside from following up travel papers of clients for which they are considered business agents subject to the contractor's tax, also negotiate for airlines the transportation of their clients. From this latter activity, the travel agencies receive commission which is subject to the 6% percentage tax as they are commercial brokers under Section 187(t), in relation to Section 208, of the Tax Code. Such being the case, aside from the fixed tax of P100, they are also subject to a fixed tax of P1,000, pursuant to Section 192(3) (bb) of said Code. In other words, a travel agency is subject to two (2) fixed taxes, one as a contractor for services rendered to its clients and another as broker for negotiating or bringing about the sale of airline tickets to its passengers.

In order to maximize the collection of taxes from travel agencies all revenue personnel concerned should see to it that the books of accounts of travel agencies are not registered unless they show proof of payment of both fixed taxes aforementioned. cd i It is desired that this Circular be given as wide as publicity as possible. EFREN I. PLANA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-13-80 Revenue Memorandum Circular No. 23-80 May 13, 1980 REVENUE MEMORANDUM CIRCULAR NO. 23-80 Subject : Loss of One (1) Pad of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Nos. 2680251-2680300, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipt, to wit: cda Serial No. : Quantity 2680251-2680300 : One (1) Pad The above Revenue Official Receipts were reported to the Regional Director, Revenue Region No. 1, Baguio City, as missing or lost by Mr. BENJAMIN B. LEBENG, Revenue Collection Agent of Tuba, Benguet, in his letter of April 2, 1980. Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Official Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-10-80 Revenue Memorandum Circular No. 24-80 May 10, 1980 REVENUE MEMORANDUM CIRCULAR NO. 24-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 2294487. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of One (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 2294487 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 2, Tuguegarao, Cagayan as missing or lost sometime on March 14, 1980 by Mr.

RAFAEL M. GOZUM, Revenue Collector II, Office of the Collection Agent, Cauayan, Isabela. cdasia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner of Internal Revenue BY: TOMAS C. TOLEDO Assistant Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. no date Revenue Memorandum Circular No. 25-80 No date supplied 1980 REVENUE MEMORANDUM CIRCULAR NO. 25-80 Subject : Granting of tax exemption on the prizes to be awarded to foreign competitors in the Philippine Open Golf Championship to be held in Puerto Azul from February 21-24, 1980. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is reproduced hereunder the memorandum dated February 12, 1980 of Honorable Jacobo C. Clave, Presidential Executive Assistant, to Minister Cesar Virata. acd "February 12, 1980 "16-80 "MEMORANDUM "For : Minister Cesar E.A. Virata Ministry of Finance "From : The Presidential Executive Assistant "Please be advised that the President has approved the request of Dr. Rebecco E. Panlilio for tax exemption on the prizes to be awarded to foreign competitors in the Philippine Open Golf Championship which will be held in Puerto Azul from February 21-24, 1980. cdtai (Sgd.) JACOBO C. CLAVE Presidential Executive Assistant "Copy furnished: Dr. Rebecco E. Panlilio Philippine Village Hotel Pasay City, Metro Manila" All revenue officers and others concerned should give this circular as wide a publicity as possible. cdtai

RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-13-80 Revenue Memorandum Circular No. 26-80 June 13, 1980 REVENUE MEMORANDUM CIRCULAR NO. 26-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. A-3706780. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity A-3706780 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 11-A, Cotabato City, as missing or lost sometime on March, 1980, by PASCUAL G. BONILLA, Revenue Collection Agent of Koronadal, South Cotabato. aisa dc All Internal Revenue Officers, Employees and others concerned are requested to promptly notify this office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-22-80 Revenue Memorandum Circular No. 27-80 May 22, 1980 REVENUE MEMORANDUM CIRCULAR NO. 27-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 4106578. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 4106578 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-A, Manila, as missing or lost sometime on April 15, 1980 while in the custody of the issuing officer, Revenue Seizure Agent CESARIO A. RIVERA, JR. of Revenue District No. 25, South Manila. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd

RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-13-80 Revenue Memorandum Circular No. 28-80 June 13, 1980 REVENUE MEMORANDUM CIRCULAR NO. 28-80 Subject : Loss of Twenty-three (23) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial No. A-4139028 to A-4139050, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of twenty-three (23) sets of Revenue Tax Receipts, to wit: Serial No. : Quantity A-4139028 to A-4139050 : Twenty-three (23) sets The above Revenue Tax Receipts were reported to the Regional Director, Revenue Region No. 3-A, San Fernando, Pampanga as missing or lost sometime on April 14, 1980 while in the custody of Mrs. ROSARIO B. RIGOR, Revenue Clerk I, Office of the Collection Agent, Angeles City. cdtai All Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner of Internal Revenue TAN-A5239-J1139-A-0 By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-13-80 Revenue Memorandum Circular No. 29-80 June 13, 1980 REVENUE MEMORANDUM CIRCULAR NO. 29-80 Subject : Loss of Four (4) Copies of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. A-2782992. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of four (4) copies of Revenue Tax Receipt, to wit: ---------------------Serial No. : Quantity

---------------------A-2782992 : One (1) Central Bank's copy : One (1) BIR-DPC Copy : One (1) Agent Bank's Copy : One (1) Taxpayer's Copy -----------------------The above copies of Revenue Tax Receipt No. A-2782992 were reported missing or lost by Mr. SALVADOR T. AUSTRIA, Collection Agent of Limay, Bataan, while in his custody sometime on March 15, 1980. cdasia The Internal Revenue Officers, Employees and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-24-80 Revenue Memorandum Circular No. 30-80 June 24, 1980 REVENUE MEMORANDUM CIRCULAR NO. 30-80 Subject : Publishing the Procedures Prescribed for the availment of the Debit System as a mode of payment of National Internal Revenue Taxes through Banks. To : All Internal Revenue Officers and all others concerned. The Central Bank, in its Circular 707, Series of 1979 authorized the use of the Debit System as an additional mode of payment thru banks of national internal revenue taxes involving amounts of P20,000 and above. Under this system, taxpayers may request their banks to debit their accounts (savings or current) for the amount of their tax payments. This mode of payment was permitted to prevent the diversion and misappropriation of tax payments made by checks. acd The procedure for this System was prescribed in RMO No. 10-80 as follows: 1. The taxpayer or his representative files the tax return with or presents any other basic document to the authorized collection unit, which document shall be the basis for the preparation of the Revenue Tax Receipt (RTR); 2. The RTR Issuing Officer shall, in applicable cases, inform the taxpayer or his representative of the debit system as a mode of payment; 3. He shall address the RTR to the authorized Agent Bank specified by the taxpayer wherein he maintains an account; 4. The taxpayer shall advise his bank to debit his account for the amount of the tax indicated in the RTR; aisa dc 5. The authorized Agent Bank shall issue the Confirmation Receipt, validate the same and indicate in space No. 12 of the receipt the remarks "Account Debited";

6. All national internal revenue tax collections made under the debit system or any other mode of payment is booked and credited by the authorized Agent Bank to a Special Account due to "Central Bank-Internal Revenue Account." All Internal Revenue Officers are hereby urged to encourage taxpayers to avail of the debit system whenever applicable and to give the above procedures as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner June 25, 1980 MEMORANDUM FOR The Commissioner Thru Asst. Commissioner Tomas C. Toledo Attached is a copy of the memorandum for the Commissioner of the then Chairman of the Committee on Specialized Accountable Forms dated February 2, 1977, recommending the payment of a special monthly allowance to the Revenue Laborers who are assigned at the Government Printing Office (GPO). The memorandum was recommended for approval by then Asst. Commissioner Lauro D. Abrahan, but Commissioner Plana failed to act thereon. cdt Considering that the six (6) Revenue Laborers are not civil service eligibles, they cannot therefore hope to be promoted to a higher position. Inasmuch as these people are entrusted with very delicate tasks which used to be a source of anomalies in the overprinting of documentary stamps, strips stamps and Revenue Official Receipts, they should therefore be given other incentives to boost their morale and prevent them from being tempted into committing irregularities. In view of the foregoing, I am therefore reiterating the previous recommendation for the grant of a special monthly allowance of two hundred pesos to the revenue personnel assigned at the Government Printing Office. It might be pertinent to mention that revenue personnel assigned at the APO-NEDA in the printing of Residence Certificates were given a monthly allowance of two hundred pesos which was charged to the Intelligence Fund, in lieu of transportation expenses aside from overtime pay. casia JOSE A. RESURRECCION Asst. Revenue Service Chief (Inspection) Chairman, Committee on Specialized Accountable Forms TAN-R2627-K1322-A-9 Recommending Approval: TOMAS C. TOLEDO Asst. Commissioner TAN-T4338-J227-A-9 APPROVED: RUBEN B. ANCHETA Acting Commissioner of Internal Revenue

TAN-3101-320-04 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-30-80 Revenue Memorandum Circular No. 31-80 May 30, 1980 REVENUE MEMORANDUM CIRCULAR NO. 31-80 Subject : Loss of 412,131 pieces of Internal Revenue Auxiliary Labels for Alcohol, JAM series. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of 412,131 pieces of Internal Revenue Auxiliary Labels for Alcohol, to wit: aisa dc ---------------------------Quantity : Inclusive Serial Numbers ---------------------------70,010 pcs. : JAM-OS 0485400001-0485470010 10 " : JAM-OS 0485472171-0485472180 10 " : JAM-OS 0485479291-0485479300 20,010 " : JAM-OS 0485479991-0485500000 5,670 ": JAM-OS 0487000001-0487005670 94,320 " : JAM-OS 0487005681-0487100000 40,000 " : JAM-OS 0487760001-0487800000 100,000 " : JAM-OS 0489100001-0489200000 10 " : JAM-OS 0490306111-0490306120 80 " : JAM-OS 0490310481-0490310560 2" : JAM-OS 0490310831-0490310832 10 " : JAM-OS 0490311061-0490311070 12 " : JAM-OS 0490314341-0490314352 2" : JAM-OS 0490314991-0490314992 3,930 ": JAM-OS 0490320001-0490323930 1 pc. : JAM-OS 0490325371 1" : JAM-OS 0490325381 1" : JAM-OS 0490325391 1" : JAM-OS 0490325401 40 pcs. : JAM-OS 0490327801-0490327840 5" : JAM-OS 0490327846-0490327850 5" : JAM-OS 0490327856-0490327860 1,570 ": JAM-OS 0490327991-0490329560 790 " : JAM-OS 0490330001-0490330790 180 " : JAM-OS 0490331241-0490331420 20 " : JAM-OS 0490331931-0490331950 130 " : JAM-OS 0490332001-0490332130 20 " : JAM-OS 0490332521-0490332540 10 pcs. : JAM-OS 0490332601-0490332610 10 " : JAM-OS 0490333171-0490333180 10 " : JAM-OS 0490334421-0490334430 10 " : JAM-OS 0490336131-0490336140

10 " : JAM-OS 0490345451-0490345460 10 " : JAM-OS 0490354001-0490354010 10 " : JAM-OS 0490358001-0490358010 8,890 ": JAM-OS 0490420271-0490429160 50 " : JAM-OS 0490440131-0490440180 6,240 ": JAM-OS 0490441411-0490447650 10,000 " : JAM-OS 0491800001-0491810000 10 " : JAM-OS 0491820001-0491820010 10,000 " : JAM-OS 0491840001-0491850000 10,000 " : JAM-OS 0491850001-0491860000 10,000 " : JAM-OS 0491860001-0491870000 31 " : JAM-OS 0491870001-0491870031 10,000 " : JAM-OS 0491880001-0491890000 10,000 " : JAM-OS 0491890001-0491900000 ---------------------------The above Internal Revenue Auxiliary Labels for Alcohol were part of a shipment received in bad order from Japan as reported to the Chief, Accountable Forms Division by the importer, JAMECCA Enterprises, Inc. in its letter of May 26, 1980. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Internal Revenue Auxiliary Labels are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-19-80 Revenue Memorandum Circular No. 32-80 May 19, 1980 REVENUE MEMORANDUM CIRCULAR NO. 32-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3858937. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: -----------------------Serial No. : Quantity -----------------------3858937 : One (1) Set -----------------------The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on March 17, 1980, by Mrs.

LORENZA C. DELUTA, Revenue Cash Clerk of the office of the Collection Agent of Paraaque, Metro Manila. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-26-80 Revenue Memorandum Circular No. 33-80 May 26, 1980 REVENUE MEMORANDUM CIRCULAR NO. 33-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3184725. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 3184725 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on January 25, 1980 while in the custody of Mrs. ELUCIDA P. CRUZ, Revenue Collection Agent of Malabon, Metro Manila. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-C4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-31-80 Revenue Memorandum Circular No. 34-80 July 31, 1980 REVENUE MEMORANDUM CIRCULAR NO. 34-80 Subject : Determination of gross receipts for purposes of the caterer's tax under Section 206 of the Tax Code.

To : All Internal Revenue Officers and Others Concerned: It has been observed that in restaurants, refreshment parlors and other eating places, proprietors or operators thereof issued invoices or receipts wherein the caterer's tax imposed by Section 206 of the Tax Code is billed as separate item as follows: Food P100.00 3% tax on P100.00 3.00 ---Total amount paid P103.00 ======= Our attention has been called to the effect that under the above example, said proprietor or operator considers only the amount of P100.00 as his gross receipts upon which the caterer's tax is based. Such determination of the gross receipts is erroneous. (Araas Annotation and Jurisprudence on the National Internal Revenue Code of 1977, Vol. II, p. 301) aisa dc The caterer's tax imposed by Section 206 of the Tax Code, like the contractor's tax imposed in Section 205 of the same Code, being as excise tax is directly imposed on and collectible from the person exercising the privilege as operator or proprietor of restaurants, refreshment parlors and other eating places. While the burden of the tax may be shifted to the customer, said proprietor or operator is not relieved from payment of the tax on his gross receipts. Such being the case, and considering that the caterer's tax is based on gross receipts which means the entire amount received, said tax even if shifted to the customer, still forms part of the caterer's taxable gross receipts. Thus, under the above example, the amount of P103.00 actually received by the proprietor or operator shall be the basis of the 3% tax and not only on the P100.00. This Circular is being issued to clarify, emphasize and reiterate the position of this Office. cdasia It is requested that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-28-80 Revenue Memorandum Circular No. 35-80 July 28, 1980 REVENUE MEMORANDUM CIRCULAR NO. 35-80 Subject : Loss of one (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 1347927. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 1347927 : One (1) set The above Revenue Tax Receipt was reported to the Assistant Regional Director, Revenue Region No. 8, Tacloban City as missing or lost sometime on March 17, 1980 while in the custody of Mr. FIME U. LEGION, Revenue Collection Agent of Catarman, Northern Samar. cdtai All Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found,

taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-29-80 Revenue Memorandum Circular No. 36-80 July 29, 1980 REVENUE MEMORANDUM CIRCULAR NO. 36-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3858937. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 3858937 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost sometime on March 17, 1980 while in the custody of Mrs. LORENZA C. DELUTA, Revenue Cash Clerk of the Office of the Collection Agent of Paraaque, Metro Manila. casia All Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Assistant Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-06-80 Revenue Memorandum Circular No. 37-80 August 6, 1980 REVENUE MEMORANDUM CIRCULAR NO. 37-80 Subject : Prescribing a uniform exchange rate for U.S. dollars and other foreign currencies to Philippine pesos for internal revenue tax purposes for the calendar year 1980. To : All Internal Revenue Officers and Others Concerned.

For the purpose of establishing a uniform rate of exchange of U.S. dollars or other foreign currencies to Philippine pesos for internal revenue tax purposes for the calendar year 1980, the following schedule of exchange rates are hereby prescribed for reference and guidance of all concerned: 1. For income tax purposes, the following rules shall govern: (a) In the case of resident citizens and alien individuals as well as domestic corporations deriving income in foreign currency, whether from within or without the Philippines, the conversion rate shall be at P7.50 to U.S. $1.00; cd (b) In the case of a non-resident citizen whose income tax liability is computed in terms of U.S. dollars and who chooses to pay his income tax liability in Philippine pesos, the conversion shall be at the guiding rate of exchange quoted by the Central Bank at the time he makes the payment; (c) For purposes of branch profit remittance tax, conversion shall be at P7.50 to U.S. $1.00; (d) In the case of International Carriers, whether regularly operating in the Philippines or not, including tramp vessels and off-line international airlines, the conversion shall be at P7.50 to U.S. $1.00; cdasia (e) For purposes of withholding taxes at source provided for under Sections 53 and 54 of the Tax Code of 1977, the conversion shall be at P7.50 to U.S. $1.00; (f) For purposes of the withholding tax on wages, the conversion shall be at P7.50 to U.S. $1.00. 2. For percentage tax purposes, the following rules shall govern: (a) In the case of International Carriers, whether regularly operating in the Philippines or not, including tramp vessels and off-line international airlines, the conversion shall be at P7.50 to U.S. $1.00; (b) In the case of transactions involving computation of advance sales tax or compensation tax, the rate of exchange used by the Bureau of Customs at the time of payment of such taxes shall prevail; cdt (c) For purposes of other percentage taxes, the conversion shall be at P7.50 to U.S. $1.00. 3. For other tax purposes, the conversion shall be at P7.50 to U.S. $1.00. 4. Where the currency involved is other than U.S. dollars, the foreign currency shall first be converted to U.S. dollars at the prevailing rate of exchange between the two currencies. The resulting amount shall then be converted to Philippine pesos in accordance with the above promulgated rules. ENFORCEMENT AND PUBLICITY All Internal Revenue Officers and others charged with the enforcement of internal revenue laws are enjoined to enforce the provision of this Circular accordingly and to give it as wide a publicity as possible. acd RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-06-80 Revenue Memorandum Circular No. 38-80 August 6, 1980

REVENUE MEMORANDUM CIRCULAR NO. 38-80 Subject : Loss of One (1) Central Bank Copy of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 1346379. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) copy of Revenue Tax Receipt, to wit: cd Serial No. : Quantity 1346379 : One (1) Piece - Central Bank : Copy The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 8, Tacloban City, as missing or lost while in the custody of FIME U. LEGION, Collection Agent of Catarman, Northern Samar, last January 16, 1980. Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-22-80 Revenue Memorandum Circular No. 39-80 August 22, 1980 August 22, 1980 REVENUE MEMORANDUM CIRCULAR NO. 39-80 Subject : Publishing Revenue Regulations No. 5-80 dated June 10, 1980, further amending Section 6 of Revenue Regulations No. 7-76, as amended by Revenue Regulations No. 2-80. To : For the information and guidance of all concerned, there is published hereunder the full text of Revenue Regulations No. 7-76, as amended: "Republika Ng Pilipinas Ministri ng Pananalapi KAWANIHAN NG RENTAS INTERNAS Lungsod ng Quezon September 2, 1976 REVENUE REGULATIONS NO. 7-76 Subject : Rules and Regulations Relative to the Purchases and Sales of Tax-Free Articles by the Armed Forces of the Philippines Commissary and Exchange Service. All Internal Revenue Officers & Others

To

Concerned: Pursuant to the provisions of Section 338 of the National Internal Revenue Code, as amended, in relation to Presidential Decree No. 83 dated December 20, 1972, the following rules and regulations governing the purchases of the Armed Forces of the Philippines Commissary and Exchange Service, hereinafter known as AFPCES, of taxfree articles or commodities from local manufacturers, producers or suppliers, and the sales thereof to persons entitled to commissary and PX privileges under Letter of Instructions No. 31 dated October 23, 1972, are hereby promulgated. cdtai A. On Articles Subject to Sales Tax: Sec. 1. As envisioned in Presidential Decree No. 83, the AFPCES shall be the only agency or unit of the Armed Forces of the Philippines which is authorized to purchase tax-free articles or commodities from local manufacturers, producers or suppliers for sale to persons entitled to commissary or PX privileges under Letter of Instructions No. 31, as amended. Sec. 2. No purchase order for tax free articles or commodities originating from AFPCES shall be filled by any manufacturer, producer or supplier unless the same is approved by the authorized official of AFPCES whose full name, rank, branch of service and serial number are indicated therein. The identity of the approving official, together with the specimens of his signature shall be furnished the Commissioner of Internal Revenue thru the Indirect Taxes Division. Sec. 3. In filing out the purchase order, the manufacturer, producer or supplier shall indicate in its invoice the articles or commodities actually sold, the number of units, the gross selling price, the tax due and the net selling price per unit. Each invoice shall be accompanied by a statement showing how the amount of tax due per article was arrived at, certified to as correct by the President, Manager or Comptroller. Sec. 4. The AFPCES shall submit to the Commissioner of Internal Revenue through the Indirect Taxes Division a bi-monthly report of its purchases. The report shall include a list of the manufacturers, producers or suppliers, a copy of the corresponding sales invoice and the statement of the sales tax due on each article or commodity sold by said manufacturer, producer or supplier, and the corresponding purchase order. Sec. 5. The manufacturers, producers or suppliers referred to herein shall have a registry book, duly registered with the Bureau of Internal Revenue. All sales made to AFPCES shall be entered in the said registry book not later than the day immediately following the date of the transaction. The book shall be kept and maintained like any ordinary accounting record and shall be opened for inspection at any time during office hours by any duly authorized internal revenue officer. aisa dc Sec. 6. IN FILING HIS QUARTERLY PERCENTAGE TAX RETURN THE MANUFACTURER OR PRODUCER SELLING ARTICLES OR COMMODITIES TO AFPCES SHALL EXCLUDE FROM HIS TOTAL GROSS SALES SUBJECT TO TAX THE SALES MADE TO AFPCES DURING THE QUARTER. THE TAX FREE SALES TO AFPCES SHALL, HOWEVER, BE INDICATED IN THE RETURN BY MEANS OF A FOOTNOTE, OR AN ATTACHMENT STATING THE AMOUNT OF SALES AND THE PERCENTAGE, SPECIFIC OR MINING TAXES PAID ON THE RAW MATERIALS, PARTS, ACCESSORIES OR OTHER ARTICLES FORMING PART OF THE FINISHED PRODUCT SOLD.

ANY PERCENTAGE, SPECIFIC OR MINING TAX PAID ON DOMESTICALLY MANUFACTURED OR IMPORTED RAW MATERIALS, PARTS, ACCESSORIES OR OTHER ARTICLES FORMING PART OF THE FINISHED PRODUCT SOLD TO AFPCES MAY BE CLAIMED AS A TAX CREDIT BY THE MANUFACTURER OR PRODUCER IN ACCORDANCE WITH REVENUE REGULATIONS 8-78. casia B. On Articles Subject to Specific Tax: Sec. 7. The following articles, when purchased by AFPCES from local manufacturers, compounders, brewers or suppliers, for sale to persons entitled to commissary or PX privileges, shall be exempt from the specific taxes prescribed under Title IV of the National Internal Revenue Code: 1. Tobacco products a. smoking and chewing tobacco b. cigars c. cigarettes 2. Alcoholic beverages a. compounded liquors b. wines and imitation wines c. fermented liquor-beer 3. Matches 4. Petroleum Products Sec. 8. The commercial labels intended for the above enumerated articles other than petroleum products shall bear the following inscription: cd i "FOR THE EXCLUSIVE USE BY AFP PERSONNEL AND OTHER AUTHORIZED PERSONS UNDER P.D. NO. 83. THE POSSESSION OR USE OF THESE ARTICLES BY UNAUTHORIZED PERSONS IS PROHIBITED BY LAW." In the event that the size and/or existing design of the commercial labels being used for the articles concerned would not allow the printing of the inscription as herein required without disfiguring the usual appearance of those labels, the said inscription may be printed on a separate secondary label to be affixed on a conspicuous side of the pack, package, box, bottle or other form of container of the said articles. The color of the crowns or bottle caps of fermented liquor and other alcoholic beverages sold to AFPCES shall be different from the color of the crowns or caps being used on tax-paid products of the same kind. Moreover, the said bottle caps shall bear the inscription "AFP-TAX-FREE" in bold letters printed or engraved on the top or on the side of the cap or crown. acd Sec. 9. The requirement of affixing strip stamps or auxiliary labels on containers of all the aforesaid articles is hereby waived or dispensed with. In lieu thereof, strips of paper of the same size or dimension as that of the regular strip stamps for locally manufactured cigarettes and other tobacco products and of the regular auxiliary labels for wines and liquors shall be used for affixture to packs of cigarettes, box of cigars or packages of smoking or chewing tobacco and to bottles of wines, imitation wines and compounded liquor to be sold to AFPCES or its authorized post exchanges. These substitute strips or labels shall have a different color and shall bear the inscription, "For the Exclusive Use by the AFP Personnel and Other Authorized Persons Under P.D. No. 83."

Sec. 10. The substitute strips or labels referred to in the preceding section shall be placed in the custody and control of the Accountable Forms Division of the Bureau of Internal Revenue. The issuance thereof in favor of manufacturers of cigarettes and other tobacco products, wines, imitation wines and compounded liquors shall be effected in accordance with the written request of AFPCES. cd i Sec. 11. Manufacturers of cigarettes and other tobacco products, wines, imitation wines and compounded liquors intending to sell tax-free products to the AFP Commissary & Exchange Service or its authorized post exchanges shall turn over their stocks of printed paper strips to be used in lieu of strip stamps or auxiliary labels to the revenue officers assigned in their respective establishments who in turn shall assume the responsibility of safekeeping, issuance and proper recording thereof on a day-to-day basis. The manufacturer, compounder, brewer or supplier concerned shall request the revenue officer assigned in his establishment to issue the requisitioned quantity of printed paper strips to fill a purchase order made by the AFPCES or any of its authorized post exchanges. Any paper strip damaged or mutilated in the process of affixture thereof to the packs or bottles of the tax-free articles should be returned to the revenue officer assigned in the establishment for replacement with an equal number of good paper strips. The revenue officer shall make day-to-day entries in a separate record purposely for paper strips in his custody to reflect the following: cdasia a. Quantity of paper on hand at the beginning of the day; b. Quantity of paper strips received from the manufacturer; c. Quantity of paper strips issued for affixture during the day; d. Quantity of damaged paper strips returned by manufacturer and replaced with an equal quantity good ones; and e. Quantity of paper strips on hand at the end of the day. A monthly resume of above data shall be submitted by the revenue officer together with the manufacturer's transcript of official register books on or before the 8th day of the succeeding month. cda Each copy of the invoice and/or other related shipping paper shall bear the signature of the revenue officer assigned in the establishment who is required to verify the articles listed thereon to determine their correct quantity and description and the manufacturer's compliance with existing revenue laws and regulations. Sec. 11-A. Purchases by AFPCES of petroleum products on a tax-free basis shall be allowed only after a copy of the supply contract entered into with a local oil company is submitted to the Commissioner of Internal Revenue thru the Gasoline & Miscellaneous Tax Division on or before January 1 of every year, together with a list of persons entitled to commissary and PX privileges and indicating, if any, the vehicles registered in their names, the make of vehicles and the corresponding plate numbers. In case the petroleum products sold to AFPCES are tax-paid, a claim may be filed by AFPCES for tax refund or replenishment under Sections 34 and 35 of Revenue Regulations No. 13-77, otherwise known as Petroleum Products Regulations. In case the petroleum products delivered to AFPCES are tax-paid but the purchase price is net of specific tax, the supplier-oil company may file a claim for tax refund, tax credit or replenishment. casia

All invoices covering sales by AFPCES of motor fuel and lubricants shall indicate legibly, among others, the name of the purchaser, make of vehicle, plate number, kind and quantity. A copy of the sale invoice shall in all cases accompany the claim for tax refund, tax credit or replenishment filed either by AFPCES or by the supplier-oil company. Sec. 12. The provision of sections 1, 2, 3, 4 & 5 of these regulations shall apply to purchases by AFPCES from local manufacturers, compounders, brewers or suppliers of articles subject to specific tax, except that in the case of identity of the approving official referred to in section 2, and submission of bi-monthly report of purchases by the AFPCES mentioned in section 5, both of these regulations, the same shall be submitted to the Commissioner of Internal Revenue thru the Manufactured Tobacco Tax Division, Alcohol Tax Division and the Gasoline & Miscellaneous Tax Division, as the case may be. aisa dc Sec. 13. Any existing regulations, orders, or instructions or portions thereof inconsistent with these regulations are hereby repealed, amended or modified accordingly. Sec. 14. These regulations shall take effect immediately. (SGD.) CESAR VIRATA Secretary of Finance TAN RECOMMENDED BY: (SGD.) EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3" All internal revenue officers and others concerned with the enforcement of internal revenue laws are hereby enjoined to be guided accordingly. TOMAS C. TOLEDO Acting Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-27-80 Revenue Memorandum Circular No. 40-80 August 27, 1980 REVENUE MEMORANDUM CIRCULAR NO. 40-80 Subject : Publishing Letter of Instructions No. 1055 To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder the full text of Letter of Instructions No. 1055, defining who are marginal farmers and exempting them from the payment of the fixed and percentage taxes imposed by Section 192(1) and 198 of the National Internal Revenue Code of 1977, as amended. "LETTER OF INSTRUCTIONS NO. 1055 "To : The Minister of Finance Commissioner of Internal Revenue "To uplift the economic well-being of individual farmers engaged in small-scale, subsistence farming in line with the social amelioration program of the Government, a marginal farmer which shall mean an individual engaged in small-scale, subsistence farming, whose sales, barters or exchanges of agricultural products produced by himself

do not exceed a gross value of P20,000 per annum, is hereby exempted from the payment of the fixed and percentage taxes imposed by Sections 192(1) and 198 of the National Internal Revenue Code of 1977 as amended. cdasia "The Minister of Finance, upon recommendation of the Commissioner of Internal Revenue, shall issue the necessary rules and regulations to implement this Letter of Instructions. "Done in the City of Manila, this 17th day of August, in the year of Our Lord, nineteen hundred and eighty. "(SGD.) FERDINAND E. MARCOS "President of the Philippines" Features of the LOI: 1. For one to be classified as a marginal farmer pursuant to this Letter of Instructions, the following requisites must concur: a. He must be an individual engaged in small-scale subsistence farming; cdasia b. He must be the producer of the agricultural products sold, bartered or exchanged by him; and c. His sales, barters or exchanges of agricultural products produced by him do not exceed P20,000 per annum. 2. A marginal farmer shall be exempted from the payment of the fixed and percentage taxes prescribed under Sections 192(1) and 198 of the National Internal Revenue Code. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-15-80 Revenue Memorandum Circular No. 41-80 August 15, 1980 REVENUE MEMORANDUM CIRCULAR NO. 41-80 Subject : Loss of Fifty (50) Pads of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 5462501-5463750, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of fifty (50) pads of Revenue Tax Receipts, to wit: Serial No. : Quantity 5462501-5463750 : Fifty (50) Pads The above Revenue Tax Receipt were reported to the Regional Director, Revenue Region No. 4-C, San Pablo City, as lost while in the custody of MRS. MARITA N. MAGSINO, District Collection Supervisor for Revenue District No. 43, San Jose, Occidental Mindoro, last July 9, 1980. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner

By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-19-80 Revenue Memorandum Circular No. 42-80 August 19, 1980 REVENUE MEMORANDUM CIRCULAR NO. 42-80 Subject : Loss of One (1) Central Bank Copy of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3341844. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) copy of Revenue Tax Receipt, to wit: Serial No. : Quantity 3341844 : One (1) Piece-Central Bank Copy The Central Bank Copy of the above Revenue Tax Receipt was reported to the Assistant Regional Director, Revenue Region No. 8, Tacloban City, as missing or lost while in the custody of MRS. LILIA C. MIEL, Revenue Collection Agent of Maasin, Southern Leyte, last May 20, 1980. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd TOMAS C. TOLEDO Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-GO636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-01-80 Revenue Memorandum Circular No. 43-80 September 1, 1980 REVENUE MEMORANDUM CIRCULAR NO. 43-80 Subject : Publishing Letter of Instructions No. 1051 deferring the implementation of Presidential Decree No. 1089 governing the denaturing, taxation and removal of distilled spirits or alcohol for blending with gasoline or other motor fuels for the production of "Alcogas." To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder are pertinent portions of Letter of Instructions No. 1051, dated August 1, 1980, deferring the implementation of Presidential Decree No. 1089: "Sec. I. The implementation of PD 1089 is hereby temporarily suspended until further instructions. acd

"Sec. II. The Ministry of Finance, the Ministry of Energy and the Philippine National Alcohol Commission shall jointly reassess and review the specific tax on fuel alcohol and recommend, if necessary, the rate thereof as well as the timing of the continuation of the implementation of PD 1089. "Sec. III. The Commissioner of the Bureau of Internal Revenue and the Executive Director of the Philippine National Alcohol Commission shall jointly promulgate the rules and regulations pursuant to the implementation of this Letter of Instructions." Tax Implications of LOI No. 1051 The temporary suspension of the implementation of PD 1089 has deferred the imposition of the specific tax on alcohol to be blended with gasoline or other motor fuels for the production of "Alcogas" at the same rate of tax on premium gasoline (now at P1.00 per liter). acd That deferment of tax notwithstanding, distilled spirits or alcohol intended for "Alcogas" production still remains to be taxable at P0.01 as denatured alcohol for motive power under Section 153(d) of the Tax Code of 1977, as amended, since by regulations, such alcohol require prior denaturing before its removal from the distillery premises and that the end-product ("Alcogas") will be used for motive power. Until such time as the temporary suspension of the implementation of PD 1089 is lifted or a new rate of tax for alcohol intended for "Alcogas" production is prescribed, such alcohol shall be taxable at P0.01 per liter. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. aisa dc RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-01-80 Revenue Memorandum Circular No. 44-80 September 1, 1980 September 1, 1980 REVENUE MEMORANDUM CIRCULAR NO. 44-80 Subject : Recruitment of Examiners To : Revenue Service Chiefs, Regional Directors, Division Chiefs, and Others Concerned. In order to give incentive to deserving employees, and in order to facilitate the staffing of assessment units in the regions and revenue districts, Revenue Memorandum Circular No. 84-78 dated October 1, 1978, which provides that only CPAs or Lawyers with at least 18 units in Accounting shall be considered for appointment as Revenue Examiner, is hereby modified. In conformity with the Bureau's Merit Promotion Plan, insiders who are not CPAs or Lawyers may now be appointed as Revenue Examiner, provided the following conditions are met: casia 1. The employee is a Bachelor of Science in Commerce or Bachelor in Business Administration, major in Accounting, or a Bachelor of Laws with 18 units in accounting, and is a First Grade Civil Service eligible (or its equivalent). 2. The employee must already occupy a position with a salary range not lower than Range-52. 3. The employee must have been in the revenue service for at least three (3) years. casia

4. The employee has signified in writing his willingness to be assigned to a particular region where no applicants with LLB or CPA qualifications have been received by either the national or regional offices for a period of at least six (6) months. cdt Please be guided accordingly. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-17-80 Revenue Memorandum Circular No. 45-80 September 17, 1980 REVENUE MEMORANDUM CIRCULAR NO. 45-80 Subject : Loss of Two (2) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 3150883 and 4287878. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Tax Receipts, to wit: Serial No. : Quantity 3150883 : One (1) Set 4287878 : One (1) Set The above Revenue Tax Receipts were reported to the Regional Director, Revenue Region No. 4-B, Quezon City as missing or lost while in the custody of Mr. CECILIO G. PICARZO, Revenue Cash Clerk, Collection Branch, same region. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-18-80 Revenue Memorandum Circular No. 46-80 September 18, 1980 REVENUE MEMORANDUM CIRCULAR NO. 46-80 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 2695591. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: Serial No. : Quantity 2695591 : One (1) Set The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City, as missing or lost sometime on March 6, 1980 by JULIUS B.

ALUYEN, Supervising Revenue Examiner I, Revenue District Office No. 32, Makati, Metro Manila. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the abovementioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-16-80 Revenue Memorandum Circular No. 47-80 September 16, 1980 REVENUE MEMORANDUM CIRCULAR NO. 47-80 Subject : Loss of Thirteen (13) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 5403563 5403575, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of thirteen (13) sets of Revenue Tax Receipts, to wit: Serial No. : Quantity 5403563-5403575 : Thirteen (13) Sets The above Revenue Tax Receipts were reported as lost or missing sometime on September 2, 1980 while in the custody of MS. HELEN CRUZ CALALANG, a municipal clerk assigned at the Office of the Collection Agent, Cainta, Rizal. cdasia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-17-80 Revenue Memorandum Circular No. 48-80 September 17, 1980 September 17, 1980 REVENUE MEMORANDUM CIRCULAR NO. 48-80 Subject : Publishing Batas Pambansa Blg. 81, "An Act Further Amending Section 149 Subparagraph (b) of the National Internal Revenue Code and for Other Purposes." To : All Internal Revenue Officers and Others Concerned.

For the information and guidance of all concerned, quoted hereunder are pertinent portions of Batas Pambansa Blg. 81: "Sec. 1. Section 149(b) of the National Internal Revenue Code of 1977, as amended, is hereby further amended to read as follows: "(b) Cigarettes "(1) On cigarettes packed in thirties, the retail price of which per pack does not exceed ninety centavos, on each thousand, three pesos; cda "(2) On cigarettes packed in thirties, the retail price of which per pack exceeds ninety centavos but does not exceed one peso and twenty-five centavos, on each thousand, five pesos; "(3) On cigarettes packed in thirties, the retail price of which per pack exceeds one peso and twenty-five centavos, on each thousand, eight pesos; "(4) On cigarettes packed in twenties, the retail price of which per pack does not exceed one peso and forty-five centavos, on each thousand, fourteen pesos; "(5) On cigarettes packed in twenties, the retail price of which exceeds one peso and forty-five centavos but does not exceed one peso and seventy-five centavos, on each thousand, twenty pesos; "(6) On cigarettes packed in twenties, the retail price of which exceeds one peso and seventy-five centavos but does not exceed two pesos and five centavos, on each thousand, twenty two pesos; aisa dc "(7) On cigarettes packed in twenties, the retail price of which exceeds two pesos and five centavos but does not exceed two pesos and forty centavos, on each thousand, twenty-five pesos; "(8) On cigarettes packed in twenties, the retail price of which exceeds two pesos and forty centavos but does not exceed two pesos and eighty-five centavos, on each thousand, thirty-seven pesos; "(9) On cigarettes packed in twenties, the retail price of which exceed two pesos and eighty-five centavos but does not exceed three pesos and thirty-five centavos, on each thousand, forty-five pesos; cdasia "(10) On cigarettes packed in twenties, the retail price of which exceeds three pesos and thirty-five centavos, on each thousand, fifty-five pesos; "(11) If the cigarettes of local manufacture are of foreign brands or trademarks and being manufactured locally under licensing agreements with the foreign brand or trademark owners, the tax shall be increased by fifty per centum per thousand: Provided, That any subsequent transfer or alienation of title or right over a cigarette brand or trademark by a foreign owner to a local manufacturer in whatever manner, form or description shall not affect the rates of tax then prevailing after the effectivity of this Code: Provided, further, That the maximum retail price per pack of cigarettes subject to the surcharge of fifty per centum may be increased beyond the price bracket range for the corresponding category of cigarettes not subject to the surcharge, but such increase shall not exceed the amount of the surcharge applicable to a pack of cigarettes within the same category; "(12) If the cigarettes are of foreign manufacture, regardless of the retail price or contents per pack, on each thousand, eighty-seven pesos.

"Nothing under the foregoing subparagraph (b) shall be deemed to allow a downward reclassification for tax purposes of any existing brand of cigarettes whenever there is a change in the tax rates or retail price ceilings thereof. "Cigarettes subject to tax at lower rates before the effectivity of the new tax rates herein prescribed shall automatically be subject to the corresponding higher rates and there is nothing under this subsection (b) which allows any downward reclassification of tax rates for existing brands of cigarettes duly registered at the time the herein rates become effective. "Duly registered and/or existing brands of cigarettes packed in twenties at the time of the new rates herein prescribed shall not be allowed to be packed in thirties. (For the sake of brevity in reproduction, the succeeding portions of Section 149 not amended by the new legislation have been omitted.) "Sec. 2. This Act shall take effect upon its approval." Salient Features of the Amendatory Law: (a) The maximum retail prices per pack and the corresponding rates of specific tax on cigarettes have been increased, except in the case of those packed in 30's, the retail prices of which have been raised but the existing tax rates have been maintained or left unchanged. cdtai Shown hereunder are the changes in retail prices and corresponding specific tax rates provided for under the amendatory law: Sec. 149(b) - Cigarettes Rate of Tax per 1,000 Maximum Retail Price per Pack Old New Item No. Old Price New Price Inc. Rate Rate Inc. Packed in 30's (1) P0.80 or less P0.90 or less P0.10 P3.00 (no change) (2) 0.81 - 1.00 0.91 - 1.25 0.25 5.00 (no change) (3) 1.01 - 1.10 Over 1.25 0.15 8.00 (no change) (4) P1.35 or less P1.45 or less P0.10 P12.00 P14.00 P2.00 (5) 1.36 - 1.65 1.46 - 1.75 0.10 18.00 20.00 2.00 (6) 1.66 - 1.95 1.76 - 2.05 0.10 20.00 22.00 2.00 (7) 1.96 - 2.25 2.06 - 2.40 0.15 22.00 25.00 3.00 (8) 2.26 - 2.70 2.41 - 2.85 0.15 34.00 37.00 3.00 (9) 2.71 - 3.20 2.86 - 3.35 0.15 42.00 45.00 3.00 (10) Over 3.20 Over 3.35 0.15 52.00 55.00 3.00 (11) The old provision imposing 50% surcharge on locally manufactured cigarettes of foreign brands has been retained in the new tax legislation. Consequently, the rates of tax applicable to foreign brands have likewise been increased due to the increase in rates for local brands upon which the 50% surcharge is based, to wit: Old Rates of New Rates of Tax per M Tax Per M Increase Local Brand (x) - Foreign Brand Foreign Brand Per M Per Pack P14.00 P21.00 P18.00 P3.00 P0.06 20.00 30.00 27.00 3.00 0.06 22.00 33.00 30.00 3.00 0.06 25.00 37.50 33.00 4.50 0.09

37.00 55.50 51.00 4.50 0.09 45.00 67.00 63.00 4.50 0.09 55.00 82.50 78.00 4.50 0.09 (x) - Surcharge of 50% included. Old Rate New Rate Increase (12) Imported cigarettes P82.00 P87.00 P5.00 (b) Since the imposition of the 50% surcharge on local cigarettes of foreign brands, their maximum retail prices per pack have heretofore been subject to the same statutory price limits prescribed for corresponding local brands not subject to such surcharge, the big disparity in tax burden notwithstanding. acd To rectify this inequity in retail prices, the new law has authorized local manufacturers of foreign brand cigarettes subject to the 50% surcharge to increase their maximum retail prices beyond the price bracket range for corresponding category of local brand cigarettes not subject to such surcharge. However, the increase in retail prices shall not exceed the amount of surcharge applicable to a pack of cigarettes within the same category. For the guidance of all concerned, particularly those charged with the enforcement of the cigarette tax law and the collection of specific tax on said articles, the following tabulation illustrates the application of the retail pricing amendment and the resultant maximum retail prices per pack of foreign brand cigarettes produced locally. Local Brand (20's) Foreign Brand (20's) New Max. New Tax Rate New Tax Rate Tax Differential Max. Rate Price Per M Per Pack Per M Per Pack Per Pack Ret. Price (1) (2) (3) (4) (5) (6) (7) P1.45 or less P14.00 P0.28 P21.00 P0.42 P0.14 P1.59 or less 1.46 - 1.75 20.00 0.40 30.00 0.60 0.20 1.60 - 1.95 1.76 - 2.05 22.00 0.44 33.00 0.66 0.22 1.96 - 2.27 2.06 - 2.40 25.00 0.50 37.50 0.75 0.25 2.28 - 2.65 2.41 - 2.85 37.00 0.74 55.50 1.11 0.37 2.66 - 3.22 2.86 - 3.35 45.00 0.90 67.50 1.35 0.45 3.23 - 3.80 Over 3.35 55.00 1.10 82.50 1.65 0.55 Over 3.80 Helpful guides for the use of the foregoing tabulation: (a) Equivalent tax per pack (20's) (a) Local Brands: = Col. (2) x 20 Col. (3) 1000 (b) Foreign Brands = Col. (4) x 20 Col. (5) 1000 (b) Tax differential per pack of foreign brand cigarettes Col. (6) = Col. (5) less Col. (3) (c) Resultant Maximum Retail Price per Pack of Foreign Brands Upper limit Col. (7) = Upper limit of Col. (1) plus Col. 6 Effectivity date. - The new rates of specific tax on cigarettes packed in 20's and the corresponding maximum retail prices per pack are effective on September 17, 1980, the date of the approval of Batas Pambansa Blg. 81. cd i

All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-17-80 Revenue Memorandum Circular No. 49-80 September 17, 1980 September 17, 1980 REVENUE MEMORANDUM CIRCULAR NO. 49-80 Subject : Publishing Batas Pambansa Blg. 82, "An Act Further Amending Sections 145, 146, 147, 181 and 186 of the National Internal Revenue Code and for Other Purposes." To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder are pertinent portions of Batas Pambansa Blg. 82: cda "Sec. 1. Section 145 of the National Internal Revenue Code of 1977, as amended, is hereby further amended to read as follows. "Sec. 145. Specific tax on distilled spirits. - On distilled spirits there shall be collected, subject to the provisions of Section one hundred thirty-nine of this Code, except as hereinafter provided, specific taxes as follows: cd i "(a) If produced domestically from locally produced raw materials, per proof liter, two pesos and forty centavos: Provided, That if produced in a pot still or other similar primary distilling apparatus, by a distiller producing not more than one hundred liters a day, containing not more than fifty per centum of alcohol by volume, per proof liter, one peso and fifty-six centavos; "(b) If imported or produced from imported raw materials, per proof liter, thirty-five pesos. "This tax shall be proportionally increased for any strength of the spirits taxed over proof spirits, and the tax shall attach to this substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirits, or be immediately or at any subsequent time transformed into any other substance either in the process of original production or by any subsequent process. "'Spirits or distilled spirits' is the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilutions and mixtures thereof, from whatever source by whatever process produced, and shall include whisky, brandy, rum, gin and vodka, and other similar products or mixtures except compounded liquors taxed under Section 146 of this Code. cda "'Proof spirits' is liquor containing one-half of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths at fifteen degrees centigrade. A 'proof liter' means a liter of proof spirits." "Sec. 2. Section 146 of the same Tax Code, as amended, is hereby further amended to read as follows: "Sec. 146. Specific tax on wines and compounded liquors. - On wines and imitation wines and compounded liquors there shall be collected, per liter of volume capacity, the following taxes:

"(a) Sparkling wines, regardless of proof, twelve pesos; if imported, twenty-six pesos and forty centavos. "(b) Still wines containing fourteen per centum of alcohol or less (except those manufactured from locally grown raw materials), two pesos; if imported, four pesos and forty centavos; "(c) Still wines containing more than fourteen per centum of alcohol, four pesos; if imported, eight pesos and eighty centavos; "Imitation wines containing more than twenty-five per centum of alcohol shall be taxed as distilled spirits; "(d) Compounded liquors containing seventeen and one-half per centum of alcohol or less, ninety-six centavos; "(e) Compounded liquors containing more than seventeen and one-half per centum of alcohol, but not more than twenty-five per centum thereof, one pesos and thirty-four centavos; cdt "(f) Compounded liquors containing more than twenty-five per centum of alcohol, but not more than thirty-two and one-half per centum thereof, one peso and seventy-two centavos; "(g) Compounded liquors containing more than thirty-two and one-half per centum of alcohol, but not more than forty per centum thereof, two pesos and ten centavos; and "(h) Compounded liquors containing more than forty per centum of alcohol, two pesos and sixty-six centavos. "For the purpose of this Section, 'compounded liquors' as prescribed under subparagraphs (d), (e), (f), (g), and (h) of this Section, the amount of specific tax paid on the distilled spirits used in the compounding of such intoxicating beverage shall be credited against the tax due on the compounded liquors as soon as they are in existence as such. "For the purpose of this Section, "compounded liquors" shall include any intoxicating beverage whatever, concocted by or resulting from the mixture of or addition to distilled spirits, either before or after rectification, of any coloring matter, flavoring extract or essence or other kind of wine, liquor or other ingredient." "Sec. 3. Section 147 of the same Code is hereby further amended to read as follows: "Sec. 147. Specific tax on fermented liquors. - On beer, lager beer, ale, porter, and other fermented liquors (except tuba, basi, tapuy and similar domestic fermented liquors), there shall be collected, on each liter of volume capacity, one peso and twenty centavos: Provided, That if the fermented liquor is imported the tax shall be increased by one hundred per centum." cdt "Sec. 4. Section 181 of the same Tax Code is hereby amended to read as follows: "Sec. 181. Unlawful use of denatured alcohol. - Any person who, for the purpose of manufacturing any beverage, uses denatured alcohol or alcohol specially denatured to be used for motive power or withdrawn under bond for industrial uses or alcohol knowingly misrepresented to be denatured to be unfit for oral intake, or who knowingly sells or offers for sale any beverage made in whole or in part from such alcohol, or who uses such alcohol for the manufacture of liquid medicinal preparations taken internally, or knowingly sells or offers for sale such preparations containing as an ingredient such alcohol, shall on conviction be fined not less than ten thousand pesos and imprisoned for

not less than six years and one day. If the violator is an alien, he shall be liable for deportation. "Any person who shall unlawfully recover, or attempt to recover by distillation or other process any denatured alcohol or who knowingly sells or offers for sale, conceals, or otherwise disposes of alcohol so recovered or redistilled shall be subject to the same penalties imposed under this Section. cda "Sec. 5. Section 186 of the same Code is hereby amended to read as follows: "Sec. 186. Shipment or removal of liquor or tobacco products under false name or brand or as an imitation of any existing or otherwise known product name or brand. Any person who ships, transports or removes spirituous, compounded or fermented liquors, wines, or any manufactured products of tobacco under any other than the proper name or brand known to the trade as designating the kind and quality of the contents of the cask, bottle or package containing the same, or as an imitation of any existing or otherwise known product name or brand, or causes such act to be done, shall on conviction be subject to a fine of not less than ten thousand pesos and imprisonment of not less than six years and one day; and in addition, the article or articles so transported or removed shall be forfeited. If the violator is an alien, he shall be liable for deportation. "Sec. 6. Fifty percent of the increase in the rates provided by this Act shall take effect upon approval of this Act and the full amount shall take effect on April 1, 1981. "Sec. 7. This Act shall take effect immediately." Salient Features of the Amendatory Law: (a) Except for the status quo in rates of taxes on imported distilled spirits which by statutory definition include imported whisky, brandy, rum, gin, vodka and other similar products (except compounded liquors) and sparkling wines of local and foreign manufacture, the rates of specific tax on the other alcoholic products taxable under Sections 145, 146 and 147 have been increased by 100% across-the-board under Batas Pambansa Blg. 82. cdtai (b) Aside from the strikingly identical rate of increase in specific taxes on the alcoholic products subject thereto, the amendatory law also provides that "Fifty percent of the increase in the rates provided by this Act shall take effect upon approval of this Act and the full amount shall take effect on April 1, 1981." Consequently, from September 17, 1980, (date of approval of B.P. Blg. 82) until March 31, 1981, one-half (1/2) of the amount of increase in tax rates shall be in force. Starting on April 1, 1981, the full amount of the increase in the rates under the amendatory legislation shall take effect and thereby achieving to the fullest extent the 100% increase in rates of specific tax on alcoholic products as originally provided for under the proposed tax measure. (c) Increase in Rates of Specific Tax (1) Sec. 145. Specific tax on distilled spirits Shown in the following tabulation are the increased rates of tax applicable to distilled spirits effective on the dates prescribed by the amendatory law; cda New Rate Effective uponEffective Old Law Approval of Law April 1, 1981 Domestic spirits P1.20/p. l. P1.80/p. l. P2.40/p.1. "Lambanog" .78/p. l. 1.17/p. l. 1.56/p. l.

Imported spirits 35.00/p. l. (no change) (no change) (2) Sec. 146. Specific tax on wines and compounded liquors. Following the same pattern as in the foregoing tabulated rates of specific tax on distilled spirits, the increased rates of tax on wines and compounded liquors and their effective dates are shown hereunder: cdtai New Rate Effective uponEffective Old Rate Approval of Law April 1, 1981 (a) Sparkling wines Local P12.00/liter (no change) (no change) Imported 26.40/liter (no change) (no change) (b) Still wines (14% alcohol or less) Local P1.00/liter P1.50/liter P2.00/liter Imported 2.20/ " 3.30/ " 4.40/ " (NB: - Local still wines manufactured from locally grown raw materials are exempt from specific tax under the amendatory law.) (c) Still wines (Over 14% alcohol) Local P2.00/liter P3.00/liter P4.00/liter Imported 4.40/ " 6.60/ " 8.80/ " Imitation wines containing more than 25% of alcohol shall be taxed as distilled spirits at the new rates and effective on the dates prescribed under the amendatory law. cdt (d) Compounded liquors containing 17-1/2 % alcohol or less P0.48/liter P0.72/liter P0.96/liter (e) containing over 17-1/2 % to 25% alcohol .67/ " 1.005/ " 1.34/ " (f) containing over 25% to 32-1/2 % alcohol.86/" 1.29/" 1.72/" (g) containing over 32-1/2 to 40% alcohol 1.05/ " 1.575/ " 2.10/ " (h) containing over 40% alcohol 1.33/ " 1.995/ " 2.66/ " In computing the specific tax on compounded liquors at the above new rates and effective on the indicated dates under the amendatory law, the amount of specific tax paid on distilled spirits used in the compounding of such intoxicating beverages shall be credited against the tax due on the compounded liquors. cdt (3) Sec. 147. Specific tax on fermented liquors (Beer) In view of the staggering of the increase in rates of tax or fermented liquors, the new rates are shown hereunder: New Rate Effective uponEffective

Old Rate Approval of Law April 1, 1981 Local Beer P0.60/liter P0.90/liter P1.20/liter Imported beer 1.20/ " 1.80/ " 2.40/ " (d) Amendments to Certain Penal Provisions To add more teeth to the enforcement of the law and the collection of specific taxes on distilled spirits and intoxicating liquors and as a much stronger deterrent against manufacturers and/or traffickers of illicit alcohol products, heavier penalties have been imposed for certain violations punishable under the following amended Sections of Title IV: Sec. 181. Unlawful use of denatured alcohol. Nature of Violation - The use of denatured alcohol or alcohol specially denatured for motive power or withdrawn under bond for industrial uses or alcohol knowingly misrepresented to be denatured to be unfit for oral intake in the manufacture of any beverage or liquid medicinal preparations taken internally; or who knowingly sells or offers for sale any beverage or preparations containing as an ingredient such unlawfully used alcohol. cdt Old Penalty New Penalty Fine - not less than P1,000; and Not less than P10,000 and Prison Terms - not more than one (1) year Not less than 6 years and 1 day; Plus deportation for alien violators. Nature of Violation - Unlawful recovery or attempt to recover by distillation or other process any denatured alcohol; or knowingly selling or offering for sale, concealing or otherwise disposing of alcohol so recovered or redistilled. Old Penalty New Penalty Same penalties under Sec. 264 Same penalty for unlawful of the Rev. Administrative Code. use of denatured alcohol afore-mentioned. Sec. 186. Shipment or removal of liquor or tobacco products under false name or brand or as an imitation of any existing known product name or brand. cdt Old Law The Law, as Amended Did not include shipment or Includes shipment or removal removal of imitation of any of imitation of any known existing known product name or product name or brand as an brand as a punishable violation. offense punishable under Sec. 186. Old Penalty New Penalty A fine of P500.00 and forfeiture A fine of not less than P10,000.00 of articles so transported or and imprisonment of not less than removed. 6 years and 1 day Plus forfeiture of articles so transported or removed. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

09-16-80 Revenue Memorandum Circular No. 50-80 September 16, 1980 REVENUE MEMORANDUM CIRCULAR NO. 50-80 Subject : Loss of One (1) Original Copy of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 1395883. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) original copy of Revenue Tax Receipt, to wit: Serial No. : Quantity 1395883 : One (1) Piece - Original Copy The above copy of Revenue Tax Receipt was reported to the Assistant Regional Director, Revenue Region No. 6-B, Bacolod City as missing or lost sometime on July 14, 1980 by PURITA S. SERDEA, Revenue Collection Agent of Victorias, Negros Occidental. casia Internal Revenue officers, employees, and others concerned are requested to promptly notify this office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-13-80 Revenue Memorandum Circular No. 51-80 October 13, 1980 REVENUE MEMORANDUM CIRCULAR NO. 51-80 Subject : Loss of Two (2) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. A-3225039 and A 3225040. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Tax Receipts, to wit: Serial No. : Quantity A-3225039 : One (1) Set A-3225040 : One (1) Set The above Revenue Tax Receipts were reported to the Regional Director, Revenue Region No. 5, Legazpi City, as missing or lost sometime on April 15, 1980 while in the custody of JULITA S. TORRES, Revenue Collector II of Virac, Catanduanes. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i ROMULO M. VILLA Acting Commissioner

TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-17-80 Revenue Memorandum Circular No. 52-80 October 17, 1980 REVENUE MEMORANDUM CIRCULAR NO. 52-80 Subject : Loss of One (1) Original Copy of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3232621. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) original copy of Revenue Tax Receipt, to wit: Serial No. : Quantity 3232621 : One (1) Piece - Original Copy The above copy of Revenue Tax Receipt, which was issued to the Collection Agent of Naga City, Revenue District No. 45, was reported to the Regional Director, Revenue Region No. 5, Legazpi City, as missing or lost. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc ROMULO M. VILLA Acting Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-17-80 Revenue Memorandum Circular No. 53-80 October 17, 1980 REVENUE MEMORANDUM CIRCULAR NO. 53-80 Subject : Loss of One (1) Taxpayer's Copy of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 3735902. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) copy of Revenue Tax Receipt, to wit: Serial No. : Quantity 3735902 : One (1) Piece - Taxpayer's Copy The above copy of Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-C, San Pablo City, as missing or lost while in the custody of Mr. JOVENCIO A. CAPUA, Revenue Collection Agent of Calapan, Oriental Mindoro. cdasia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i ROMULO M. VILLA Acting Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

11-04-80 Revenue Memorandum Circular No. 54-80 November 4, 1980 REVENUE MEMORANDUM CIRCULAR NO. 54-80 Subject : Loss of One (1) Pad of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Numbers 2276051 to 2276100-G, inclusive. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts, to wit: cdt Serial Number : Quantity 2276051-2276067-G (Issued) : Seventeen (17) pieces (Collection Agent's Copy) 2276068-2276100-G (Unissued) : Thirty-three (33) sets The above receipts were reported by Lily A. Pama, Revenue Collector I of San Enrique, Iloilo as missing or lost while in her custody last June 19, 1980. cdasia Internal Revenue Officers, Employees, and Others Concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia ROMULO M. VILLA Deputy Commissioner of Internal Revenue TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-03-80 Revenue Memorandum Circular No. 55-80 December 3, 1980 REVENUE MEMORANDUM CIRCULAR NO. 55-80 Subject : Publishing Section 24(b) (2) (b) of the National Internal Revenue Code, as amended by Presidential Decree No. 1705. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, Section 24(b) (2) (b) of the Tax Code, as amended by P.D. No. 1705, is quoted as follows: "(b) Tax on branch profits remittances. - Any profit remitted abroad by a branch office to its mother company shall be subject to a tax of fifteen (15%) per cent (Except those registered with the Export Processing Zone Authority): Provided, that, any profit remitted by a branch office to its mother company authorized to engage in petroleum operations in the Philippines shall be subject to tax at seven and one-half (7.5%) per cent; And provided, further that fixed or determinable annual periodical gains, profits, and income or certain gains described in Section 24(b) (1) or 53(b)(2) of this code shall not be considered as branch profits unless the same are effectively connected with the conduct of a trade or business in the Philippines by foreign corporation." cdtai FEATURES OF THE AMENDMENT Two (2) amendments to Sec. 24(b) (2) (b) of the 1977 Tax Code on branch profit remittances have been effected by P.D. No. 1705. They are: 1. Reduction of the tax rate on the profits remitted by a branch office to its mother company authorized to engage in petroleum operations. - The tax on profits remitted by a

branch office to its mother company authorized to engaged in petroleum operations in the Philippines has been reduced to 7.5%. 2. Imposition of a branch profits tax on income effectively connected with business. - Fixed or determinable annual periodical gains, profits, and income on certain gains described in Section 24 (b)(1) or 53(b) (2) of the 1977 Tax Code, (i.e. income earned from Philippine sources by non-resident foreign corporations) are generally not considered branch profits subject to the 15% remittance tax unless the same are effectively connected with the conduct of a trade or business in the Philippines by the foreign corporation. To be "effectively connected" it is not necessary that the income be derived from the actual operation of taxpayer-corporation's trade or business; it is sufficient that the income arises from the business activity in which the corporation is engaged. casia For example, if a resident foreign corporation is engaged in the buying and selling of machineries in the Philippines and invests in some shares of stock on which dividends are subsequently received, the dividends thus earned are not considered effectively connected with its trade or business in this country. On the other hand, if a resident foreign corporation with a branch office in the Philippines engaged in the canning business allows its trade name or brand to be used and royalties are received by its parent company, such royalties which constitute passive income, are effectively connected with its trade or business and should be subject to tax, if remitted abroad. Effectivity. - The foregoing amendment took effect upon the promulgation of P.D. No. 1705 on August 1, 1980. Enforcement. - It is desired that this Circular be given as wide a publicity as possible. cdasia RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-02-80 Revenue Memorandum Circular No. 56-80 December 2, 1980 REVENUE MEMORANDUM CIRCULAR NO. 56-80 Subject : Publishing Section 30 (c) of the National Internal Revenue Code, as amended by Presidential Decree No. 1705. To : All Internal Revenue Officers and Others Concerned: For the information of all concerned, Section 30 (c) of the National Internal Revenue Code, as amended by P.D. No. 1705 is quoted as follows: "Sec. 30. Deductions from gross income. - In computing net income there shall be allowed as deductions xxx xxx xxx "(c) Taxes: "(1) In general. - Taxes paid or accrued within the taxable year, except xxx xxx xxx "(F) Taxes paid on articles imported by the taxpayer where such importation is not connected with his trade or business. cd "(G) Excess electric energy consumption tax imposed by Batas Pambansa Blg. 36."

FEATURES OF THE AMENDMENT P.D. No. 1705 further restricts the scope of taxes which are deductible under Section 30(c) of the 1977 Tax Code by adding two non-deductible taxes, e.g.: 1. Taxes paid on articles imported by the taxpayer where such importation is not connected with his trade or business. - Previously, all taxes paid on imported articles were allowed as deduction for the taxpayer-importer. Under this amendment, a taxpayer is now precluded from claiming said taxes as deduction if the importation is not connected with the taxpayer's trade or business. Thus, compensating taxes paid on articles imported for one's own personal use is no longer deductible because it is not connected with the taxpayer's business. 2. Excess electric energy consumption tax imposed by Batas Pambansa Blg. 36. Non-deductibility of this tax was provided by Batas Pambansa Blg. 36. This was inserted in the new Decree so that the same shall form part of the present Code. aisa dc Effectivity. - The foregoing amendment took effect upon the promulgation of P.D. No. 1705 on August 1, 1980. Enforcement. - It is desired that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-24-80 Revenue Memorandum Circular No. 57-80 November 24, 1980 REVENUE MEMORANDUM CIRCULAR NO. 57-80 Subject : Loss of Eight (8) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 5168718 to 5168725, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of eight (8) sets of Revenue Tax Receipts, to wit: -----------------------Serial Number : Quantity -----------------------5168718-5168725 : Eight (8) Sets -----------------------The above Revenue Tax Receipts were reported to the Regional Director, Revenue Region No. 4-A, Manila, as missing or lost, by ANGELINA R. DE LEON, RTR Issuing Officer, same region. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-09-80 Revenue Memorandum Circular No. 58-80 October 9, 1980

REVENUE MEMORANDUM CIRCULAR NO. 58-80 Subject : Loss of One (1) Pad of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 4956251 to 4956275, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Tax Receipts, to wit: -----------------------Serial No. : Quantity -----------------------4956251-4956275 : One (1) pad -----------------------The above Revenue Tax Receipts were reported as missing or lost, by Miss MYRNA V. FALLESGON, a Revenue Stenographer assigned as Revenue Tax Receipts Custodian in the Administrative Branch, Revenue Region No. 4-A, Manila. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-05-81 Revenue Memorandum Circular No. 1-81 January 5, 1981 REVENUE MEMORANDUM CIRCULAR NO. 1-81 Subject : Publishing Section 113(c) of the National Internal Revenue Code of 1977, as amended by P.D. No. 1705. To : All Internal Revenue Officers and others concerned: For the information and guidance of all concerned, quoted hereunder is Section 113(c) of the National Internal Revenue Code of 1977, as amended by P.D. No. 1705: "(c) Surcharge. - If the amount of tax included in the notice and demand from the Commissioner of Internal Revenue shown on the Return is not paid in full on or before the date prescribed for its payment under paragraph (a) of this section, or any amount of deficiency, or any interest assessed in connection therewith is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this Section, there shall be collected in addition to the interest prescribed herein and in Sections 111 and 112 and as part of the tax surcharge of ten per centum of the unpaid amount." aisa dc Under the above-quoted provision, which took effect on August 1, 1980, the date of promulgation of P.D. No. 1705, the surcharge was increased from 5% to 10%. Consequently, in the case of a deficiency estate tax assessment issued before August 1, 1980, if the period prescribed in the assessment notice within which the tax shall be paid expired and, therefore, the taxpayer become delinquent, before August 1, 1980 only a 5% surcharge shall be imposed even if the tax remained unpaid after August 1, 1980. On the other hand, if the period prescribed for payment expired and, therefore, the taxpayer become delinquent on or after August 1, 1980, the 10% surcharge shall be imposed in conformity with P.D. No. 1705. acd

It is desired that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-07-81 Revenue Memorandum Circular No. 2-81 January 7, 1981 REVENUE MEMORANDUM CIRCULAR NO. 2-81 Subject : Prescribing a Uniform Exchange rate for U.S. Dollars and other Foreign Currencies to Philippine pesos for Internal Revenue Tax purposes for the calendar year 1981. To : All Internal Revenue Officers and others concerned. For the purpose of establishing a uniform rate of exchange of U.S. dollars and other foreign currencies to Philippine pesos for internal revenue tax purposes for the calendar year 1981, the following schedule of exchange rates are hereby prescribed for reference and guidance of all concerned: 1. For income tax purposes, the following rules shall govern: (a) In the case of resident citizens and alien individuals as well as domestic corporations deriving income in foreign currency, whether from within or without the Philippines, the conversion rate shall be at P7.55 to U.S. $1.00; cdt (b) In the case of non-resident citizen whose income tax liability is computed in terms of U.S. dollars and who chooses to pay his income tax liability in Philippine pesos, the conversion shall be at the guiding rate of exchange quoted by the Central Bank at the time he makes the payment; (c) For purposes of branch profit remittance tax, conversion shall be at P7.55 to U.S. $1.00; (d) In the case of International Carriers, whether regularly operating in the Philippines or not, including tramp vessels and off-line international airlines, the conversion shall be at P7.55 to U.S. $1.00; (e) For purposes of withholding taxes at source, provided for under Sections 53 and 54 of the Tax Code of 1977, the conversion shall be at P7.55 to U.S. $1.00. cd i 2. For percentage tax purposes, the following rules shall govern: (a) In the case of International Carriers, whether regularly operating in the Philippines or not, including tramp vessels and off-line international airlines, the conversion shall be at P7.55 to U.S. $1.00; (b) In the case of transactions involving computation of advance sales tax or compensating tax, the rate of exchange used by the Bureau of Customs at the time of payment of such taxes shall prevail; (c) For purposes of other percentage taxes, the conversion shall be at P7.55 to U.S. $1.00. 3. For other tax purposes, the conversion shall be at P7.55 to U.S.$1.00. 4. Where the currency involved is other than U.S. dollars, the foreign currency shall first be converted to U.S. dollars at the prevailing rate of exchange between the two currencies. The resulting amount shall then be converted to Philippines pesos in accordance with the above promulgated rules. cdtai ENFORCEMENT AND PUBLICITY

All Internal Revenue Officers and others charged with the enforcement of internal revenue laws are enjoined to enforce the provision of this Circular accordingly and to give it as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-15-81 Revenue Memorandum Circular No. 3-81 December 15, 1981 REVENUE MEMORANDUM CIRCULAR NO. 3-81 Subject : Loss of (1) Set of Revenue Tax Receipt (CB RCO Form No. 0220) bearing Serial No. 4160390. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: -------------------------Serial No. : Quantity -------------------------4160390 : One (1) Set -------------------------The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 10-A, Cagayan de Oro City, as missing or lost, by MRS. ESTER S. PALALA, Revenue Collector I, Ozamiz City. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the abovementioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-08-80 Revenue Memorandum Circular No. 4-81 July 8, 1980 July 8, 1980 REVENUE MEMORANDUM CIRCULAR NO. 4-81 Subject : Guidelines in the Proper Enforcement of Tax Laws To : All Internal Revenue Officers and Others Concerned A study conducted on the problem of harassment reportedly being committed by or against BIR personnel has resulted in pinpointing five (5) areas of concern on harassment committed by BIR personnel and four (4) areas of concern on harassment committed by taxpayers. casia The five (5) areas of concern as listed under harassment of taxpayers by BIR personnel are as follows:

1. Fantastic and/or arbitrary assessment as determined by the Revenue District Officer in the Regional level and Chief of Investigating Division in the Central Office as the case may be; 2. a) Arrogant and/or disrespectful behavior; b) Non-observance of punctuality and/or disrespectful behavior; 3. Indiscriminate issuance of the five (5) days letter conference; 4. Unreasonable delay in the investigation and processing of tax cases; and 5. Requiring the taxpayer to prepare working papers, and other documents which are normally on file in the BIR like income tax return of partner and list of inventories. The four (4) areas of concern on harassment of BIR personnel by taxpayers are: 1. Unfounded denunciations; 2. "Padrino System" and name-dropping (padrino is any person who wield influence); 3. Frame-up by resorting to entrapment; and 4. a) Hostility and/or non-cooperation of taxpayer under investigation; b) Non-observance of punctuality of appointment with examiner by taxpayer. In order that the abovementioned areas of concern affecting both revenue personnel and taxpayers could be considerably minimized if not altogether eradicated, it is enjoined that the guidelines herein prescribed should be scrupulously followed, viz: a. Fieldman should be very careful in preparing reports of assessments and said reports of assessments should be thoroughly studied by their supervisors and superiors for their validity and substance and demerits imposed on erring examiners and supervisors. b. Supervisors should monitor the activities of their fieldmen and closer supervision should be exercised over them. c. Any fieldman duly authorized to obtain valuable information on potential taxpayers from outside sources should as a rule, submit a written feedback to the Revenue District Officer or Chief of Investigating Division, as the case may be, within sixty (60) days from date of the written authority. d. The Revenue District Officer or the Chief of the Investigating Division concerned should sign all official communications/tax assessments emanating from their level of authority. e. Letters of authority should definitely specify the taxable year under investigation and the name of the examiner authorized to conduct the investigation; and in cases of unverified prior taxable years, a written request shall be forwarded to the Regional Director for approval in the Regional Office; and to the Commissioner by the Chief of Investigating Division in the Central Office. cd f. The Revenue District Officer/Regional Director in the District/Regional Office and the Chief of Investigating Division in the Central Office should conduct periodic seminars on human and public relations among their fieldmen. g. Any findings, except errors in mathematical computation, involving a change of assessment after review of reports of examination by higher authority of the BIR should be returned to the unit which handled the original field investigation for comment and/or further examination. Failure of the examiner to return the tax docket within a period of thirty (30) working days with the desired comment and/or observation shall make him liable to administrative action (underlining supplied).

h. Examiners are required to submit reports on the tax cases assigned to them within the reglementary period of one hundred and twenty (120) days or progress report thereof except in transfer tax cases where the gross estate is in the amount of P100,000.00 or below, the report of which shall be submitted within a period of thirty (30) working days, shall likewise apply to verification of tax dockets, use of cash registers and use of loose leaf invoice or books. i. The Revenue District Officer and Chief, Assessment Branch of the Regional Office and the operating divisions and the Direct and Indirect Taxes Division in the Central Office shall require a uniform check list on the contents of the report of investigation. j. All BIR offices concerned shall make available working papers and other documents normally on file, and when not available, the taxpayer shall then present for reproduction his/its copy at the expense of the BIR. Relative to unfounded denunciations, the Bureau, as a policy, shall not entertain complaints/affidavits unless corroborated by a witness to the tax case investigation and unless preliminary inquiry has been conducted as to its veracity. Examiners shall not be administratively charged nor preventively suspended, until after confrontation whereby a prima facie case is established against him/her by the Regional Director in the Regional Office or the Deputy Commissioner/Assistant Commissioners in the Central Office. Taxpayer's denunciation filed after substantial valid assessments or collections have been submitted to the Revenue District Officer by the fieldmen should be regarded as retaliatory action by the taxpayer unless proven otherwise. Fieldmen/supervisors should not entertain anonymous letters including telephone calls. Whenever taxpayers resort to name-dropping or use of padrino, a written report thereon should be submitted to their immediate superior, copy furnished the Commissioner of Internal Revenue. In tax investigations, all taxpayers should submit the written authority of the person/persons authorized to represent him/it in the tax investigation and said written authority should be incorporated in the report; and any other person/persons not mentioned in the written authority should be disregarded. Unless the circumstances so warrant, entrapment should not be resorted to. It is desired that a uniform list of books of accounts and accounting records be adopted to be presented simultaneously to the letter of authority. All internal revenue officers and others concerned are hereby enjoined to comply strictly with the guidelines hereinabove set forth so that effective and proper enforcement of tax laws could be achieved. casia Provisions of other Circulars inconsistent herewith are hereby repealed. This Circular takes effect immediately. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-15-80 Revenue Memorandum Circular No. 5-81 December 15, 1980 REVENUE MEMORANDUM CIRCULAR NO. 5-81

Subject : Loss of Five (5) Original Copies of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 3213154, 3244057, 3244267, 3237621 and 3222621. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of five (5) original copies of Revenue Tax Receipts, to wit: cd i Serial No. Quantity Issued To 3213154 One (1) Piece - Original Copy Violeta R. Jariel Revenue Collector I Daet, Camarines Norte 3244057 One (1) Piece - Original Copy - do 3244267 One (1) Piece - Original Copy - do 3237621 One (1) Piece - Original Copy Rufino Quitasol Revenue Collector III Legazpi City 3222621 One (1) Piece - Original Copy Joaquin B. Romero Collection Agent Tabaco, Albay The original copies of the above Revenue Tax Receipts were reported as missing to the Regional Director, Revenue Region No. 5, Legazpi City. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the abovementioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner of Internal Revenue ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-21-81 Revenue Memorandum Circular No. 6-81 January 21, 1981 January 8, 1981 REVENUE MEMORANDUM CIRCULAR NO. 6-81 Subject : Publishing the Memorandum Agreement dated January 8, 1981 between the Commission on Audit and Bureau of Internal Revenue providing for a joint and simultaneous Audit of Franchise holders. To : All Internal Revenue Officers and others concerned. For the information and guidance of all concerned the Memorandum of Agreement dated January 8, 1981 between the Commission of Audit and Bureau of Internal Revenue is quoted as follows: cdt "WHEREAS, the Commission on Audit and the Bureau of Internal Revenue, hereinafter referred to as COA and BIR, are government agencies authorized to conduct audit and examination of the books of accounts of franchise holders, the former for franchise tax and the latter for other internal revenue tax purposes;

"WHEREAS, there are franchise holders whose franchise provides exclusive audit by the COA, but whose business operations invariably involve the payment of other internal revenue taxes; "WHEREAS, joint and concerted efforts of COA and BIR will result to an effective and expedient assessment and collection of government revenues and likewise preclude inconvenience and other irritants on the part of franchise holders. "NOW, THEREFORE, be it agreed, as it is hereby agreed that: 1. COA and BIR shall conduct joint and simultaneous investigation of the books of accounts of franchise holders, the former for franchise tax, and the latter, for other internal revenue tax purposes; 2. A committee of both government agencies be formed to formulate operational procedures and guidelines necessary in the coordinated and joint undertaking; 3. COA and BIR representatives shall meet and/or conduct periodic dialogues to exchange ideas and information on vital matters affecting the conduct of the investigation and the interests of the taxpayers; and 4. COA and BIR shall issue implementing rules and regulations to insure the effective implementation of the objectives sought to be attained by this MEMORANDUM OF AGREEMENT." Pursuant to the above Agreement COA will furnish the BIR, thru the Service & Miscellaneous Taxes Division, a list of franchise grantees to be audited by their Office, at least one (1) week before the start of the actual audit. The list will be forwarded to the respective regions and/or offices immediately upon receipt who shall thereafter promptly assign examiners to conduct the verification of other internal revenue taxes in coordination with the COA Auditors so that investigations of their cases would be made jointly and simultaneously. Effectivity - The foregoing memorandum of agreement took effect on January 8, 1981. aisa dc Enforcement - It is desired that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-29-81 Revenue Memorandum Circular No. 7-81 January 29, 1981 REVENUE MEMORANDUM CIRCULAR NO. 7-81 Subject : Revalidation of Regional Letters of Authority and Investigation of 1979 Tax Cases. To : All Internal Revenue Officers and Others Concerned. For the information of all concerned, notice is hereby given that all Letters of Authority issued by any official of the Bureau for cases still pending investigation are hereby cancelled. cda Before new Letters of Authority for 1979 and unverified prior years can be issued, the following conditions should be complied with: cda

1. All fieldmen shall submit an inventory of pending cases as of January 31, 1981 to their respective Revenue District Officers who shall in turn transmit the same to the Regional Director. 2. All fieldmen shall also submit the reports of investigation on all terminated cases to their respective Revenue District Officers so that assessment notices/letters of demand could be issued. 3. All monthly reports of accomplishments under BIR Form No. 40.01 (1) to (5) and BIR Form No. 40.21, up to and including the month of December, 1980, must have been submitted. 4. A certification shall be given by the Revenue District Officer to the Regional Director to the effect that the conditions referred to in paragraphs 1 to 3 above have been fully satisfied. cdasia Only after compliance with the above requirements and due notice thereof given to the Commissioner of Internal Revenue can the Regional Directors issue the new Letters of Authority for the Investigation of 1979 and unverified previous years' income tax returns. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-03-81 Revenue Memorandum Circular No. 8-81 February 3, 1981 REVENUE MEMORANDUM CIRCULAR NO. 8-81 Subject : Publishing the Directive of the President for A Six-Month Moratorium for Tax Payment in the Calamity Areas in Region X. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is hereby quoted hereunder the Memorandum dated January 29, 1981 of the President, as follows: "MALACAANG MANILA January 29, 1981 "9-81 MEMORANDUM "TO: X Commissioner Ruben Ancheta Bureau of Internal Revenue The General Manager Government Service Insurance System The Administrator Social Security System All Heads of Government Financial Institutions "In order to alleviate the sufferings of the flood victims in the calamity areas in the country, the following instructions are hereby issued for immediate implementation: cdasia a. The Bureau of Internal Revenue shall grant a moratorium for tax payment due on January 20, 1981 for a period of six (6) months from the said date in the calamity areas in Region 10.

b. All government financial institutions shall grant moratorium on amortization of all loans of flood victims in the calamity areas in Region 10 with rural banks and government banking institutions. c. The Government Service Insurance System and the Social Security System shall grant five months' salary loans to the flood victims in certain provinces and cities in Mindanao mentioned in Proclamation No. 2044, including Davao del Sur, as well as those in Region II who were affected by the recent typhoon. "(SGD.) FERDINAND E. MARCOS President of the Philippines" In the implementation of the foregoing Presidential directive, the following guidelines shall be observed: 1. Only taxpayers in the calamity areas in Region X are covered by the moratorium order. cdtai 2. The moratorium shall comprehend only tax payments due on January 20, 1981. 3. The moratorium for tax payment shall be for a period of six (6) months from the said date and, therefore, shall not go beyond July 20, 1981. 4. Failure to pay the tax during the six months moratorium period shall not give rise to the imposition of interest and penalties for late payment as provided in the Tax Code. 5. The taxpayers concerned should signify their intention to avail of the benefit of the moratorium order by filing a notice to that effect with the Regional Director, the Revenue District Officer or the Collection Agent or duly authorized Treasurer of the city or municipality where they have their legal residence or place of business, indicating in the said notice their name, address and taxpayer account number. aisa dc This Circular should be given the widest dissemination possible in the calamity-affected areas. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-10-81 Revenue Memorandum Circular No. 9-81 February 10, 1981 REVENUE MEMORANDUM CIRCULAR NO. 9-81 Subject : Preparation of Formal Administrative Charges To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder are the pertinent provisions of Finance Ministry Circular No. 1-81 dated February 2, 1981 and Section 40 of PD 807. casia "When preparing a formal charge against any personnel of the Finance Ministry, including Treasurers and Assessors and their assistants, do not indicate that the respondent will be given a formal hearing if he so elects, where the charge is serious and the evidence appears to be strong. Reason: We may choose not to conduct a formal investigation and instead take summary action on the basis of Section 40 of PD 807. "Please be guided accordingly. (SGD.) EFREN I. PLANA Deputy Minister"

"Sec. 40. Summary Proceedings. - No formal investigation is necessary and the respondent may be immediately removed or dismissed if any of the following circumstances is present: casia (a) When the charge is serious and the evidence of guilt is strong. (b) When the respondent is a recidivist or has been repeatedly charged and there is reasonable ground to believe that he is guilty of the present charge. aisa dc (c) When the respondent is notoriously undesirable. "Resort to summary proceedings by disciplining authority shall be done with utmost objectivity and impartiality to the end that no injustice is committed: Provided, That removal or dismissal except those by the President himself, or upon his order, may be appealed to the Commission." RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-24-81 Revenue Memorandum Circular No. 10-81 February 24, 1981 REVENUE MEMORANDUM CIRCULAR NO. 10-81 Subject : Implementation of Section 193, Tax Code, as amended by Presidential Decree No. 1705. To : All Internal Revenue Officers and others concerned. Section 193 of the Tax Code, as amended by Section 29 of P. D. No. 1705 requires any person subject to the percentage tax to file a final annual percentage tax return "on or before the twentieth day of February following the close of the taxable year." It is also provided that if the percentage tax is not paid on time, a surcharge of 25% as well as 20% annual interest shall be imposed. casia It is noted that Section 29 of P.D. No. 1705 takes effect upon promulgation of the rules and regulations by the Minister of Finance upon recommendation of the Commissioner of Internal Revenue (Sec. 33, P.D. No. 1705). Considering that Revenue Regulation No. 681 implementing said Section 29 has been promulgated to take effect on January 28, 1981, it is clear that the requirement prescribed therein as regards the date of filing of the final annual percentage tax return took effect on said date (January 28, 1981). It follows that no surcharge and interest should be imposed upon the filing of the said return on or before February 20, 1981. cd It is desired that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-06-81 Revenue Memorandum Circular No. 11-81 March 6, 1981 REVENUE MEMORANDUM CIRCULAR NO. 11-81 Subject : Clarificatory Statement on the Personal and Additional Exemptions

In view of the conflicting views regarding the interpretation of Section 23 as amended by Presidential Decree No. 1773, the following guidelines shall govern the manner of claiming personal and additional exemption by individual taxpayers. A. Increase in the amount of personal and additional exemptions. The amount of personal and additional exemptions which an individual taxpayer may claim beginning with taxable year 1980 was increased as follows: acd 1. Married P6,000 2. Unmarried but head of family4,500 3. Unmarried but not qualifying as head of the family 3,000 4. For each of the first 4 qualified dependent child 2,000 5. For each qualified dependent child in excess of the maximum number of four dependents 1,000 B. Tax Status of individuals for personal and additional exemptions, defined: 1. For purposes of the allowance for personal and additional exemptions, a "married man" or a "married woman" is a man or a woman who is legally married under the pertinent provisions of Civil Code of the Philippines. 2. A "head of family" means an unmarried man or woman with one or both parents, or with one or more brothers or sisters, or with one or more legitimate, recognized natural, or adopted children living with and dependent upon him or her for their chief support where such brothers, sisters, or children are not more than twenty-one years of age, unmarried, and not gainfully employed, or where such children are incapable of selfsupport because of mental or physical defect. 3. A widow or widower will be considered, for purposes of the personal and additional exemptions, as unmarried man or woman who may have the status of a "head of the family" depending upon whether he or she has qualified dependents. 4. Legally separated husband and wife may be allowed to file a separate income tax return pursuant to Section 45(d) which provides as follows: "(d) Husband and Wife. - In the case of married persons, whether citizens, resident or non-resident aliens, only one consolidated return for the taxable year shall be filed by either spouse to cover the income of both spouses; but where it is impracticable for the spouses to file one consolidated return, each spouse may file his separate return of income, but the returns so filed shall be consolidated for the purpose of the tax prescribed under this Title." It appears that married persons are required to file only one consolidated return. Although legal separation, (being one of the causes of impracticability for filing only one consolidated return) may not justify the non-consolidation of separate returns that may be allowed to be filed, the administrative difficulty of consolidating such separate returns may warrant the expediency of treating each of the legally separated spouses as separate taxable unit. The practical effect of this treatment is that each of the spouses will be considered as single (unmarried) individuals but they may qualify as a head of the family entitled to claim additional exemptions for children which may be actually dependent upon each of them for chief support. cdt

C. Number of qualified dependent children. Presidential Decree No. 1773 did not disturb the number of dependents to which an individual would have been entitled to claim for 1980 had there been no amendment. In other words, the number of qualified dependents which an individual taxpayer is entitled to claim before 1980 may still be claimed for 1980 and succeeding taxable years. What was changed by P.D. 1773 is the amount of additional exemption for each of the first four dependents. The application of this amendment may be illustrated by the following situations: Case 1 Assume that an individual has the following 9 dependent children: Ages Dependent Date of Birth 1972 1979 1980 A 1-1-54 19 26 27 B 1-1-56 17 24 25 C 1-1-58 15 22 23 D 1-1-60 13 20 21 E 1-1-62 11 18 19 F 1-1-64 9 16 17 G 1-1-66 7 14 15 H 1-1-68 5 12 13 I 1-1-70 3 10 11 For the taxable year 1972, he was entitled to claim all the nine children as total dependents, although P.D. 69 limited the number of dependent children to a maximum of four, considering that all of them were born before 1973 and were not over 21 years of age at the end of 1972. (Revenue Memorandum Circular No. 2-73) For the taxable year 1980, dependents A, B, and C were already 21 years of age and were not therefore qualified as dependent children. Only six (6) dependents, D, E, F, G, H, and I were qualified for purposes of the additional exemptions of P2,000 each, while H and I who are in excess of four but otherwise are qualified dependents before 1980, are entitled to an additional exemption of P1,000 each. Case 2 Assume that an individual has the following dependents: Ages Dependent Date of Birth 1972 1979 1980 A 1-1-58 14 21 22 B 1-1-60 12 19 20 C 1-1-62 10 17 18 D 1-1-64 8 15 16 E 1-1-67 5 12 13 F 1-1-70 2 9 10 G 1-1-72 1 7 8 H 1-1-74 5 6 I 1-1-76 3 4 J 1-1-78 1 2

For the taxable year 1972, he is entitled to claim additional exemptions for 7 dependents: A, B, C, D, E, F, and G. For the taxable year 1979, he is entitled to an additional exemption for 7 dependents. The 3 dependents who were born after 1972 do not qualify as dependents. For the taxable year 1980, the eldest dependent, A who was born on January 1, 1958 was over 21 years of age as of the end of 1980. Accordingly, he is no longer qualified as a dependent. However, the next succeeding 4 eldest children, B, C, D and E are entitled to an additional exemption of P2,000 each. Dependents F and G who are in excess over the maximum of 4 dependents but who were born respectively on January 1, 1970 and January 1, 1972 are still entitled to an additional exemption of P1,000 each. Dependents H, I and J, although considered as dependents in excess of the maximum allowable number of 4, do not qualify for further additional exemption because they are born after 1972. Case 3 Assume that an individual has the following dependents: Ages Dependent Date of Birth 1972 1979 1980 A 1-1-55 17 24 25 B 1-1-56 16 23 24 C 1-1-64 8 15 16 D 1-1-70 2 9 10 E 1-1-72 1 7 8 F 1-1-73 6 7 G 1-1-75 4 5 H 1-1-77 2 3 For the taxable year 1972, he is entitled to claim additional exemptions for 5 dependents: A, B, C, D and E. Dependent E, although in excess of the maximum of 4, is also qualified for further additional exemption because he was born in 1972. For the taxable year 1979, dependents A & B are no longer qualified for additional exemption because they are over 21 years of age as of the end of the taxable year. However, dependents C, D and E who were born in 1972 and prior years, respectively, remained qualified as dependent children for purposes of the additional exemption. Dependent F, even though born after 1972, qualifies as additional dependent because the total number of dependents which may be claimed by an individual taxpayer shall not exceed four (4). Dependents G and H who are in excess of the maximum allowable number of 4 dependents and who were born after 1972 no longer qualify. For the taxable year 1980, dependents C, D, E and F qualify as dependents not in excess of the maximum number of 4, for purposes of the additional exemptions. Dependents G and H who were not otherwise qualified as dependent children for purpose of the additional exemption will not likewise qualify as such for 1980 because they are already in excess if 4 maximum allowable number of dependents. cdtai Case 4 Assume the same facts as in Case 3 except that dependent C got married during 1980. C, therefore, no longer qualifies as a dependent for purposes of the additional exemption. Therefore, dependent G will qualify, together with dependents D, E and F for purposes of

determining the total maximum number of four (4) dependents to which the individual may be entitled to claim for purposes of the additional exemption and, for each taxable year, can claim P2,000 as additional exemption. Dependent H remains not qualified because he is in excess of 4 and was not otherwise qualified as a dependent before 1980. aisa dc All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-10-81 Revenue Memorandum Circular No. 12-81 February 10, 1981 REVENUE MEMORANDUM CIRCULAR NO. 12-81 Subject : Publishing Section 23(c) of the National Internal Revenue Code of 1977, as amended by P.D. No. 1773 To : All Internal Revenue Officers and other concerned. For the Information of all concerned, quoted hereunder is Section 23(c) of the Tax Code of 1977, as amended by P.D. No. 1773: "(c) Additional exemption for dependent. - The sum of Two Thousand pesos for each legitimate, recognized natural or adopted child wholly dependent upon and living with the taxpayer if such dependents are not more than twenty-one years of age, married, and not gainfully employed or incapable of self-support because of mental or physical defect. The additional exemption under this subsection shall be allowed only if the person making the return is either married or head of the family: Provided, however, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents: Provided, further, That an additional exemption of One Thousand pesos shall be allowed for each child who otherwise qualified as dependent prior to January 1, 1980." cd i Features of the Amendment Under the amendment introduced by P.D. No. 1773, the additional personal exemption for a dependent child has been increased from P1,000 to P2,000. The amendment also added that "an additional exemption of one thousand pesos shall be allowed for each child who otherwise qualified as dependent prior to January 1, 1980". This means that while before January 1, 1980, a taxpayer can claim additional personal exemptions for more than four (4) dependents qualified as of December 31, 1972, beginning calendar year 1980, the taxpayer can claim additional personal exemption of P2,000 for each child but limited only to maximum of four (4) dependents. With respect to the qualified dependents exceeding four (4), the taxpayer can claim only P1,000 additional personal exemption for each child. cdt It is desired that this circular be given as wide a publicity as possible. RUBEN B. ANCHETA Actisng Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

03-26-81 Revenue Memorandum Circular No. 13-81 March 26, 1981 REVENUE MEMORANDUM CIRCULAR NO. 13-81 Subject : Loss of Two (2) Pads of Withdrawal Certificates bearing Serial Nos. 179001 to 179050, inclusive and 179051 to 179100, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of two (2) pads of Withdrawal Certificates, to wit: -------------------------Serial Number : Quantity -------------------------179001 - 179050 : One pad (50 sets) -------------------------179051 - 179100 : One pad (50 sets) -------------------------The above Withdrawal Certificates were, on March 2, 1981, reported by Revenue Inspector ROMEO C. DIZON as missing or lost while in the custody of an employee of the Bataan Refining Corporation at Limay. cda Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the abovementioned Withdrawal Certificates are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-23-81 Revenue Memorandum Circular No. 14-81 March 23, 1981 REVENUE MEMORANDUM CIRCULAR NO. 14-81 Subject : Publishing Executive Order No. 672 Revising the Rates of Specific Tax on certain Petroleum Products To : All Internal Revenue Officials, Employees and others concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Executive Order No. 672: "MALACAANG Manila EXECUTIVE ORDER NO. 572 WHEREAS, the government has not imposed any additional specific tax on petroleum products when the last price increases were authorized on August 3, 1980;

WHEREAS, the latest round of increases in crude oil prices implemented by the oilproducing countries has inevitably escalated the cost of vital materials and equipment indispensable for the country's infrastructure projects; cd WHEREAS, on-going development projects of government and the cost of expanding public services require more funds, a considerable portion of which are to be funded from specific taxes collected on petroleum products. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution and by Section 290-B of the National Internal Revenue Code of 1977, as amended by Presidential Decree No. 1773, do hereby order as follows: Sec. 1. The rates of specific tax on certain petroleum products are hereby revised, hereby amending for this purpose Sections 153, 155 and 156 of the National Internal Revenue Code to read as follows: "Sec. 153. Specific tax on manufactured oils and other fuels. - On refined and manufactured minerals oils and motor fuels, there shall be collected the following taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such: "(a) Kerosene, per liter of volume capacity, nine centavos; "(b) Lubricating oils, per liter of volume capacity, eighty centavos; "(c) Naphtha, gasoline and all other similar products of distillation, per liter of volume capacity, one peso and six centavos: Provided, That on premium and aviation gasoline the tax shall be one peso and ten centavos and one peso, respectively, per liter of volume capacity; "(d) On denatured alcohol to be used for motive power, per liter of volume capacity, one centavo: Provided, That unless otherwise provided for by special laws, if the denatured alcohol is mixed with gasoline, the specific tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For the purpose of this subsection, the removal of denatured alcohol of not less than one hundred eighty degrees proof (ninety per centum absolute alcohol) shall be deemed to have been removed for motive power, unless shown to the contrary; acd "(e) Processed gas, per liter of volume capacity, three centavos; "(f) Thinners and solvents, per liter of volume capacity, sixty-one centavos; "(g) Liquefied petroleum gas, per kilogram, twenty-one centavos: Provided, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the specific on diesel fuel oil; "(h) Asphalts, per kilogram, twelve centavos; "(i) Greases, waxes and petroleum, per kilogram, fifty centavos; "(j) Aviation turbo-jet fuel, per liter of volume capacity, sixty-four centavos." "Sec. 55. Specific tax on bunker fuel oil. - On fuel oil, commercially known as bunker fuel oil, and on all similar fuel oils, having more or less the same generating power, there shall be collected, per liter of volume capacity, five centavos, which tax shall attach to this fuel oil as soon as it is in existence as such. Sec. 156. Specific tax on diesel fuel oil. - On fuel oil, commercially known as diesel fuel oil, and all similar fuel oils, having more or less the same generating power, per liter of volume capacity, twenty-five and one-half centavos, which tax shall attach to this fuel oil as soon as it is in existence as such." cdt

Sec. 2. This Executive Order shall take effect immediately. Done in the City of Manila, this 21st day of March, in the year of Our Lord, nineteen hundred and eighty-one. (SGD.) FERDINAND E. MARCOS" Amendatory features of Executive Order No. 672: The Executive Order revising the rates of specific tax on certain petroleum products has, in effect, amended Sections 153, 155 and 156 of the National Internal Revenue Code as hereinabove published. Shown below is a tabulation indicating the new rates of specific tax on certain petroleum products covered by subject Executive Order. NIRC Sec. Article Old Rate Increase New Rate 153 (a) Kerosene P0.07/liter P0.02/liter P0.09/liter (b) Lubricating oils 0.80/liter (none) (no change) (c) Naptha and Regular gasoline 0.91/liter 0.15/liter 1.06/liter Premium gasoline 1.00/liter 0.10/liter 1.10/liter Aviation gasoline 1.00/liter (none) (no change) (d) Denatured Alcohol for motive power 0.01/liter (none) (no change) (e) Processed gas 0.03/liter (none) (no change) (f) Thinners & Solvents 0.57/liter 0.04 0.61/liter (g) Liquefied petroleum gas 0.14/liter 0.07/kg. 0.21/kg. (h) Asphalts 0.08/kg. 0.04/kg. 0.12/kg. (i) Greases, Waxes & Petroleum 0.50/kg. (none) (no change) (j) Aviation Turbo-jet Fuel 0.55/liter 0.09/liter 0.64/liter 155 Bunker Fuel Oil 0.04 1/2/liter 0.00 1/2/liter 0.05/liter 156 Diesel Fuel Oil 0.17 1/2/liter 0.08/liter 0.251/2/liter Effectivity. - The new rates of specific tax prescribed under Executive No. 672 are effective on March 22, 1981, the date of the effectivity of the Order promulgated by the Board of Energy authorizing the increase in the prices of certain petroleum products. cd All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-08-81 Revenue Memorandum Circular No. 15-81 April 8, 1981 REVENUE MEMORANDUM CIRCULAR NO. 15-81 Subject : Loss of One (1) Taxpayer's Copy of Revenue Official Receipt (BIR Form No. 25.24) bearing Serial No. 1917712-G.

To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) taxpayer's copy of Revenue Official Receipt, to wit: -------------------------Serial No. : Quantity -------------------------1917712-G : One (1) Piece - Taxpayer's Copy -------------------------The taxpayer's copy of the above Revenue Official Receipt was reported to the Regional Director, Revenue Region No. 2, Tuguegarao, Cagayan, as missing or lost, by RANULFO B. BAUTISTA, Collection Agent of Sta. Marcela, Kalinga-Apayao. casia Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the abovementioned Revenue Official Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-13-81 Revenue Memorandum Circular No. 16-81 April 13, 1981 REVENUE MEMORANDUM CIRCULAR NO. 16-81 Subject : Loss of one (1) Original Copy of Revenue Official Receipt (BIR Form No. 25.24) bearing Serial No. 1909989-G. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) original copy of Revenue Official Receipt, to wit: -------------------------Serial No. : Quantity -------------------------1909989-G : One (1) Piece - Original Copy -------------------------The original copy of the above Revenue Official Receipt was reported by NESTOR T. CALLANG, Revenue Collector II, Bambang, Nueva Vizcaya, as missing or lost. cd i Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Official Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner of Internal Revenue

By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-23-81 Revenue Memorandum Circular No. 17-81 April 23, 1981 REVENUE MEMORANDUM CIRCULAR NO. 17-81 Subject : Loss of one (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. 4116322. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: -------------------------Serial No. : Quantity -------------------------4116322 : One (1) Set -------------------------The above Revenue Tax Receipt was reported on March 16, 1981 to the Regional Director, Revenue Region No. 4-A, Manila, as missing or lost, by RUBEN C. JORDAN, Revenue Seizure Agent II, Revenue District No. 23, same region. cdt All Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-23-81 Revenue Memorandum Circular No. 18-81 April 23, 1981 REVENUE MEMORANDUM CIRCULAR NO. 18-81 Subject : Publishing Executive Order No. 674-A, Revising the Rates of Specific Tax on Locally-Produced Distilled Spirits, Wines, Compounded Liquors and Fermented Liquors. To : All Internal Revenue Officials, Employees and Others Concerned. For the information and guidance of all concerned, quoted hereunder are the pertinent provisions of Executive Order No. 674-A: "Sec. 1. The rates of specific tax on locally-produced distilled spirits, wines and compounded liquors, and fermented liquors prescribed under Section 145(a); 146(b) to (h); and 147, respectively, of the National Internal Revenue Code are hereby revised effective on the dates hereunder indicated, to wit:

Rate of Tax Effective Date "Sec. 145(a) " Domestic distilled spirits = 2.10/proof liter = 2.40/proof liter " -

= P1.80/proof liter October 1, 1981 April 1, 1982

April 1, 1981

Local spirits (or "lambanog") produced by small distiller = 1.17/proof liter = 1.36 1/2 proof liter October 1, 1981 = 1.56/proof liter April 1, 1982

April 1, 1981

"Sec. 146(b) " Domestic still wines containing 14% alcohol or less (except those manufactured from locally grown raw materials = 1.50 per literApril 1, 1981 = 1.75 per literOctober 1, 1981 = 2.00 per literApril 1, 1982 Imported still wines containing 14% alcohol or less = 3.30 per literApril 1, 1981 = 3.85 per literOctober 1, 1981 = 4.40 per literApril 1, 1982 "(c) "Domestic still wines containing more than 14% alcohol = 3.00 per literApril 1, 1981 = 3.50 per literOctober 1, 1981 = 4.00 per literApril 1, 1982 "Imported still wines containing more than 14% alcohol = P6.60 per liter April 1, 1981 = 7.70 per literOctober 1, 1981 = 8.80 per liter April 1, 1982 "Imitation wines containing more than 25% of alcohol shall be taxed as distilled spirits at the new rates effective on the dates prescribed under this Executive Order. cd "(d) "Compounded liquors containing not more than 17 1/2% alcohol = P0.72 per liter April 1, 1981

"

= 0.84 per literOctober 1, 1981 = 0.96 per literApril 1, 1982 "(e) "Compounded liquors containing more than 17 1/2% alcohol, but not more than 25% alcohol = P1.00 1/2 per liter April 1, 1981 = 1.17 1/4 per liter October 1, 1981 = 1.34 per literApril 1, 1982 "(f) "Compounded liquors containing more than 25% alcohol, but not more than 32 1/2% alcohol = P1.29 per liter April 1, 1981 = 1.50 1/2 per liter October 1, 1981 = 1.72 per literApril 1, 1982 "(g) "Compounded liquors containing more than 32 1/2% alcohol, but not more than 40% alcohol = P1.57 1/2 per liter April 1, 1981 = 1.83 3/4 per liter October 1, 1981 = 2.10 per literApril 1, 1982 "(h) "Compounded liquors containing more than 40% alcohol = P1.99 1/2 per liter April 1, 1981 = 2.32 3/4 per liter October 1, 1991 = 2.66 per literApril 1, 1982 "In computing the specific tax on compounded liquors at above rates effective on the dates above shown, the amount of specific tax paid on distilled spirits used in the compounding of such intoxicating beverage shall be credited against the tax due on the compounded liquors. Rate of Tax Effective Date "Beer, lager beer, ale, porter, and other fermented liquors (except tuba, basi, tapuy and similar domestic fermented liquors) = P0.90 per liter April 1, 1981 = 1.05 per literOctober 1, 1981 = 1.20 per literApril 1, 1982 "If the fermented liquor is imported, the tax shall be increased by 100 per centum, hence, the tax shall be as follows: cdasia Rate of Tax Effective Date = P1.80 per liter April 1, 1981 = 2.10 per literOctober 1, 1981 = 2.40 per literApril 1, 1982 "Sec. 2. The revised rates of specific tax shall take effect on the dates provided for under this Executive Order.

"Done in the City of Manila, this 31st day of March, in the year of our Lord, nineteen hundred and eighty-one." Amendatory Features of Executive Order No. 674-A: Under Batas Pambansa Blg. 82, the rates of specific tax on distilled spirits, wines, compounded liquors and fermented liquors have been increased by 100% across-theboard, except for imported spirits and sparkling wines. However, said law has further provided that 50% of the increase shall take effect on the date of its approval (September 17, 1980) and that the remaining 50% or the full amount of the increase shall take effect on April 1, 1981. Executive Order No. 674-A has, however, revised the rates of specific tax on locallyproduced distilled spirits, still wines, compounded liquors and fermented liquors in force from September 17, 1980, up to March 31, 1981. In revising the rates of specific tax on the alcoholic products concerned, Executive Order No. 674-A has, in effect, deferred the effectivity of the full amount of increase of specific tax on said articles from April 1, 1981, to April 1, 1982, but during the interim, the remaining 50% of such increase shall be imposed on a staggered basis as follows: cd i Inclusive Dates In Force: April 1, 1981 to September 30, 1981; Same rates in force as of March 31, 1981; October 1, 1981 to March 31, 1982; Rates in force as of April 1, 1981, plus 25% of the increase under Batas Pambansa Blg. 82;

April 1, 1982 and thereafter. Rates in force as of March 31, 1982, plus the remaining 25% of the increase under the old law (BP Blg. 82). As a guide in the implementation of the tax implications of Executive Order No. 674-A, the following is a tabulated summary of the various rates of tax effective as a aforementioned dates: Effective Dates & Rates of Specific Tax Article April 1, 1981 Oct. 1, 1981 April 1, 1982 Sec. 145(b) Domestic distilled spirits P1.80/p.l. P2.10/p.l. P2.40/p.1. Local spirits (or "lambanog") 1.17/p.l. 1.36 1/2/p.1. 1.56/p.l. [NB: P.L. stands for proof liter.] Sec. 146(b) Domestic still wines containing 14% alcohol or less (except those manufactured from locally grown raw materials.) 1.50/liter Imported wines

1.75/liter

2.00/liter

containing 14% alcohol or less 3.30/liter 3.85/liter (c) Domestic still wines containing more than 14% alcohol 3.00/liter

4.40/liter

3.50/liter

4.00/liter

Imported still wines containing more than 14% alcohol 6.60/liter 7.70/liter 8.80/liter Imitation wines containing more than 25% of alcohol shall be taxed as distilled spirits effective on the dates prescribed under the Executive Order. (d) Compound liquors containing 17 1/2% alcohol or less 0.72/liter 0.84/liter 0.96/liter (e) Compounded liquors containing more than 17 1/2% alcohol, but not more than 25% alcohol1.00 1/2/liter 1.17 1/4/liter 1.34/liter Compounded liquors containing more than 25% alcohol, but not more than 32 1/2% alcohol1.29/liter 1.50 1/2/liter

(f)

1.72/liter

(g)

Compounded liquors containing more than 32 1/2% alcohol, but not more than 40% alcohol1.57 1/2/liter 1.83 3/4/liter 2.10/liter

Compounded liquors containing more than 40% 1.99 1/2/liter 2.32 3/4/liter 2.66/liter In computing the specific tax on compounded liquors as prescribed under subparagraphs (d), (e), (f), (g) and (h) of this Section, the amount of specific tax paid on the distilled spirits used in the compounding of such intoxicating beverage shall be credited against the tax due on the compounded liquors herein defined and the tax shall attach to compounded liquors as soon as they are in existence as such. April 1, 1981 Oct. 1, 1981 April 1, 1982 Sec. 147 - Beer, lager beer, ale, porter, and other fermented

(h)

liquors (except "tuba", "basi" and "tapuy" and similar domestic fermented liquors) 0.90/liter 1.05/liter 1.20/liter If the fermented liquor is imported, the tax shall be increased by 100% 1.80/liter 2.10/liter 2.40/liter As clearly provided for under the Executive Order, the revised rates of specific tax shall take effect on the dates therein prescribed. cdasia All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-04-81 Revenue Memorandum Circular No. 19-81 June 4, 1981 REVENUE MEMORANDUM CIRCULAR NO. 19-81 Subject : Memorandum of the President prohibiting investigation of amnesty tax returns filed under Presidential Decree No. 1740 and the features of its implementation. A. The Presidential Directive. For the information and guidance of all concerned, the memorandum of the President dated 18 May 1981 are hereby reproduced. "18 May 1981 "MEMORANDUM TO The Commissioner of Internal Revenue "SUBJECT : Prohibiting the Commissioner of Internal Revenue or His Duly Authorized Representative from Conducting an Investigation on the Amnesty Tax Returns Filed Under Presidential Decree No. 1740, Subject to Certain Exceptions. "WHEREAS, under Presidential Decree No. 1740, individual taxpayers were given the opportunity to avail of an administrative tax amnesty; casia "WHEREAS, the issuance of Presidential Decree No. 1740 was to prepare the taxpaying public to face a new challenge and to demonstrate their maturity and responsibility towards the government without fear nor compulsion in whatever form; WHEREAS, to meet this new challenge, it is imperative that taxpayers who have availed themselves of the administrative tax amnesty be assured of the government's protection. cdasia "WHEREFORE, the Commissioner of Internal Revenue or his duly authorized representative is hereby prohibited from conducting an investigation on amnesty tax returns filed under Presidential Decree No. 1740, except upon lawful order of the Court. "(SGD.) President of the Philippines" B. Features of the Presidential Memorandum

1. Amnesty tax returns filed by an individual taxpayer under PD 1740 shall not be subject to investigation, except upon lawful order of the court. The amnesty tax return referred to in the memorandum means the regular individual income tax returns (BIR Forms 1701 or 1701A or 1701C) or an amended return (BIR Form No. 1745) filed by an individual taxpayer in availing of the benefits provided by PD 1740 as prescribed in Section 5 of Revenue Regulations No. 9-80. Although the Memorandum refers to "amnesty tax returns", the investigation of which when filed by an individual is prohibited, the prohibition applies to the investigation of any income tax liability for any of the taxable years 1974-1979 for which any of the amnesty tax returns was filed by the taxpayer. cdt C. Effect of the Presidential Directive on Ongoing Tax Audits. 1. The audit and investigation of internal revenue tax liabilities under existing policy and procedures is not suspended. However, if an individual taxpayer manifests his intention to avail of the benefits by accomplishing and filing with the Revenue District Officer a form (Annex A) prescribed therefor, the audit and investigation of his income tax liability will be discontinued. The audit and/or investigation of his other internal revenue tax liabilities, if any, for any of the years 1974 - 1979, is not covered by the prohibition. cda 2. In auditing an individual taxpayer's other internal revenue tax liabilities, the revenue examiner may look into his books of accounts and other pertinent records but whatever determination he may make for such other internal revenue tax purposes shall not be used as a basis for a correlative determination for income tax purposes. aisa dc D. Coverage of PD 1740. 1. Section 2 of PD 1740 provides, among other things, than an individual may avail of the provisions of the said decree with respect to income tax liabilities covering the period 1974-1979, except deficiency income taxes assessed on or before the effectivity of the decree. The decree took effect on September 17, 1980. Accordingly, deficiency income taxes assessed on or before September 17, 1980 are already beyond the scope of PD 1740. However, deficiency income tax assessed after September 17, 1980 may still be the subject of the amnesty. acd 2. Corporations are definitely not covered by PD 1740 and the memorandum of the President. E. Publicity All internal revenue officers and others concerned should give this Circular as wide publicity as possible. RUBEN B. ANCHETA Acting Commissioner ANNEX A The Regional Director Revenue Region No. ____ Bureau of Internal Revenue ____________________ Sir:

Please be informed that I intend to avail of the benefits granted under Presidential Decree No. 1740 and under the memorandum of the President to the Commissioner of Internal Revenue dated 18 May 1981 prohibiting investigation of amnesty tax returns. cd In view thereof I request that the investigation of my income tax liability/liabilities for the year/s _________ be discontinued, subject to the condition that if, after August 31, 1981, I have not filed an amnesty tax returns under the provisions of Section 5 of Revenue Regulations No. 9-80, the Bureau of Internal Revenue may proceed to the tax audit of my internal revenue tax liabilities under its existing policies and procedures. cdt Very truly yours, ____________ Taxpayer Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-29-81 Revenue Memorandum Circular No. 20-81 May 29, 1981 REVENUE MEMORANDUM CIRCULAR NO. 20-81 Subject : Publishing the Updated National Internal Revenue Code of 1977. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is hereby published the updated National Internal Revenue Code of 1977, which contains all Presidential Decrees, enactments of the Batasang Pambansa and all other Presidential Issuances on tax matters up to May 1981. cdt The subject matter of the appendices were trimmed down by eliminating statutes and decrees which have been incorporated in the Tax Code and those which have lost their relevance. casia The footnotes were transferred from the end of the codal provisions to the bottom of each respective pages. The publication of the updated Tax Code is necessary in order to keep the tax authorities and the public abreast of the changes in the tax laws. This Code shall be considered as the official National Internal Revenue Code and shall henceforth be used as the official reference. cda RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-29-81 Revenue Memorandum Circular No. 21-81 June 29, 1981 REVENUE MEMORANDUM CIRCULAR NO. 21-81 Subject : Loss of one (1) Set of Revenue Tax Receipt (CB RCO Form No. 02.02) bearing Serial No. 5288838. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: cdt --------------------------Serial No. : Quantity

--------------------------5288838 : One (1) Set --------------------------The above Revenue Tax Receipt was reported to the Regional Director, Revenue Region No. 4-B, Quezon City, as missing or lost while in the custody of Mrs. ELUCIDA P. CRUZ, Revenue Collection Agent of Malabon, Metro Manila. All Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-30-81 Revenue Memorandum Circular No. 22-81 June 30, 1981 REVENUE MEMORANDUM CIRCULAR NO. 22-81 Subject : Loss of One (1) Pad of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Nos. 2712551-G to 2712600-G. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts, to wit: aisa dc -----------------------------Serial No. : Quantity ------------------------------2712551-G to 2712600-G : One (1) Pad - (Fifty Sets) -------------------------------The above Revenue Official Receipts were reported missing or lost while in the custody of MRS. SONIA Q. PADIERNOS, Revenue Collection Agent of Jaen, Nueva Ecija. cdt Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Official Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-06-81 Revenue Memorandum Circular No. 23-81 July 6, 1981 REVENUE MEMORANDUM CIRCULAR NO. 23-81 Subject : Publishing Ministry Order No. 21-81 dated May 13, 1981 of the Acting Minister of Finance regarding immediate take over of an employee's duties in case of his absence or inability to preclude any delay in the flow of work. To : All Internal Revenue Officials, Employees and Others Concerned. For the information and guidance of all concerned, there is quoted in full Ministry Order No. 21-81: "May 13, 1981 MINISTRY ORDER NO. 21-81 "In the interest of the service and to enhance efficiency in the Ministry, all Assistant Secretaries, the Director of Local Government Finance, Regional Directors, Service/Division Chiefs and Heads of Office, including City, Provincial and Municipal Treasurers and Assessors, are hereby enjoined to take such measures as may be necessary so that in case any officer or employee is absent or unavailable, there would be another who could immediately take over his duties to preclude any delay in the flow of work. cdtai "For the above purpose, all needed steps should be taken in order that there will always be previously trained personnel to take over the assignment of others within the Office, Service or Division and that papers, especially urgent matters, shall not be kept inside locked drawers of absent employees to avoid unnecessary delay in acting thereon. cd "This Order shall take effect immediately and all concerned shall be guided accordingly. "Efren I. Plana Acting Minister" All internal revenue officers and employees are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. acd RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-17-81 Revenue Memorandum Circular No. 24-81 July 17, 1981 August 1, 1980 REVENUE MEMORANDUM CIRCULAR NO. 24-81 Subject : Publishing the amendments of certain sections in Titles I, II and III of the National Internal Revenue Code effected by Presidential Decree Nos. 1705 and 1773. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the following amendments to the Tax Code, are quoted as follows: TITLE I ORGANIZATION OF THE BUREAU

"Sec. 7. Power of the Commissioner of Internal Revenue to Obtain Information, Examine, Summon and Take Testimony. "(a) From government officers or agencies. - When it comes to the knowledge of the Commissioner of Internal Revenue that certain offices or officers of the National and Local Governments such as the Office of the Register of Deeds, the Securities and Exchange Commission, the Philippine Patent Office, the Government Service Insurance System, the Social Security System, the Philippine Medical Care Commission, mayors and treasurers and others, possess valuable information for discovery of potential taxpayers, the Commissioner or his authorized representative shall obtain that information upon proper request from the offices or officers concerned. It shall be the duty of those offices or officers to furnish the desired information within thirty days from receipt of the request of the Commissioner of Internal Revenue or his authorized representative. "(b) From other persons. - For the purpose of ascertaining the correctness of any return where none has been made, determining the liability of any person for any internal revenue tax or collecting any such liability, the Commissioner or his authorized representative is empowered: "(1) To examine any book, paper, or record, or other data which may be relevant or material to such inquiry; "(2) To summon any person having possession, custody, or care of books of accounts containing entries, or of any information relating to the tax liability of any person to appear before the Commissioner or his authorized representative at a time and place specified in the summons and to produce such books, papers, records, or other data, and to give testimony; and "(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry." "Any person who neglects or refuses to obey such summons, or to produce books, papers, records or other data, or give testimony, as required, shall be liable to the penalties prescribed by Section 337 hereof." (as amended by Presidential Decree Nos. 1705 and 1773) acd "Sec. 16. Power of the Commissioner of Internal Revenue to make assessments. "(a) Failure to submit required reports, statements, etc. - When a report required by law as a basis for the assessment of any national internal revenue tax shall not be forthcoming within the time fixed by law or regulation, or when there is reason to believe that any such report, is false, incomplete, or erroneous, the Commissioner of Internal Revenue shall assess the proper tax on the best evidence obtainable. "(b) Authority to conduct surveillance. - The Commissioner of Internal Revenue may place the business operations of any person, natural or juridical, under observation or surveillance for a period of two months if there are reasons to believe that such person is not declaring his correct income and receipts for internal revenue tax purposes. The findings for this period may be used as a basis for assessing the taxes for the other months or quarters of the same or different taxable years and such assessment shall be deemed prima facie correct. "(c) Authority to terminate taxable period. - When it shall come to the knowledge of the Commissioner of Internal Revenue that a taxpayer is retiring from the business

subject to tax or intends to leave the Philippines, or remove his property therefrom, or hide or conceal his property, or perform any act tending to obstruct the proceedings for the collection of the tax for the past or current quarter or year, or render the same totally or partly ineffective unless such proceedings are begun immediately, the Commissioner of Internal Revenue shall declare the tax period of such taxpayer terminated at any time and shall send the taxpayer a notice of such decision, together with a request for the immediate payment of the tax for the period so declared terminated and the tax for the preceding year or quarter, or such portion thereof as may be unpaid, and said taxes shall be due and payable immediately and shall be subject to all the penalties hereafter prescribed, unless paid within the time fixed in the demand made by the Commissioner of Internal Revenue." (As amended by Presidential Decree Nos. 1705 and 1773.) TITLE II INCOME TAX "Sec. 23. Amount of personal exemptions allowable to individuals. - For the purpose of the tax provided for in this Title, there shall be allowed in the nature of a deduction from the amount of net income the following personal exemptions: "(a) Personal exemptions of single individuals. - The sum of Three Thousand pesos, if the person making the return is a single person or a married person judicially decreed as legally separated from his or her spouse. "(b) Personal exemption of married persons or heads of family. - The sum of Six Thousand pesos, if the person making the return is a married man or a married woman, or Four thousand five hundred pesos if the person making the return is the head of a family: Provided, That only one exemption of Six thousand pesos shall be made from the aggregate income of both husband and wife when not legally separated. For the purpose of this section, the term "head of the family" means an unmarried man or woman with one or both parents, or with one or more brothers or sisters, or with one or more legitimate, recognized natural, or adopted children living with and dependent upon him or her for their chief support where such brothers, sisters, or children are not more than twenty-one years of age, unmarried, and not gainfully employed, or where such children are incapable of self-support because of mental or physical defect. "(c) Additional exemption for dependents. - The sum of Two thousand pesos for each legitimate, recognized natural or adopted child wholly dependent upon and living with the taxpayer if such dependents are not more than twenty-one years of age, unmarried, and not gainfully employed or incapable of self-support because of mental or physical defect. The additional exemption under this subsection shall be allowed only if the person making the return is either married or head of the family: Provided, however, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents: Provided, further, That an additional exemption of One thousand pesos shall be allowed for each child who otherwise qualified as dependent prior to January 1, 1980." cdtai "(d) Change of Status. - . . . . "(e) Allowances for Adjustment. - Upon the recommendation of the Minister of Finance, the President may, not often than once every three years, adjust the personal and additional exemptions taking into account, among others, the movements in consumer price indices, levels of minimum wages, and bare subsistence levels."

"(f) Personal exemptions allowable to a non-resident alien individual. - . . . ." (As amended by Presidential Decree No. 1773.) "Sec. 24. Rates of tax on corporations. - (a) . . . (b) Tax on foreign corporations. (1) . . . (2) Resident corporations. - (i) . . . . (ii) Tax on branch profits remittances. - Any profit remitted abroad by a branch to its head office shall be subject to a tax of fifteen per cent (15%) (except those registered with the Export Processing Zone Authority): Provided, That any profit remitted by a branch to its head office authorized to engage in petroleum operations in the Philippines shall be subject to tax at seven and one-half per cent (7.5%): And Provided, Further, That interests, dividends, rents, royalties, including remunerations for technical services, salaries, wages, premiums, annuities, emoluments or other fixed or determinable annual, periodical or casual gains, profits, income, and capital gains received by a foreign corporation during each taxable year from all sources within the Philippines shall not be considered as branch profits unless the same are effectively connected with the conduct of its trade or business in the Philippines." "(e) Corporation Development Tax. - In addition to the tax imposed in subsection (a) of this Section, an additional tax in an amount equivalent to 10% of the same taxable net income shall be paid by a domestic or a resident foreign corporation which qualifies as a closely-held corporation as defined herein. The term "closely-held corporation" means any corporation, (a) at least 50% in value of the outstanding stock or (b) at least 50% of the total combined voting power of all classes of stock entitled to vote, at any time during the taxable year, is owned directly or indirectly by or for not more than five persons, natural or juridical. For the purpose of determining whether an individual indirectly owns shares of stock in a corporation, the attribution rules prescribed by paragraphs (b) and (c) of Section 66 of this Code shall be applied. The additional corporate income tax imposed in this Subsection shall be collected and paid at the same time and in the same manner as the tax imposed in subsection (a) of this Section. "The foregoing provisions shall not apply to banks, non-bank financial intermediaries or corporations organized primarily, and authorized by the Central Bank of the Philippines to hold shares of stock of banks unless - (A) More than twenty (20%) per cent of all classes of stock entitled to vote of such corporation is held by (1) persons related to each other within the third degree of consanguinity or affinity, or (2) a corporation, the majority of the shares are owned by such related persons or (3) two or more corporations the majority of the shares are owned by the same person or so related persons." "(f) Tax on transactions by offshore banking units and under the expanded foreign currency deposits system. "(1) Offshore Banking Units. - The provisions of any law to the contrary notwithstanding, income derived by offshore banking units authorized by the Central Bank of the Philippines from foreign currency transactions with non-residents, other offshore banking units, local commercial banks, including branches of foreign banks that may be authorized by the Central Bank to transact business with offshore banking units shall be exempt from all taxes except net income from such transactions as may be specified by the Minister of Finance, upon recommendation of the Monetary Board, to be subject to the usual income tax payable by banks: Provided, however, That any interest income derived from foreign currency loans granted to residents other than offshore banking units or local commercial banks, including local branches of foreign banks that

may be authorized by the Central Bank of the Philippines to transact business with offshore banking units, shall be subject only to a 10% final withholding tax." "Any income of non-residents from transactions with said offshore banking units shall be exempt from income tax." "(2) Expanded Foreign Currency Deposit System. - Income derived by a depository bank under the expanded foreign currency deposit system from foreign currency transaction with non-residents, offshore banking units in the Philippines, local commercial banks including branches of foreign banks that may be authorized by the Central Bank to transact business with foreign currency deposit system units and other depository banks under the expanded foreign currency deposit system shall be exempt from all taxes, except net income from such transactions as may be specified by the Minister of Finance, upon recommendation of the Monetary Board to be subject to the usual income tax payable by banks: Provided, however, That interest income from foreign currency loans granted by such depository banks under said expanded system to residents (other than offshore banking units in the Philippines or other depository banks under the expanded system) shall be subject to a 10% final withholding tax," "Any income of non-residents from transactions with depository banks under the expanded system, shall be exempt from income tax." (As amended by Presidential Decree Nos. 1705 and 1773.) "Sec. 26. Tax liability of members of general professional partnerships. - (a) Persons exercising a common profession in general partnership shall be liable for income tax only in their individual capacity, and the share in the net profits of the general professional partnership to which any taxable partner would be entitled, whether distributed or otherwise, shall be returned for taxation and the tax paid in accordance with the provisions of this Title. "(b) In determining his distributive share in the net income of the partnership, each partner "(1) Shall take into account separately his distributive share of the partnership's income, gain, loss deduction, or credit to the extent provided by the pertinent provisions of this code; and "(2) Shall be deemed to have elected the itemized deductions, unless he declares his distributive share of the gross income undiminished by his share of the deductions." (As amended by Presidential Decree No. 1705.) "Sec. 30. Deductions from gross income. - . . . ." "(c) Taxes. xxx xxx xxx" "(F) Taxes paid on articles imported by the taxpayer where such importation is not connected with his trade or business." "(G) Excess electric energy consumption tax imposed by Batas Pambansa Blg. 36." xxx xxx xxx (k) Optional standard deduction. - In lieu of the deductions allowed under this section, an individual other than a non-resident alien, may elect a standard deduction in an amount not exceeding 10% per centum of his gross income. Unless the taxpayer signifies in his return his intention to elect the optional standard deduction, he shall be considered as having availed himself of the deductions allowed in the preceding subsection. The Minister of Finance shall prescribe the manner of the election. Such

election when made in the return shall be irrevocable for the taxable year for which the return is made." "xxx xxx xxx" "Notwithstanding the provisions of the preceding paragraphs, the Minister of Finance upon recommendation of the Commissioner, may for tax audit purposes prescribe by regulations, limitations or ceilings for any of the itemized deductions under this Section." (As amended by Presidential Decree Nos. 1705 and 1773.) "Sec. 35. Determination of gain or loss from the sale or other disposition of property. "xxx xxx xxx" "(b) In the case of property acquired on or after March first, nineteen hundred and thirteen, the cost thereof if such property was acquired by purchase or the fair market price or value as of the date of the acquisition if the same was acquired by inheritance. If the property was acquired by gift the basis shall be the same as it would be in the hands of the donor, or the last preceding owner by whom it was not acquired by gift, except that if such basis is greater than the fair market value of the property at the time of the gift then for the purpose of determining loss the basis shall be such fair market value." (As amended by Presidential Decree No. 1773.) "(c) Exchange of property. "(1) General rule. - Except as herein provided, upon the sale or exchange of property, the entire amount of the gain or loss, as the case may be, shall be recognized. "(2) Exception. - No gain or loss shall be recognized if in pursuance of a plan of merger or consolidation (a) a corporation which is a party to a merger or consolidation exchanges property solely for stock in a corporation which is a party to the merger or consolidation, (b) a shareholder exchanges stock in a corporation which is a party to the merger or consolidation solely for the stock of another corporation also a party to the merger or consolidation, or (c) a security holder of a corporation which is a party to the merger or consolidation exchanges his securities in such corporation solely for stock or securities in another corporation, a party to the merger or consolidation. No gain or loss shall also be recognized if property is transferred to a corporation by a person in exchange for stock in such a corporation of which as a result of such exchange said person, alone or together with others, not exceeding four persons, gains control of said corporation; Provided, That stocks issued for services shall not be considered as issued in return for property. "(3) Exchange not solely in kind. "(a) If, in connection with an exchange described in the above exceptions, an individual, a shareholder, security holder or corporation receives not only stock or securities permitted to be received without recognition of gain or loss, but also money and/or other property, the gain, if any, but not the loss, shall be recognized but in an amount not in excess of the sum of the money and the fair market value of such other property received: Provided, That as to the shareholder, if the money and/or other property received has the effect of a distribution of a taxable dividend, there shall be taxed as dividend to the shareholder an amount of the gain he recognized not in excess of his proportionate share of the undistributed earnings and profits of the corporation; the remainder, if any, of the gain recognized shall be treated as a capital gain.

"(b) If, in connection with the exchange described in the above exceptions, the transferor corporation received not only stock permitted to be received without the recognition of gain or loss but also money and/or other property, then (1) if the corporation receiving such money and/or other property distributed it in pursuance of the plan of merger or consolidation, no gain to the corporation shall be recognized from the exchange, but (2) if the corporation receiving such other property and/or money does not distribute it in pursuance of the plan of merger or consolidation, the gain if any, but not the loss to the corporation shall be recognized but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not distributed. "(4) Assumption of Liability. - (a) If the taxpayer, in connection with the exchanges described in the foregoing exceptions, receives stock or securities which would be permitted to be received without the recognition of the gain if it were the sole consideration, and as a part of the consideration, another party to the exchange assumes a liability of the taxpayer, or acquires from the taxpayer property subject to a liability, then such assumption or acquisition shall not be treated as money and/or other property, and shall not prevent the exchange from being within the exceptions. "(b) If the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceed the total of the adjusted basis of the property transferred pursuant to such exchange, then such excess shall be considered as a gain from the sale or exchange of a capital asset or of property which is not a capital asset, as the case may be. "(5) Basis. - (a) The basis of the stock or securities received by the transferor upon the exchange specified in the above exception shall be the same as the basis of the property, stock or securities exchanged, decreased by (1) the money received, and (2) the fair market value of the other property received, and increased by (a) the amount treated as dividend of the shareholder and (b) the amount of any gain that was recognized on the exchange; Provided, That the property received as "boot" shall have as basis its fair market value: Provided, Further, That if as part of the consideration to the transferor, the transferee of property assumes a liability of the transferor or acquires from the latter property subject to a liability, such assumption or acquisition (in the amount of the liability) shall, for purposes of this paragraph be treated as money received by the transferor on the exchange: Provided, finally, That if the transferor received several kinds of stock or securities, the Commissioner of Internal Revenue is hereby authorized to allocate the basis among the several classes of stocks or securities. "(b) The basis of the property transferred in the hands of the transferee shall be the same as it would be in the hands of the transferor, increased by the amount of the gain recognized to the transferor on the transfer. "(6) Definitions. - (a) The term "securities" means bonds and debentures but not "notes" of whatever class or duration. "(b) The term "merger" or "consolidation", when used in this section, shall be understood to mean; (1) the ordinary merger or consolidation or (2) the acquisition by one corporation of all or substantially all the properties of another corporation solely for stock; Provided, That for a transaction to be regarded as a merger or consolidation within the purview of this section, it must be undertaken for a bonafide business purpose and not solely for the purpose of escaping the burden of taxation: Provided, further, That in determining whether a bonafide business purpose exists each and every step of the

transaction shall be considered and the whole transaction or series of transactions shall be treated as a single unit: Provided, finally, That in determining whether the property transferred constitutes a substantial portion of the property of the transferor, the term "property" shall be taken to include the cash assets of the transferor. cd "(c) The term "control" when used in this Section shall mean ownership of stocks in a corporation possessing at least fifty-one per cent of the total voting power of all classes of stocks entitled to vote. "(d) The Minister of Finance upon recommendation of the Commissioner of Internal Revenue is hereby authorized to issue rules and regulations for the purpose of determining the proper amount of transferred assets which meet the standard of the phrase "substantially all" and for the proper implementation of this section." (As amended by Presidential Decree Nos. 1705 and 1773.) "Sec. 45. - Individual returns. - . . . "(c) When to file. - The return of: "(1) Residents of the Philippines, whether citizens or aliens, whose income had been derived solely from salaries, wages, interests, dividends, allowances, commissions, bonuses, fees, pensions, or any combination thereof shall be filed on or before the eighteenth day of March of each year, covering income for the preceding taxable year. "(2) All other individuals not mentioned above, including non-resident citizens shall be filed on or before the fifteenth day of April of each year covering income of the preceding taxable year. "Individuals subject to the final schedular tax on net capital gains from the sale or other disposition of real property under Section 34(b) of this Code, shall file or cause to be filed a separate return prescribed therefor by the Commissioner within thirty (30) days following each sale or other disposition of capital assets." (As amended by Presidential Decree Nos. 1705 and 1773.) "Sec. 46. - Corporation returns. - . . . "(b) Fiscal year of corporations. - Every corporation (other than partnerships, no matter how created or organized) may designate the last day of any month in the year as the day of the closing of its fiscal year, and shall be entitled to have the tax payable by it computed upon the basis of the net income ascertained as herein provided for the year ending on the day so designated in the year preceding the date of assessment instead of upon the basis of the net income for the calendar year preceding the date of assessment; and it shall give notice of the day it has thus designated as the closing of its fiscal year to the Commissioner of Internal Revenue at any time not less than thirty days prior to the fifteenth day of April of the year in which its return would be filed if made upon the basis of the calendar year." (As amended by Presidential Decree No. 1705.) "Sec. 51. - Payment and assessment of income tax. (a) Payment of tax. (1) In general. - The total amount of tax imposed by this Title shall be paid at the time the return is filed. Such tax shall be paid by the person subject thereto. If the return is filed after the time prescribed by law (including cases in which an extension of time for filing the return has been granted under section forty-seven of this Code), there shall be paid at the time of such filing the tax or installment which would have been payable on or before such time if the return had been filed within the time

prescribed by law, and the remaining installment shall be paid at the time at which, and in the amount in which, it would have been payable if the return had been so filed, subject to the payment of interest at twenty per centum per annum from the original due date. In the case of tramp vessels, the shipping agents and/or the husbanding agents, and in their absence, the captains thereof are required to file the return herein provided and pay the tax due thereon before their departure. Upon failure of the said agents or captains to file the return and pay the tax, the Bureau of Customs is hereby authorized to hold the vessel and prevent its departure until proof of payment of the tax is presented or a sufficient bond is filed to answer for the tax due." "(2) Installment payment. - When the tax due is in the excess of two thousand pesos, the taxpayer other than a corporation taxable under Section twenty-four, self-employed individuals who may be required to pay estimated income tax under Chapter X, and the withholding agents required to deduct and withhold the tax under Sections 53 and 54, all of this Title, may elect to pay the tax in two equal installments, in which case, the first installment shall be paid at the time the return is filed and the second installment, on or before the eighteenth day of July following the close of the calendar year. If any installment is not paid on or before the date fixed for its payment, the whole amount of the tax unpaid becomes due and payable, together with the delinquency penalties." "(d) Interest on deficiency. - Interest upon the amount determined as a deficiency shall be assessed at the same time as the deficiency and shall be paid upon notice and demand from the Commissioner and shall be collected as a part of the tax at the rate of twenty per centum per annum from the date prescribed for the payment of the tax, (or, if the tax is paid in installment from the date prescribed for the payment of the first installment) to the date the deficiency is assessed: Provided, That the maximum amount that may be collected as interest on the deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." "(e) Additions to the tax in case of non-payment. (1) Tax shown on the return. - Where the amount determined by the taxpayer as the tax imposed by this Title or any installment thereof, or any part of such amount or installment, is not paid on or before the date prescribed for its payment, there shall be collected as a part of the tax, interest upon such unpaid amount at the rate of twenty per centum per annum from the date prescribed for its payment until it is paid: Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." "(2) Deficiency. - Where a deficiency, or any interest assessed in connection therewith under paragraph (d) of this section, or any addition to the taxes provided for in Section seventy-two of this Code is not paid in full within thirty days from the date of notice and demand from the Commissioner of Internal Revenue, there shall be collected upon the unpaid amount as part of the tax, interest at the rate of twenty per centum per annum from the date of such notice and demand until it is paid: Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding. (As amended by Presidential Decree No. 1705) casia

"(3) Surcharge. - If any amount of tax shown on the return is not paid in full on or before the date prescribed for its payment under paragraph (a) of this Section, or any amount of deficiency, and any interest assessed on connection therewith, is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this Section, there shall be collected in addition to the interest prescribed herein and in paragraph (d) above and as part of the tax a surcharge of ten per centum of the amount of tax unpaid." (As amended by PD No. 1705) "Sec. 53. - Withholding of tax at source. - . . . "(c) Resident individuals and corporations. - Dividends received by individuals residing in the Philippines from a domestic corporation, as well as royalties (except payments of any kind to mining claim - owners or lessees of mining rights pursuant to any kind of agreement) received by such individuals and domestic and/or resident foreign corporations from any person whether natural or juridical shall be subject to withholding tax at source at the rate of 10% thereof. A tax shall be withheld by the payer-corporation and/or person and paid in the same manner and subject to the same conditions as provided in Section 54 of the National Internal Revenue Code: Provided, however, That the tax withheld under this subparagraph shall be credited against the income tax liability of the recipient-taxpayer for the taxable year." (As amended by Presidential Decree No. 1705). "Sec. 54. Returns and payment of taxes withheld at source. - . . . "(b) Penalties for failure to render returns; for rendering false or fraudulent returns; and for non-payment of taxes withheld. - The surcharges and the penalties imposed in Sections Seventy-two and Seventy-three, respectively, of this Title shall apply to failure to file returns, to filing false or fraudulent returns or failure to pay the tax required under this Section. "In case the taxes deducted and withheld are not paid within the time prescribed, there shall be added to the amount of the unpaid tax a surcharge of twenty-five per centum plus interest at the rate of twenty per centum per annum from the date the same became due until paid." "If the withholding agent is the government or any of its agencies political subdivisions or instrumentalities, or a government-owned or controlled corporation, the employee thereof responsible for the withholding and remittance of the tax shall be personally liable for the surcharge and interest imposed herein." (As amended by Presidential Decree Nos. 1705 and 1773). "Sec. 72. - Surcharges for failure to render returns and for rendering false and fraudulent returns. - . . . "(b) In case the return is filed with a person other than that mentioned in Sections 45(b) and 87(a) of this Code; and" (As amended by Presidential Decree N0. 1773) "Sec. 83. - Distribution of dividends or assets by corporations. - ... "(d) Net income of a partnership deemed constructively received by partners. - The net income declared by a partnership for a taxable year which is subject to tax under Section 24(a) of this Code, after deducting the corporate income tax imposed therein, shall be deemed to have been actually or constructively received by the partners in the same

taxable year and shall be taxed to them in their individual capacity, whether actually distributed or not." (As amended by Presidential Decree No. 1705) "Sec. 84. - DECLARATION OF INCOME TAX FOR INDIVIDUALS. "(a) IN GENERAL. - Except as otherwise provided in this Section, every individual subject to income tax under Sections 21 and 22 (a) of this title, receiving selfemployment income whether it constitutes the sole source of his income or in combination with salaries, wages, and other fixed or determinable income shall make and file a declaration of this estimated income for the current taxable year on or before April 15 of the same taxable year. In general, self-employment income consist of the earnings derived by the individual from the practice of profession or conduct of trade or business carried on by him as a sole proprietor or by a partnership of which he is a member. Nonresident Filipino citizens, with respect to income from without the Philippines, and nonresident aliens not engaged in trade or business in the Philippines, are not required to render a declaration of estimated income tax. The declaration shall contain such pertinent information as the Minister of Finance may by forms and/or regulations prescribed. An individual may make amendments of a declaration filed during the taxable year under the regulations prescribed by the Minister of Finance." "(b) Return and payment of estimated income tax by individuals. - The amount of estimated tax (as defined in paragraph (c)) with respect to which a declaration is required under paragraph (a) shall be paid in four installment. The first installment shall be paid at the time of the declaration and the second and third shall be paid on August 15 and November 15 of the current year, respectively. The fourth installment shall be paid on or before April 15 of the following calendar year when the final income tax return is due to be filed." "(c) Definition of Estimated Tax. - In the case of an individual, the term "Estimated Tax" means the amount which the individual declared as income tax in his final and annual income tax return for the preceding taxable year, minus the sum of the credits allowed under this title, against the said tax. If, during the current taxable year, the taxpayer reasonably expect to pay a bigger income tax, he shall file an amended declaration during any interval of installment payment dates." (As amended by Presidential Decree No. 1705.) "Sec. 85. - Declaration of Corporate Quarterly Income Tax. - Every corporation shall file in duplicate a quarterly summary declaration of its gross income and deductions on a cumulative basis for the preceding quarter or quarters upon which the income tax, as provided in Title II of this Code shall be levied, collected and paid. The tax so computed shall be decreased by the amount of tax previously paid or assessed during the preceding quarters and shall be paid not later than sixty (60) days from the close of each of the first three (3) quarters of the taxable year, whether calendar or fiscal year." (As amended by Presidential Decree No. 1705) "Sec. 86. - Final Adjustment Return. - Every corporation liable to tax under Section 24 shall file a final adjustment return covering the total net income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable net income of that year the corporation shall either: "(a) Pay the excess tax still due; or

"(b) Be refunded the excess amount paid, as the case may be "In case the corporation is entitled to a refund of the excess estimated quarterly income taxes paid, the refundable amount shown on its final adjustment return may be credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable year." (As amended by Presidential Decree No. 1705.) "Sec. 87. (a) Place of Filing. - The quarterly income tax declaration required in Section 85 and the final adjustment return required in Section 86 shall be filed with the Revenue District Officer, or the Collection Agent or duly authorized treasurer of the municipality having jurisdiction over the location of the principal office of the corporation filing the return or place where its main books of accounts and other data from which the return is prepared are kept." "(b) Time of filing the income tax return. - The corporate quarterly declaration shall be filed within sixty (60) days following the close of each of the first three quarters of the taxable year. The final adjustment return shall be filed on or before the 15th day of April or on or before the 15th day of the 4th month following the close of the fiscal year, as the case may be." "(c) Time of payment of the income tax. - The income tax due on the corporate quarterly returns and the final income tax returns computed in accordance with Sections 85 and 86 shall be paid at the time the declaration or return is filed in a manner prescribed by the Commissioner of Internal Revenue." (As amended by Presidential Decree No. 1705.) "Sec. 88. - Civil penalties. (a) Individuals. (1) Addition to the tax. - In the case of underpayment of the estimated tax, there shall be added to the tax an amount determined at the rate of 20% per annum upon the amount of the underpayment (determined under subsection (b)(2) for the period of the underpayment (determined under subsection (b)(3). cda "(2) Amount of Underpayment. - For purposes of subsection (b)(1), the amount of the underpayment shall be the excess of (A) The amount of the installment which would be required to be paid if the estimated tax were equal to 80% of the tax shown on the return for the taxable year or; if no return was filed, 80% of the tax for such year, over, (B) The amount, if any, of the installment paid on or before the last day prescribed for such payment. "(3) For purposes of applying subsections (a)(1) and (a)(2) "(A) The estimated tax shall be computed without any reduction for the amount which the individual estimates as his credit for taxes withheld at source on wages, dividend and interest, and "(B) The amount of the creditable taxes for the taxable year shall be deemed a payment of estimated tax, and an equal part of such amount shall be deemed on each installment date for such taxable year, unless all amounts were actually withheld, in which case the amounts so withheld shall be deemed payments of estimated tax on the dates which such amounts were actually withheld. "(4) Period of Underpayment. - The period of underpayment shall run from the date the installment was required to be paid to whichever of the following dates is the earlier.

"(A) The 15th day of March following the close of the taxable year. "(B) With respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this paragraph, a payment of estimated tax on any installment date shall be considered a payment of any previous underpayment only to the extent that such payment exceeds the amount of the installment determined under subsection (2)(A) for such installment date. "(b) Corporations (1) Deficiency, defined. - As used, and in respect of the tax referred to in Section 85, the term "Deficiency" means: "(i) The amount by which eighty per centum of the tax referred to in Section 85 exceeds the amount shown by the taxpayer as the tax on its quarterly return, including tax credit allowable; "(ii) If no amount is shown by the taxpayer as tax on its return, or if no return is filed by the taxpayer, and the taxpayer has tax credit allowable against such tax; or "(iii) If no amount is shown by the taxpayer as tax on its return, and the taxpayer has no tax credit allowable, eight per centum of the estimated tax referred to in Section 85. "(2) (i) Interest. - Interest upon the amount determined as a deficiency shall be assessed at the same time as the deficiency; and shall be paid upon notice and demand from the Commissioner of Internal Revenue; and shall be collected as part of the tax at the rate of twenty per centum per annum from the date prescribed for the payment of the tax to the date the deficiency is assessed: Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period not later than the fifteenth day of April or the fifteenth day of the fourth month following the close of the taxable year: Provided, further, That no interest on deficiency quarterly income tax shall be assessed at any time after assessment of the actual income tax due for the taxable year. "(ii) Addition to estimated tax in case of non-payment. - (1) Tax shown on the quarterly return. - Where the amount shown by the taxpayer as tax on its quarterly return or part of such amount, is not paid on or before the date prescribed for its payment; there shall be collected, as part of the tax interest upon such unpaid amount at the rate of twenty per centum per annum from the date prescribed for its payment until it is paid but not later than the fifteenth day of April or the fifteenth day of the fourth month following the close of the taxable year. "(2) Deficiency. - Where the deficiency or interest on deficiency, assessed under subsection (a) of this Section, or part thereof, is not paid in full within thirty days from the date of receipt by the taxpayer of the notice and demand from the Commissioner of Internal Revenue, there shall be collected upon such unpaid amount, as part of the tax, interest at the rate of twenty per centum per annum from the date of receipt by the taxpayer of such notice and demand until it is paid not later than the fifteenth day of April or the fifteenth day of the fourth month following the close of the taxable year." (As amended by Presidential Decree No. 1705.) "Sec. 89. - Declaration under penalties of perjury. - (1) The declaration and return required under this Chapter shall, in lieu of an oath, contain a written declaration that they are made under the penalties of perjury.

"(2) Any person who willfully files a declaration or return containing information which is not true and correct as to every material matter shall, upon conviction, be subject to the penalties prescribed for perjury under the Revised Penal Code." (As amended by Presidential Decree No. 1705.) "Sec. 96. - Surcharges for failure to render returns; filing false or fraudulent returns; delinquency in payment of taxes; and failure to deduct and withhold. "The surcharges and penalties prescribed in Sections 72 and 73 of this Title in cases of failure to render returns and for filing false or fraudulent returns shall apply to returns required under Sections 93 and 94." "In case the taxes deducted and withheld by the employer are not paid within the time prescribed, there shall be added a surcharge of twenty-five per centum and interest at the rate of twenty per centum per annum from the time the same became due until paid. "If the employer, in violation of the provisions of Section 91 hereof fails to deduct and withhold the tax required, he shall be liable to pay a surcharge of twenty-five per centum. However, if the failure is due to willful neglect or with intent to defraud the government, a surcharge of fifty per centum shall be imposed. Interest at the rate of twenty per centum per annum shall likewise be imposed from the time the tax is required to be withheld until the date of assessment." "If the withholding agent is the government or any of its agencies, political subdivisions, or instrumentalities, or is a government-owned or controlled corporation, the employee or officer thereof responsible for the withholding and/or remittance of the tax shall be personally liable for the surcharge and interest imposed herein." (As amended by Presidential Decree No. 1773.) "Sec. 97. - Penalties. "(a) Penalties for failure to file; for filing false or fraudulent returns or statements; failure to deduct and withhold; and failure to remit. - Any person who fails to file a return or statement as required in this Chapter, or who renders a false or fraudulent return, or who fails to deduct and withhold or fails to remit to the Commissioner of Internal Revenue the amount withheld by such agent, shall upon conviction, for each act or omission, be fined not less than One thousand pesos nor more than Two thousand pesos and imprisoned for not more than One year." (As amended by Presidential Decree No. 1773.) TITLE III ESTATE & DONOR'S TAXES "Sec. 100. - Gross Estate. - (a) . . . ." "(b) Transfer in contemplation of death. - To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, or of which he has at any time made a transfer, by trust of otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact and before his death (1) the possession or enjoyment of, or the right to the income from the property, or (2) the right, either alone or in conjunction with any person, to designate the person who shall possess or enjoy the property or the income therefrom; except in case of a bona fide sale for an adequate and full consideration in money or money's worth."

(As amended by Presidential Decree No. 1705.) "Sec. 101. - Net Estate. - . . .." "(d) Miscellaneous provisions. - No deduction shall be allowed in the case of a nonresident not a citizen of the Philippines unless the executor, administrator, or anyone of the heirs, as the case may be, includes in the return required to be filed under Section 105 the value at the time of his death of that part of gross estate of the non-resident not situated in the Philippines." (As amended by Presidential Decree No. 1705.) "Sec. 105. - Returns. - . . . ." "(b) Time for filing. - For the purpose of determining the estate tax provided for in Section 99 of this Code, the estate tax return required under the preceding subsection (a) shall be filed within nine months after the decedent's death; but if judicial testamentary or intestate proceedings shall be instituted for the settlement of the decedent's estate prior to the expiration of said period, the return shall be filed within twenty-one months after the decedent's death." "A certified copy of the schedule of partition and the order of the court approving the same shall be furnished the Commissioner of Internal Revenue by the Clerk of Court within thirty days after the promulgation of such order." "(d) Place of filing. - Except in cases where the Commissioner of Internal Revenue permits, the return required under subsection (a) shall be filed with the Revenue District Officer, Collection Agent or duly authorized treasurer of the city or municipality in which the decedent was domiciled at the time of his death or if there be no legal residence in the Philippines, then with the Office of the Commissioner of Internal Revenue." (As amended by Presidential Decree Nos. 1705 and 1773.) "Sec. 107. - Payment of tax. "(a) Time of payment. - The estate tax imposed by Section 99 shall be paid at the time the return is filed by the executor, administrator or the heirs." (As amended by Presidential Decree No. 1773.) "Sec. 111. - Interest on Extended Payment. "(a) Tax shown on the return. - If the time for payment of the estate tax or any part thereof is extended as provided in subsection (b) of Section 107, there shall be collected, as part of such amount, interest thereon at the rate of twenty per centum per annum from the day following the due date of the tax to the expiration of period of the extension." "(b) Deficiency. - In case an extension for the payment of a deficiency is granted for the payment, there shall be collected, as a part of the tax, interest on the part of the deficiency, the time for the payment of which is so extended, at the rate of twenty per centum per annum for the period of the extension." (As amended by Presidential Decree No. 1773.) "Sec. 112. Interest on deficiency. - Interest upon the amount determined as a deficiency, assessed at the same time as the deficiency, shall be paid upon notice and demand from the Commissioner of Internal Revenue, and shall be collected as a part of the tax, at the rate of twenty per centum per annum, from the due date of the tax to the date the deficiency is assessed: Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding."

(As amended by Presidential Decree No. 1773.) "Sec. 113. Additions to the tax in case of non-payment. "(a) Tax shown on the return. "(1) Payment not extended. - Where the amount of the tax imposed by this Chapter, or any part of such amount is not paid on the due date of the tax, there shall be collected as part of the tax, interest upon such unpaid amount at the rate of twenty per centum per annum, from the due date until it is paid: Provided, That the maximum amount that may be collected as interest on delinquency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." "(2) Payment extended. - Where an extension of time for payment of the amount of the tax has been granted, and the amount. the time for the payment of which has been extended, and the interest thereon determined under subsection (a) of Section 111 is not paid in full prior to the expiration of the period of the extension, interest at the rate of twenty per centum per annum, shall be collected on such unpaid amount from the date the same was originally due until it is paid." "(b) Deficiency. "(1) Payment not extended. - Where a deficiency, or any interest assessed in connection therewith under Section 112, or any addition to the taxes provided for in Section 114 is not paid in full within thirty days from the date of the notice and demand from the Commissioner, there shall be collected as part of the tax, interest upon the unpaid amount at the rate of twenty per centum per annum from the date of such notice and demand until it is paid: Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." "(2) Payment extended. - If the part of the deficiency the time for payment of which is extended is not paid in accordance with the terms of the extension, there shall be collected, as part of the tax, interest on such unpaid amount at the rate of twenty per centum per annum from the date the same was originally due until it is paid." "(c) Surcharge. - If any amount of tax shown on the return is not paid in full on or before the date prescribed for its payment under paragraph (a) of this section, or any amount of deficiency, or any interest assessed in connection therewith is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this section, there shall be collected in addition to the interest prescribed herein and in Sections 111 and 112 as part of the tax surcharge of ten per centum of the unpaid amount." (As amended by Presidential Decree Nos. 1705 and 1773.) "Sec. 114 . Ad Valorem Penalties. (a) Failure to file return/etc. - The Commissioner shall add to the tax twenty-five per centum (25%) of each amount: "(i) In case of any failure to make and file a return within the time prescribed by law or by the Commissioner except that when a return is voluntarily and without notice from the Commissioner filed after such time, and it is shown that the failure to file it was due to a reasonable cause, no such addition shall be made to the tax:

"(ii) In case the return is filed with a person other than that mentioned in Section 105(d) of this Code. "(b) False or Fraudulent Return. - In case a false or fraudulent return is made, the Commissioner of Internal Revenue shall add to the tax or to the deficiency tax, in case any payment has been made the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount shall be added to the tax." (As amended by Presidential Decree No. 1705.) "Sec. 118. Payment of tax antecedent to the transfer of shares, bonds or rights. - . . .." "If a bank has knowledge of the death of a person who maintained a bank deposit account alone, or jointly with another it shall not allow any withdrawal from the said deposit account, unless the Commissioner has certified that the taxes imposed thereon by this Title have been paid, Provided, however, that the administrator of the estate or any one of the heirs of the decedent may upon authorization by the Commissioner of Internal Revenue, withdrawn an amount not exceeding P10,000 without the said certification. For this purpose, all withdrawal slips shall contain a statement to the effect that all of the joint depositors are still living at the time of withdrawal by any one of the joint depositors and such statement shall be under oath by the said depositors." (As amended by Presidential Decree No. 1705.) "Sec. 121. Rates of tax payable by donor. "(a) In general. - The tax for each calendar year shall be computed on the basis of the total net gifts made during the calendar year, in accordance with the following schedule: If the net gift is The tax shall be Over But not over Plus of Excess Over P 1,000 Exempt P 1,000 50,000 1.5% P 1,000 50,000 75,000 735 2.5% 50,000 75,000 100,000 1,360 3% 75,000 100,000 150,000 2,110 6% 100,000 150,000 200,000 5,110 9% 150,000 200,000 300,000 9,610 12% 200,000 300,000 400,000 21,610 15% 300,000 400,000 500,000 36,610 18% 400,000 500,000 625,000 54,610 21% 500,000 625,000 750,000 80,860 24% 625,000 750,000 875,000 110,860 28% 750,000 875,000 1,000,000 145,860 32% 875,000 1,000,000 2,000,000 185,860 36% 1,000,000 2,000,000 3,000,000 545,860 38% 2,000,000 3,000,00 925,860 40% 3,000,000 "(b) Tax Payable by Donor if Donee is a Stranger. - When the donee or beneficiary is a stranger, the tax payable by the donor shall be either the amount computed in accordance with the preceding paragraph (a) or twenty per cent (20%) of the net gifts, whichever is higher. For the purpose of this tax, a stranger is a person who is not a: "(i) Brother, sister (whether by whole or half-blood), spouse, ancestor, and lineal descendant, or

"(ii) A relative by consanguinity in the collateral line within the fourth degree of relationship." (As amended by Presidential Decree No. 1773.) "Sec. 122. Transfer for less than adequate and full consideration. - Where property is transferred for less than an adequate and full consideration in money or money's worth, then the amount by which the fair market value of the property exceeded the value of the consideration shall, for the purpose of the tax imposed by this Chapter, be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year." (As amended by Presidential Decree No. 1773.) "Sec. 125. Returns. - . . .." "(b) Time and Place of filing. - The return of the donor required in this section shall be filed within thirty days after the date the gift is made and, except in cases where the Commissioner permits the return shall be filed with the Revenue District Officer, Collection Agent or duly authorized Treasurer of the municipality in which the donor was domiciled at the time of the transfer or if there be no legal residence in the Philippines, then with the Office of the Commissioner of Internal Revenue." (As amended by Presidential Decree No. 1705.) "Sec. 126. Payment of tax. "(a) Time and place of payment of tax. - The donor's tax imposed by Section 121 shall be paid at the time the return is filed. The tax shall be paid by the donor to the Revenue District Officer, Collection Agent or duly authorized treasurer of the city or municipality of which the donor was domiciled at the time of the transfer or if there is no legal residence in the Philippines, with the Office of the Commissioner of Internal Revenue." (As amended by Presidential Decree No. 1773.) "Sec. 128. Interest on extended payments. "(a) Tax shown on the return. - If the time for the payment of the amount determined as the tax by the donor is extended under the authority of subsection (b) of Section 126, there shall be collected, as a part of such amount, interest thereon at the rate of twenty per centum per annum from the date when such payment should have been made if no extension had been granted until the expiration of the period of the extension." "(b) Deficiency. - In case an extension for the payment of a deficiency is granted, there shall be collected, as a part of the tax, interest on the part of the deficiency, the time for payment of which is so extended at the rate of twenty per centum per annum, for the period of the extension." (As amended by Presidential Decree No. 1773.) "Sec. 129. Interest on deficiency. - Interest upon the amount determined as deficiency, shall be paid upon notice and demand from the Commissioner, and shall be collected as a part of the tax, at the rate of twenty per centum per annum, from the due date of the tax to the date the deficiency is assessed. Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." (As amended by Presidential Decree No. 1773.) "Sec. 130. Additions to the tax in case of non-payment. "(a) Tax shown on the return. -

"(1) Payment not extended. - Where the amount of the tax determined by the donor as the tax or any part of such amount is not paid on the due date of the tax, there shall be collected as part of the tax, interest upon such unpaid amount at the rate of twenty per centum per annum, from due date until it is paid: Provided, That the maximum amount that may be collected as interest on delinquency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." "(2) Payment extended. - Where an extension of the time for payment of the amount so determined as the tax by the donor has been granted, and the amount, the time for the payment of which has been extended and the interest thereon determined under subsection (a) of this Section 128 is not paid in full prior to the expiration of the period of extension, interest at the rate of twenty per centum per annum, shall be collected on such unpaid amount from the date when the same was originally due until it is paid." "(b) Deficiency. "(1) Payment not extended. - Where a deficiency, or any interest assessed in connection therewith, or any addition to the tax provided for in Section 131 is not paid in full within thirty days from the date of the notice and demand from the Commissioner, there shall be collected as part of the tax, interest upon the unpaid amount at the rate of twenty per centum per annum, from the date of such notice and demand until it is paid: Provided, That the maximum amount that may be collected as interest on delinquency shall in no case exceed the amount corresponding to a period of three years, the present provisions regarding prescription to the contrary notwithstanding." "(2) Payment extended. - If any part of the deficiency the time for payment of which is extended is not paid in accordance with the terms of the extension, there shall be collected, as a part of the tax, interest on such unpaid amount at the rate of twenty per centum per annum, from the date the same was originally due until it is paid." "(c) Surcharge. - If any amount of tax shown on the return by the donor is not paid in full on or before the date prescribed for its payment under paragraph (a) of this section, or any amount of deficiency, or any interest assessed in connection therewith is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this section, there shall be collected in addition to the interest prescribed herein and in Sections 128 and 129 and as part of the tax a surcharge of ten per centum of the unpaid amount." (As amended by Presidential Decree No. 1773.) "Sec. 131. Ad valorem penalties. (a) Failure to file return, etc. - The Commissioner shall add to the tax twenty-five per centum (25%) of each amount: "(i) In case of any failure to make and file a return within the time prescribed by law or by the Commissioner, except that when a return is voluntarily and without notice from the Commissioner filed after such time, and it is shown that the failure to file it was due to a reasonable cause and not to willful neglect no such addition shall be made to the tax; "(ii) In case the return is filed with a person other than that mentioned in Section 125(b) of this Code. "(b) False or fraudulent return. - In case a false or fraudulent return is made, the Commissioner of Internal Revenue shall add to the tax or to the deficiency tax, in case

any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount shall be added to the tax." (As amended by Presidential Decree No. 1705.) FEATURES OF THE AMENDMENTS TITLE I ORGANIZATION OF THE BUREAU 1. Section 7 as amended by PD Nos. 1705 & 1773. The amendment specifically empowers the Commissioner to issue Subpoena Duces Tecum and Subpoena Ad Testificandum. With this direct grant of authority, summons proceedings initiated by the Commissioner will no longer be subject to the review of the Office of the Solicitor General. In addition, he can exercise other powers to obtain vital information for the discovery of potential taxpayers. In case of neglect or refusal to obey such summons, penalties are provided therefor. Further, the term "deputies" is changed to "authorized representative". 2. Section 16 as amended by PD 1773. The last paragraph on the procedure for protesting an assessment has been transferred from Section 16 to Section 319 and designated as Section 319-A, the latter provision being more germane to the subject. The phrase "best evidence obtainable" to qualify assessments being protested under Section 16(d) of the Tax Code, as amended by P.D. 1705, has been deleted to make the procedure on protests applicable to all kinds of assessments, whether based on "best evidence obtainable" or not. TITLE II INCOME TAX 1. Section 23(a)(b)(c) and (e) as amended by PD 1773. The personal and additional exemptions have been increased as follows: (i) single individuals - from P1,800 to P3,000; (ii) (iii) head of family - from P3,000 to P4,500; married taxpayers - from P3,000 to P6,000;

(iv) additional exemption for each dependent - from P1,000 to P2,000. The total number of dependents for purposes of the additional exemption is limited to four. However, a taxpayer may still claim as additional exemption of P1,000 for each child in excess of four, who qualified as a dependent prior to January 1, 1980. A new paragraph, subsection (e), was incorporated in Section 23. The amendment introduces in the Philippines the so-called "indexation scheme" whereby personal and additional exemptions may be adjusted, not oftener than once every three years, on the basis of the movements in consumer price indices, levels of minimum wages, and bare subsistence levels. 2. Section 24(b)(2)(a) as amended by PD Nos. 1705 and 1773. As amended by PD 1705 - branch profits remittances are covered by Revenue Memorandum Circular No. 55-80 dated December 3, 1980.

As amended by PD 1773 - mention of Section 24(b)(1) and Section 53(b)(2) have been eliminated so as to avoid confusion considering that both these sections refer to income of non-resident foreign corporations. The amendment now clearly enumerates the kinds of gains, profits, emoluments, etc. which shall be considered in the determination of what constitutes branch profits of resident foreign corporations. 3. Section 24(e) as amended by PD 1773. To stimulate the formation of open corporations in the Philippines, vis-a-vis the disincentive to closely-held corporations; the corporate development tax has been increased from 5% to 10%; and the return of investment (ROI) test is eliminated. This is already covered by Revenue Regulations No. 7-81. 4. Section 24(f) as amended by PD 1773. With certain exceptions, income derived from foreign currency transactions by offshore banking units and under the expanded foreign currency deposit system are exempt from all taxes. The extent or coverage of this amendment will be treated in a separate regulation. 5. Section 26 as amended by PD 1705. Under the amendment, a partner in a tax-exempt general professional partnership, who is required to return for taxation his distributive share in the income of the partnership, shall be entitled to avail of the 10% Optional Standard Deduction only if he declares his distributive share of the gross income of the partnership, undiminished by his share of the deductions. Hence, if the partner declares his share in the net income of the partnership, whether it be distributed or otherwise, he shall be deemed to have elected the itemized deduction and may no longer claim the Optional Standard Deduction. 6. Section 30(c), subparagraphs (F) and (G). As amended by PD 1705 - this is already covered by Revenue Memorandum Circular No. 56-80. As amended by PD 1773 - the amendment is merely corrective. 7. Section 30(k) as amended by PD 1773. To encourage more taxpayers to opt for standard deduction instead of the itemized deduction thereby simplifying tax administration, the ceiling deduction of P5,000 is eliminated. 8. Section 30 as amended by PD 1773. This is a new provision empowering the Minister of Finance upon recommendation of the Commissioner to prescribe by regulations, limitations or ceilings for any of the itemized deductions, for tax audit purposes. 9. Section 35(b) as amended by PD 1773. The amendment by Presidential Decree No. 1773 modified the basis for determining gain or loss from sale of property previously acquired thru donation by the seller. Prior to the amendment, the fair market value of the property at the time of donation (acquisition) constitutes the basis for determining gain or loss. Under the amendment, the basis shall be the same ("substituted basis") as it would be in the hands of the donor, or the last preceding owner by whom it was not acquired by gift. However, if such basis is greater than the fair market value of the property at the time of the gift then for the purpose of determining loss the basis shall be such fair market value. 10. Section 35(c) as amended by PD Nos. 1705 and 1773. -

In order that the income tax incidence on the exchange of property may be postponed until its subsequent sale or disposition, the transferor must transfer the property directly to a corporation in exchange for its stock. Before the amendment by PD 1773, Section 35(c)(3)(c) of the Tax Code provided for only two of the effects of an assumption of liabilities as part of the exchange of property, i.e., that it would not affect by itself, the tax-free character of the exchange and would not be considered as "boot". The provision of Section 35(c)(3)(c) covers only the case where the liability transferred does not exceed the transferor's basis for the property transferred. The amendments, therefore, to Section 35(c)(3)(c) (as Sec. 35(c)(4)) and Section 35(c)(4) (as Section 35(c) (5)) are more codifications of the rulings issued by the Bureau of Internal Revenue on the effect of assumption of liability as "boot" in determining the basis to the recipient of the stock. For purposes only of determining the basis to the transferor of property, of the stock received by him in exchange, where the transferee of the property assumes a liability of the transferor or acquires from him property subject to a liability, the amount of such liability is to be treated as money received by the transferor upon the exchange. A separate regulations on the implementation of the provisions of Section 35(c) of the Tax Code, as amended, will be issued for the guidance of all concerned. 11. Section 45(c) as amended by PD Nos. 1705 & 1773. Provides for the time for filing of income tax returns by: a) Residents of the Philippines, whether citizens or aliens, with fixed income or whose income had been derived solely from salaries, wages, interests, dividends, allowances, commissions, bonuses, fees, pensions, or any combination thereof - March 18. cdtai b) All other individuals not mentioned in paragraph (a) of Section 45 including nonresident citizens - April 15. Individuals subject to the final schedular tax on net capital gains from the sale or other disposition of real property under Section 34(h) of the Tax Code are required to file a separate return (BIR Form No. ______) within thirty (30) days from each sale or disposition of capital assets. 12. Section 46(b) as amended by PD 1705. To synchronize the filing of returns of partnerships with the individual partners, partnerships are now required to file their income tax returns on the calendar year basis only. To effect the transition from fiscal to calendar year basis, partnerships shall be required to file a fractional return for less than twelve months in the filing of their income tax returns. 13. Section 51 as amended by PD 1705. As in the case of estate and donor's taxes, the deficiency and delinquency interest rates on income tax had been increased from 14% to 20%; and surcharge for non-payment of tax has been increased from 5% to 10%. The 10% surcharge can now be imposed in case of non-payment of income tax even without a previous assessment notice and letter of demand. Under the amendment, a taxpayer other than a corporation taxable under Section 24 of the Tax Code, self-employed individuals who may be required to pay estimated income tax and the withholding agents required to deduct and withhold the tax under Sections 53 and 54 of the same Code, may elect to pay income tax in two equal installments when the

tax due is in excess of P2,000 (P1,000 before the amendment), in which case, the first installment shall be paid at the time the return is filed and the second installment, on or before the eighteenth day of July following the close of the calendar year. 14. Section 53(c) as amended by PD 1705. The amendment removes from the preferential withholding tax treatment of 10% royalty payments to mining claim owners or lessees of mining rights pursuant to any kind of agreement. Such payment, generally treated as "no sweat" income, will instead be taxed at the ordinary individual or corporate rate level. 15. Section 54(b) as amended by PD Nos. 1705 and 1773. The amendment is clerical as well as substantial. As amended by PD 1705, Section 54 speaks of surcharges prescribed in Sec. 73 of the Code. However, the correct designation thereof should have been Sec. 72 instead of Sec. 73. The substantial amendment consists of the addition of interest to the existing surcharge which the law imposes as a personal liability of the government employee/officer who fails to remit the taxes withheld on wages on time. 16. Section 72(b) as amended by PD 1733. The amendment to paragraph (b), Sec. 72 of the National Internal Revenue Code, as amended by Batas Pambansa Blg. 36 is only corrective in nature in order to change Sec. 86 to Sec. 87, thereof. 17. Section 83 as amended by PD 1705. The amendment added a new paragraph to Sec. 83 providing that the net income of a partnership (after corporate income tax) for the taxable year shall be deemed actually or constructively received by the partners in the same taxable year, taxable to them in their individual capacity, whether actually distributed or not. 18. Section 84 as amended by PD 1705. The requirement for self-employed individuals to pay estimated income tax shall take effect only upon promulgation of the implementing rules and regulations by the Minister of Finance. However, implementation of the said tax shall be held in abeyance pending the outcome of the gross income proposed under Cabinet Bill No. 34. 19. Sections 85, 86 and 87 as amended by PD 1705. The amendments are mostly corrective. In case of a corporation, the income tax due on its corporate quarterly returns and final adjustment returns shall be paid at the time the returns or declarations are filed (pay-as-you-file system) with the Revenue District Officer, or the Collection Agent or duly authorized treasurer of the municipality having jurisdiction over the principal office and place where the books of accounts and other data of the corporation are kept. 20. Sections 84 and 88(a) and (b) as amended by PD 1705. The provisions on estimated income tax and returns as well as on civil penalties in case of underpayment of the estimated tax by individual taxpayers shall be covered by separate regulations for the guidance of all concerned. The delinquency and deficiency interest rates in case of non-payment of corporate estimated income tax was also increased from 15% to 20%. 21. Section 96 as amended by PD 1773. -

The statutory penalties for delinquency in the payment of taxes withheld on wages had been increased from 5% to 25% in the case of surcharge and from 1% per month to 20% per annum in the case of interest. For the failure to deduct and withhold the tax on wages of its employees, the employer shall be liable to 25% surcharge. However, if the failure is due to willful neglect or with intent to defraud the government a surcharge of 50% and 20% interest per annum is imposed. If the withholding agent is the government or any of its agencies, political subdivisions, or instrumentalities, or is a government-owned or controlled corporations, the employee or officer responsible for withholding and/or remittance of the tax is made personally liable to pay the penalties, i.e. surcharge and interest. 22. Section 97(a) as amended by PD 1773. Under the amendment, failure to deduct and withhold and failure to remit are now penalized with a fine of not less than P1,000 nor more than P2,000 and imprisonment for not more than one year. cdtai TITLE III ESTATE AND DONOR'S TAX 1. Section 100 as amended by PD 1705. The integration of donor's and donee's taxes and the reduction of the estate tax rates under Presidential Decree No. 69 were designed to encourage the transfer of properties during the lifetime of an individual. To harmonize, therefore, such intendment in the law, the amendment removes the presumption under the old law that any transfer of a material portion of decedent's death without adequate and full consideration within 3 years prior to decedent's death is in contemplation of death. The effect of this deletion is to require establishment or proof of the fact that the transfer was actually made in contemplation of death. 2. Section 101(d) as amended by PD 1705. For estate tax purposes, deduction shall be allowed in the case of a non-resident alien decedent if the value at the time of his death of that part of his gross estate not situated in the Philippines is declared in the return filed for the estate. 3. Section 105 as amended by PD Nos. 1705 & 1773. The estate tax return shall now be filed with the Revenue District Officer, Collection Agent or duly authorized treasurer of the municipality in which the decedent was domiciled at the time of his death or if there is no legal residence in the Philippines, then with the Office of the Commissioner of Internal Revenue. Time for filing estate tax returns was changed from 6 to 9 months after the decedent's death - when there are no judicial/testamentary proceedings and from 12 to 21 months after the decedent's death - when there are judicial testamentary or intestate proceedings. 4. Section 107 as amended by PD 1773. Like income and other internal revenue taxes, the estate tax is now payable under the "pay-as-you-file" system. 5. Sections 111, 112 and 113(a)(b)(c) as amended by PD 1773. Interest rates on estate taxes had been increased from 14% to 20% on: a) extended payment of the tax per return

b) extended payment of a deficiency c) deficiency interest d) delinquency interest Section 113(c) as amended by PD 1705 is further amended by PD 1773 so that the 10% surcharge (formerly 5%) can now be imposed in case of non-payment of estate tax even without a previous assessment notice and letter of demand. 6. Section 114 as amended by PD 1705. The amendment strengthens the jurisdictional requirement in the filing of income tax returns to harmonize with the other Titles of the Tax Code. 7. Section 118 as amended by PD 1705. As a rule, banks are prohibited to allow the withdrawal of deposits of decedents unless certification of tax payment is first presented. Considering that there are instances where the heirs of the decedents depend upon the cash deposits of their chief support let alone the fact that estate proceedings in court are sometimes protracted, the heirs should therefore be allowed to withdraw an amount to provide for their upkeep. 8. Section 121 as amended by PD 1773. A new paragraph is added providing for the tax payable by the donor if the donee is a stranger. Donees not coming within the degree of relationship specified in the amendment are now classified as "strangers". Under the amendment of Section 121(b), the donor's tax computed on the amount representing insufficiency of consideration of property sold to a stranger would actually be equal to the capital gains tax on gains from real estate transaction thus discouraging underdeclaration of the selling price of real property and availment of the lower donor's tax on insufficiency of consideration. 9. Section 122 as amended by PD 1773. The amendment harmonizes the provisions of our gift tax laws, particularly Sections 122 and 124 of the Tax Code on the valuation of property transferred, e.g. gifts made in property. Hence, for gift tax purposes, Section 122 as amended, not only dispensed with the test of "donative intent" but formulated as well a much more workable external test that "where property is transferred for less than an adequate and full consideration in money or money's worth", the excess of the fair market value of the property transferred over the consideration given therefor shall be deemed a gift subject to the donor's tax. 10. Sections 125(b) and 131 as amended by PD 1705. The provision as to the place of filing donor's tax return is amended. As in the case of other internal revenue taxes, the donor's tax return shall now be filed with the Revenue District Officer, Collection Agent or duly authorized treasurer of the municipality in which the donor was domiciled at the time of the transfer or if there is no legal residence in the Philippines, then with the Office of the Commissioner of Internal Revenue. In case the return is filed with a person other than the aforementioned officials, a surcharge of 25% shall be imposed. 11. Section 126(a) as amended by PD 1773. Under the amendment, the donor's tax like other internal revenue taxes shall now be paid by the donor to the Revenue District Officer, Collection Agent or duly authorized treasurer of the city or municipality in which the donor was domiciled at the time of the transfer or if there is no legal residence in the Philippines, with the Office of the Commissioner of Internal Revenue.

12. Sections 128, 129 and 130 as amended by PD 1773. Interest rates on donor's taxes had been increased from 14% to 20% on: a) extended payment of the tax per return b) extended payment of a deficiency c) deficiency interest d) delinquency interest The 10% surcharge (formerly 5%) can now be imposed if the donor's tax or deficiency donor's tax is not paid in full on or before the date prescribed for its payment, even without a previous assessment notice and letter of demand. Effectivity. 1) P.D. 17O5 took effect on August 1, 1980; and 2) P.D. 1773 took effect on January 16, 1981. Enforcement. - It is desired that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-15-81 Revenue Memorandum Circular No. 25-81 July 15, 1981 REVENUE MEMORANDUM CIRCULAR NO. 25-81 Subject : Loss of Five (5) Sets of Revenue Tax Receipts (CB RCO Form No. 02-02) bearing Serial Nos. 6146221 to 6146225, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of five (5) sets of Revenue Tax Receipts, to wit: acd ---------------------------Serial No. : Quantity ---------------------------6146221 - 6146225 : Five (5) Sets ---------------------------The above Revenue Tax Receipts were reported to the Acting Regional Director, Revenue Region No. 3-B, Valenzuela, Metro Manila, as missing or lost sometime on March 18, 1981, by Mrs. FE FERNANDO, Revenue Collection Agent of Malolos, Bulacan. cdtai Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-28-81 Revenue Memorandum Circular No. 26-81 July 29, 1981 REVENUE MEMORANDUM CIRCULAR NO. 26-81 MEMORANDUM TO: All Regional Directors Revenue District Officers and Other Personnel Concerned In the memorandum of the President dated 20 July 1981, the prohibition from investigation of amnesty tax returns filed under Presidential Decree No. 1740 has been clarified. Under said memorandum, conditions have been laid down so as to prevent sham amnesty availments, thereby insuring that the true objectives of the amnesty Decree is achieved. cd i Conformably thereto, your attention is invited to the attached Revenue Memorandum Circular (RMC No. 26-81) prescribing guidelines for the correct availment of the tax amnesty. It is directed that all taxpayers desiring to avail of said amnesty be made to comply strictly with the requirements prescribed therein. For emphasis, it may be stated that under the aforementioned Presidential Memorandum, immunity from investigation shall only be accorded the taxpayer when his amnesty tax payment on a yearly basis has been computed in accordance with the rates prescribed under Section 21 of the Tax Code or that of the rates prescribed in the said presidential memorandum, which ever is higher but in no case less than P1,000. It is also informed, that income tax assessments issued after September 17, 1980, may be the subject of tax amnesty availment. Be guided accordingly. cd i RUBEN B. ANCHETA Acting Commissioner July 28, 1981 REVENUE MEMORANDUM CIRCULAR NO. 26-81 Subject : Memorandum of the President prescribing additional conditions necessary for immunity from investigation of amnesty tax returns filed under Presidential Decree No. 1740, and the amount of amnesty tax payments. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the Memorandum of the President dated 20 July 1981 is hereby reproduced hereunder: acd "20 July 1981 "MEMORANDUM TO The Commissioner of Internal Revenue "SUBJECT : PROHIBITION FROM INVESTIGATION OF AMNESTY TAX RETURNS UNDER PRESIDENTIAL DECREE NO. 1740

UNDER CERTAIN CONDITIONS AND SUBJECT TO CERTAIN EXCEPTIONS. "WHEREAS, the Commissioner of Internal Revenue or his duly authorized representative has been prohibited from conducting an investigation of the amnesty tax returns filed under Presidential Decree No. 1740; "WHEREAS, such prohibition if made absolute and unconditional may be unduly taken advantage of by unscrupulous individuals by filing amnesty tax returns and paying minimal or token amounts, in violation of the true intent and purpose of Presidential Decree No. 1740; cdasia "WHEREAS, there is a need to clarify the said prohibition so as to prevent sham amnesty availments and thereby achieve the objectives of Presidential Decree No. 1740. "WHEREFORE, the Commissioner of Internal Revenue or his duly authorized representative is hereby prohibited from conducting an investigation on amnesty tax returns filed under Presidential Decree No. 1740, as well as any income tax liability for any of the taxable years 1974 to 1979 for which any of the amnesty tax returns was filed by the taxpayer, except upon lawful order of the Court; provided, however, that such immunity from investigation shall only be accorded the taxpayer under the following conditions: "1. That he has complied with the requirements of Presidential Decree No. 1740 and has paid an amnesty tax computed in accordance with the returns prescribed under the Tax Code; cdt "2. That such amnesty tax shall not be less than the following percentages of the undeclared income and/or overclaimed costs, deductions or exemptions reported in the said returns: "Not exceeding P250,000.00 15% "Exceeding P250,000.00 but not exceeding P500,000.00 20% "Exceeding P500,000.00 but not exceeding P750,000.00 25% "Exceeding P750,000.00 but not exceeding P1,000,000.00 30% "Exceeding P1,000,000.00 35% "3. That the said amnesty tax payment shall in no case be less than P1,000.00 for each taxable year covered by the amnesty return; and "4. That he has filed his Statement of Assets, Liabilities and Networth together with the amnesty tax returns. "Those who have since availed of the tax amnesty but did not comply with the above conditions must file amended amnesty returns that meet the said criteria, together with their Statement of Assets, Liabilities and Networth; otherwise, they will not qualify for the benefits and immunities granted by Presidential Decree No. 1740. cdtai "(SGD.) FERDINAND E. MARCOS President of the Philippines" FEATURES OF THE PRESIDENTIAL MEMORANDUM 1. Amnesty tax returns filed by an individual taxpayer under PD 1740, as well as any income tax liability for any of the taxable years 1974 to 1979 for which any of the

amnesty tax returns was filed by the taxpayer shall not be subject to investigation provided the following conditions are met and satisfied: (a) That the taxpayer files his Statement of Assets, Liabilities and Networth together with an amnesty tax return which shall either be the regular individual income tax return (BIR Forms 1701 or 1701A) or an amended return (BIR Form 1745) reporting therein his undeclared income and/or overclaimed costs, deductions or exemptions. acd (b) That he must pay as amnesty tax, the correct amount of the income tax as computed in accordance with the National Internal Revenue Code which, however, should not be less than the prescribed percentages of the undeclared income and/or overclaimed costs, deductions, or exemptions enumerated in the aforequoted Memorandum of the President. (c) That in no case shall such amnesty tax payment for any of the taxable years 1974 to 1979 be less than P1,000. aisa dc 2. Taxpayers who have previously filed amnesty tax returns, paid the correct tax thereon, and complied strictly with the requirements prescribed by Presidential Decree No. 1740, need not file any amended return. However, those filing only token amnesty returns before the issuance of the above Presidential memorandum-directive should file an amended amnesty return together with their Statements of Assets, Liabilities and Networth and pay the corresponding amnesty tax in order to qualify for the immunity from investigation granted by law. All internal revenue officers and others concerned are hereby enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd i RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-10-81 Revenue Memorandum Circular No. 27-81 August 10, 1981 January 1, 1981 REVENUE MEMORANDUM CIRCULAR NO. 27-81 Subject : Publishing Commission on Audit, Ministry of Finance Joint Circular No. 1-81 To : All Revenue Service Chiefs, Regional Directors, Field Auditors and Others Concerned For the information and guidance of all concerned, there is quoted below Joint Circular No. 1-81 of the Commission on Audit and the Ministry of Finance, to wit: cdasia "Joint Circular No. 1-81 Subject : Amendments to Paragraph II, Sec. 2 of Department Order No. 2073, (Ministry of Finance) dated June 14, 1973 on the Frequency of Deposits of National Collections Direct to the Bureau of the Treasury or Through Any of the Authorized Government Depository Banks. To : All Heads of Ministries, Bureaus and Offices, Self Governing Boards and Commissions, State Universities and Colleges, Schools, Hospitals and Sanitaria, Regional/Field Offices; All National Collecting Officers, Local Treasurers, City, Unit Auditors, and Others Concerned. 1.0 Purpose

This Circular is issued to amend the guidelines in the frequency of depositing national collections direct to the National Treasury or thru any of the authorized government depository banks to minimize the expenses and man-hours spent relative thereto. 2.0 Frequency of Depositing National Collections and Number of Remittance Advices. cdasia Paragraph II, Sec. 2 of Department Order No. 20-73 (Ministry of Finance) dated June 14, 1973 is hereby amended to read as follows: 2. Frequency of Deposits and Number of Remittance Advices. a. Frequency of Deposits Collecting Officers shall deposit their national collections intact to the Bureau of the Treasury or to any authorized government depository banks as prescribed below: ------------------------------------: Travel Time : : Distance : (To and From Office : Accumulated : Frequency of (Office to BTR/ : to BTR/Dep. Bank- : Collections : Deposits Dep. Bank) : Ordinary Transp. : : ------------------------------------1. Less than 15 : Less than 1 day : a. P500 or more : a. Daily km. : : b. Less than : Weekly or as soon : : P500 : as Collections : : : reach P500.00 ------------------------------------: : : 2. 15-30 km. : Weekly or as : Collections : reach P2,000 ------------------------------------: b. A day or more Weekly : : Twice a month : P2,000.00 : or as soon as : : : : P2,000.00 b.1 P2,000 or : or more b.2 Less than : : : b.1 : b.2 : b.2 Less than : soon as Less than 1 day : : : a.1 P2,000 or : a.1 Daily : more : : : a.2

: collection reach : P2,000.00 ------------------------------------3. More than 30 : a. Less than 1 day Daily km. : : Weekly or as : collections : P2,000.00 ------------------------------------: b. A day or more Twice a week : : Weekly : : Monthly or as : collections : P2,000.00 -------------------------------------

: : : : : : : : : : : : :

: : a.1 P2,000 or : a.1

: more : a.2 Less than : a.2 P2,000 : : b.1 More than : P5,000 b.2 P2,000 - : P5,000 : b.3 Less than : P2,000 : : soon as reach b.1 : b.2 b.3 soon as reach

b. Number of Remittance Advice. Only one set of remittance advice shall be prepared for every deposit for each agency. However, a separate set of remittance advices shall be prepared for the following: (1) Redeposit/replenishment of dishonored cash items (2) Undeposited collections at the end of any calendar year deposited in the ensuing year under a separate remittance advice. cd 3.0 Responsibilities Heads of Agencies, COA Auditors and Treasury Provincial Fiscal Examiners shall strictly enforce the provisions of this Circular. 4.0 Repealing Clause Provisions of Department Order No. 20-73 (Ministry of Finance) dated June 14, 1973 and pertinent provisions of Commission on Audit General Circular No. 130, dated June 16, 1975 and other circulars/orders that are inconsistent herewith are hereby revoked or modified accordingly. 5.0 Effectivity This Circular shall take effect January 1, 1981.

(Sgd.) FRANCISCO S. TANTUICO, JR. (Sgd.) ALFREDO PIO DE RODA, JR. Acting Chairman Acting Minister of Finance" Commission on Audit All those concerned are hereby enjoined to be guided accordingly. RUBEN B. ANCHETA Acting Commissioner TAN: A5239-J1139-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-12-81 Revenue Memorandum Circular No. 28-81 August 12, 1981 REVENUE MEMORANDUM CIRCULAR NO. 28-81 Subject : Loss of Two (2) Sets of Revenue Tax Receipts (CB RCO Form No. 02.02) bearing Serial Nos. A665226 and A 6652627. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Tax Receipts, to wit: cdt ---------------------------Serial No. : Quantity ---------------------------A 6552626 : One (1) Set A 6552627 : One (1) Set ---------------------------The above Revenue Tax Receipts, an accountability of PURITA DELA CRUZ, Revenue Collection Agent of Urdaneta, Pangasinan, were reported as missing or lost sometime on May 15, 1981. casia Internal Revenue Officers, Employees and Others Concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-12-81 Revenue Memorandum Circular No. 29-81 August 12, 1981 REVENUE MEMORANDUM CIRCULAR NO. 29-81 Subject : Loss of Six (6) Sets of Auxiliary Invoice for Timber (BIR Form No. 14.04) bearing Serial Nos. 402621 to 402526, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of six (6) sets of Auxiliary Invoice for Timber, to wit: cdasia

---------------------------Serial No. : Quantity ---------------------------402521 - 402526 : Six (6) Sets ---------------------------The above Auxiliary Invoices were reported as missing or lost to the Regional Director, Revenue Region No. 1, Baguio City on July 10, 1981 by the Chief of the Administrative Branch. cda Internal Revenue Officers, Employees and Others Concerned are requested to promptly notify this Office in case the above-mentioned invoices are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-31-81 Revenue Memorandum Circular No. 30-81 August 31, 1981 REVENUE MEMORANDUM CIRCULAR NO. 30-81 Subject : Loss of Seventy-two (72 Sets of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Numbers 1804829 G to 1804850-G, inclusive, and 2589501-G to 2589550 G, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of seventy-two sets of Revenue Official Receipts, to wit: ---------------------------Inclusive Serial Numbers : Quantity ---------------------------1804829-G to 1804850-G : Twenty-two (22) Sets 2589501-G to 2589550-G : Fifty (50) Sets ---------------------------The above Revenue Official Receipts were discovered missing in the course of an audit on the accountability of a Revenue Collection Agent, formerly stationed at Zamboanga City, as reported by the Regional Director, Revenue Region No. 9, Zamboanga City. aisa dc Internal Revenue Officers, Employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Revenue Official Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner

By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-09-81 Revenue Memorandum Circular No. 31-81 September 9, 1981 REVENUE MEMORANDUM CIRCULAR NO. 31-81 Subject : Issuance of "Payment Compliance Certificate" required under the Joint Budget/Finance Circular Nos. 289 and 2 78, respectively, dated May 9, 1978, implementing Section 23 of Presidential Decree No. 1177 and for other purposes. To : All Internal Revenue Officers and Others Concerned. Pursuant to the provisions of Budget Circular No. 289 and Finance Circular No. 2-78, the following rules and procedures are hereby promulgated to govern the issuance of "Payment Compliance Certificates" to units of Government, including governmentowned or controlled corporations in settlement of their internal revenue tax liabilities: A. Entities entitled to the issuance of "Payment Compliance Certificate." 1. Presidential Decree No. 1177, subjects all units of government including government-owned or controlled corporations to the payment of income taxes, custom duties, and others taxes and fees imposed under revenue laws. However, under the abovestated implementing circulars, all government units, including government-owned or controlled corporations which are exempted by law from the payment of taxes, duties and fees shall be entitled to either a tax subsidy or payments constituting equity contribution without necessity of paying cash or its equivalent; so that in lieu thereof, a "Payment Compliance Certificate" shall be issued by this Bureau. 2. To assure effective control in the issuance of said certificates, it is directed that the annual income tax returns filed by the aforesaid entities in the various Revenue Regions, after being processed therein under existing rules and regulations, should forthwith be segregated and transmitted by the Revenue Regional Director concerned to the Chief, Government and Tax Exempt Corporations Division of the National Office. B. Procedures to be followed in the issuance of "Payment Compliance Certificate." 1. All taxes, fees and others charges if found to be due from government units and government-owned and controlled corporations shall as a matter of uniform procedure be determined and assessed pursuant to the provisions of the National Internal Revenue Code, the payment compliance certificate being only a privilege to invoke by the taxexempt unit or entity. 2. Hence, the "Payment Compliance Certificate" shall be issued upon request by any qualified unit of the government, including government-owned or controlled corporations, but only upon presentation of proof of exemption under existing law. acd 3. The "Payment Compliance Certificate" shall be issued by the Government and Tax Exempt Corporations Division to government units and government-owned and controlled corporations located within the Metro Manila area and by the Regional Director for those located outside the Metro Manila area.

4. The "Payment Compliance Certificate" shall be accomplished in the prescribed form (Annex "A") in six (6) copies and numbered consecutively with the following coding: Issuing Office - Number - Year of Return Illustration: NO-001-81 - For the National Office RR- -001-81 - For the Regional Office Note: If the issuing revenue region is Manila, then the numbering and coding will be as follows: RR-4A-001-81 C. Manner of accounting for "Payment Compliance Certificates." 1. The copies prepared for the "Payment Compliance Certificate" shall be distributed as follows: Taxpaying Agency - Original plus two copies Accounting Division, B.I.R. - 2 copies Issuing Office - 1 copy 2. The issuing office shall within five (5) days after the end of each quarter, compile and summarize in Annex "B" all "Payment Compliance Certificates" issued. Three (3) copies thereof, shall be forwarded to the Accounting Division. 3. The Accounting Division shall furnish the Data Processing Center and Receivable Accounts Division with a copy of Annex "B". casia D. On imported goods/commodities. 1. In the case of taxes, fees or charges on imported commodities/goods, no "Payment Compliance" shall be issued unless an Authority issued by the Ministry of Finance and/or Ministry of Budget approving the release of the importation from customs custody is presented. Taxes, fees and charges on shipments without the corresponding Authority from the Ministry of Finance and/or Ministry of Budget shall be treated as importations of articles with locally available equivalents and shall be subject to the payment of the corresponding taxes, fees and charges due thereon. E. Effectivity. 1. The provisions of this Revenue Memorandum Circular shall take effect immediately supplementing Revenue Memorandum Circular No. 95-78 dated November 7, 1978. RUBEN B. ANCHETA Acting Commissioner Annex "A" BIR Form No. _____ Republic of the Philippines Ministry of Finance BUREAU OF INTERNAL REVENUE Control No.____ PAYMENT COMPLIANCE CERTIFICATE Issued to: Name of Government Agency: _______________________________

Officer Representing Agency: ________________________________ Address: _______________________________________________ Tax Exempting Law: ______________________________________ (State the law and section thereof, or attach proof of exemption) To Whom It May Concern: Pursuant to Section 23 of Presidential Decree No. 1177, as implemented by Joint Budget Circular No. 289 and Finance Circular No. 2-78 dated May 9, 1978, and in view of the internal revenue tax liabilities of (Name of Government Agency or Unit) ____________________________________________ as per Attached tax return or BIR assessment notice, this PAYMENT COMPLIANCE CERTIFICATE is hereby issued in favor of the said agency for the following taxes and fees: cda Kind of Tax ____________ Year/or Period Covered ____________ Tax Due P___________ Surcharge ____________ Interest ____________ Compromise ____________ TOTAL AMOUNT DUE ____________ Remarks: _________________________________________________ _________________________________________________________ _________________________________________________________ Issued this ___________ day of ________ 19 _____. RUBEN B. ANCHETA Acting Commissioner of Internal Revenue By: DOMINGO C. PAZ Chief Gov't Tax Exempt Corporations Division Regional Director Attachment: As stated above (Accomplish in six (6) copies) BIR Form No. ________ QUARTERLY SUMMARY OF "PAYMENT COMPLIANCE CERTIFICATE" Quarter Ending _______ 1980 PCC Government Amount of Tax Date Issued Control No. Agency/Corp. Exempting Law Kind of Tax Covered and Penalties Certified Correct: _____________ Accomplish in 6 copies to be distributed as follows: Accounting Division - 5 copies Issuing Office - 1 copy Period

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-09-81 Revenue Memorandum Circular No. 32-81 September 9, 1981 REVENUE MEMORANDUM CIRCULAR NO. 32-81 Subject : Loss of Four (4) Copies of Revenue Tax Receipts (CB RCO Form No. 02.02) bearing Serial Number 6161062. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of four (4) copies of Revenue Tax Receipts, to wit: aisa dc ---------------------------Serial No. : Quantity ---------------------------6161062 : Four (4) Copies ---------------------------The above Revenue Tax Receipts, an accountability of HONORIO RODRIGUEZ, Revenue Collection Agent for Naga City, were reported to the Regional Director, Revenue Region No. 5, Legaspi City, as missing or lost sometime on June 9, 1981, while in the custody of Edna V. Magdaraog, an RTR casual employee. Internal Revenue Officers, Employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-14-81 Revenue Memorandum Circular No. 33-81 September 14, 1981 REVENUE MEMORANDUM CIRCULAR NO. 33-81 Subject : Publishing the National Priority Plan (NPP) for 1981 as prepared by the National Economic Development Authority (NEDA), pursuant to the provisions of Batas Pambansa Blg. 45, as implemented by BIR-NEDA Regulations No. 1-81 dated April 30, 1981. To : All Internal Revenue Officers, Employees and Others Concerned. For the information and guidance of all concerned, there is attached herewith as ANNEX "A" the National Priority Plan (NPP) and its enclosures, as prepared by the National Economic Development Authority for the year 1981 in compliance with the pertinent provisions of Batas Pambansa Blg. 45, as implemented by BIR-NEDA Regulations No. 1-81, dated April 30, 1981. cd i Features of the National Priority Plan as prepared by NEDA:

1. Batas Pambansa Blg. 45, effective December 18, 1979, amended paragraph (h) of Section 30 of the National Internal Revenue Code of 1977, as amended, and provides, among others, that donations to the Government of the Philippines or to any of its agencies or political subdivisions, including fully-owned government corporations exclusively to finance, to provide for, or to be used in undertaking priority activities in education, health, youth and sports development, human settlements, science and culture and in economic development according to a national priority plan to be determined by the NEDA, shall be deductible in full for income tax purposes. 2. The term "National Priority Plan" refers to the annual list prepared by the NEDA, containing priority programs, projects and activities of the Government and those of Government Corporations in the following sectors: education, health, youth and sports development, human settlements, science and culture and economic development, as these sectors are defined in BIR-NEDA Regulations No. 1-81, dated April 30, 1981. casia 3. Only (a) ministries, agencies, bureaus, commissions and authorities, including state colleges and universities; (b) autonomous regional, provincial, city and municipal governments; and (c) fully-owned government corporations as listed and included in the National Priority Plan prepared by NEDA and furnished the BIR shall be considered as eligible and qualified donee institutions for the purpose of availing the income tax benefits mentioned in the preceding first paragraph hereof. casia 4. The aforesaid Plan is intended to be effective for the remainder of 1981 and subsequent years, subject to modification or revision by NEDA and, therefore, may include both new inclusions and carry-overs from previous plans. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-01-81 Revenue Memorandum Circular No. 34-81 October 1, 1981 REVENUE MEMORANDUM CIRCULAR NO. 34-81 Subject : BIR certification in Export Declaration (ED) and certification fee included in the authority to Collect To : Internal Revenue Officers Concerned Quoted hereunder in the instruction this Office had issued to the BIR Representative at the National Exporting Coordinating Center (NECC) for your guidance and information: "27 July 1981 "MEMORANDUM : The Chief National Audit Review Division FOR : The BIR Representative at the National Exporting Coordinating Center (NECC) All others Concerned

SUBJECT

: BIR certification in the Export Declaration and Assessment of 50 certification fee as included in the authority to Collect In line with the President's directive to cut red tape in the processing of documents especially those relating to trade, all concerned are hereby ordered to immediately implement the following: cdt 1. Issue BIR certification only to exporters of tobacco, minerals and forest products after they have paid the taxes due to them such as ad valorem tax, forest charges, tabacco inspection fee and other internal taxes, fees charges and fund fees. cd 2. Inform all exporters whose products do not fall within the categories of tobacco, minerals and forest products to directly proceed to the Bureau of Customs to secure their authority to load without the BIR certification. No certification fee shall be collected from these exporters. For strict compliance". (SGD.) RUBEN B. ANCHETA Commissioner The certification referred to above is the signature affixed on the space provided for under the Export Declaration (ED Form No. 3) by the BIR Representative assigned to export Coordinating Centers. cd i The certification fee assessed on the certification made on the Export Declaration (ED Form No. 3) shall be included in one Authority to Collect for wharfage fees, inspection fees, and other fees and charges which shall be deducted by the Central Bank of the Philippines from the export proceeds received by the exporter. ROMULO M. VILLA Acting Commissioner TAN-V4656-D1920-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-12-81 Revenue Memorandum Circular No. 35-81 October 12, 1981 REVENUE MEMORANDUM CIRCULAR NO. 35-81 Subject : Publishing Questions and Answers on Deposit Substitutes as Amended by Revenue Regulations Nos. 8-81 and 16 81. To : All Internal Revenue Officials, Employees and Others Concerned. 1. Question: Revenue Regulation 8-81 (20% final withholding tax) applies to "income derived from banking activities" while paragraph (h) of Revenue Regulation 1681 (20% creditable withholding tax) applies to "other trust arrangements" not covered by either RR 8-81 or paragraph (g) of RR 16-81 (15% creditable withholding tax on income distributed to trust beneficiaries). Are non-bank financial intermediaries, whether quasibank or non-quasi bank, performing trust and/or investment management functions covered by these regulations as are trust/investment management operations of banks? Answer: Revenue Regulations 8-81 taxes specifically income from banking activities of banks and non-bank financial intermediaries with quasi-banking license. As such, all other institutions such as financing companies, non-bank financial

intermediaries with no quasi-banking license are not covered by the 20% withholding tax. Their trust and investment management activities, however, are subject to RR 13-78 and the amending RR 16-81, either to the 15% or 20%. 2. Question: Because of client's desire to preserve the confidentiality inherent in trust arrangement, may income of trust clients be withheld taxes on a final 20% rather than creditable? cd Answer: RR-8-81 effective May 1, 1981 stipulates the type of trust arrangements on which the 20% final withholding tax is applicable. RR 16-81, on the other hand, through the addition of paragraph (h) to RR 13-78 provides for a 20% creditable withholding tax effective August 1, 1981 on trust arrangements otherwise not covered by the 20% final and the old 15% creditable withholding taxes. A client of any banking institution or any non-bank financial intermediary with quasi-banking license wishing to be withheld taxes on a final basis rather than on a creditable basis should have a trust arrangement which maybe considered as deposit substitutes for tax purposes, i.e, which either assures or guarantees return on investment although indeterminable; otherwise income of said client on arrangement other than those covered above shall be subject to the 20% creditable withholding tax. 3. Question: Revenue Regulations 8-81 redefines "deposit substitutes" to include certain trust/agency arrangement of banks. The apprehension among banks whose clients wish to be withheld taxes on a final basis for reasons of confidentiality is that these trust/agency arrangements may be construed as deposit substitute and consequently be subject to various Central Bank reserve requirements and Securities and Exchange Commission registration requirements. What is the BIR stand on this? Answer: While the Bureau is aware of these implications, the sole concern of the tax regulation is to generate tax revenues from various income sources. The definition of "deposit substitute" under Revenue Regulation 8-81, therefore, is only for purposes of taxation. 4. Question: Where trust funds are disposed of in tax-free (e.g. tax exempt government securities) or tax paid (e.g. savings, time deposit, money market instruments) investments, need taxes be withheld again on income therefrom? Answer: There is no need withhold taxes under these situations. 5. Question: What is the BIR interpretation of the effectivity of the imposition of the 20% withholding tax? cdtai Answer: The 20% creditable withholding tax imposed by Revenue Regulation 16-81 should be withheld on income earned beginning August 1, 1981 of all trust arrangements other than those considered as deposit substitutes; whereas, the 20% final withholding tax imposed by RR 8-81 applies to income earned on trust arrangements considered as a deposit substitute beginning May 1, 1981. All internal revenue officers and employees are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-28-81 Revenue Memorandum Circular No. 36-81 October 28, 1981 October 28, 1981

REVENUE MEMORANDUM CIRCULAR NO. 36-81 Subject : Allowable tax Campaign Expenses To : All Service Chiefs, Regional Directors, Revenue District Officers and Others Concerned In order to facilitate action and ensure uniformity and objectivity in the processing of voucher claims and supporting documents pertaining to the disbursement of tax campaign funds, it is hereby directed that the following tax campaign expenses shall be allowed for payment and/or reimbursement: cd 1. Cost of streamers, posters, leaflets, film strips, movie slides, expenses for radiocast and telecast and other advertising and tax campaign materials; 2. Rentals of conference room, chairs, vehicles, sound system and office equipment that will be utilized in campaign meetings and in tax centers established or to be established; cda 3. Meals, snacks and merienda that may be served in tax information meetings with associations or groups of taxpayers; 4. Speakers' honoraria and incidental expenses to promote tax programs; 5. Meals and transportation of Bureau employees who are required to render overtime service during the tax campaign period. cdasia Please be guided accordingly. (Sgd). RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-11-81 Revenue Memorandum Circular No. 37-81 November 11, 1981 REVENUE MEMORANDUM CIRCULAR NO. 37-81 Subject : Publishing the Memorandum of Agreement between the Commissioners of the Land Registration Commission and the Bureau of Internal Revenue To : All Revenue Service Chiefs, Regional Directors, Revenue District Officers and All Others Concerned. For the information and guidance of all concerned there is published hereunder the Memorandum of Agreement between the Land Registration Commission and the Bureau of Internal Revenue providing for a working arrangement between the two offices on the registration of transfers of real property. cd Republic of the Philippines Metro Manila MEMORANDUM OF AGREEMENT This Memorandum of Agreement is hereby entered into by and between the Commissioners of the Land Registration Commission and the Bureau of Internal Revenue with the following objectives: 1. To ensure effective implementation of the capital gains tax law, (Batas Pambansa Blg. 37) and pertinent provisions of the National Internal Revenue Code involving taxation of transfers of real properties through donation, inheritance, or other mode of conveyance;

2. To effect proper coordination between the two (2) offices in the registration of transfers of ownership and other transactions involving real property; and aisa dc 3. To ensure that the correct taxes on such transactions are properly assessed and collected. To attain the foregoing objectives, the parties to this agreement hereby agree to the following: 1. That The Bureau of Internal Revenue shall: a) Issue a Certificate of Clearance for all transfers of properties through sale (under the Capital Gains Tax Law), donation, inheritance, or other mode of conveyance after the taxes on such transactions have been duly paid, or a Certificate of Exemption from payment of taxes if the transactions are not subject to any tax; b) Release to the taxpayer the original and triplicate copies of the Certificate of Clearance or Exemption for presentation to the Register of Deeds of the city or municipality having jurisdiction over the property transferred; c) Submit to the Register of Deeds concerned the specimen signatures of the BIR officials authorized to sign the Certificate of Clearance or Exemption; and d) Assign a liaison officer with the Officer of the Register of Deeds. 2. The Land Registration Commission shall: a) Register transfers of real property subject to the Capital Gains Tax, Donor's Tax or Estate Tax or those exempt therefrom only upon presentation of the required Certificate of Clearance or Exemption issued by the authorized BIR officials; b) Prepare a list of all transfers of real property registered during the preceding month indicating the names and addresses of the vendors and vendees, and location of properties transferred, to which list the corresponding triplicate copies of Certificate of Clearance or Exemption shall be attached; c) Release to the duly authorized representatives of the Revenue District Officer two (2) copies of the list with the triplicate copies of the Certificates of Clearance or Exemption; and d) Allow authorized BIR examiners access to records of registration of transfers of real properties including those registered prior to the effectivity of this Agreement. cdasia This Memorandum Agreement shall take effect immediately. IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures this 11th day of November, 1981, Quezon City, Philippines. (SGD) FEDERICO B. ALFONSO, JR. Acting Commissioner Land Registration Commissioner (SGD) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue All those concerned are hereby enjoined to be guided accordingly. (SGD) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

11-13-81 Revenue Memorandum Circular No. 38-81 November 13, 1981 REVENUE MEMORANDUM CIRCULAR NO. 38-81 Subject : Publishing Ministry Circular No. 39 of the Ministry of Justice. To : All Revenue Service Chiefs, Regional Directors, Revenue District Officers and all Others Concerned. For the information and guidance of all concerned, there is published hereunder Ministry Circular No. 39 of the Ministry of Justice. "Republika ng Pilipinas Ministri ng Katarungan Ministry of Justice Manila Office of the Minister TO : All Concerned SUBJECT : Duty of Officials and Employees of registries of Deeds to see to it that Internal Revenue Laws and Regulations concerning documentary stamps in the registration of legal and/or commercial documents be strictly complied with. cd Acting Commissioner Ruben Ancheta of the Bureau of Internal Revenue has invited the attention of this Ministry to reported instances of non-implementation of Internal Revenue Laws and Regulations concerning the payment of documentary stamps in the registration of and/or notarization of legal and commercial documents, resulting in the loss of revenues to the government. cd i Wherefore, the following procedures are hereby prescribed and ordered to be strictly observed in the registration of legal and/or commercial documents: 1. The documents should be affixed with the correct amount of documentary stamps or accompanied by the BIR confirmation receipt, if the amount of tax exceeds P10.00; 2. To fix responsibility, the Register of Deeds himself must cancel the affixed documentary stamps forthwith and before the documents are filed with the registry records; and 3. Documentary stamps should be properly pasted and not merely stapled on the document. Strict compliance herewith is hereby enjoined. acd October 15, 1981. (SGD) RICARDO C. PUNO Minister of Justice All those concerned are hereby enjoined to be guided accordingly. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-07-81 Revenue Memorandum Circular No. 39-81 December 7, 1981 REVENUE MEMORANDUM CIRCULAR NO. 39-81

Subject : Loss of Ninety-three (93) Sets of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Numbers 0811552-F to 0811600-F, inclusive, and 0811757-F to 0811800-F, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned Notice is hereby given of the loss of ninety-three sets of Revenue Official Receipts, to wit: cd ---------------------------Inclusive Serial Numbers : Quantity ---------------------------0811552-F to 0811600-F : Forty-nine (49) Sets 0811757-F to 0811800-F : Forty-four (44) Sets ---------------------------The above Revenue Official Receipts were reported lost while in the custody of ESPINOSO CUSTODIO, Acting Collection Agent of Dimalungan, Aurora. aisa dc Internal Revenue Officers, Employees and Others Concerned are requested to promptly notify this Office in case the above-mentioned Revenue Official Receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-05-82 Revenue Memorandum Circular No. 1-82 November 5, 1982 REVENUE MEMORANDUM CIRCULAR NO. 1-82 Subject : Place of filing by a BRANCH of its percentage tax returns covering gross receipts or earnings and payment of the tax due thereon. To : All internal revenue officers and others concerned. For the information of all concerned, quoted hereunder is the pertinent portion of Section 193 of the Tax Code, as amended by Presidential Decree No. 1773: "Sec. 193. Payment of percentage taxes: "(a) In general. "(2) Where to file. - Except in cases where the Commissioner otherwise permits, the percentage tax returns required to be filed in the preceding paragraph shall be filed with the Revenue District Officer, Collection Agent, or duly authorized Treasurer of the Municipality in which such person has his legal residence or principal place of business in the Philippines." (Underscoring supplied) Also quoted hereunder are Sections 4 and 6 of Revenue Regulations No. 6-81 dated January 28, 1981, implementing the above-quoted provisions of the Tax Code: "Sec. 4. Where to file. - The percentage tax return shall be filed with the Revenue District Officer, Collection Agent or authorized Municipal Treasurer at the taxpayer's

legal residence or principal place of business in the Philippines, or in any other place where the Commissioner may authorize. aisa dc "Sec. 6. When and where to pay the tax. The quarterly and final annual percentage taxes shall be paid upon the filing of the corresponding return to the authorized officer mentioned in Section 4 hereof. Similar provisions govern the filing of the gross receipts tax returns and payment of the tax due from banks, non-bank financial intermediaries and finance companies. (Sec. 6, Revenue Regulations No. 12-80) Considering that a branch is considered a "separate or distinct establishment or place where business subject to tax is conducted" and, therefore, subject to separate privilege tax (Section 188, Tax Code), this Office believes that a branch has its legal residence or principal place of business in its area of business operations so that the said branch has to file its percentage tax return and pay the tax declared therein with the Revenue District Officer, Collection Agent or authorized Municipal Treasurer of the place where said branch is located. For the purpose of effecting compliance with this Circular, the Regional Director of the place where a branch is located should inform said branch that henceforth the percentage tax return covering the gross receipts of the branch should be filed with the above mentioned revenue officials. Under the foregoing provisions of law and regulations, the Commissioner of Internal Revenue may authorize the filing of percentage tax returns and payment of the tax due thereon in any place other than the taxpayer's legal residence or principal place of business. And if the Commissioner authorizes the filing or percentage tax returns in any other place, it shall be mandatory for the taxpayer to file the return therein. The foregoing provisions of this Circular are hereby made applicable to the returns filed by persons subject to percentage tax under Title V of the Tax Code, except those subject to the sales tax under Sections 194, 195, 196, 197, 199 and 201. The returns filed by banks, non-bank financial intermediaries, finance and insurance companies are also covered by this Circular. acd In the case of royalty taxes on minerals and mineral products, the lessee, owner or operator of the mine must file the corresponding return with the Revenue District Officer, Collection Agent or the Treasurer of the city or municipality of the place where the mine is located. (Sec. 256, Tax Code, as amended by Batas Pambansa Blg. 84; Sections 6 and 7, Revenue Regulations No. 13-80) In the case of charges on forest products, the licensee or his authorized agent shall file the log scale report (considered as the return) upon which the correct forest charges shall be based, with the Revenue District Officer, Collection Agent or duly authorized Treasurer of the Municipality of the place where the timber concession is located or where the forest products were gathered and removed. (Sec. 281, Tax Code, as amended by Batas Pambansa Blg. 83; Sec. 7, Revenue Regulations No. 2-81) The Regional Office having the jurisdiction of the place where the branch return is filed shall undertake the examination of said return, but the report of investigation shall be forwarded to the Regional Office having jurisdiction over the taxpayer's main office for purposes of consolidation where the taxpayers are listed as falling within the investigative jurisdiction of Divisions in the National Office, the examination of the branch return shall be made by the National Office, however if there are strong reasons and or evidence to indicate the existence of fraud in the filing of the returns, representations should be made

by the Region concerned to have a joint investigation of the branch return with the proper Division of the National Office. casia It is desired that this Circular be given as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-04-82 Revenue Memorandum Circular No. 2-82 January 4, 1982 REVENUE MEMORANDUM CIRCULAR NO. 2-82 Subject : Professional responsibility of Certified Public Accountants in the preparation of Audited/Published Financial Statements. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, No. 9 of Letter of Instructions No. 1107 dated 16 February, 1981 is hereby reproduced: casia "9. The Professional Regulation Commission shall see to it that Certified Public Accountants auditing the books of commercial paper issuers comply with the highest standards of the auditing profession and shall adopt such disciplinary measures as may be found appropriate in cases where misrepresentations exists in the audited/published financial statements." FEATURES: 1. Certified Public Accountants (CPA) are subject to administrative disciplinary action by the Professional Regulation Commission for any misrepresentation in the financial statements prepared and audited by them. 2. All BIR personnel concerned are hereby directed to report all misrepresentations uncovered or found in any audited financial statement to the Tax Fraud Division for evaluation and confirmation of the misrepresentation. In case evidence of misrepresentation is strong, a complaint shall be filed with the Professional Regulation Commission against the CPA concerned so that the appropriate disciplinary measure may be imposed. 3. Reports of misrepresentations shall not be limited to financial statements of commercial paper issuers; all cases of misrepresentations by CPA's shall be fully investigated and duly reported to the Professional Regulation Commission. 4. The following formal requirements for financial statements shall likewise be verified: a) The auditor's report should be properly dated and manually signed; casia b) The coverage of the financial report should be identified; c) There must be a statement certifying to the accountant/s Professional Tax Receipt (PTR) Number; d) The complete mailing address of both the client and the auditor must be clearly indicated; e) If the certification is made under a firm name, the name of the certifying partner must be stated; f) The report should bear the dry seal of the certifying accountant, the auditor's board certificate number, and the date and place of issuance of the PTR.

The financial statement shall be returned for completion if any omission of any of the foregoing requirements is noted. cda All internal revenue officers and others concerned shall give this circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-04-82 Revenue Memorandum Circular No. 3-82 January 4, 1982 REVENUE MEMORANDUM CIRCULAR NO. 3-82 Subject : Publishing Pertinent Portions of Ministry of Justice Circular No. 39, dated October 15, 1981, relative to the strict compliance with Internal Revenue Laws and Regulations concerning documentary stamps in the registration of legal and/or commercial documents. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, certain portions of the Ministry of Justice Circular No. 39 are quoted as follows: "Wherefore, the following procedures are hereby prescribed and ordered to be strictly observed in the registration of legal and/or commercial documents: casia "1. The documents should be affixed with the correct amount of documentary stamps or accompanied by the BIR confirmation receipt, if the amount of tax exceeds P10.00; "2. To fix responsibility, the Register of Deeds himself must cancel the affixed documentary stamps forthwith and before the documents are filled with the registry records; and "3. Documentary stamps should be properly posted and not merely stapled on the document." cdasia It is desired that this Circular be included and given emphasis in the tax information campaign being undertaken by the Office. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-18-82 Revenue Memorandum Circular No. 4-82 November 18, 1982 November 18, 1982 REVENUE MEMORANDUM CIRCULAR NO. 4-82 Subject : Guidelines On Renewal Of Permits For Tobacco Dealers To : All Internal Revenue Officers and Others Concerned. In connection with the renewal of permits for tobacco dealers, the following guidelines are hereby prescribed: 1. For persons to be authorized to buy native leaf tobacco including tobacco wrappers from farmers, they shall be issued a permit to be designated as L-3N. aisa dc 2. Dealers who are allowed to purchase tobacco from other permittees shall be issued the L-3 permit. Henceforth, holders of L-3 permits shall not be allowed to buy tobacco directly from farmers. casia

This Circular shall take effect immediately. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-21-82 Revenue Memorandum Circular No. 5-82 January 21, 1982 REVENUE MEMORANDUM CIRCULAR NO. 5-82 Subject : Publishing the Features of Batas Pambansa Blg. 135 Amending Certain Provisions of the National Internal Revenue Code of 1977, as amended, and Providing for a Modified Gross Income Tax System. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the following are the essential features of Batas Pambansa Blg. 135. The schedular approach is used whereby income is classified into three categories, namely: I. Compensation Income of Individuals; II. Income of Individuals from business, trade, profession, or vocation; and III. Passive Incomes. cdtai CATEGORY I, COMPENSATION INCOME A. Coverage. Income arising from employer-employee relationship including the following: 1. Salaries, wages, compensation, emolument and honoraria; 2. Bonuses, 3. Allowances such as transportation, representation, entertainment and the like; 4. Fees (including director's fees paid to a director who is at the same time an employee of the payor); 5. Taxable pensions; and 6. Other incomes of similar nature, including compensation paid in kind. B. Exclusions. - The following income items are excluded: 1. Actual, moral, exemplary and nominal damages received by the employee or his heirs pursuant to a final judgment or compromise agreement arising out of or related to an employer-employee relationship. 2. All items enumerated under Section 29 of the Tax Code, as follows: a. Life insurance; b. Amount received by insured as return of premium; c. Gift, bequests, and devices; d. Interest on Government securities; e. Compensation for injuries and sickness; f. Income exempt under treaty; g. Retirement benefits, pensions, gratitudes, etc.; and h. Miscellaneous items 1) Income received from their investments in the Philippines in loans, stocks, bonds or other domestic securities, or from interest on their deposits in banks of the Philippines by (a) foreign governments (b) financing institutions owned, controlled or enjoying refinancing from them, and (c) international or regional financing institutions established by governments. cd

2) Income derived from any public utility or from the exercise of any essential governmental function accruing to the Government of the Philippines or to any political subdivision thereof. 3) Income derived as rewards under R.A. No. 2338, as amended by P.D. No. 707. 4) Interest earned from deposits maintained with a bank under the expanded foreign currency deposit system. C. Exemption. - Only personal and additional exemptions are deductible. These are: For single individuals or those legally separated from his other spouse (P3,000) For Heads of Family (P4,500) For Married Persons (P6,000) For each qualified dependent but not exceeding four (P2,000) Where dependents exceed four, additional exemption for each child who qualified as dependent prior to January 1, 1980 (P1,000) D. Deductions. - The following are not allowed. 1. Optional standard deduction; 2. Itemized deduction; 3. Deduction for the working wife. E. Tax Rates. - The rates range from 0% to 35% divided into 10 brackets as follows: Not over P2,500 0% Over P 2,500 but not over P 5,000 P 1% Over P 5,000 but not over P 10,000 P 25+3% of excess over P 5,000 Over P 10,000 but not over P 20,000 P 175+7% of excess over P 10,000 Over P 20,000 but not over P 40,000 P 875+11% of excess over P 20,000 Over P 40,000 but not over P 60,000 P 3,075+15% of excess over P 40,000 Over P 60,000 but not over P 100,000 P 6,075+19% of excess over P 60,000 Over P 100,000 but not over P 250,000 P 13,675+24% of excess over P 100,000 Over P 250,000 but not over P 500,000 P 49,675+29% of excess over P 250,000 Over P 500,000 P 122,175+35% of excess over P 500,000 F. Withholding Tax. - The employer shall deduct and withhold the tax determined in accordance with the new withholding tax table. The withholding tax is either of the following: 1. Final Withholding tax - Taxes withheld from the following employees deriving compensation income from only one employer shall be deemed final: a. Single or married individuals but legally separated; b. Heads of family;

c. Married individuals when not legally separated and only one of the spouses receives compensation income; and d. Married individuals when not legally separated and both spouses receive compensation income from the same employer. In this case, the employer shall treat the spouses as a single taxable unit by aggregating their joint compensation income in determining the correct withholding tax. acd 2. Creditable Withholding tax - taxes withheld by more than one employer from individuals, whether single, head of family or married, shall not be deemed final but may be applied against the tax due per income tax return required to be filed under Section 45a(2) of the Tax Code. Every employee receiving wages shall file with his employer a signed withholding exemption certificate, in triplicate, on Form W-4, relating to the number of withholding exemption units claimed which in no case shall exceed the number to which he is legally entitled. A new withholding exemption certificate shall be filed within 10 days from the time a change in his personal status and number of dependents occur. New employees shall file the required certificate with their employers within 5 days from the start of employment. If an employee fails or refuses to file the withholding exemption certificate, the employer shall withhold taxes prescribed under the schedule for Zero exemption of the withholding tax table. The personal exemption to which an employee is entitled depends upon his status as single, married, head of family, and the number of his qualified dependents (i.e., legitimate, recognized natural or adopted children in accordance with Section 23 of the Tax Code, as amended). G. Filing of Returns 1. In the case of employees whose withholding tax is deemed final, the employers shall file BIR Form No. W2-A to be accomplished by both the employer and the employee. 2. Employee whose withholding tax are deemed creditable shall file the revised income tax returns (BIR Form No. ) required to be filed under Sec. 45a(2) of the Tax Code. 3. The required return shall be filed on or before the eighteenth day of March of each year. H. Penalties. - Compensation income earners subject to final income tax are exempt from penalties for non-filing of income tax returns and non-payment of tax on such compensation income. I. Taxpayers Covered. - Residents, whether citizens or aliens shall be governed by the above scheme relative to compensation income. CATEGORY II BUSINESS INCOME, INCOME FROM PROFESSION, TRADE OR VOCATION A. 1. 2. Coverage. - Income includes the following: Business and/or trade income; Income from profession and vocation; and

3. All other incomes not covered by Category I (taxable compensation income) and Category III (passive income). B. Exclusions. - The following incomes are excluded: 1. Gross compensation income and items of gross income subject to the final income tax, and 2. All items enumerated under Section 29 of the Tax Code. C. Exemptions. - The following scheme governs: 1. The same levels of personal and additional exemptions as in Category I are allowed. 2. For taxpayers with mixed incomes (both Category I and Category II incomes), personal and additional exemptions shall be deducted first from Category I income and any excess thereof shall be deductible from Category II income. cda D. Deductions. 1. Taxpayers, except non-resident aliens, may elect a standard deduction in an amount not exceeding 10% of his gross income without any maximum limit, or the itemized deduction. 2. Items of deduction are allowed only if they are related to business, trade, profession or vocation, except in the case of charitable and other contributions which shall remain deductible as provided by BP 45 all other personal deductions such as tuition fees, medical expenses, nonbusiness interest and the like are disallowed. E. Tax Rates. - The rates range from 5% to 60% divided into five brackets as follows: Not over P10,000 5% Over P 10,000 but not over P 30,000 P 500+15% of excess over P 10,000 Over P 30,000 but not over P 150,000 P 3,500+30% of excess over P 30,000 Over P 150,000 but not over P 500,000 P 39,500+45% of excess over P 150,000 Over P 500,000 P 197,000+60% of excess over P 500,000 F. Filing. - Income earners under Category II, and mixed income earners (both under Category I and Category II) on a single return with two schedules, one for Category I and the other for Category II, shall file their income tax returns on or before April 15 of each year. CATEGORY III. PASSIVE A. Tax Rates 1. Passive income received by resident citizens and resident aliens: a. Interest - The aggregate amount of exempt interest of Philippine currency bank deposit accounts increased to P1,000 a year or P250 per quarter (originally P800 a year of P200 per quarter). Final tax of 20% on interest from trust fund and similar arrangements. [P.D. No. 1739 imposes the final tax of 15% on savings deposit and 20% on time deposits and yield or any other monetary benefit from deposit substitutes.] b. Dividends and share of individual partner-Final tax of 15% of dividends received from a domestic corporation and the share of an individual partner in a partnership subject to tax.

c. Royalties - Final tax of 15%. d. Prizes and other winning - Final tax of 15% on prizes (except prizes amounting to P3,000 or less which shall be subject to tax under Sec. 21(b) at 5% to 60% rates) and other winnings (except Philippine Charity Sweepstakes winnings). 2. Passive income received by non-resident aliens, whether or not engaged in trade or business in the Philippines. Final tax of 30% on dividends, share in the net profits of a taxable partnership, interest, royalties, prizes and other winnings. acd B. Withholding The tax on dividends, interest, royalties, prizes and other winnings shall be withheld by the payor-corporation and/or person, and shall be final. C. Exclusion. Interest earned from deposits maintained with a bank under the expanded foreign currency deposit system. Effectivity. - The foregoing amendments shall be applicable to incomes earned on January 1, 1982. For purposes of BP 135, the implementation thereof shall be governed by the rules and regulations to be promulgated by the Minister of Finance. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-05-82 Revenue Memorandum Circular No. 6-82 February 5, 1982 REVENUE MEMORANDUM CIRCULAR NO. 6-82 Subject : Prescribing a Uniform Exchange Rate of U.S. Dollars and Other Foreign Currencies to Philippine Pesos for Internal Revenue Tax Purposes. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the following rules are hereby prescribed to govern the conversion of U.S. dollars and other foreign currencies to Philippine pesos for internal revenue tax purposes effective January 1, 1982: cd i 1. In all cases where, in the determination of the income, percentage and other internal revenue tax liabilities of any individual, whether citizen or alien, resident or nonresident, or corporation, whether domestic or foreign, there is a need to convert the amount of tax due from U.S. dollars to Philippine pesos, the conversion rate to be applied shall be P8.20 to U.S. $1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank, whichever is higher. 2. In the case of internal revenue tax liabilities computed foreign currencies other than U.S. dollars, the amount of tax due in foreign currency shall first be converted to U.S. dollars at the prevailing rate of exchange between the two currencies. The resulting amount shall then be converted to Philippine pesos in accordance with the rule stated in the preceding paragraph. casia ENFORCEMENT AND PUBLICITY

All Internal Revenue Officers and others charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and to give it the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-08-82 Revenue Memorandum Circular No. 7-82 February 8, 1982 REVENUE MEMORANDUM CIRCULAR NO. 7-82 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial Number A-3766382. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: ---------------------Serial Number : Quantity ---------------------A-3766382 : One (1) Set ---------------------The above Revenue Tax Receipt was reported as missing by JULIAN C. SANGALANG, Revenue Collector III, Lemery, Batangas, on June 24, 1980. cdasia Internal Revenue Officers, Employees, and Others Concerned are requested to promptly notify this Office in case the above-mentioned Revenue Tax Receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner By: (Sgd.) ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-17-82 Revenue Memorandum Circular No. 8-82 March 17, 1982 REVENUE MEMORANDUM CIRCULAR NO. 8-82 Subject : Clarification as to proper tax base in the computation of the 15% branch profit remittance tax. To : All Internal Revenue Officers and Others Concerned. In BIR Ruling No. 016-79 dated April 18, 1979 anent the 15% branch profit remittance tax as an income tax imposed under Section 24(b) (2), National Internal Revenue Code of 1977, as amended, this Office ruled that ". . . . the 15% branch profit remittance tax should be based on the amount of P1,504,330.43 representing profit derived from the disposition of the shares, 15% of which is P225,649.57." It will be noted that the basis of computation in accordance with the ruling is profit without deduction for the 15% tax. cd

On January 21, 1980, this Office, in another ruling issued in answer to a query as to the tax base upon which the 15% branch profit remittance tax should be imposed held that "the 15% branch profit remittance tax shall be imposed on the profit actually remitted abroad and not on the total branch profit out of which the remittance is to be made." As the latter ruling seems to have given rise to some misconception that it modified BIR Ruling No. 016-79 with respect to the manner of computation of the 15% branch profit remittance tax, this Office issued a clarificatory ruling on Oct. 23, 1981 explaining "The above ruling (of January 21, 1980) merely emphasized the distinction between the total branch profit which is remittable and that portion of the branch profit actually remitted without deduction on account of the tax to be paid. casia "The phrase 'any profit remitted abroad' should be construed to mean the profit to be remitted. Hence, there must be an actual remittance, as distinguished from profit which is remittable. "To give an example: If the total branch profit is P115,000.00 but the amount to be remitted is only P100,000.00, then the tax base should be P100,000.00. "Moreover, the 15% profit remittance tax imposed by Section 24 (b) (2) of the Tax Code is an income tax, it is therefore clear that the same is non-deductible from the gross (profit) income. Inasmuch as the tax is an exaction on profit realized for remittance abroad, the deduction thereof as an expense is not sustained by law since nowhere in Section 30 of the Tax Code is it provided that the same is deductible. Besides deductions from gross income are matters of legislative grace, what is not expressly granted by law is deemed withheld." acd Considering that the 15% branch profit remittance tax is imposed and collected at source, necessarily the tax base should be the amount actually applied for by the branch with the Central Bank of the Philippines as profit to be remitted abroad. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-02-82 Revenue Memorandum Circular No. 9-82 April 2, 1982 REVENUE MEMORANDUM CIRCULAR NO. 9-82 Subject : Loss of Forty (40) Sets of Auxiliary Invoices for Timber Products (BIR Form No. 14.05) bearing Serial Nos. 116241 to 116280, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of forty (40) sets of Auxiliary Invoices for Timber, to wit: -----------------------------Serial Number : Quantity -----------------------------116241 - 116280 : Forty (40) Sets -----------------------------The above Auxiliary Invoices were reported lost while in the custody of EDILBERTO O. DIAZ, Acting Revenue Collection Agent of Las Navas, Northern Samar. cda

Internal Revenue officers, employees, and others concerned are requested to promptly notify this Office in case the above-mentioned Auxiliary Invoices are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By: (Sgd.) TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-08-82 Revenue Memorandum Circular No. 10-82 March 8, 1982 May 16, 1981 REVENUE MEMORANDUM CIRCULAR NO. 10-82 Subject : Publishing Administrative Order No. 450 eliminating the requirement of a Letter of Confirmation and Tax Clearance for participating in public bidding and other purposes, by repealing Administrative Order No. 66. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of Administrative Order No. 450. ADMINISTRATIVE ORDER NO. 450 "ELIMINATING THE REQUIREMENT OF A LETTER OF CONFIRMATION AND TAX CLEARANCE FOR PARTICIPATING IN PUBLIC BIDDING AND OTHER PURPOSES, BY REPEALING ADMINISTRATIVE ORDER NO. 66. "WHEREAS, our people has developed a high sense of civic responsibility as shown by the improved level of compliance and increasing amount of taxes paid over the years; cdasia "WHEREAS, some administrative requirements became archaic, and onerous that their continued enforcement unduly burdens the public; "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby repeal Administrative Order No. 66 requiring the presentation of a Letter of Confirmation (BIR Form No. 19.65-A-1) and BIR Tax Clearance (BIR Form No. 17.61) as prerequisites to participate in any public bidding with the government or any of its agencies including government-owned and controlled corporations and for other similar purposes. "Done in the City of Manila, this 16th day of May, in the year of Our Lord, nineteen hundred and eighty-one." By the President: (SGD.) JUAN C. TUVERA Presidential Executive Assistant This administrative Order is prescribed to simplify procedures thru the elimination or reduction of red tape and the facilitation of action on papers related to contracts with government agencies/entities. cd The Administrative Order took effect May 16, 1981, the date when it was approved.

All internal revenue officers and others concerned are hereby enjoined to be guided accordingly to give this Circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-19-82 Revenue Memorandum Circular No. 11-82 April 19, 1982 REVENUE MEMORANDUM CIRCULAR NO. 11-82 Subject : Publishing Order No. 792 implementing the final 25% increase in Specific Tax Rates on Distilled Spirits, Wines, Compounded Liquors and Fermented Liquors pursuant to Batas Pambansa Blg. 82. To : All Internal Revenue Officials, Employees and Others Concerned. For the information and guidance of all concerned, quoted hereunder are the pertinent provisions of Executive Order No. 792. "Sec. 1. The final 25% increase in specific tax rates on distilled spirits, wines and compounded liquors and fermented liquors under Section 145(a); 146(b) to (h); and 147, respectively, of the National Internal Revenue Code, as amended by BP 82 shall take effect on April 12, 1982." Thus, the revised rates of specific tax on distilled spirits, wine, compounded liquors and fermented liquors under Section 145, 146 and 147 of the NIRC, as amended are as follows: aisa dc 1. Sec. 145. Specific tax on distilled spirits. a) Domestic distilled spirits - P2.40/proof liter Local spirits (or "lambanog") produced by small distillers - P1.56/proof liter b) 2. a) Imported or produced from imported raw materials - P35/proof liter Sec. 146. Specific tax on wines and compounded liquors. Domestic sparkling wines regardless of proof - P12/liter Imported sparkling wines regardless of proof - P26.40/liter. b) Domestic still wines containing 14% alcohol or less except those manufactured from locally grown raw materials - P2.00/liter Imported still wines containing 14% alcohol or less - P4.40/liter c) Domestic still wines

containing more than 14% alcohol- P4.00/liter Imported still wines containing more than 14% alcohol- P8.80/liter Imitation wines containing more than 25% alcohol shall be taxed as distilled spirits. d) e) Compounded liquors containing 17 1/2% alcohol or less - P0.96/liter Compounded liquors containing more than 17 1/2% but not more than 25% alcohol - P1.34/liter Compounded liquors containing more than 25% but not more than 32 1/2% alcohol - P1.72/liter Compounded liquors containing more than 32 1/2% but not more than 40% alcohol - P2.10/liter

f)

g)

h)

Compounded liquors containing more than 40% alcohol - P2.66/liter In computing the specific tax on compounded liquors, the amount of specific tax paid on distilled spirits used in the compounding of such intoxicating beverage shall be credited against the tax due on the compounded liquors. "Compounded liquor" shall include any intoxicating beverage whatever, concocted by or resulting from the mixture of or addition to distilled spirits, either before or after rectification, of any coloring matter, flavoring extract or essence or other kind of wine, liquor or other ingredient. acd 3. Sec. 147. Specific tax on fermented liquors. Beer, lager, beer, ale, porter, and other fermented liquors (except tuba, basi, tapuy and similar domestic fermented liquors) - P1.20/liter Imported fermented liquor - P2.40/liter In accordance with the provisions of Executive Order No. 792, the revised rates of specific tax shall take effect April 12, 1982. cd i It is desired that this Circular be given the widest publicity possible. Sgd. RUBEN B. ANCHETA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-12-82 Revenue Memorandum Circular No. 12-82 May 12, 1982 REVENUE MEMORANDUM CIRCULAR NO. 12-82 Subject : Publishing Batas Pambansa Blg. 221 revising the rates of capital gains tax on certain shares of stock. To : All Internal Revenue Officials, Employees and others Concerned. For the information and guidance of all concerned, Batas Pambansa Blg. 225 and 221 are one and the same law which revised the rates of capital gains tax on certain sales of shares of stock. This particular law was inadvertently numbered as BP Blg. 225 in Revenue Regulations No. 2-82. It was only after Revenue Regulations No. 2-82 was published that the Batasang Pambansa, thru its Finance Committee, informed the Bureau of the corrected number of the law. The salient features of Batas Pambansa Blg. 221 are: The sale of shares of stocks is subject to capital gains tax under Sec. 34(g) of the NIRC as amended. 1. Shares of stocks listed and traded through a local stock exchange - 1/4 of 1% of the gross selling price of the shares of stock sold, exchanged or transferred. 2. Shares of stocks not traded through a local stock exchange - On net capital gains derived during the taxable year from sales, exchanges, transfers or similar transactions of shares of stock, Not over P100,000 10% Over P100,000 20% The revised rates of tax under Batas Pambansa Blg. 221 took effect on March 25, 1982, the date of approval of the law. casia It is desired that this Circular be given as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-28-82 Revenue Memorandum Circular No. 13-82 May 28, 1982 May 28, 1982 REVENUE MEMORANDUM CIRCULAR NO. 13-82 Subject : Procedure in the issuance of permits to use loose leaf books of accounts, records, invoices and receipts. To : All Regional Directors, Revenue District Officers, Collection Agents and Others Concerned. In order to insure effective control and supervision in the issuance of permits to use loose leaf books of accounts, records, invoices and receipts, the following procedure is hereby promulgated for the guidance of all concerned: 1. All requests for permit to use loose leaf books of accounts, records, invoices and receipts should be filed either in the office of the Revenue District Officer or the Regional Director. The said request should be referred to the fieldmen of the revenue district who has jurisdiction over the taxpayer, for appropriate investigation. cdtai The investigation should be conducted in accordance with the following:

a) The necessity of the use of the loose leaf forms requested should be determined and the reason or reasons for recommending the approval or disapproval of the request should be clearly stated in the report; b) The report should, likewise, include a statement of the privilege or fixed taxes paid by the taxpayer by citing the official receipt/confirmation number, date of payment, amount paid and the corresponding paragraph and schedule, including a statement whether the business of the taxpayer has been duly registered with the Bureau of Internal Revenue. The examiner should investigate whether all the privilege and fixed taxes due on the activities engaged in by the taxpayer have been duly paid; c) The taxpayer should be informed by the investigating examiner that a condition precedent to the issuance of a permit to use loose leaf invoices and receipts is that the taxpayer upon receipt of the permit should immediately register with the Collection Agent or the Revenue District Officer, a register which should be a bound book. The bound book should show in detail and in column the serial numbers of the invoices or receipts printed for use by the business on the left side of the book. Every additional printing should be recorded on the same side of the bound book. On the right hand side, the serial number of the invoices and receipts used during the week, together with the total amount involved should be entered weekly. 2. Upon receipt by the Revenue District Officer of the report of the investigating examiner, he must check with his IBM list of delinquent accounts to determine whether the taxpayer owes anything to the Bureau. If the taxpayer is delinquent in the payment of his tax liabilities, such fact should be communicated to the taxpayer with the request that the delinquent taxes should be paid, otherwise his request to use loose leaf forms will not be given due course. If there is no delinquency, on the part of the taxpayer, the report should be forwarded to the Regional Office. casia 3. Upon receipt by the Regional Office, the reports should be processed to determine further through the Collection Branch whether the taxpayer has no delinquent tax liabilities, through the Tax Fraud Unit to determine whether the taxpayer has derogatory information regarding tax evasion, and through the Assessment Branch to determine whether the taxpayer has any pending report for processing which will involve a big amount of deficiency tax. In case of positive information on any of the above-mentioned branches, the Regional Director should inform the taxpayer of such fact, informing him that his request cannot be given due course. 4. In the preparation of the permit to use loose leaf invoices which should be prepared for the signature of the Regional Director, the taxpayer should be required to bind the loose leaf forms within fifteen (15) days after the end of his taxable year and the condition to register a bound book for recording of the serial numbers of invoices printed and serial numbers of invoices used within the week and the amount involved. The letter should likewise contain a statement that if the taxpayer is discovered to have violated any of the provisions of the bookkeeping regulations, his permit to use loose leaf forms will be immediately cancelled. 5. The permit should be duly numbered and a permit register should be kept in the Assessment Branch showing the number of the permit, name of the taxpayer, address, nature of loose leaf to be used and such other information as may be necessary for the keeping of the register.

6. All permits to be issued under this Circular are to be considered on a permanent basis unless otherwise revoked. cda This Revenue Memorandum Circular revokes all Circulars or Orders previously issued which are inconsistent herewith. This Circular shall become effective upon approval. (Sgd.) Ruben B. Ancheta Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-03-82 Revenue Memorandum Circular No. 14-82 June 3, 1982 REVENUE MEMORANDUM CIRCULAR NO. 14-82 Subject : Loss of One (1) Pad of Authority to Cancel Assessment (BIR Form No. 17.58) bearing Serial Numbers 391301 to 391350, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) pad of Authority to Cancel Assessment, to wit: cdasia -----------------------------Inclusive Serial Number : Quantity -----------------------------391301 - 391350 : One (1) pad - (Fifty Sets) -----------------------------The above ATCAs which were reported missing by Mr. REYNALDO A. CUEVAS, Revenue Accountable Forms Custodian of the Accountable Forms Division, have been cancelled and all official transactions involving the use of said form are therefore invalidated. casia Internal revenue officers, employees, and others concerned are requested to promptly notify this office in case any of the above mentioned ATCA (used or unused) is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-O By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-12-82 Revenue Memorandum Circular No. 15-82 July 12, 1982 REVENUE MEMORANDUM CIRCULAR NO. 15-82 Subject : Loss of One Hundred (100) sets of Auxiliary Invoice for Timber Products (BIR Form No. 14.04) bearing Serial Nos. 306661 to 306760, inclusive. To : All Internal Revenue Officers, Employees. and Others Concerned.

Notice is hereby given of the loss of one hundred (100) sets of Auxiliary Invoice for Timber, to wit: cd -----------------------------Inclusive Serial Number : Quantity -----------------------------306661 to 306760 : One Hundred (100) Sets -----------------------------The above Auxiliary Invoices were reported lost while in the custody of Mr. EDILBERTO O. DIAZ, Revenue Collection Agent of Las Navas, Northern Samar. casia Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned Auxiliary Invoices are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-13-82 Revenue Memorandum Circular No. 16-82 July 13, 1982 REVENUE MEMORANDUM CIRCULAR NO. 16-82 Subject : Loss of One (1) Set of Revenue Tax Receipt (CB RCO Form No. 02-02) bearing Serial No. A-6756456. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: --------------------------Serial Number : Quantity --------------------------A-6756456 : One (1) Set --------------------------The above Revenue Tax Receipt was reported missing last December 29, 1981 while in the custody of Mrs. AMEPHILIA B. DANLAG, Revenue Collection Agent of Compostela, Cebu. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above revenue tax receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-O By: ROMULO M. VILLA Deputy Commissioner

TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-07-82 Revenue Memorandum Circular No. 17-82 June 7, 1982 REVENUE MEMORANDUM CIRCULAR NO. 17-82 Subject : Loss of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts, to wit: aisa dc -----------------------------Inclusive Serial Number : Quantity -----------------------------4233051-G to 4233100-G : 1 pad (Fifty Sets) 4233173-G : 1 piece (Collecting Officer's Copy) 4233174-G : 1 piece (Taxpayer's Copy) : 1 piece (Auditor's Copy) 4233175-G : 1 piece (BIR National Office Copy) : 1 piece (Auditor's Copy) : 1 piece (Collecting Officer's Copy) 4233176-G : 1 set 4233179-G : 1 piece (BIR National Office Copy) : 1 piece (Taxpayer's Copy) : 1 piece (Collecting Officer's Copy) 4233390-G : 1 piece (Collecting Officer's Copy) 4233398-G : 1 piece (Collecting Officer's Copy) -----------------------------The above receipts which are under the accountability of Mr. EFREN P. CASTAEDA, Revenue Attache, in London, England, were reported as missing or lost last March 22, 1982. acd Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned revenue official receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-O By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-14-82 Revenue Memorandum Circular No. 18-82 June 14, 1982 REVENUE MEMORANDUM CIRCULAR NO. 18-82

Subject : Loss of one (1) pad of Revenue Officials (BIR Form No. 25.24) bearing serial numbers 3702001-G to 3702050-G, inclusive. To : All internal Revenue Officers, Employees, and Other concern. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipt, to wit: aisa dc -----------------------------Inclusive Serial Number : Quantity -----------------------------3702001-G to 3702050-G : One (1) Pad (Fifty sets) -----------------------------The above receipts were reported as missing or lost on April 28, 1982 while in the custody of ALFONSO B. BRAVO, Revenue District Collection Supervisor, Tarlac, Tarlac. cdtai Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned revenue official receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition of use thereof. RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-O By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-21-82 Revenue Memorandum Circular No. 19-82 June 21, 1982 REVENUE MEMORANDUM CIRCULAR NO. 19-82 Subject : Loss of One (1) Stub of Revenue Official Receipts (BIR Form No. 25.24) Serially Numbered from 3695351-G to 3695400-G, inclusive. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) stub of Revenue Official Receipts, to wit: cd -----------------------------Inclusive Serial Number : Quantity -----------------------------3695351-G -3695393-G : 43 copies (Collecting Officer's Copy) 3695394-G : 4 copies (Cancelled set) 3695395-G : 3 copies (BIR National Office, Auditor's and Collecting Officer's Copies) 3695396-G : 3 copies -do3695397-G : 3 copies -do3695398-G : 3 copies -do-

3695399-G : 3 copies -do3695400-G : 4 copies (Unused set) -----------------------------The above receipts were reported as missing or lost on May 11, 1982 while in the custody of OLIVE V. CRUZ, Revenue Collection Agent, Bagac, Bataan. Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case any of the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-O By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-13-82 Revenue Memorandum Circular No. 20-82 August 13, 1982 August 13, 1982 REVENUE MEMORANDUM CIRCULAR NO. 20-82 Subject : Dissemination of the withholding tax primer and adoption of the new withholding tax forms To : All Internal Revenue Officers and Others Concerned. A. Objective - This Revenue Memorandum Circular is being issued to define necessary activities supportive to the nationwide implementation effort of the Withholding Tax System to assure its success. acd B. Dissemination of the Withholding Tax Primer. The Withholding Tax Primer, which contains information on Withholding Tax Laws and Regulations, complete instructions on the filing and filling-up of Withholding Tax Forms and Tax Tables to assist taxpayers in the computation of taxes, should be disseminated to all Withholding Agents and other interested parties in as wide an area as possible. This effort is necessary not only to increase tax consciousness among the public, but also to ensure that correct Withholding Tax information is available to the public, specially Withholding Agents, whenever and wherever needed. Further, the dissemination of the Primer should be on a continuing basis. cdtai C. Adoption of the New Withholding tax forms Concurrent with the dissemination of the Withholding Tax Primer will be the adoption of the new Withholding Tax Forms for use by Withholding Agents in filing their returns. By the last quarter of 1982, Withholding Agents should be required to use the new Forms for the period as prescribed by Withholding Tax Laws and Regulations, and for every other period thereafter. Necessarily, the adoption of the new Withholding Tax Forms nationwide will require the appropriate Procedural Responsibilities attendant to the Forms to be also implemented concurrently. cdtai D. Effectivity. This Memorandum Circular shall take effect immediately.

(Sgd.) Ruben B. Ancheta Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-10-82 Revenue Memorandum Circular No. 21-82 August 10, 1982 REVENUE MEMORANDUM CIRCULAR NO. 21-82 Subject : Loss of 4,663 pieces of internal revenue regular labels bearing Serial Number 0000046138 to 0000050800 and 91, 912 pieces of internal revenue auxiliary labels bearing Serial Numbers 0000008089 to 0000100000 for repacked distilled spirits (B-15). To : All Internal Revenue Officers, Employees, and others concerned. Notice is hereby given of the loss of 4,663 pieces of internal revenue regular and 91,912 pieces of internal revenue auxiliary labels for repacked distilled spirits (B-15), to wit: cda -------------------------------Inclusive Serial Numbers : Quantity -------------------------------0000046138 to 0000050800 : 4,663 Regular Labels ME-6 0000008089 to 0000100000 : 91,912 Auxiliary Labels EC-6 -------------------------------The above internal revenue labels were reported by Revenue Regional Director Jesus Parado of Revenue Region No. 3A, San Fernando, Pampanga, to have been lost while in the premises and custody of Washington Distillery, Inc. of Sta. Lucia, San Fernando, Pampanga, while they are in its repacking establishment (B-15-3077). cd Internal Revenue Officers, Employees and Others Concerned are requested to promptly notify this Office in case the abovementioned internal revenue labels are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-16-82 Revenue Memorandum Circular No. 22-82 August 16, 1982 REVENUE MEMORANDUM CIRCULAR NO. 22-82 Subject : Publishing Letter of Instructions No. 1264 To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Letter of Instruction No. 1264, pertaining to the ban on importation, manufacture, distribution, sale and display of certain types of toy firearms and explosives. cdt "LETTER OF INSTRUCTION NO. 1264

"To

The Minister of National Defense The Minister of Local Government The Minister of Finance The Minister of Trade and Industry The Minister of Justice

"Subject

: Ban on the Importation, Manufacture, Distribution, Sale and Display of Certain Types of Toy Firearms and Explosives "WHEREAS, there is now a proliferation of imported toy firearms and explosive which, except for its weight, are replicas in appearance, measurements, color and parts as its genuine counterpart firearms and explosives; cd i "WHEREAS, these toy firearms and explosives could mislead the public into believing that these firearms are in fact genuine and as such could be used, as in fact reports indicate that these had been used, for illegal and/or criminal purposes by unscrupulous individuals; "WHEREAS, in the interest of public safety and general welfare there is an imperative need to ban the importation, manufacture, distribution, sale and display of these types of toys; "NOW, THEREFORE, I, FERDINAND E. MARCOS, do hereby order and direct the following: "1. Henceforth, the importation, manufacture, distribution, sale and display of toy firearms and explosives which, even if dissimilar to in some aspects, are replicas in appearance, measurements, color and parts as its genuine counterpart firearms and explosives, are prohibited. "2. The Minister of Finance, Trade and Industry, Local Government and National Defense shall issue necessary rules and regulations to implement these instructions. cdtai "3. The Philippine Constabulary/Integrated National Police is directed to confiscate all toy firearms and explosives such as described in paragraph 1 hereof, which are displayed or otherwise used for illegal criminal purposes. "Strict compliance herewith is enjoined. "Done in the City of Manila, this 31st day of July in the year of Our Lord, nineteen hundred and eighty-two." (SGD.) FERDINAND E. MARCOS President of the Philippines All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this Circular as wide publicity as possible. cda TOMAS C. TOLEDO Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-27-82 Revenue Memorandum Circular No. 23-82 August 27, 1982 REVENUE MEMORANDUM CIRCULAR NO. 23-82

Subject : Publishing the letter of the Commissioner of the Professional Regulation Commission regarding public accountants who are not included in the roster of Certified Public Accountants. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the letter of the Professional Regulations Commissioner is quoted as follows: PROFESSIONAL REGULATION COMMISSION MANILA July 30, 1982 "Commissioner Ruben Ancheta Bureau of Internal Revenue Quezon City Sir: "This has reference to the letter of vice Mayor Lolita Valenzuela of Koronadal, South Cotabato reporting that Wilson E. Obuyes, Sr. and Monserrat J. Obuyes are engaged in the practice of public accountancy. "Wilson E. Obuyes, Sr. and Monserrat J. Obuyes are not in the roster of certified public accountants kept by the Commission. casia "The affidavits and other documents submitted to us show that they are practicing the accountancy profession contrary to the third paragraph of Section 22 of Presidential Decree No. 692. "It is requested that the Bureau dishonor any financial statements or other documents submitted or signed by the aforementioned persons as certified public accountants, and that such financial statements and other documents be referred to this Commission for appropriate action. "Thank you. Very truly yours, (Sgd.) Eric C. Nubla Commissioner In view hereof, all officials and others concerned are directed to: 1. Dishonor any financial statement or other documents submitted or signed by the aforementioned persons as certified public accountants; 2. Refer immediately to the Professional Regulation Commission through this Office, for appropriate action, said financial statements and/or other documents in your possession, if any; cdtai 3. Keep tight control measures and be on the lookout for impostors who may be posing as Certified Public Accountants in your respective jurisdiction. cdt (Sgd.) Tomas C. Toledo Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-06-82 Revenue Memorandum Circular No. 24-82 September 6, 1982 REVENUE MEMORANDUM CIRCULAR NO. 24-82 Subject : Loss of One (1) Stub of Revenue Official Receipts (BIR Form No. 25.24) containing Forty-nine (49) Receipts (Collecting Officer's Copy only) bearing

Serial Numbers 4679351-G to 4679399-G, inclusive, and One (1) Unused Set bearing Serial Number 4679400-G. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) stub of Revenue Official Receipts (BIR Form No. 25.24) containing issued and unissued receipts, to wit: cdtai -----------------------------Serial Number : Quantity -----------------------------4679351-G to 4679399-G : Forty-nine (49) Pieces (Collecting : Officer's Copy only) 4679400-G : One (1) set (Unused) -----------------------------The above revenue official receipt were reported as missing or lost while in the custody of Mr. AMER S. MAGLANOC, Revenue Collector I, Carranglan, Nueva Ecija. Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case any of the abovementioned revenue official receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-O By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-27-82 Revenue Memorandum Circular No. 25-82 September 27, 1982 REVENUE MEMORANDUM CIRCULAR NO. 25-82 Subject : Lifting of Investigation Ban and Allowing the Issuance of Letters of Authority to Investigate 1981 Tax Cases. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, notice is hereby given that effective today, the ban on the investigation of internal revenue tax liabilities for 1981 as imposed by Revenue Memorandum Order No. 25-82 is hereby lifted. Accordingly, letters of authority for investigation of 1981 tax cases can now be issued. However, within 15 days from date hereof, Revenue District Officers shall submit a report to the Revenue Service Chief, National Assessment Office, thru their Regional Directors, on whether or not cdt a. reports of investigation on all terminated cases have already been submitted; b. all reports of accomplishment already due under BIR Form No. 40.01, (1) to (5), and BIR Form No. 40.21 have been submitted within the prescribed period; and c. all prescribing cases have been or are being acted upon in accordance with Revenue Memorandum Order No. 16-80 dated May 9, 1980.

The same report shall also be submitted within the same period by the Division Chiefs of the investigating divisions in the National Office to the Revenue Service Chief, Sector Operations Office. On the basis of the said report, examiners who have been remiss in complying with the above requirements should not be issued letters of authority to investigate 1981 tax cases until after they shall have submitted the required reports. cda In the investigation of 1981 internal revenue tax cases, priority should be given to the investigation of taxpayers whose internal revenue tax payments have declined in 1980, in accordance with the behest contained in Revenue Memorandum Order No. 25-82. (Sgd.) Ruben B. Ancheta Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-01-82 Revenue Memorandum Circular No. 26-82 October 1, 1982 REVENUE MEMORANDUM CIRCULAR NO. 26-82 Subject : Publishing the Revised Withholding Regulations No. 6-82 on Compensation Income To : All Internal Revenue Officers, Withholding Agents and others Concerned. For the information and guidance of all concerned, notice is hereby given that the regulations on compensation income had been revised, and shall be known as Revenue Regulations No. 6-82, effective October 1, 1982, the date of its approval. Its salient features are: cd 1. Year-end adjustment that will insure that the total amount of tax deducted and withheld by an employer is equal to the tax on the annualized compensation income of an employee, except in the cases of an employee having multiple employers, of employed husband and wife with separate employers, and other situations like the termination of employment during the taxable year; 2. Appropriate tables and guidelines for the computation of tax to be withheld on compensation of citizens for services rendered outside the Philippines; cd i 3. Calculation in cases where substantial and irregular supplementary compensation is paid; and 4. Needful clarifications. RUBEN B. ANCHETA Acting Commissioner TAN: A5239-J1139-A-O Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-18-82 Revenue Memorandum Circular No. 27-82 November 18, 1982 REVENUE MEMORANDUM CIRCULAR NO. 27-82 Subject : Publishing Section 27 of Executive Order No. 748 of the President dated 17 March 1982. To : All Internal Revenue Officers, Employees and Others Concerned. For the information and guidance of all concerned, quoted hereunder is Section 27 of Executive Order No. 784 dated 17 March 1982:

"Sec. 27. Repealing Clause. - All laws, decrees, orders, proclamations, rules, regulations, or parts thereof, which are inconsistent with any of the provisions of the Executive Order are hereby repealed or modified accordingly, Provided, however, that Sections 24, 24-a and 26 of Republic Act No. 2067, as amended, are hereby re-affirmed in respect to the Authority, its line agencies and its attached entities." casia FEATURES: Executive Order No. 784 reorganized the National Science Development Board and its agencies into a National Science and Technology Authority. By virtue of Section 27 of Executive Order No. 784, the National Science and Technology Authority is reassuming the certification functions for tax purposes of the National Science and Development Board in accordance with Sections 24 and 24-a of RA No. 2067, as amended. The certification functions refer to: (a) certification by the NSDB that such foundations and funds are dedicated to scientific pursuits (Sec. 24 of RA 2067). (b) certification of the NSDB that such articles are imported solely for scientific and technological research and development and not for barter, sale or hire (Sec. 24-a of RA 2067). Section 24 of RA No. 2067, as amended, provides, among others that all funds contributed to the support and maintenance of such foundations and their projects as well as specific research and development projects undertaken by private individuals and educational institutions, shall be tax-exempt and deductible from the donor's income tax returns, upon certification by the Board that such foundations and funds are dedicated to scientific pursuits. This restores the authority of the National Science & Development Board (now the National Science and Technology Authority) to certify whether or not the doneeinstitution is indeed dedicated to scientific pursuits for tax deductibility purposes. In view hereof, the registration requirements and procedures under Section 5 of BIR-NEDA Regulations No. 1-81 as amended implementing Batas Pambansa Blg. 45 are amended accordingly. cdasia It should be noted, however, that deductibility of donations shall apply only to individuals with business incomes and that fixed-income earners are not allowed such deductions as a result of the introduction of the modified gross income tax under Batas Pambansa Blg. 135. Sec. 24-a of RA No. 2067, as amended and as implemented by NSDB Policy Instructions No. 12 provides that any provision of existing laws to the contrary notwithstanding, apparatus, instruments, utensils, equipment, and materials may be imported into the Philippines, whether or not foreign exchange has been allocated by the Central Bank for the payment of such importations, free from all taxes and duties, upon certification of the NSDB that such articles are imported solely for scientific and technological research and development and not for barter, sale or hire. In case such articles are subsequently conveyed or transferred to other parties for a pecuniary consideration, taxes and duties shall be collected thereon at double rate provided for under existing laws, payable by the transferor. The NSDB shall promulgate the rules and regulations to implement this provision. Under Executive Order No. 784, the certificate shall now be issued by the NSTA. It is desired that this Circular be given as wide a publicity as possible.

RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-22-82 Revenue Memorandum Circular No. 28-82 December 22, 1982 REVENUE MEMORANDUM CIRCULAR NO. 28-82 Subject : Treatment of fixed or variable transportation, representation and other allowances, and extension of time to furnish BIR Form W-2. To : All Internal Revenue Officers, Withholding Agents and Others Concerned. A. FIXED ALLOWANCES. In order to remove any doubt that fixed or variable allowances for transportation, representation and other allowances, are considered items of compensation subject to withholding of tax, paragraph c of Section 2 of Revenue Regulations No. 6-82, effective October 1, 1982, is quoted hereunder: "(c) In general. - Fixed or variable transportation, representation and other allowances, which are received by a public officer or employee, or officer or employee of a private entity, in addition to the regular compensation fixed for his position or office is compensation subject to withholding. cd "Amounts paid specifically - either as advance or reimbursement for transportation, representation and other bona-fide ordinary and necessary expenses incurred or reasonably expected to be incurred by the employee in the performance of his duties in the business of the employer are not compensation subject to withholding. However, if the reimbursement exceeds the actual expenses, the excess if not returned to the employer constitutes taxable compensation. Transportation and other reimbursed expenses must be identified either by making a separate payment or by specifically indicating the separate amounts where both compensation and expense allowances are combined in a single payment." Any other treatment is contrary to the express provision of Section 28(b) of the Tax Code, as amended by Batas Pambansa Blg. 135, which specifically includes allowances for "transportation, representation, entertainment" as items of gross compensation. Hence, that portion of BIR Ruling No. 164-82, dated May 6, 1982, holding that "Consequently, commutable allowances, i.e., fixed allowances given to employee become reimbursements or advances, as the case maybe, if the employee makes an accounting or liquidation that the said allowances were actually spent in the performance of his duties," is deemed superseded. B. TIME TO FURNISH W-2 FOR 1992 EXTENDED. This being the initial year of implementation of the withholding tax on compensation income requiring the filing and furnishing of restructured forms, and under the authority of Section 95(c) of the National Internal Revenue Code, the time to furnish the certificate of Income Tax Withheld on Compensation, BIR Form W-2, to employees is extended to March 10, 1983, to give adequate time for its accomplishment by employers/withholding agents. cd i RUBEN A. ANCHETA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-04-83 Revenue Memorandum Circular No. 1-83 January 4, 1983 REVENUE MEMORANDUM CIRCULAR NO. 1-83 Subject : Modification of Revenue Memorandum Circular No. 28-82 regarding Treatment of Fixed or Variable Transportation, representation and other allowances To : All Internal Revenue Officers and others concerned. A closer analysis of Section 2(c) of Revenue Regulations No. 6-82, which was quoted in Revenue Memorandum Circular No. 28-82 shows that transportation and representation allowances proven to be incurred for the benefit of the employer thru accounting/liquidation procedures, are not includible in the taxable income of the employees; and, such interpretation has been correctly reflected in BIR Ruling No. 16482 dated May 6, 1982. The rationale or purpose of the ruling is to give Offices and employees the opportunity to prove that the ultimate beneficiary of said allowances is the Office or employer. Such a right to present proof should not be denied or impaired. BIR Ruling No. 164-82 is, therefore, maintained. cd i While this Office will allow the exercise of this right, it will, however, provide also the necessary guidelines in the liquidation/accounting of such allowances with the end in view or preventing such schemes as may be resorted to in order to reduce the income tax liabilities of employees. The guidelines will be issued shortly. casia This modifies, accordingly, Revenue Memorandum Circular No. 28-82 insofar as the treatment of allowances is concerned. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-28-82 Revenue Memorandum Circular No. 2-83 September 28, 1982 September 28, 1982 REVENUE MEMORANDUM CIRCULAR NO. 2-83 Subject : Letter of Instructions No. 1263 by his Excellency President Ferdinand E. Marcos. To : All Internal Revenue Officers and Others Concerned. Following is the reproduced copy of Letter of Instructions No. 1263 for the information and guidance of all concerned. "LETTER OF INSTRUCTIONS NO. 1263 To: The Ministry of Local Government The Ministry of Finance The Ministry of the Budget The Ministry of Justice The National Economic and Development Authority The National Census and Statistics Office The Commission on Elections, and all Ministries, Bureaus, Offices, Agencies and Government Instrumentalities,

including government-owned and controlled corporations. WHEREAS, Letter of Instructions No. 1175 directs, among others, the Ministry of Local Government (MLG) to come up with a complete list of barangays nationwide to enable the National Census and Statistics Office to finalize the population census at the barangay level; cdtai WHEREAS, in compliance to the aforementioned directive, the MLG has submitted an integrated barangay list which shall, from now on, be considered official for all purposes; WHEREAS, cognizant of the fact that the integrated barangay list shall be indispensable in the formulation and implementation of governmental programs and projects, the said list should be regularly updated, verified and validated; and WHEREAS, to avoid future discrepancies of figures on the number of barangays, there is a need to pinpoint a specific agency to serve as a central source of barangay data and information. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order and direct as follows: 1. For purposes of systematic recording of barangay data, the Operations Monitoring and Support Office of the Ministry of Local Government shall serve as the sole source of information. Said Office shall be tasked to regularly update, verify and validate the total number of barangays nationwide; establish and maintain a comprehensive data bank; and disseminate relevant information in connection therewith, without prejudice to its designated Ministry functions. cdt 2. All queries and/or requests, emanating from concerned government entities, on the total number of barangays and other related matters shall be coursed through the aforementioned office for appropriate action. This Letter of Instructions shall take effect immediately. Done in the City of Manila, this 29th day of July, in the year of Our Lord, nineteen hundred and eighty-two. (Sgd.) FERDINAND E. MARCOS President of the Philippines Please be guided accordingly. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-01-83 Revenue Memorandum Circular No. 3-83 January 1, 1983 REVENUE MEMORANDUM CIRCULAR NO. 3-83 Subject : Publishing Executive Order No. 863 Increasing the Retail Prices and Specific Taxes on Cigarettes. To : All Internal Revenue Officials, Employees and Others Concerned. For the information and guidance of all concerned, hereunder are the salient features of Executive Order No. 863: I. The revised maximum retail prices and specific taxes on cigarettes are as follows: cda A. Locally manufactured:

Cigarettes packed in 30's NEW MAXIMUM RETAIL PRICE PER PACK SPECIFIC TAX EXCEEDING NOT EXCEEDING PER THOUSAND (No Change) P1.10 P3.00 P1.10 1.45 5.00 1.45 8.00 B. Locally manufactured: 1. Cigarettes packed in 20's - Local Brand New Maximum New Tax Rates Retail Price Per Pack Per Thousand/Per Pack P1.85 or less P17.00 P0.34 1.86 P2.15 23.00 0.46 2.16 2.45 25.00 0.50 2.46 2.85 28.00 0.56 2.86 3.25 40.00 0.80 3.26 3.75 48.00 0.96 Over P3.75 58.00 1.16 2. Cigarettes packed in 20's - Foreign Brand New Maximum New Tax Rates Retail Price Per Pack Per Thousand/Per Pack P2.02 or less P25.50 P0.51 2.03 P2.38 34.50 0.69 2.39 2.70 37.50 0.75 2.71 3.13 42.00 0.84 3.14 3.65 60.00 1.20 3.66 4.23 72.00 1.44 Over P4.23 87.00 1.74 C. Imported Cigarettes Old Rate New Rate P87.00 P92.00 II. The safeguards as well as the specific requirements under existing provisions of Section 149 of the National Internal Revenue Code, as amended, were retained in Executive Order No. 863. cda III. The provisions of Executive Order No. 863 shall take effect on January 1, 1983. All Internal Revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-12-83 Revenue Memorandum Circular No. 4-83 January 12, 1983 REVENUE MEMORANDUM CIRCULAR NO. 4-83

Subject : Certificate of Income Tax Withheld on Compensation, BIR Form W-2. To : All Internal Revenue Officers, Withholding Agents and Others Concerned. In view of the numerous requests for permission either to use the old Statement of Taxes Withheld on Wages or the revised Certificate of Income Taxes Withheld on Compensation (BIR Form W-2) without the itemization of the regular and supplementary compensations, and this being the initial year of implementation of the withholding tax on compensation under the modified gross income taxation, withholding agents are hereby permitted either to use the old BIR Form W-2 or the new BIR Form W-2 without the need to itemize the regular and supplementary compensations. cdtai It is understood, however, that the permission is given only for statements or certificates for compensation paid for taxable year 1982. cdtai (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-11-83 Revenue Memorandum Circular No. 5-83 October 11, 1983 REVENUE MEMORANDUM CIRCULAR NO. 5-83 Subject : Publishing Revenue Regulations No. 16-81 renumbering a pertinent subsection thereof. To : All Internal Revenue Officers, Employees and Others Concerned. For the information and guidance of all concerned quoted hereunder is Sec. 2 of RR No. 16-81 changing "Sec. 1(h) Other trust arrangements. -" into "Sec. 1(k) Other trust arrangements" on account of the amendment of Sec. 1(h) of RR 13-78 by RR 6-79, to read as follows: "Sec. 2. Section 1 of said Revenue Regulations No. 13-78 is hereby further amended by adding a new paragraph denoted as paragraph (k) to read as follows: cdtai "k. Other trust arrangements. - On yield/income, not previously subjected to a final tax, pertaining to all other trust and similar arrangements, whether covered by a trust indenture/agreement or by an investment/portfolio management agreement or any other similar document involving the investment/management of funds: Provided, That any such arrangement (i) does not fall within the purview of the preceding Subsection (g) hereof, and (ii) is not characterized as a trust certificate under the definition of a trust certificate pursuant to Section 2(g) of Revenue Regulations No. 12-80, as amended by Revenue Regulations No. 8-81 - - - twenty per centum (20%)." "For this purpose, 'yield' shall mean the difference between the amount placed and the amount received upon maturity of the particular investment instrument by its terms by acceleration or otherwise." casia It is desired that this Circular be given as wide publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-18-83 Revenue Memorandum Circular No. 6-83 January 18, 1983

REVENUE MEMORANDUM CIRCULAR NO. 6-83 Subject : Loss of the Original Copy of Auxiliary Invoice (BIR Form No. 14.04) bearing Serial No. 508323. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) piece of Auxiliary Invoice, to wit: -------------------------Serial Number : Quantity ------------------------------508323 : One (1) piece (Original Copy) -------------------------The above Auxiliary Invoice was reported missing by the Revenue District Officer, Revenue District No. 43, San Jose, Occidental Mindoro. cda Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned auxiliary invoice is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-83 Revenue Memorandum Circular No. 7-83 February 18, 1983 April 1, 1983 REVENUE MEMORANDUM CIRCULAR NO. 7-83 Subject : Publishing Executive Order No. 872 Limiting the Tax Credit to Taxes Actually Paid in Computing Sales Tax on Manufactured Articles. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of Executive Order No. 872: EXECUTIVE ORDER NO. 872 LIMITING THE TAX CREDIT TO TAXES ACTUALLY PAID IN COMPUTING SALES TAX ON MANUFACTURED ARTICLES. "WHEREAS, under present law, taxes on tax-exempt articles which are used as raw materials in the manufacture of finished products are allowed as tax credit against sales taxes, although no taxes are actually paid on such tax-exempt articles; cd "WHEREAS, such concession results in substantial erosion of tax base considering that a tax credit is granted on the basis merely of an assumed payment; "WHEREAS, there is need to rationalize this incentive in accordance with the mandate of Presidential Decree No. 1816; "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, pursuant to the powers vested in me under Section 1 of Presidential Decree No. 1816; do hereby direct and order:

"Sec. 1. The pertinent provisions in Sections 194, 195, 196, 197, 199 and 201 of the National Internal Revenue Code, as amended, to the effect that the tax otherwise due on any raw material, part or accessory or other article which is exempt from tax shall be deemed to have been paid for the purpose of computing the sales tax due, are hereby repealed. "Sec. 2. Section 200 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: 'Sec. 200. - Tax on tax-exempt products of pioneer enterprises registered with the Board of Investments deemed paid. - Whenever a tax-exempt product of a pioneer enterprise registered with the Board of Investments is used in the manufacture or production of any article sold domestically, the sales or specific taxes otherwise due on such tax exempt product shall be credited against the sales tax due on the manufactured article.' cdt "Sec. 3. The Minister of Finance, upon recommendation of the Commissioner of the Bureau of Internal Revenue, shall promulgate the necessary rules and regulations for the implementation of this Executive Order. "Sec. 4. This Executive Order shall take effect April 1, 1983. "Done in the City of Manila, this 16th day of February in the year of Our Lord, Nineteen Hundred and Eighty-Three. (Sgd.) FERDINAND E. MARCOS President of the Philippines By the President: (Sgd.) JUAN C. TUVERA Presidential Executive Assistant" Salient Features of Executive Order No. 872 1. The "tax-deemed-paid" treatment given to tax-exempt raw material, part, accessory or other article used in the manufacture of a finished product subject to sales tax under Sections 194, 195, 196, 197, 199 and 201 of the Tax Code, as amended, is, as a general rule, no longer available to the manufacturer for purposes of tax credit against the sales tax due on the finished product. 2. Section 200 of the Tax Code, as amended, limits the application of the taxdeemed-paid treatment to the tax-exempt product of a pioneer enterprise registered with the Board of Investments used in the manufacture or production of any article sold domestically, so that only the sales or specific taxes otherwise due on such tax-exempt product shall be allowed as credit against the sales tax due on the finished article. aisa dc 3. The Executive Order takes effect on April 1, 1983. All internal revenue officials, employees and other concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-28-83 Revenue Memorandum Circular No. 8-83 February 28, 1983 REVENUE MEMORANDUM CIRCULAR NO. 8-83

Subject : Payments of the Four Per Cent (4%) Premium Tax by Insurance Companies. To : Revenue Service Chief, Revenue Regional Directors, Revenue District Officers, District Collection Supervisors, Revenue Collectors, Revenue Cash Clerks and Others Concerned. Quoted hereunder is the self-explanatory Circular Letter, dated June 30, 1981 issued by Honorable Gregoria Cruz Arnaldo, Insurance Commissioner for the information, guidance and compliance of all concerned, to wit: "Subject : Payment of the Four Per Cent (4%) Premium Tax required under Section 263 of the National Internal Revenue Code of 1977 (formerly Section 255 of the NIRC, as amended by P.D. No. 739) "To : All Insurance Companies Doing Business in the Philippines In order to facilitate the issuance of the corresponding confirmation/certification by the Bureau of Internal Revenue of the share of Premium Tax accruing to the Insurance Fund, all insurance companies doing business in the Philippines are hereby enjoined to pay the four per cent (4%) Premium Tax required under Section 263 of the National Internal Revenue Code of 1977 (formerly Section 255 of the NIRC, as amended by P.D. 739), to the nearest office or agency of the Philippine National Bank, Land Bank of the Philippines or the Philippine Veterans Bank. casia This Circular shall take effect immediately. (Sgd.) Gregoria Cruz Arnaldo Insurance Commissioner" In another Circular Letter, dated January 25, 1983 on the same subject matter, the Insurance Commissioner has enjoined all insurance companies doing business in the Philippines "to see to it that whenever payments are made, the right kind of tax (Premium Tax) and the Tax Numeric Code No. 7030-0001 be indicated in the Revenue Tax Receipt (RTR) and Central Bank Confirmation Receipt (CBCR) issued by BIR agents and by authorized agent banks, respectively." casia All internal revenue officers concerned are hereby directed to give this Revenue Memorandum Circular as wide a publicity as possible for proper implementation. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-07-83 Revenue Memorandum Circular No. 9-83 March 7, 1983 REVENUE MEMORANDUM CIRCULAR NO. 9-83 Subject : Prescribing a Uniform Exchange Rate of U.S. Dollars and Other Foreign Currencies to Philippine Pesos for Internal Revenue Tax Purposes. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the following rules are hereby prescribed to govern the conversion of U.S. dollars and other foreign currencies to Philippine pesos for internal revenue tax purposes effective January 1, 1983. cdtai

1. In all cases where, in the determination of the income, percentage and other internal revenue tax liabilities, of any individual, whether citizen or alien, resident or nonresident, or corporation, whether domestic or foreign, there is a need to convert the amount of tax due from U.S. dollars to Philippine pesos, the conversion rate to be applied shall be P9.50 to U.S.$1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank, whichever is higher. 2. In the case of Internal revenue tax liabilities computed in foreign currencies other than U.S. dollars, the amount of tax due in foreign currency shall first be converted into U.S. dollars at the prevailing rate of exchange between the two currencies. The resulting amount shall then be converted to Philippine pesos in accordance with the rules stated in the preceding paragraph. cdtai ENFORCEMENT AND PUBLICITY All Internal Revenue Officers and others charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and to give it the widest publicity possible. aisa dc (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-22-83 Revenue Memorandum Circular No. 10-83 February 22, 1983 REVENUE MEMORANDUM CIRCULAR NO. 10-83 Subject : Clarification on the amendments by Revenue Regulations No. 1-83 of Revenue Regulations No. 1-68 otherwise known as the PRIVATE RETIREMENT BENEFIT PLAN REGULATIONS. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the Private Retirement Benefit Plan Regulations had been amended by Revenue Regulations No. 1-83 dated October 28, 1982 with the following salient features, viz: 1. As a pre-requisite to the issuance of a certificate of qualification of a Retirement Plan, the regulations as amended (a) provide, in detail, for the documentation requirements for trusteed, non-trusteed and multi-employers plans; and (b) prescribe certain fees to be paid by the employer both upon issuance of the original certificate of qualification and the amendatory certificate of qualification. cdt 2. Trustees of all trusteed Retirement Plans only, i.e., whether their qualification for tax-exemption has been duly adjudicated by this Office before or after the effectivity of these amendatory regulations, are now required to file an annual information return on or before April 15 of each year with the Government and Tax Exempt Corporation Division of the Bureau of Internal Revenue, which return shall be subject to examination by examiners of the said Division. Therefore, insurance companies as insurers/custodian of funds of non-trusteed or insured plans, e.g., Private Retirement Benefit Plan established and maintained by an employer under a Deposit Administration Contract or Deferred Annuity Contract, as the case may be, and approved by this Office under R.A. No. 4917 (now Section 29(c)(7)(A) of the Tax Code), should continue to file the regular income tax returns (not the aforementioned

annual information return) for income or earnings derived from investments of the covered employees' retirement fund which are subject to income tax. 3. Penalty is prescribed for failure to file the required annual information return. cda These amendatory regulations shall take effect on March 16, 1983, or thirty (30) days after their publication on February 14, 1983 in the newspapers of general circulation. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-23-83 Revenue Memorandum Circular No. 11-83 March 23, 1983 REVENUE MEMORANDUM CIRCULAR NO. 11-83 Subject : Loss of the Duplicate or 2nd Copy of Capital Gains Certification Form (BIR Form No. 19.54 Taxable) To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) piece of Capital Gains Certification (BIR Form No. 19.54 Taxable) to wit: cdasia -------------------------Serial Number : Quantity -------------------------005406 : One (1) piece (Duplicate Copy) -------------------------The above Capital Gains Certification form was reported missing by the Revenue District Officer, Revenue District No. 38, Hilltop, Batangas City. cd i Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned capital gains certification form is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-27-83 Revenue Memorandum Circular No. 12-83 April 27, 1983 REVENUE MEMORANDUM CIRCULAR NO. 12-83 Subject : Loss of One (1) Set of Revenue Tax Receipt bearing Serial No. 0557881 to 0557900. To : All Internal Revenue Officers, Employees, and Others Concerned.

Notice is hereby given of the loss of one (1) set of Revenue Tax Receipt, to wit: -------------------------Serial Number : Quantity -------------------------0557881 to 0557900 : One (1) Set -------------------------The above Revenue Tax Receipt was reported missing last March 18, 1983 while in the custody of Mr. VIVENCIO M. GAPASIN, Revenue Examiner I, Revenue District No. 25, Revenue Region No. 4-A, South Manila. cd Internal Revenue Officers, Employees and Others concerned are requested to promptly notify this Office in case the above revenue tax receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc ROMULO M. VILLA Acting Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-22-83 Revenue Memorandum Circular No. 13-83 April 22, 1983 REVENUE MEMORANDUM CIRCULAR NO. 13-83 Subject : Publishing Section 193(b) of the National Internal Revenue Code as amended by Executive Order No. 883 To : All Internal Revenue Officials and Others Concerned: For the information and guidance all concerned, Section 193(b) of the National Internal Revenue Code as amended by Executive Order No. 883 is quoted as follows: cda "(b) Sales tax on imported articles. - When the articles are imported, the percentage taxes established in Sections 194, 195, 196, 197, 198, 199 and 201 of this Code shall be paid in advance by the importer, in accordance with the regulations promulgated by the Minister of Finance and prior to the release of such articles from Bureau of Customs' custody, based on the home consumption value or price (excluding internal revenue excise taxes) thereof, plus ten (10%) percent of such home consumption value or price, including postage, commission, customs duty and all similar charges, except freight and insurance, to be declared in an importer's return, plus [one hundred per centum of such total value in the case of articles enumerated in Sections 194 and 195; fifty per centum in the case of articles under Sections 196 and 197; and twenty-five per centum in the case of articles under Sections 198, 199 and 201]; TWENTY-FIVE PER CENTUM OF THE TOTAL VALUE OF SUCH ARTICLES. The tax imposed in this Section shall not apply to articles to be used by the importer himself in the manufacture or preparation of articles subject to specific tax; Provided, however, That where the National Economic & Development Authority certifies to the availability of local raw materials of sufficient quantity, comparable quality and price to meet the needs of manufacturers subject to specific tax the importation of such raw materials shall be subject to the tax herein imposed." cdt Executive Order No. 883 took effect on March 16, 1983. Therefore, all imported articles released from the Bureau of Customs' custody before said date shall be subject to the landed cost plus 100% mark-up in the case of articles enumerated in Sections 194 and

195, 50% in the case of articles under Sections 196 and 197 and 25% in the case of articles under Sections 198, 199 and 201. From March 16, 1983, all imported articles enumerated under said provisions (Sections 195 and 199, inclusive, and 201) shall be subject to the uniform mark-up of 25%. cdt It is desired that this Circular be given as wide as publicity as possible. ROMULO M. VILLA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-26-83 Revenue Memorandum Circular No. 14-83 April 26, 1983 REVENUE MEMORANDUM CIRCULAR NO. 14-83 Subject : Loss of Five (5) Copies of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions (BIR Form No. 19.54). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of five (5) copies of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions, to wit: cd -------------------------Serial Nos. : Quantity -------------------------042490 : One (1) piece (Triplicate Copy) 042491 : One (1) piece (Triplicate Copy) 042492 : One (1) piece (Triplicate Copy) 042786 : One (1) piece (Triplicate Copy) 044865 : One (1) piece (Duplicate Copy) -------------------------The above certificates which were reported missing by the Chief, Administrative Branch, Revenue Region 4-C, San Pablo City, have been cancelled and all official transactions involving the use of said forms are therefore invalidated. cdtai Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned certificates are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-17-83 Revenue Memorandum Circular No. 15-83 May 17, 1983 REVENUE MEMORANDUM CIRCULAR NO. 15-83

Subject : Prescribing the tax and increments to be collected from taxpayers who voluntarily amend inaccurate income tax returns up to August 1, 1983. To : All Internal Revenue Officers and Others Concerned. It has come to the attention of this Office that a substantial number of individual taxpayers have filed inaccurate income tax returns for the year 1982, the deadline for the filing of which fell last March 18. Many married taxpayers are said to have filed separate returns while others have increased the number of dependent children, resulting in lower income tax payments. cdt In order that the correct income taxes could be collected from these individual taxpayers, those who filed inaccurate income tax returns for CY 1982, including married couples who filed separate returns, may file amended consolidated income tax returns on or before August 1, 1983 to correct those previously filed, subject only to the payment of the following: 1. Such deficiency income tax as may be determined to be due under the amended return; 2. Twenty per cent (20%) interest per annum on such deficiency, as provided in Section 51 (d) of the Tax Code; and 3. Ten per cent (10%) surcharge on such deficiency as provided in Sec. 51 (e) (3) of the Tax Code. After August 1, 1983 the 50% fraud penalty will be imposed on the deficiency tax and criminal prosecution will be instituted against the erring taxpayers for filing false and fraudulent returns, in accordance with the provisions of Section 73, 2nd paragraph of the Tax Code. cd All internal revenue officers and others concerned should give this Circular as wide publicity as possible. (Sgd.) ROMULO M. VILLA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-31-83 Revenue Memorandum Circular No. 16-83 May 31, 1983 REVENUE MEMORANDUM CIRCULAR NO. 16-83 Subject : Treatment of Fixed or Variable Transportation, Representation/Entertainment and Other Allowances under Sec. 2(c) of Revenue Regulations No. 6-82. To : All Internal Revenue Officers and Others Concerned. In order to implement effectively Section 28(b) of the Tax Code, as amended, fixed or variable transportation, representation/entertainment and other allowances, which are given to a public officer or employee, or officer or employee of a private entity, shall be treated as compensation income, subject to withholding as prescribed in Sec. 2(c) of Revenue Regulations 6-82. acd Consequently, any ruling, circular or order, or part thereof, which is contrary to or inconsistent with the above stated treatment, is hereby deemed superseded. All Internal Revenue Officers are hereby enjoined to give this Circular the widest publicity possible. aisa dc (Sgd.) RUBEN B. ANCHETA

Commissioner of Internal Revenue TAN: A5239-V1139-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-11-83 Revenue Memorandum Circular No. 17-83 May 11, 1983 REVENUE MEMORANDUM CIRCULAR NO. 17-83 Subject : Loss of Director's Copy (Triplicate) of Set A-No. 335242 RR of BIR Form No. 19.65-A (Letter of Authority - RR). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of the triplicate copy of a Letter of Authority, to wit: -------------------------Serial Number : Quantity -------------------------A-No. 335242 RR : 1 sheet (Triplicate - Director's copy) -------------------------The above letter of authority with the missing triplicate copy as reported by Revenue District Officer FORTUNATO G. LAGMAY, Revenue District Office No. 90, Mati, Davao Oriental, has been cancelled and any official transaction involving the use of said set is therefore invalidated. aisa dc Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned form is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: TOMAS C. TOLEDO TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-27-83 Revenue Memorandum Circular No. 18-83 May 27, 1983 REVENUE MEMORANDUM CIRCULAR NO. 18-83 Subject : Loss of Six (6) Revenue Tax Receipts bearing Serial No. 9132620 to 9132625 To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of Six (6) Revenue Tax Receipts, to wit: Serial Number Quantity 9132620 to Six (6) Revenue Tax 9132625 Receipts The above Revenue Tax Receipts were reported missing last March 10, 1983 while in the custody of Mr. EMILIANO A. AGUILAR, Revenue Collection Agent, Cabanatuan City, Revenue Region No. 3-B, Valenzuela, Bulacan. cdt

Internal Revenue Officers, Employees, and Others Concerned are requested to promptly notify this Office in case the above revenue tax receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-24-83 Revenue Memorandum Circular No. 19-83 June 24, 1983 REVENUE MEMORANDUM CIRCULAR NO. 19-83 Subject : Amending Revenue Memorandum Circular No. 9-83 dated March 7, 1983 on the applicable uniform exchange rate of U.S. dollars and Other Foreign Currencies to Philippine Pesos for Internal Revenue Tax Purposes. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the following rules as amended are hereby prescribed to govern the conversion of U.S. dollars and other foreign currencies to Philippine pesos contained in RMC No. 9-83 dated March 7, 1983. casia (a) January 1 to June 22, 1983 - The conversion rate to be applied shall be P9.50 to US$1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank whichever is higher; (b) June 23 to December 31, 1983. The conversion rate to be applied shall be P11.00 to US$1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank whichever is higher. aisa dc ENFORCEMENT AND PUBLICITY All Internal Revenue Officers and Others charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and to give it the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-22-83 Revenue Memorandum Circular No. 20-83 June 22, 1983 REVENUE MEMORANDUM CIRCULAR NO. 20-83 Subject : Loss of Two (2) Copies of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions (BIR Form No. 19 54) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of two (2) copies of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions, to wit: cd Serial Number Quantity 020102 One (1) piece (Triplicate Copy) 020103 One (1) piece (Triplicate Copy) The above certificates, which were reported missing by the Revenue District Officer, Revenue District Office No. 38, Batangas City, have been cancelled and all official transactions involving the use of said form are therefore invalidated. aisa dc

Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned certificate forms are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-07-83 Revenue Memorandum Circular No. 21-83 July 7, 1983 July 7, 1983 REVENUE MEMORANDUM CIRCULAR NO. 21-83 Subject : Publishing Executive Order No. 900 To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 900, revising the rates of specific taxes on certain petroleum products. "EXECUTIVE ORDER NO. 900 "REVISING THE RATES OF SPECIFIC TAX ON CERTAIN PETROLEUM PRODUCTS "WHEREAS, the change in the international pricing system for petroleum and the consequent dismantling of the Consumer Price Equalization Fund make imperative adjustments in the prices of petroleum products to more realistic levels; cdtai "WHEREAS, in the restructuring of prices of petroleum products, it is likewise necessary to adjust for certain such products the specific tax component thereof in order to impose a ceiling on the profit which a company will realize therefrom; and "WHEREAS, the adjustments in the rates of specific taxes are necessary to attain an equal level with increases in prices of petroleum products without in any manner increasing the tax burden of the consuming public; "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution and by Section 290-B of the National Internal Revenue Code of 1977, as amended by Presidential Decree No. 1773, do hereby order: "Sec. 1. The rates on certain petroleum products prescribed in Section 153 of the National Internal Revenue Code is hereby revised as follows: "Sec. 153. Specific tax on manufacture oils and other fuels. - On refined and manufactured mineral oils and motor fuels, there shall be collected the following taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such: aisa dc "(a) Kerosene, per liter of volume capacity four and one-half centavo; "(b) Lubricating oils, per liter of volume capacity, eighty centavos; "(c) Naphtha, gasoline and all other similar products of distillation, per liter of volume capacity, one peso and thirty-four centavos: Provided, That on premium and aviation

gasoline, the tax shall be one peso and thirty-eight centavos and one peso, respectively, per liter of volume capacity; "(d) On denatured alcohol to be used for motive power, per liter of volume capacity, one centavo: Provided, That unless otherwise provided for by special laws, if the denatured alcohol is mixed with gasoline, the specific tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For the purpose of this subsection, the removal of denatured alcohol of not less than one hundred eighty degrees proof (ninety per centum absolute alcohol) shall be deemed to have been removed for motive power, unless shown to the contrary; "(e) Processed gas, per liter of volume capacity, three centavos; cd "(f) Thinners and solvents, per liter of volume capacity, sixty-one centavos; "(g) Liquefied petroleum gas, per kilogram, twenty-one centavos: Provided, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the specific tax on diesel fuel oil; "(h) Asphalts, per kilogram, twelve centavos; "(i) Greases, waxes and petrolatum, per kilogram, fifty centavos; "(j) Aviation turbo-jet fuel, per liter of volume capacity, sixty-four centavos." "Sec. 2. The rate prescribed in Section 156 of the National Internal Revenue Code is hereby revised as follows: "Sec. 156. Specific tax on diesel fuel oil. - On fuel oil, commercially known as diesel fuel oil, and on all similar fuel oils, having more or less the same generating power, per liter of volume capacity, twelve and three-fourth centavos, which tax shall attach to this fuel oil as soon as it is in existence as such." cd i "Sec. 3. This Executive Order shall take effect immediately. "DONE in the City of Manila, this 1st day of July, in the year of Our Lord, nineteen hundred and eighty-three." "(SGD.) FERDINAND E. MARCOS President Republic of the Philippines" Features of the Executive Order: 1. An increase in the specific tax on the following products: Old Rate New Rate a) Premium Gas. P1.10/liter P1.38/liter b) Regular Gas. 1.06 " 1.34 " 2. A decrease in the specific tax on the following products: a) Kerosene P0.09/liter P0.045/liter b) Diesel fuel 0.255 " 0.1275 " All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-19-83 Revenue Memorandum Circular No. 22-83 July 19, 1983 REVENUE MEMORANDUM CIRCULAR NO. 22-83

Subject : Implementation of withholding Tax on Compensation of Filipinos Employed in U.S. Military Bases/Facilities in the Philippines. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, notice is hereby given that 1. Effective October 1, 1983, the Philippine income tax shall be withheld from the compensation of Filipinos employed by the Armed Forces of the United States in connection with the construction, maintenance and operation of the United States bases/facilities; cdasia 2. The implementation of the withholding tax system has been initiated at the request of the Government of the Philippines to promote the convenience of the said employees in complying with their income tax obligations, and the Government of the United States in complying with that request, incurs no obligation with respect to any reduction in net compensation arising from the withholding of tax; 3. Each Filipino employee shall be required to accomplish the Employee's Withholding Exemption Certificate (W-4) in four (4) copies pursuant to the withholding tax laws and regulations. Three (3) copies thereof shall be filed with the authorized officer of the U.S. facility at the designated time and place. An employee who fails to file the withholding exemption certificate, or has other employers from whom he receives higher compensation than that from the Government of the United States, shall fall under the schedule for zero exemption. Likewise, when both spouses are employed, the wife shall also be considered as falling under the schedule for zero exemption; and 4. The employee shall pay the difference between the amount of the credit for tax withheld for three (3) months and the tax due on his income tax return for 1983, since his remuneration or compensation from January to September in this initial year of implementation has not been subjected to the withholding tax. cd All Internal Revenue Officers are hereby enjoined to give this Circular the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-19-83 Revenue Memorandum Circular No. 23-83 July 19, 1983 REVENUE MEMORANDUM CIRCULAR NO. 23-83 Subject : Loss of One (1) Set of Revenue Official Receipt (BIR Form No. 25.24) bearing Serial No. 6451351-G. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Official Receipt, to wit: acd -------------------------Serial Number : Quantity -------------------------6451351-G : One (1) Set -------------------------The above receipt which was reported missing by the Acting Accountable Forms Custodian, Revenue Region No. 1, Baguio City, has been cancelled and any official transaction involving the use of said form is therefore invalidated.

Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO TAN-T-4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-83 Revenue Memorandum Circular No. 24-83 September 7, 1983 REVENUE MEMORANDUM CIRCULAR NO. 24-83 Subject : Loss of Seven (7) Sets of Confirmation Receipts (BIR Form CB82-02-03.) To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of seven (7) sets of Confirmation Receipts, to wit: cdt -------------------------Serial Numbers : Quantity -------------------------A-9742874 : One (1) set -------------------------A-9742875 : One (1) set -------------------------A-10363743 : One (1) set -------------------------A-7597025 : One (1) set -------------------------A-7597050 : One (1) set -------------------------A-0684920 : One (1) set -------------------------A-0003515 : One (1) set -------------------------The above receipts which ware reported missing by the Chief, Accountable Forms Division, National Office, Diliman, Quezon City had been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdtai Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By:

TOMAS C. TOLEDO TAN-T-4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-83 Revenue Memorandum Circular No. 25-83 September 7, 1983 REVENUE MEMORANDUM CIRCULAR NO. 25-83 Subject : Loss of Seven (7) Sets of Confirmation Receipts (BIR Form CB82-02-03.) To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of seven (7) sets of Confirmation Receipts, to wit: acd -------------------------Serial Numbers : Quantity -------------------------A-8419126 : One (1) set -------------------------A-8419128 : One (1) set -------------------------A-8419129 : One (1) set -------------------------A-8419130 : One (1) set -------------------------A-8419172 : One (1) set -------------------------A-9742849 : One (1) set -------------------------A-9742850 : One (1) set -------------------------The above receipts which were reported missing by the Chief, Accountable Forms Division, National Office, Diliman, Quezon City had been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO TAN-T-4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-83 Revenue Memorandum Circular No. 26-83 September 7, 1983

REVENUE MEMORANDUM CIRCULAR NO. 26-83 Subject : Loss of Five (5) Sets of Revenue Payment Order (RTR) (BIR Form CB RCO-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of five (5) sets of Revenue Payment Order, (RTR) to wit: cd --------------------------Serial Numbers : Quantity --------------------------A-6756456 : One (1) Set --------------------------A-3762251 to A-3762275 : Twenty five (25) sets --------------------------A-8120218 & A-8122086 : Two (2) sets --------------------------B-0147576 : One (1) set --------------------------10307439, 10307441, 10324684 : Three (3) sets and --------------------------10324702 : One (1) set --------------------------The above receipts which were reported missing by the Chief, Accountable Forms Division, National Office, Diliman, Quezon City, had been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-83 Revenue Memorandum Circular No. 27-83 September 7, 1983 REVENUE MEMORANDUM CIRCULAR NO. 27-83 Subject : Loss of Five (5) Sets of Revenue Payment Order (RTR) (BIR Form CB RCO-02-02) To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of five (5) sets of Revenue Payment Order, (RTR) to wit: cd i --------------------------

Serial Numbers : Quantity -------------------------A-3766382 : One (1) set -------------------------A-8605478 : One (1) set -------------------------A-8283054 : One (1) set -------------------------A-8169983 : One (1) set -------------------------A-8823807 : One (1) set -------------------------The above receipts which were reported missing by the Chief, Accountable Forms Division, National Office, Diliman, Quezon City had been cancelled and any official transactions involving the use of said forms are therefore invalidated. cda Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO TAN-T-4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-30-83 Revenue Memorandum Circular No. 28-83 August 30, 1983 REVENUE MEMORANDUM CIRCULAR NO. 28-83 Subject : Loss of One (1) Set of Revenue Official Receipt (BIR Form No. 25.24) bearing Serial No. 6451351-G To : All Internal Revenue Officers, Employees, and Others Concerned Notice is hereby given of the loss of one (1) set of Revenue Official Receipt, to wit: acd -------------------------Serial Number : Quantity -------------------------6451351-G : One (1) set -------------------------The above revenue official receipt which was found missing per Inspection Report of the Regional Auditor of Baguio City, dated June 14, 1983, has been cancelled and all official transactions involving the use of said receipt is therefore invalidated. cdtai Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA

Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-02-83 Revenue Memorandum Circular No. 29-83 August 2, 1983 REVENUE MEMORANDUM CIRCULAR NO. 29-83 Subject : Loss of One (1) Set of Revenue Official Receipt (BIR Form No. 25.24) bearing Serial No. 6101963-G. To : All Internal Revenue Officials, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Official Receipt, to wit: -------------------------Serial Number : Quantity -------------------------6101963-G : One (1) set -------------------------The above revenue official receipt which was reported missing by Mr. JOSUE A. SINEL, Revenue Collection Agent, Ibajay, Aklan, has been cancelled and all official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-30-83 Revenue Memorandum Circular No. 30-83 August 30, 1983 REVENUE MEMORANDUM CIRCULAR NO. 30-83 Subject : Loss of Six (6) Sets of Revenue Official Receipts (BIR Form No. 25.25) bearing Serial Nos. 5069780-G, 5069809-G, 5069880-G, 5069893-G, 6237000-G, and 6237050-G. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of six (6) sets of Revenue Official Receipts, to wit: cd i -------------------------Serial Numbers : Quantity --------------------------

5069780-G : One (1) Set 5069809-G : - do 5069880-G : - do 5069893-G : - do 6237000-G : - do 6237050-G : - do -------------------------The above revenue official receipts which were discovered missing by Mrs. MILAGROSA P. EBUEZA, Cash Clerk, Office of the Collection Agent, Bislig, Surigao del Sur, have been cancelled and all official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-22-83 Revenue Memorandum Circular No. 31-83 August 22, 1983 REVENUE MEMORANDUM CIRCULAR NO. 31-83 Subject : Loss of Quadruplicate Copy of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions (BIR Form No. 19.54) bearing Serial Number 063637. To : All Internal Revenue Officials, Employees and Others Concerned. Notice is hereby given of the loss of quadruplicate copy of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions, to wit: --------------------------Serial Number : Quantity --------------------------063637 : One (1) piece (quadruplicate copy) --------------------------The above copy of the said Certificate which was reported missing by Mr. Ramon I. Yago, Revenue Clerk I of Revenue District No. 29, Caloocan City, has been cancelled together with the remaining three copies of the set and all transactions involving the use of the said set are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned certificate form is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i

RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-13-83 Revenue Memorandum Circular No. 32-83 September 13, 1983 September 13, 1983 REVENUE MEMORANDUM CIRCULAR NO. 32-83 Subject : Clarification on the Delegation of Administrative Authority to Regional Directors under RMO No. 23-80 as amended by RMO No. 30-81 regarding approval of vacation, sick and maternity leave of absence with pay or without pay for a period not exceeding one (1) year. To : All Regional Directors and Other Revenue Officials Concerned It has been observed that actions properly within the context of delegated authority under RMO No. 23-80, as in matters concerning absences of employees, are sometimes passed on to the National Office. In these instances, the Personnel Division takes action in order to avoid further delay. However, in order to fully implement said memorandum order, all actions within the jurisdiction of the Regional Directors should be completed by these officials. aisa dc The following guidelines are hereby promulgated to clarify further the delegated authority of Regional Directors under RMO No. 23-80 as amended by RMO No. 30-81 with respect to the absences of employees under their jurisdiction. 1. Regional Directors can drop from the service those employees over whom they have the power to appoint. In the case of an employee whose latest appointment was issued by the Commissioner, the Director shall duly inform the Personnel Division of the employee's unauthorized leave so that appropriate action can be taken. 2. Dropping from the rolls may be initiated when: 2.1 An employee has been absent for an unreasonable period of time, or for at least 30 days without an approved leave of absence (AWOL). This 30-day period is inclusive of Saturdays, Sundays and Holidays. 2.2 An employee fails to return to duty without reasonable or valid cause after the expiration of his approved leave and he has been duly notified and warned to report to work. aisa dc 3. Actions corollary to the foregoing are: 3.1 Suspension of the payment of the employee's salary. 3.2 Referral, to the Chief, Legal Branch, for investigation and proper disciplinary action if the facts warrant. 3.3 Notify the employee by letter to report to duty immediately. 3.4 If the employee fails to report, warn him by letter to do so within one month otherwise he will be dropped from the rolls.

3.5 If the employee still fails to report, release dropping papers to the Civil Service Commission for confirmation, and to the employee for his information. 3.6 Notify the Personnel Division in all the foregoing actions, for administrative and records purposes. cdt 4. Dropping from the rolls is not disciplinary. However, should an employee seek reinstatement, the office may file administrative disciplinary action against him should the facts warrant: 5. Actions on leave applications should be made in accordance with Section 20 of Civil Service Rule XVI quoted as follows: "Sec. 20. Leave of absence for any reason other than serious illness of an officer or employee or of any member of his immediate family must be contingent upon the needs of the service." 6. Applications for leave without pay for more than one year should not be approved pursuant to Section 33 of the aforesaid Rule as follows: aisa dc "Sec. 33. Under no circumstances shall leave without pay be granted for more than one year. If an employee who is on leave without pay for any reason fails to return to duty at the expiration of one year from the effective date of such leave, he shall be considered automatically separated from the service: Provided, that he shall, within a reasonable time before the expiration of his one year leave of absence without pay, be notified in writing of the expiration thereof with a warning that if he fails to report for duty on said date he will be dropped from the service." Please be guided accordingly. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-06-83 Revenue Memorandum Circular No. 33-83 October 6, 1983 REVENUE MEMORANDUM CIRCULAR NO. 33-83 Subject : Amending Revenue Memorandum Circular No. 19-83 dated June 24, 1983 on the applicable uniform exchange rate of U.S. Dollar to Philippine Peso for Internal Revenue Tax Purposes. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, paragraph (b) of Memorandum Circular No. 19-83 dated June 24, 1983 is hereby amended to read as follows: (a) ... (b) From June 23 to October 4, 1983, the conversion rate to be applied shall be P11.00 to US$1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank whichever is higher, and from October 5, 1983 to December 31, 1983 - P14.00 to US$1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank, whichever, is higher. cdtai ENFORCEMENT AND PUBLICITY All Internal Revenue Officers and Others charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and to give it the widest publicity possible. aisa dc (Sgd.) RUBEN B. ANCHETA

Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-12-83 Revenue Memorandum Circular No. 34-83 October 12, 1983 REVENUE MEMORANDUM CIRCULAR NO. 34-83 Subject : Ten Percent (10%) surcharge for late payment of income and transfer taxes. To : All Internal Revenue Officers and Others Concerned. 1. The Law For the information and guidance of all concerned, quoted hereunder are the pertinent provisions of Sections 51, 113 and 130 of the National Internal Revenue Code, as amended: "Sec. 51. PAYMENT AND ASSESSMENT OF INCOME TAX . . . . (3) Surcharge. - If any amount of tax shown on the return is not paid in full on or before the date prescribed for its payment under paragraph (a) of this Section, or any amount of deficiency, and any interest assessed in connection therewith, is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this Section, there shall be collected in addition to the interest prescribed herein and in paragraph (d) above and as part of the tax a surcharge of ten per centum of the amount of tax unpaid." (Section 51(e)(3), NIRC, as amended by P.D. 1705). UNDERSCORING SUPPLIED cdasia "Sec. 113. ADDITIONS TO THE TAX IN CASE OF NONPAYMENT . . . . (c) Surcharge. - If any amount of tax shown on the return is not paid in full on or before the date prescribed for its payment under paragraph (a) of this Section, or any amount of deficiency, or any interest assessed in connection therewith is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this Section, there shall be collected in addition to the interest prescribed herein and in Sections 111 and 112 as part of the tax surcharge of ten per centum of the unpaid amount." (Section 113(c), NIRC, as amended by P.D. Nos. 1705 and 1773) UNDERSCORING SUPPLIED "Sec. 130. ADDITIONS TO THE TAX IN CASE OF NONPAYMENT . . . . (c) Surcharge. - If any amount of tax shown on the return by the donor is not paid in full on or before the date prescribed for its payment under paragraph (a) of this Section, or any amount of deficiency, or any interest assessed in connection therewith is not paid in full within the period prescribed in the assessment notice and demand required under paragraph (b) of this Section, there shall be collected in addition to the interest prescribed herein and in Sections 128 and 129 and as a part of the tax a surcharge of ten per centum of the unpaid amount." (Section 130 (c), NIRC, as amended by P.D. No. 1773) UNDERSCORING SUPPLIED 2. Conditions For Imposition of the Ten Percent Surcharge. 2.1 Under the abovequoted provisions of law, there are two (2) situations for which the ten percent surcharge shall be imposed, in addition to interests, for late payment of income tax (Section 51, NIRC), estate tax (Section 113, NIRC); and donor's gift tax (Section 130, NIRC):

2.1/1 Where the tax shown on the return filed by a taxpayer is not paid on or before the date prescribed for its payment; or 2.1/2 Where the deficiency tax assessment is not paid by a taxpayer within the period prescribed in the assessment notice and demand letter. 2.2 Extended payment. 2.2/1 If the Commissioner (or his duly authorized representative) has authorized the payment of the tax beyond the due date of payment, the ten percent (10%) surcharge shall not be imposed unless the taxpayer fails to pay the tax on or before the date/s prescribed within the extended period of payment. casia 2.2/2 If the Commissioner (or his duly authorized representative) authorized payment of the tax before the expiration of the due date in two (2) or more installments/amortizations, the ten percent (10%) surcharge shall be imposed only on every installment or amortization which is not paid by the taxpayer on or before the date/s prescribed within the period of extension granted and no such surcharge shall be imposed on amortizations not yet due per approved amortization schedule except when there is an acceleration clause. 2.2/3 If the taxpayer submits a request for extension after the expiration of the due date, the 10% surcharge shall be imposed even if the extension has been granted. 3. Basis of the Ten Percent (10%) Surcharge 3.1 Tax shown on the return. - In case the tax shown on the return filed by a taxpayer is not paid on or before the date prescribed for its payment, the ten percent (10%) surcharge shall be based on the amount of basic tax due per return filed. 3.2 Deficiency assessment.- In case the deficiency tax is not paid within the period prescribed in the assessment notice and demand letter, the ten percent (10%) surcharge shall be based on the amount of basic tax and deficiency interest included in the deficiency assessment. Other ad valorem penalties (i.e., the 25% surcharge for late filing of the return; 25% surcharge for filing the return with wrong venue; 50% surcharge for non-filing of the return due to willful intent or filing a false or fraudulent return), if any, included in the assessment notice shall not bear this ten percent delinquency surcharge. 4. Effectivity. 4.1 Income tax and Estate tax. - Section 51(e)(3) - Income Tax; and Section 113(c) Estate tax, of the National Internal Revenue Code, as amended by P.D. 1705, became effective on August 1, 1980. 4.2 Donor's gift tax. - Section 130(c) of the National Internal Revenue Code, as amended by P.D. 1773 (donor's gift tax) became effective on January 16, 1981. 4.3 If a deficiency tax assessment had been issued before the said effectivity date, and the deficiency tax was not paid within the period prescribed in the assessment notice and demand which had expired also before the said effectivity date and, therefore, the taxpayer became delinquent before effectivity of P.D. 1705 and P.D. 1773, the five percent (5%) surcharge which was applicable before the amendment of Sections 51(e)(3), 113(c), and 130(c) shall be imposed regardless of whether the assessment remains unpaid on or after effectivity of these new laws. 4.4 However, if the period prescribed in the assessment notice and demand within which the deficiency tax assessment shall be paid had expired on or after effectivity of P.D. 1705 and P.D. 1773 and, therefore, the taxpayer became delinquent during effectivity of these new laws, ten percent (10%) surcharge shall be imposed. cd i

5. Illustrative Computations of Increments All Internal Revenue Officers concerned are enjoined to adhere strictly with the provisions of this Revenue Memorandum Circular in making or issuing tax assessments. To achieve uniformity in computing increments incident to late payment of income, estate and gift taxes, all revenue officers and others concerned shall be guided by the following computational formats: Case I Assume that an individual was qualified and opted to pay his income tax for tax year 1980 in two (2) equal installments under Section 51 (a) (2) of the Tax Code. Assume that he paid the 1st installment upon filing, as follows: 1980 Income tax due per return P6,000.00 Less: Creditable withholding taxes 2,000.00 Amount due P4,000.00 The 1st installment of his income tax shall be computed, as follows: Income tax due per return P6,000.00 1st installment thereof (50%) 3,000.00 Less: Creditable withholding tax/es 2,000.00 Amount payable to complete 1st installment P1,000.00 Assuming that the said individual failed to pay the 2nd installment (P3,000.00) on July 18, 1981 (last day to complete payment) and tendered payment only on July 18, 1982, the tax and increments incident to late payment shall be computed as follows: 1980 Income tax due per return P6,000.00 Less: 1st installment Creditable withholding taxes P2,000.00 C.R. No. dated 1,000.00 3,000.00 Balance (2nd installment) 3,000.00 Add: 10% surcharge 300.00 20% int. p.a. fr. 7-18-81 to 7-18-82 600.00 Compromise for late payment (suggested) 40.00 940.00 Total P3,940.00 ========= Case II Assume that the said individual did not file his 1980 income tax return on the due date (April 15, 1981). However, on April 15, 1982 he voluntarily filed his 1980 income tax return and tendered payment but reason for delay in filing his return is not meritorious (for purposes of the 25% surcharge). Computations of the tax and increments incident to late filing and late payment shall be as follows:

1980 Income tax due per return P6,000.00 Less: Creditable withholding tax/es 2,000.00 Delinquency P4,000.00 Add: Delinquency increments 25% surcharge for late filing P1,000.00 10% surcharge for late payment 400.00 20% int. p.a. fr. 4-15-81 to 4-15-82 800.00 Compromise for late filing (suggested) 80.00 Compromise for late payment (suggested) 40.00 2,320.00 Total P6,320.00 ========= Case III Assume that the said individual did not file his 1980 income tax return on the due date (April 15, 1981). On July 18, 1982, he voluntarily filed his 1980 income tax return and tendered payment but reason for delay in filing his return is not meritorious (for purposes of the 25% surcharge). However, the amount of creditable withholding taxes withheld from his income is equal to 50% or more of his tax due per return (e.g., P4,000.00) In this case, he shall be only considered delinquent with respect to the second installment of his tax liability since the creditable taxes withheld from him were advance payments of his income taxes. cdtai 1980 Income Tax due per return P6,000.00 Less: Creditable withholding tax/es 4,000.00 Delinquency (2nd installment 2,000.00 Add: Delinquency increments 25% surcharge for late filing P 500.00 10% surcharge for late payment 200.00 20% int. p.a. fr. 7-18-81 to 7-18-82 400.00 Compromise for late filing (suggested) 80.00 Compromise for late payment 30.00 1,210.00 Total P3,210.00 ========= Case IV

Assume that this 1980 income tax return of the said individual had been verified and tax audited. This tax audit (whether based on the return filed or based on his accounting record) resulted to a deficiency assessment. The assessment notice was issued on April 15, 1983. Deadline given for payment was on May 15, 1983. Details of the deficiency income tax assessment were as follows: 1980 Income Tax due per tax audit P10,000.00 Less: Income tax shown per return filed 6,000.00 Deficiency 4,000.00 Add: Deficiency increments 50% surcharge for filing fraudulent return 2,000.00 20% int. p.a. fr. 4-15-81 to 4-15-83 1,000.00 Suggested compromise penalty for violation of Bookkeeping Regulations 300.00 Total P 7,900.00 Assume, further, that said individual did not pay the deficiency assessment on or before the deadline set in the assessment and demand (May 15, 1983). Tender of payment was made only on October 15, 1983. Since the deficiency income tax was not paid within the period prescribed in the assessment notice and demand (i.e., from April 15, 1983), delinquency increments are further assessable against the taxpayer, as follows: cdt 1980 Total amount assessed on 4-15-83 P7,900.00 Less: Compromise penalty for violation of Bookkeeping Regulations 300.00 Deficiency 7,600.00 Add: Delinquency increments 10% surcharge for late payment on (on basic tax of P4,000.00 and deficiency interests of P1,600.00) P560.00 20% int. p.a. fr. 4-15-83 to 10-15-83 (on basic tax plus surcharge and interests - P7,600.00) 760.00 Compromise penalty for violation of Bookkeeping Regulations 300.00 Compromise penalty for late payment 50.00 Total P9,270.00

========= Case V Assume that the said individual filed his 1980 income tax return on time and had paid the first installment of his income tax liability on April 15, 1981. Assume, further, that on the deadline for payment of the second and last installment of his income tax liability, he was clearly incapable financially to pay his liability. Before deadline, he requested for permission to amortize this tax liability in three (3) monthly installments. His request was granted. Computation of the amortizations follows: 1980 Tax due per return P6,000.00 Less: Creditable withholding tax/es 2,000.00 Amount due 4,000.00 Less: Amount paid on 4-15-81 to complete 1st installment (C.R. No.) 1,000.00 Second installment to be amortized 3,000.00 MONTHLY AMORTIZATIONS FOR THREE MONTHS (P3,000/3 mos.) P 9,000.00 Amortization Schedule Amount of tax due on 7-18-81 P3,000.00 Add: 20% int. p.a. fr. 7-18-81 to 8-18-81 49.99 Amount due on 8-18-81 3,049.99 1st Amortization on or before 8-18-811,049.99 Balance 2,000.00 Add: 20% int. p.a. fr. 8-18-81 to 9-18-81 33.33 Amount due on 9-18-81 2,033.33 2nd Amortization on or before 9-18-811,033.33 Balance 1,000.00 Add: 20% int. p.a. fr. 9-18-81 to 10-18-81 16.66 3rd and last amortization on or before 10-18-81 P1,016.66 Case VI Assume that the said taxpayer defaulted in paying the 2nd amortization due on or before September 18, 1981. He actually paid only on September 30, 1981. In this case, he was delinquent. The ten per cent (10%) surcharge applies but only in connection with such delinquent 2nd amortization. cdtai

Computation of the tax and delinquency increments follows: 2nd Amortizations re-Extended Payments 2nd Amortization due on or before 9-18-81P1,033.33 Add: 10% surcharge (on basic tax of P1,000.00) 100.00 20% int. p.a. fr. 9-18-81 to 9-30-81 (on total of P1,033.33) 6.79 Compromise for late payment 20.00 Total P1,160.12 ========= Case VII Assume, further, that the taxpayer defaulted in paying the 2nd and 3rd monthly amortizations. Collection letter was sent to the taxpayer on December 18, 1981. Computation of the tax and delinquency increments follows: 1980 Tax due per return P 6,000.00 Less: Creditable withholding tax/es 2,000.00 Amount due 4,000.00 Less: Amount paid on 4-15-81 to complete 1st installment (C.R. No.) 1,000.00 2nd installment amortizable in three (3) months 3,000.00 Add: 20% int. p.a. fr. 7-18-81 to 8-18-81 49.99 Amount due on 8-18-81 3,049.99 Less: 1st amortization paid on 8-18-81 (C.R. No. ) 1,049.99 Balance 2,000.00 Add: 10% surcharge (on basic tax of P2,000.00) 200.00 20% int. p.a. fr. 8-18-81 to 12-18-81 133.33 Compromise for late payment 20.00 Total P2,353.33 ========= Case VIII Assume that the taxpayer had been assessed for 1980 deficiency income tax on April 15, 1983. Deadline for payment of this assessment per notice and demand was May 15, 1983. Details of the assessment were: Income tax due per tax audit P10,000.00

Less: Income tax shown per return filed 6,000.00 Deficiency 4,000.00 Add: Deficiency increments 50% surcharge for filing fraudulent return P2,000.00 20% int. p.a. fr. 4-15-81 to 4-15-83 1,600.00 Suggested compromise for violation of Bookkeeping Regulations 300.00 Total P7,900.00 ========= Assume, further, that upon a clear showing of financial incapacity, the taxpayer requested for permission to pay the assessment in four (4) monthly installments, starting May 15, 1983. His request for extended payment was granted. Computation of the monthly amortizations follows: 1980 Total amount assessed on 4-15-83 P7,900.00 Less: Suggested compromise for violation of Bookkeeping Regulations 300.00 Deficiency income tax to be amortized P7,600.00 MONTHLY AMORTIZATION FOR FOUR MONTHS (P7,400/4 MOS.) P1,900.00 Amortization Schedule Deficiency income tax assessment issued on 4-15-83 P 7,600.00 Add: 20% int. fr. 4-15-83 to 5-15-83 126.67 Amount due on 5-15-83 7,726.67 1st amortization on 5-15-83 (P1,900 plus interests of P126.67) 2,026.67 Balance on 5-15-83 5,700.00 Add 20% int. fr. 5-15-83 to 6-15-83 94.99 Amount due on 6-15-83 5,794.99 2nd amortization on 7-15-83 1,994.99 Balance on 6-15-83 3,800.00 Add: 20% int. fr. 6-15-83 to 7-15-83 63.33

Amount due on 7-15-83 3,863.33 3rd amortization on 7-15-83 1,963.33 Balance on 7-15-83 1,900.00 Add: 20% int. fr. 7-15-83 to 8-15-83 31.67 Suggested compromise for violation of Bookkeeping Regulations 300.00 4th and final amortization P2,231.67 Assume, even further, that the terms of the extended payments granted provided for an "acceleration clause" and that should the taxpayer defaults in any amortization, the remaining balance of the taxpayer's tax liability shall at once become due and demandable. Assume that the taxpayer defaulted in paying the 2ND amortization which should have been due on June 15, 1983. acd In this case, the taxpayer shall be considered already delinquent, the ten percent (10%) surcharge shall be imposed and levied. Assuming that the collection letter for the unpaid balance was issued on July 15, 1983, computation of the delinquent tax liability of the taxpayer follows: 1980 Total amount assessed on 4-15-83 P 7,900.00 Less: Suggested compromise for violation of Bookkeeping Regulations 300.00 Deficiency income tax 7,600.00 Add: 20% int. fr. 4-15-83 to 5-15-83 126.67 Amount due on 4-15-83 7,726.67 Less: 1st amortization paid on 5-15-83 (C.R. No. ) dated 2,026.67 Unpaid balance 5,700.00 Add: Delinquency increments 10% surcharge (on 3/4 of basic tax of P4,000 and deficiency interests of P1,600 = P4,200 x 10%). 420.00 20% int. fr. 5-15-83 to 7-15-83 (on unpaid balance of P5,700.00) 189.99 Compromise for violation of Bookkeeping Regulations 300.00 Compromise for late payment50.00 Total P6,539.99 =========

Note: The 10% surcharge is based on 3/4 of the basic tax of P4,000 and deficiency interests of P1,600 because the taxpayer's delinquent income tax liability represents 3/4 of the total deficiency income tax assessment. Assume that the terms of the extension does not provide for an acceleration clause. The taxpayer, however, did not pay on time the 3rd amortization due on 7-15-83. This amortization was paid only on July 30, 1983. In this case, the taxpayer is delinquent only with respect to this 3rd amortization. The 10% surcharge applies but only on this delinquent amortization. Computation of delinquency increments follows: 3rd Amortization 3rd amortization due on 7-15-83 P1,963.33 Add: 10% surcharge (on 1/4 of basic tax of P4,000 and deficiency interests of P1,600 = P1,400 x 10%) 140.00 20% int. fr. 7-15-83 to 7-30-83 16.14 Compromise for late payment20.00 Total P 2,139.47 Note: The 10% surcharge is based on 1/4 of the basic tax and deficiency interests because the extended payments authorized four (4) equal monthly installments. 6. Suggested Compromise "Penalties" 6.1 A compromise is an agreement between two or more persons who to avoid a lawsuit amicably settle their differences in such terms as they can agree on. Technically, therefore, the amount of compromise which is included in the above illustrative examples may not be assessed and demanded considering that the same does not constitute a tax or deficiency tax. Since the nominal amounts suggested as compromise in extra-judicial settlement of the civil and/or criminal liability of a taxpayer for violations of certain provisions of the Tax Code or implementing regulations are not internal revenue taxes or civil ad valorem penalties, all letters of demand and assessment notices must categorically state 6.1/1 The particular provision of the Tax Code and/or Revenue Regulations violated by the taxpayer; cda 6.1/2 That the compromise is intended as an extra-judicial settlement of the taxpayer's civil and/or criminal liability for violation of certain provisions of the Tax Code; 6.1/3 That the compromise is being suggested, rather than demanded or assessed. 6.2 Amount of suggested compromise The amount/s of compromise penalty that shall be suggested for an extra-judicial settlement of a taxpayer's civil and/or criminal liability arising from violation of the pertinent provisions of the National Internal Revenue Code and/or its implementing regulations shall strictly conform with schedules of compromise penalties prescribed in all existing revenue issuances. 6.3 Cases tainted with fraud 6.3/1 The pertinent provisions of Section 295 of the National Internal Revenue Code, as amended by P.D. 1773, is quoted, as follows: ". . . All criminal violations may be compromised except: (a) those already filed in court, and (b) those involving fraud. . . . ." 6.3/2 In view thereof, no compromise penalty shall be suggested in all letters of demand and assessment notices, in connection with tax assessment/s tainted with fraud such as (i)

cases involving deliberate under declaration or non-declaration of taxable amount; (ii) deliberate over declaration of deductions; and/or (iii) such other act/s which, per se, may be considered equivalent of fraud and committed with intent to evade payment of tax. 7. Repealing Clause All Revenue Issuances which are inconsistent herewith are hereby amended or repealed accordingly. cd 8. Enforcement and Publicity All Revenue Officers concerned are enjoined to enforce the provisions of this Revenue Memorandum Circular and give the same as wide publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-03-83 Revenue Memorandum Circular No. 35-83 November 3, 1983 REVENUE MEMORANDUM CIRCULAR NO. 35-83 Subject : Publishing Executive Order No. 919 To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 919 revising the rates of specific taxes on certain petroleum products. "EXECUTIVE ORDER NO. 919 "REVISING THE RATES OF SPECIFIC TAX ON CERTAIN PETROLEUM PRODUCTS. "WHEREAS, the increase in the peso value of our imported crude oil as a result of the recent devaluation has made it imperative to adjust the prices of petroleum products to more realistic levels; cda "WHEREAS, in the restructuring of prices of petroleum products, it is likewise necessary to adjust the specific tax components thereof in order to make the tax rates thereon consistent with their adjusted price levels; and "WHEREAS, the revision of the rates of specific tax on petroleum products is an effective measure to discourage unnecessary and wasteful consumption of petroleum products; "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution and by Section 290-B of the National Internal Revenue Code of 1977, as amended by Presidential Decree No. 1835, do hereby order as follows: "Sec. 1. The rates of specific tax on certain petroleum products are hereby revised, hereby amending for this purpose Section 153, 155 and 156 of the National Internal Revenue Code to read as follows: "Sec. 153. Specific tax on manufactured oils and other fuels. - On refined and manufactured mineral oils and motor fuels, there shall be collected the following taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such: "(a) Kerosene, per liter of volume capacity, six and three-fourth centavos; "(b) Lubricating oils, per liter of volume capacity, eighty centavos;

"(c) Naphtha, regular gasoline and all other similar products of distillation, per liter of volume capacity, one peso and fifty and one-fourth centavos: Provided, That on a premium and aviation gasoline the tax shall be one peso and fifty four and one-fourth centavos and one peso, respectively, per liter of volume capacity; cda "(d) On denatured alcohol to be used for motive power, per liter of volume capacity, one centavo: Provided, That unless otherwise provided for by special laws, if the denatured alcohol is mixed with gasoline, the specific tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For the purpose of this subsection, the removal of denatured alcohol of not less than one hundred eighty degrees proof (ninety per centum absolute alcohol) shall be deemed to have been removed for motive power, unless shown to the contrary; "(e) Processed gas, per liter of volume capacity, three centavos; "(f) Thinners and solvents, per liter of volume capacity, ninety one and one-half centavos; "(g) Liquefied petroleum gas, per kilogram, thirty-one and one-half centavos: Provided, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the specific tax on diesel fuel oil; "(h) Asphalts, per kilogram eighteen centavos; "(i) Greases, waxes and petrolatum per kilogram, fifty centavos; "(j) Aviation turbo-jet fuel, per liter of volume capacity, ninety six centavos." cdtai "Sec. 155. Specific tax on bunker fuel oil. - On fuel oil, commercially known as bunker fuel oil, and on all similar fuel oils, having more or less the same generating power, there shall be collected, per liter of volume capacity, seven and one-half centavos, which tax shall attach to this fuel oil as soon as it is in existence as such. "Sec. 156. Specific tax on diesel fuel oil. - On fuel oil, commercially known as diesel fuel oil, and on all similar fuel oils, having more or less the same generating power, per liter of volume capacity, nineteen centavos, which tax shall attach to this fuel oil as soon as it is in existence as such." Sec. 2. This Executive Order shall take effect immediately. "DONE in the City of Manila, this 3rd day of November, in the year of our Lord, nineteen hundred and eighty-three." "(Sgd.) FERDINAND E. MARCOS President Republic of the Philippines" All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia (Sgd.) RUBEN B. ANCHETA Acting Commissioner Features of the Executive Order: Increase in the specific tax on the following products: Old Rate New Rate a. b. c. d. Premium gasoline P1.38/ltr. P1.5425/ltr. Regular gasoline 1.34/ltr. 1.5025/ltr. Avturbo 0.64/ltr. 0.96/ltr. Kerosene 0.045/ltr. 0.0675/ltr.

e. Diesel 0.1275/ltr. 0.19/ltr. f. Fuel oil 0.05/ltr. 0.075/ltr. g. L P G 0.21/kg. 0.315/kg. h. Asphalts 0.12/kg. 0.18/kg. i. Solvents 0.61/ltr. 0.915/ltr. Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-17-83 Revenue Memorandum Circular No. 36-83 November 17, 1983 November 16, 1983 REVENUE MEMORANDUM CIRCULAR NO. 36-83 Subject : Publishing Executive Order No. 924 revising the retail prices and specific taxes on local and imported cigarettes. To : All Internal Revenue Officials, Employees and Others Concerned For the information and guidance of all concerned, hereunder are the salient features of Executive Order No. 924: I. The revised maximum retail prices and specific taxes on cigarettes are as follows: A. Cigarettes packed in 30's SPECIFIC TAX MAXIMUM RETAIL PRICE PER PACK PER THOUSAND/PER PACK EXCEEDING NOT EXCEEDING P140 P3.00 P0.09 P1.40 1.75 5.00 0.15 1.75 8.00 0.24 (No changes on specific tax rates for cigarettes packed in 30's) B. Cigarettes packed in 20's P2.65 P20.00 P0.40 P2.66 3.25 28.00 0.56 3.26 4.00 32.00 0.64 4.01 4.50 46.00 0.92 4.51 5.00 64.00 1.28 5.01 5.60 91.00 1.82 5.61 121.00 2.42 C. Cigarettes of foreign manufacture regardless of retail price or contents per pack P121.00. II. In addition to the above revision, Executive Order No. 924 also 1. Reduced the number of brackets from 18 to 10; cdasia 2. Converted the 50% surcharge on locally manufactured cigarettes which are of foreign brands to absolute amounts; and 3. Unified the taxes on imported cigarettes with the highest tax rate for locally manufactured cigarettes using foreign brands; III. All cigarette manufacturers concerned shall be allowed to use their cigarette labels imprinted with the old maximum retail price per pack of their products for a period of one hundred twenty (120) days from November 16, 1983 or March 15, 1984, after which date, they shall comply with the pertinent requirements of Section 149(b) of the

National Internal Revenue Code, as amended, regarding the printing of the maximum retail price and specific tax on each pack of cigarette. IV. The safeguards as well as the specific requirements under the existing provisions of Section 149 of the National Internal Revenue Code, as amended, by Executive Order No. 863, were retained in Executive Order No. 924. casia V. The provisions of Executive Order No. 924 shall take effect on November 16, 1983. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity. cda (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-29-83 Revenue Memorandum Circular No. 37-83 November 29, 1983 REVENUE MEMORANDUM CIRCULAR NO. 37-83 Subject : Determination of income and estate tax liabilities of a decedent and his estate. 1. Taxable Periods In case of death of an individual taxpayer, there shall be included in computing net income for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly includible in respect of such period or a prior period. (Section 39, NIRC.) Likewise, there shall be allowed as deductions for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly allowable in respect of such period. (Section 40, NIRC.) cd 2. Returns to be Filed in Case of Death of an Individual 2.1 Pursuant to the provisions of Sections 39 and 40, in case an individual dies, the following tax returns shall be filed 2.11 An income tax return covering the income and deductions of the decedent from January 1 to the date of his death shall be filed. Although the period covered by the return consists of less than 12 months, such period shall be considered as a "taxable year" pursuant to Section 20 (p). 2.12 If the settlement of the estate of the decedent is the object of judicial testamentary or intestate proceedings: 2.12/1 An income tax return for the estate as a taxable person shall be filed by the fiduciary or administrator. The estate's income tax return shall cover the income and deductions of the estate for the period from the date immediately following the death of the decedent to the end of the taxable year. Thereafter, annually a return for the estate shall be filed until the estate is terminated. 2.12/2 An individual return for each of the spouse, heirs/beneficiaries covering their respective income and deductions for the period from the date immediately following the death of the decedent to end of the taxable year. Such individual income tax returns shall include the income received by them from the estate pursuant to Section 57. 2.13 In the case of an estate of the decedent, the settlement of which is not the object of judicial testamentary or intestate proceedings, the income of the properties left by the

decedent is taxable directly to the heirs or beneficiaries. Each heir or beneficiary must include in his income tax return his distributive share of the net income of the estate or co-ownership. cd i 3. When to File the Returns Although the period covered by the fractional returns required to be filed under the preceding paragraphs consists of less than 12 months, such period shall be considered as a taxable year pursuant to Section 20(p) and each such return shall be filed in accordance with the provisions of Section 45. 4. Personal and Additional Exemption The personal and additional exemption prescribed in Section 23 shall be allowed in full for the decedent and for the heirs/beneficiaries. The estate is likewise entitled to the exemption prescribed in Section 58. 5. Publicity All Internal Revenue Officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide a publicity as possible. cdt (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-01-83 Revenue Memorandum Circular No. 38-83 December 1, 1983 December 1, 1983 REVENUE MEMORANDUM CIRCULAR NO. 38-83 Subject : Publishing the provisions of Executive Order No. 923, amending Sections 145, 146, 147, 157 and 177 of the National Internal Revenue Code. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the provisions of Executive Order No. 923 are hereunder quoted: "Sec. 1. Section 145 of the National Internal Revenue Code, as amended, is hereby amended as follows: Sec. 145. Specific Tax on Distilled Spirits. - On distilled spirits there shall be collected, subject to the provisions of Section one hundred thirty-nine of this Code, except as hereinafter provided, specific taxes as follows: cda (a) If produced from sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup, or sugar of the cane, provided such materials are grown commercially in the country where the distilled spirits are produced, per proof liter, three pesos: Provided, That if produced in a pot still or other similar primary distilling apparatus, by a distiller producing not more than one hundred liters a day, containing not more than fifty per centum of alcohol by volume, per proof liter, one peso and fifty-six centavos; (b) If imported or produced from imported raw materials or from raw materials other than (a) hereof, per proof liter, thirty-five pesos. This tax shall be proportionately increased for any strength of the spirits taxed over proof spirits, and the tax shall attach to this substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirits, or be immediately or at any subsequent time transformed into any other substance either in the process of original production or by any subsequent process.

"Spirits or distilled spirits" is the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilutions and mixtures thereof, from whatever source by whatever process produced, and shall include whisky, brandy, rum, gin and vodka, and other similar products or mixtures including compounded liquors and all other preparations, except toilet preparations, of which excluding water distilled spirits is the chief ingredient. "Proof spirits" is liquor containing one-half of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths at fifteen degrees centigrade. A proof liter means a liter of proof spirits." cdtai "Sec. 2. Section 146 of the National Internal Revenue Code, as amended, is hereby amended as follows: Sec. 146. Specific Tax on Wines. - On wines there shall be collected per liter of volume capacity, the following taxes: (a) Sparkling wines, regardless of proof, eighteen pesos; if imported twenty-six pesos and fifty centavos; (b) Still wines containing fourteen per centum of alcohol or less, three pesos; if imported, four pesos and forty centavos; (c) Still wines containing more than fourteen per centum of alcohol, six pesos; if imported, eight pesos and eighty centavos; and Fortified wines containing more than twenty-five per centum of alcohol shall be taxed as distilled spirits." "Sec. 3. Section 147 of the National Internal Revenue Code, as amended, is hereby amended as follows: Sec. 147. Specific Tax on Fermented Liquors. - On beer, lager beer, ale, porter, and other fermented liquors (except tuba, basi, tapuy and similar domestic fermented liquors), there shall be collected, on each liter of volume capacity, one peso and fifty centavos. "Sec. 4. Section 157 of the National Internal Revenue Code, as amended, is hereby amended as follows: Sec. 157. Specific Tax on Cinematographic Films. - There shall be collected, once only, on cinematographic films, including television films, regardless of width, a tax amounting to thirty-five centavos per linear meter. If the films are imported, the tax shall be forty-five centavos per linear meter. cd i Educational films or cinematographic films used for visual education, whether manufactured in the Philippines or imported, shall be exempt from the tax prescribed in this section. This tax shall not be collected on any tax-paid cinematographic films subsequently returned to the Philippines or on any negative film or unprinted positive film, and on any reversal film used in the amateur photography of sixteen millimeters or less, and any tax heretofore paid on cinematographic films so returned, or on any negative film or unprinted positive film, or on any reversal film shall be refunded subject to the provisions of Section two hundred ninety-five." "Sec. 5. Section 177 of the National Internal Revenue Code, as amended, is hereby amended as follows: Sec. 177. Requirements governing rectification and compounding of liquors. Persons engaged in the rectification of or compounding of liquors shall, as to the mode of conducting their business and supervision over the same, be subject to all the

requirements of law applicable to distilleries: Provided, That where a rectifier makes use of spirits upon which the specific tax has been paid, no further tax shall be collected on any rectified spirits produced exclusively therefrom: And Provided, further, That compounders in the manufacture of any intoxicating beverage whatever, shall not be allowed to make use of spirits upon which the specific tax has not been previously paid. No further tax shall be collected on any compounded liquor produced exclusively therefrom. For the purpose of this section, "compounded liquors" shall include any intoxicating beverage whatever, concocted by or resulting from the mixture of or addition to distilled spirits taxed under Section 145(A) of this Code, either before or after rectification, or any coloring matter, flavoring extract or essence or other kind of wine, liquor or other ingredient. Fortified wines are natural wines with increased alcohol content as a result of added distilled spirits." "Sec. 6. The Minister of Finance, upon recommendation of the Commissioner of Internal Revenue, shall promulgate the necessary rules and regulations for the implementation of this Executive Order." "Sec. 7. All laws, decrees, executive orders, rules and regulations and other issuances or parts thereof which are inconsistent with this order are hereby repealed, amended or modified accordingly." casia "Sec. 8. This Order shall take effect on December 1, 1983." Salient Features of Executive Order No. 923 Revision of specific taxes on the following articles: 1. Distilled spirits (Sec. 145, NIRC) 1.1 Change of basis of taxing distilled spirits - from situs of production of raw materials used (locally produced or foreign) to the kind of raw materials used in the preparation of distilled spirits as follows: 1.1.1 Produced from sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup, or sugar of the cane where such raw materials are grown commercially in the country where the distilled spirits are produced - P3.00 per proof liter. 1.1.2 Produced in a pot still or other similar primary distilling apparatus by a distiller producing not more than 100 liters a day containing not more than 50% of alcohol by volume - P1.56 per proof liter. 1.1.3 Imported or produced from other raw materials - P35.00 per proof liter 1.2. Domestic compounded liquors are taxed as distilled spirits. 2. Wines (Sec. 146, NIRC) 2.1. Sparkling wines, regardless of proof per liter of volume capacity Old Rates New Rates If locally produced P12.00 P18.00 If imported P26.40 P26.50 2.2. Still wines, containing 14% of alcohol or less Old Rates If locally produced New Rates P2.00 P3.00

If imported 2.3.

P4.40 P4.40

Still wines, containing more than 14% of alcohol Old Rates New Rates

If locally produced P4.00 P6.00 If imported P8.80 P8.80 3. Fermented liquor (Sec. 147) The specific tax rate is P1.50 on each liter of volume capacity whether locally produced or imported. 4. Cinematographic films (Sec. 157) 4.1. Per linear meter, Old Rates New Rates If locally produced P0.26 P0.35 If imported P0.39 P0.45 Requirements governing rectification and compounding of liquors (Sec. 177) Any compounder who manufactures any intoxicating beverage whatever, for domestic sale or consumption must use only distilled spirits, the specific tax on which has been previously paid, and no further tax shall be collected therefrom. This includes what was previously known as imitation wines. However, compounders who manufacture any intoxicating beverage for export, without returning to the Philippines in its original state or as an ingredient of another product, may use untaxed alcohol. aisa dc The specific tax on distilled spirits, therefore, used in the manufacture or compounded liquors for domestic sale shall be paid before the removal from the place of production. No importation of flavoring extracts, essence or other similar preparations for use as raw materials in the manufacture of compounded liquors shall be released from customs custody without an "Authority to Release Imported Goods" being issued by the Revenue Office Chief (Specific Tax Office) or his authorized representative. The amendments covering all of the above articles shall take effect on December 1, 1983. cda All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-09-84 Revenue Memorandum Circular No. 1-84 January 9, 1984 REVENUE MEMORANDUM CIRCULAR NO. 1-84 Subject : Repeal of Section 24(e) of the National Internal Revenue Code To : All Internal Revenue Officers and Others Concerned For the information of all concerned Batas Pambansa Blg. 399 is hereby reproduced: [Batas Pambansa Blg. 399] AN ACT ABOLISHING THE ADDITIONAL TEN PERCENT TAX ON THE TAXABLE NET INCOME OF CLOSELY-HELD CORPORATIONS, REPEALING

FOR THE PURPOSE PARAGRAPH (e) OF SECTION TWENTY-FOUR OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. Sec. 1. Paragraph (e) of Section twenty-four of the National Internal Revenue Code, as amended, is hereby repealed. cdasia Sec. 2. This Act shall take effect upon its approval. Approved. (SGD.) QUERUBE C. MAKALINTAL Speaker This Act was passed by the Batasang Pambansa on February 21, 1983. (SGD.) ANTONIO M. DE GUZMAN Secretary-General Approved: May 19, 1983 (Sgd.) FERDINAND E. MARCOS President of the Philippines Features of the Batas Pambansa Batas Pambansa Blg. 399 repealed the provisions of paragraph (e) of Section 24 of the National Internal Revenue Code which impose additional 10% tax on taxable net income of closely-held corporations. Applicability and Effectivity The abolition of the additional 10% tax took effect on May 19, 1983, the date of approval of Batas Pambansa Blg. 399. Since the income tax is an annual tax based either on a calendar or a fiscal year depending on the taxpayer's annual accounting period, the repeal of the corporate development tax shall be interpreted to be effective for taxable years beginning after May 19, 1983. Accordingly, corporations otherwise qualifying as "closely-held corporations" whose taxable year ends after May 13, 1983 are no longer subject to the provisions of Section 24 (e) of the Tax Code. Corporations otherwise qualifying as "closely-held corporations" whose fiscal year ends before May 19, 1983 are still liable to pay the corporate development tax. acd Enforcement and Publicity All Revenue Officers and others concerned are enjoined to observe the provisions of this Revenue Memorandum Circular and give the same as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-12-84 Revenue Memorandum Circular No. 2-84 January 12, 1984 REVENUE MEMORANDUM CIRCULAR NO. 2-84 Subject : Annual Inventories To : All Internal Revenue Officers and Others Concerned Taxpayers are hereby reminded of the provisions of Section 13 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations, quoted hereunder, which

requires the filing of annual inventory of stocks-in-trade, raw materials, goods in process, supplies and other goods: aisa dc "Sec. 13. Records of Inventories: - Persons required by law to pay internal revenue taxes on business shall keep, in addition to the other books and records prescribed in these regulations, a book of inventories, in which they shall record in detail the quantity, description, unit and total cost of every item of their stocks-in-trade, materials, supplies and other goods found in their premises, of their establishments as the time they start business and at the close of the calendar year or accounting period. The inventory at the beginning shall be made and submitted to the Commissioner of Internal Revenue, if the place of business is in Manila, or to the Deputy Provincial or City Treasurer, if in a municipality or city, within ten days after securing the privilege tax receipts or starting the business and the subsequent inventories not later than thirty days after the close of the calendar year or accounting period. This period may, in meritorious cases, be extended by the Commissioner of Internal Revenue." Inventory lists of taxpayers for the calendar year 1983 are due to be filed on or before January 30, 1984 with the Revenue District Offices, Collection Agent, or duly authorized Treasurer of the municipality in which such person had his legal residence or principal place of business in the Philippines. In addition to the information required to be declared in the inventory list under the above-quoted provision of the Regulations, taxpayers are hereby required to indicate in the inventory list the method of costing or valuing their inventories (e.g. cost or market, whichever is lower, first-in, first-out, average method, specific identification method, etc). Inventories will be subject to verification to determine whether or not the costing or valuation thereof are in accordance with existing revenue regulations. cda All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity. cda (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-16-84 Revenue Memorandum Circular No. 3-84 January 16, 1984 REVENUE MEMORANDUM CIRCULAR NO. 3-84 Subject : Loss of One (1) pad containing Fifty (50) Sets of Revenue Official Receipts (BIR Forms No. 25.24) bearing Serial Nos. 6616451-G to 6616500-G, inclusive. To : All Internal Revenue Officials, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts, to wit: cdtai ------------------------Inclusive Serial Number : Quantity ------------------------6616451-G to 6616500-G : Fifty (50) Sets ------------------------The above revenue official receipts which were reported missing by Mrs. MARIA P. RAMOS, Revenue District Collection Supervisor, Revenue District Office No. 21,

Valenzuela, Metro Manila, have been cancelled and all official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-24-84 Revenue Memorandum Circular No. 4-84 January 24, 1984 January 24, 1984 REVENUE MEMORANDUM CIRCULAR NO. 4-84 Subject : Publishing Standing Operating Procedure (SOP) No. 02 issued by the Philippine Constabulary governing the renewal of firearm licenses every two (2) years. To : All Internal Revenue Officials, Employees and Other Concerned. For the information and guidance of all concerned, hereunder are the provisions of Standing Operating Procedure No. 2, as issued by the Chief, Philippine Constabulary on December 12, 1983: "RENEWAL OF FIREARM LICENSES EVERY TWO (2) YEARS I. GENERAL: a. Purpose - This SOP prescribes the procedure to be followed in the renewal of firearm licenses every two (2) years. b. Scope - This SOP shall cover Regular Licenses (RL) for firearms issued to private individuals, corporations, companies and security agencies; all Special Permits (SP) issued to government officials and employees, military personnel of the AFP (active or retired) and commissioned officers in good standing of the Reserve Force of the AFP; and Certificates of Registration (CR) issued to Provincial/City/Municipal Treasurers, different Station Commanders INP, Ministries, Bureaus, government offices, government corporations and other similar government entities, for government-owned firearms. acd c. References - Executive Order No. 215 dated 3 December 1965 delegating to the Chief of Constabulary the power to approve or disapprove applications to possess firearms; Section 284 of the National Internal Revenue Code specifying the license fees to be paid by holders of taxable firearms; and HPC Letter dated 19 October 1983 regarding the collection of license fees and charges. II. PROCEDURE: a. All firearm licenses in the Philippines (RL, SP, and CR) shall be renewed once every two (2) years on the birthmonth of the licenses starting on 1 January 1984. cdt

b. To insure payment of firearm taxes and license fees, renewed firearm licenses will no longer be mailed direct to the owners. In Metro Manila, firearm licenses will be delivered thru the Firearms and Explosives Unit, HPC, while in the provinces delivery will be made thru the respective Provincial Commanders/Metrodiscom Commanders. c. The following are the responsibilities of the officer concerned: FIREARMS AND EXPLOSIVES UNITS 1. Shall supervise the implementation of the renewal of firearm licenses. 2. Shall furnish the Constabulary Computer Center the printed PC Form V-1 (Firearm License Renewal Form). 3. Shall send to the Provincial Commanders/Metrodiscom Commanders the renewed firearm licenses for delivery to the respective firearm licenses in their jurisdiction. CONSTABULARY COMPUTER CENTER 1. Shall be responsible for the printing of entries on PC Form No. V-1 (Firearm License Renewal Form). 2. Shall send to the Firearms & Explosives Unit all accomplished PC Form No. V-1 (renewed firearm licenses). PROVINCIAL COMMANDERS/ METRODISCOM COMMANDERS Shall deliver the renewed firearm licenses to licensees in their jurisdiction. aisa dc III. DELIVERY OF RENEWED LICENSES: a. No firearm license shall be released by the Firearms & Explosives Unit or by the Provincial Commander/Metrodiscom Commander unless the licensee has presented the Official Receipt showing that the following firearm taxes and license fees have been paid: For All Kinds of Licences (RL, SP, and CR) Firearm License Fee P20.00 (At P10.00 per annum) For Each High Powered Rifle Held on RL Initial Tax P30.00 Annual Tax 40.00 (At P20.00 per annum) For Each Revolver/Pistol Held on RL, except Cal. .22 Initial Tax P25.00 Annual Tax 40.00 (At P20.00 per annum) For Each Shotgun Held on RL Initial Tax P15.00 Annual Tax 20.00 (At P10.00 per annum) b. The Initial Tax indicated above is paid by the licensee only once upon issue of the initial firearm license, while the Annual Tax is paid yearly. However, because the renewed firearm license is good for two (2) years, the Annual Tax for the two-year validity of the license should be paid.

IV. RESCISSION: SOP No. 2, HPC, dated 23 July 1973, subject: "Renewal of Firearm Licenses" is hereby rescinded. V. EFFECTIVITY: This SOP shall take effect immediately. BY COMMAND OF LIEUTENANT GENERAL RAMOS." SALIENT FEATURES OF SOP: 1. The SOP revises the period of renewal of firearm licenses from annual to every two (2) years. cd i 2. Considering that payment of annual firearm tax as well as the firearm license is a prerequisite to the renewal of firearm licenses, such payment will also be made every two (2) years to coincide with the date of renewal of license. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity. cdt (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-21-84 Revenue Memorandum Circular No. 5-84 March 21, 1984 REVENUE MEMORANDUM CIRCULAR NO. 5-84 Subject : Loss of One (1) sheet (Taxpayer's Copy) of Revenue Official Receipt (BIR Form No. 25.24) bearing serial number 7578538-G and cancellation of the entire pad containing the same. To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of one (1) sheet of Revenue Official Receipt, to wit: ------------------------Serial Number : Quantity ------------------------7578538-G : 1 sheet (Taxpayer's Copy) ------------------------The above copy of official receipt which was reported missing by the Chairman, Committee to Supervise the Printing of Accountable Forms in the Government Printing Office, together with all the other copies of the said set and all the sets of revenue official receipts bearing serial nos. 7578501-G to 7578537-G and 7578539-G to 7578550-G have been cancelled and all official transactions involving the use of the aforementioned revenue official receipts are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA Acting Commissioner By:

TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-29-84 Revenue Memorandum Circular No. 6-84 March 29, 1984 REVENUE MEMORANDUM CIRCULAR NO. 6-84 Subject : Loss of One (1) Set of Revenue Payment Order (RTR) (BIR Form CB RCO-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order (RTR) to wit: cda ------------------------Serial Number : Quantity ------------------------1264174 : 1 set ------------------------The above receipt which was reported missing by the Collection Agent RDO #29, Caloocan City, RR # 4-B, Quezon City, had been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2222-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-02-84 Revenue Memorandum Circular No. 7-84 April 2, 1984 REVENUE MEMORANDUM CIRCULAR NO. 7-84 Subject : Loss of fifty-six (56) Sets of Confirmation Receipts (BIR Form CB-82-02-03.) To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of fifty-six (56) sets of Confirmation Receipts, to wit: cdtai -------------------------Serial Numbers : Quantity -------------------------9943601 to 9943650 : Fifty (50) sets

-------------------------0742149 : One (1) set -------------------------1627500 : One (1) set -------------------------3514028 : One (1) set -------------------------3514029 : One (1) set -------------------------3514210 : One (1) set -------------------------3446195 : One (1) set -------------------------TOTAL : Fifty six (56) sets -------------------------The above receipts which were reported missing by the Authorized Agent Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdtai Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-18-84 Revenue Memorandum Circular No. 8-84 May 18, 1984 REVENUE MEMORANDUM CIRCULAR NO. 8-84 Subject : Publishing Presidential Decree No. 1917 To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder the full text of Presidential Decree No. 1917 revising the rates on specific taxes on certain petroleum products. casia "Presidential Decree No. 1917 AMENDING SECTIONS 153, 155 AND 156 OF TITLE IV (SPECIFIC TAX) OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. "WHEREAS, the need for a cutback in the volume of crude oil imports has made it imperative that stringent measures to conserve fuel and avoid wasteful consumption thereof be adopted;

"WHEREAS, one of the most effective measures of fuel and energy conservation is the restructuring of the prices of refined petroleum products; "WHEREAS, in order to correct the demand imbalance it is necessary to reshape the consumption on oil products by realigning the tax component of the price of refined petroleum products; "WHEREAS, the revision of the specific tax rates on these products will generate additional revenue to support the economic programs of the government. "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree the following: "Sec. 1. Sections 153, 155 and 156 of the National Internal Revenue Code as amended are hereby further amended to read as follows: "Sec. 153. Specific Tax on manufactured oil and other fuels. - On refined and manufactured mineral oils and motor fuels, there shall be collected the following taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such: "(a) Kerosene, per liter of volume capacity, thirty two and three-fourth centavos; (b) Lubricating oils, per liter of volume capacity, one peso and fifty centavos; (c) Naphtha, regular gasoline and all other similar products of distillation, per liter of volume capacity, one peso and sixty six and one fourth centavos; Provided, that on premium and aviation gasoline, the tax shall be one peso and fifty four and one fourth centavos, per liter of volume capacity; (d) On denatured alcohol to be used for motive power, per liter of volume capacity, one centavo; Provided, That unless otherwise provided for by special laws, if the denatured alcohol is mixed with gasoline, the specific tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For the purpose of this subsection, the removal of denatured alcohol of not less than one hundred eighty degrees proof (ninety per centum absolute alcohol) shall be deemed to have been removed for motive power, unless shown to the contrary; (e) Processed gas, per liter of volume capacity, four and one-half centavos; cda (f) Thinners and solvents, per liter of volume capacity, ninety one and one-half centavos; (g) Liquefied petroleum gas, per kilogram, eighty five centavos; Provided, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the specific tax on diesel fuel oil; (h) Asphalts, per kilogram, forty six centavos; (i) Greases, waxes and petroleum, per kilogram, eighty centavos; and (j) Aviation turbo jet fuel, per liter of volume capacity, one peso and twenty three centavos. "Sec. 155. Specific tax on bunker fuel oil. - On fuel oil, commercially known as bunker fuel oil, and on all similar fuel oils, having more or less the same generating power, there shall be collected, per liter of volume capacity, thirty three and one-half centavos, which tax shall attach to this fuel oil as soon as it is in existence as such. "Sec. 156. Specific tax on diesel fuel oil. - On fuel oil, commercially known as diesel fuel oil, and on similar fuel oils, having more or less the generating power, per liter of

volume capacity, fifty seven and one-half centavos, which tax shall attach to this fuel oil as soon as it is in existence as such. casia "Sec. 2. This Decree shall take effect on May 17, 1984. "DONE in the City of Manila, this 10th day of April in the Year of the Lord, Nineteen Hundred and Eighty Four. FERDINAND E. MARCOS President Republic of the Philippines" Features of the Presidential Decree: Increase in the specific tax on the following products: Old Rate New Rate a. Regular Gasoline P 1.5025/ltr. P 1.6625/ltr. b. Naphtha 1.5025/ltr. 1.6625/ltr. c. Aviation Gasoline 1.00/ltr. 1.5425/ltr. d. Avturbo 0.96/ltr. 1.23/ltr. e. Kerosene 0.0675/ltr. 0.3275/ltr. f. Lubricating oil0.80/ltr. 1.50/ltr. g. Diesel 0.19/ltr. 0.575/ltr. h. Fuel oil 0.075/ltr. 0.335/ltr. i. Process Gas 0.03/ltr. 0.045/ltr. j. LPG 0.315/kg. 0.085/kg. k. Greases, Waxes & Petrolatum 0.50/kg. 0.80/kg. l. Asphalts 0.18/kg. 0.46/kg. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdt (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-23-84 Revenue Memorandum Circular No. 9-84 May 23, 1984 REVENUE MEMORANDUM CIRCULAR NO. 9-84 Subject : Loss of Twenty-Eight (28) Sets of Payment Order (BIR Form CB RC-82-02-02). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of Twenty-Eight (28) sets of Revenue Payment Order, to wit: cdt ---------------------------Serial Numbers : Quantity ---------------------------0960051 to 0960075 : Twenty-Five (25) Sets ---------------------------3012957 to 3012959 : Three (3) Sets ---------------------------TOTAL : Twenty-Eight (28) Sets ----------------------------

The above receipts which were reported missing by the Collection Agents of RR# 4-B, Quezon City and RR# 2, Tuguegarao, Cagayan, respectively, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd Internal revenue officers, employees, and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-23-84 Revenue Memorandum Circular No. 10-84 May 23, 1984 REVENUE MEMORANDUM CIRCULAR NO. 10-84 Subject : Loss of Two Hundred Seventy-One (271) Sets of Confirmation Receipts (BIR Form CB-82-02-03). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of Two Hundred Seventy-One (271) sets of Confirmation Receipts, to wit: cdtai -----------------------------Serial Numbers : Quantity -----------------------------3760656 to 3760675 : Twenty (20) sets -----------------------------3833751 to 3834000 : Two Hundred Fifty (250) sets -----------------------------9624975 : One (1) set -----------------------------TOTAL : Two Hundred Seventy One (271) sets -----------------------------The above receipts which were reported missing by the Authorized Agent Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees, and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA Acting Commissioner By:

TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-04-84 Revenue Memorandum Circular No. 11-84 June 4, 1984 June 1, 1984 REVENUE MEMORANDUM CIRCULAR NO. 11-84 Subject : Publishing Executive Order No. 947. To : All Internal Revenue Officers and Others concern. For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 947 amending Sections 145, 146 and 147 of Title IV (Specific Taxes) of the National Internal Revenue Code of 1977, as amended. "EXECUTIVE ORDER NO. 947" "AMENDING SECTIONS 145, 146 AND 147 OF TITLE IV (SPECIFIC TAXES) OF THE NATIONAL INTERNAL REVENUE CODE OF 1977, AS AMENDED" "WHEREAS, as part of the program of government to rationalize the structure of protection granted to domestic products, the protective element in our indirect tax system should be gradually eliminated. casia "WHEREAS, the removal of any protective bias in the indirect tax system requires the realignment of the specific tax component on alcohol products; "WHEREAS, the upward revision of the specific tax on alcohol products will generate additional revenue to support the economic programs of the government. "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and by Section 290B of the National Internal Revenue Code of 1977, as amended, do hereby direct and order that: "Sec. 1. Section 145 of the National Internal Revenue Code of 1977, as amended is hereby further amended as follows: "(a) If produced from the sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup or sugar of the cane, per proof liter, four pesos and twenty centavos; Provided, that such materials are produced commercially in the country where they are processed into distilled spirits; Provided, further, that if produced in a pot still or other similar primary distilling apparatus by a distiller producing not more than fifty per centum of alcohol by volume, per proof liter, one peso and fifty six centavos. "(b) If produced from raw materials other than (a) hereof, per proof liter, thirty-five pesos. casia "This tax shall be proportionally increased for any strength of the spirits taxed over proof spirits, and the tax shall attach to the substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirits, or be immediately or at any subsequent time transformed into any other substance either in the process of original production or by any subsequent process. "Spirits or distilled spirits" is the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilutions and mixtures thereof, from whatever process produced, and shall include whisky, brandy, rhum, gin and vodka, and other similar products or mixture

including compounded liquors and all other preparations, except toilet preparations, of which excluding water distilled spirits is the chief ingredient. "Proof spirits" is liquor containing one-half of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths at fifteen degrees centigrade. A proof liter means a liter of proof spirits. "Sec. 2. Section 146 of the National Internal Revenue Code of 1977, as amended, is hereby further amended as follows: "Sec. 146. Specific tax on wines. - On wines there shall be collected, per liter of volume capacity, the following: (a) Sparkling wines, regardless of proof, twenty six pesos and fifty centavos; aisa dc (b) Still wines containing fourteen percentum of alcohol or less, four pesos and forty centavos; (c) Still wines containing more than fourteen percentum of alcohol, eight pesos and eighty centavos; and (d) Fortified wines containing more than twenty five percentum of alcohol shall be taxed as distilled spirits." "Sec. 3. Section 147 of the National Internal Revenue Code of 1977, as amended, is hereby further amended as follows: "Sec. 147. Specific Tax on Fermented Liquors. - On beer, lager beer, ale, porter and other fermented liquors (except tuba, basi, tapuy and similar domestic fermented liquors), there shall be collected on each liter of volume capacity, two pesos and ten centavos." "Sec. 4. All laws, decrees, executive orders, rules and regulations and other issuances or parts thereof which are inconsistent with this Order are hereby repealed, amended or modified accordingly. "Sec. 5. This Order shall take effect on June 1, 1984. "Done in the City of Manila, this 29th day of March, in the Year of the Lord, Nineteen Hundred and Eighty-Four." cd i "(SGD.) FERDINAND E. MARCOS President" Features of the Executive Order: Increase in the specific tax on the following products: Old Rate New Rate Distilled Spirits: a) If produced from the sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup or sugar of the cane P 3.00/p.l. Domestic Wines: a) Sparkling wines P 18.00/g.l. P 26.50/g.l. b) Still Wines - 14% or less 3.00/g.l. 4.40/g.l. c) Still wines - Over 14% 6.00/g.l. 8.80/g.l.

P 4.20/p.l.

Fermented Liquors 1.50/g.l. 2.10/g.l. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-07-84 Revenue Memorandum Circular No. 12-84 June 7, 1984 June 7, 1984 REVENUE MEMORANDUM CIRCULAR NO. 12-84 Subject : Publishing Executive Order No. 957 To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 957, revising the rates of specific tax on certain petroleum products. "EXECUTIVE ORDER NO. 957 AMENDING SECTIONS 153, 155 AND 156 OF TITLE IV (SPECIFIC TAXES) OF THE NATIONAL INTERNAL REVENUE CODE OF 1977, AS AMENDED. "WHEREAS, with the recent currency realignment, it is imperative that stringent measures be adopted to conserve oil and avoid wasteful consumption thereof; cdtai "WHEREAS, the restructuring of oil prices as well as the revision of the specific tax components thereof is an effective measure of conservation; "WHEREAS, the revision of specific tax rates will mean not only a production in oil consumption but will also mean savings in foreign exchange that could be utilized for the importation of essential commodities; "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and by Section 290B of the National Internal Revenue Code of 1977, as amended, do hereby direct and order that: cd "Sec. 1. Section 153, 155 and 156 of the National Internal Revenue Code as amended are hereby further amended to read as follows: "Sec. 153. Specific tax on manufactured oil and other fuels. - On refined and manufactured mineral oil and motor fuels, there shall be collected the following taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such; "(a) Kerosene, per liter of volume capacity, thirty seven and three-fourth centavos; (b) Lubricating oils, per liter of volume capacity, one peso and fifty centavos; (c) Naphtha, regular gasoline and all other similar products of distillation, per liter of volume capacity, one peso and seventy four and one-fourth centavos; Provided, That on premium and aviation gasoline, the tax shall be one peso and sixty-two and one-fourth centavos, per liter of volume capacity; (d) On denatured alcohol to be used for motive power, per liter of volume capacity, one centavo; Provided, That unless otherwise provided for by special laws, if the denatured alcohol is mixed with gasoline, the specific tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For the purposes of this subsection, the removal of denatured alcohol of not less than one

hundred eighty degrees proof (ninety per centum absolute alcohol) shall had deemed to have been removed for motive power, unless shown to the contrary; (e) Processed gas, per liter of volume capacity, four and one-half centavos; cda (f) Thinners and solvents, per liter of volume capacity, one peso and two and onehalf centavos; (g) Liquefied petroleum gas, per kilogram, ninety seven and one-half centavos; Provided, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the specific tax on diesel fuel oil; (h) Asphalts, per kilograms, fifty three centavos; (i) Greases, waxes and petroleum, per kilogram, eighty centavos; and (j) Aviation turbo jet fuel, per liter of volume capacity, one peso and thirty-seven centavos. "Sec. 155. Specific tax on bunker oil. - On fuel oil, commercially known as bunker fuel oil, and on all similar fuel oils, having more or less the same generating power, there shall be collected, per liter of volume capacity, thirty seven and one-half centavos, which tax shall attach to this fuel oil as soon as it is in existence as such. "Sec. 156. Specific tax on diesel fuel oil. - On fuel oil, commercially known as diesel fuel oil, and on all similar fuel oils, having more or less the same generating power, per liter of volume capacity, sixty-five and one-half centavos which tax shall attach to this fuel oil as soon as it is in existence as such. "Sec. 2. This Executive Order shall take effect on June 7, 1984. cdasia "DONE in the City of Manila, this 6th day of June, in the Year of our Lord, Nineteen Hundred and Eighty-Four. (SGD.) FERDINAND E. MARCOS President Republic of the Philippines Features of the Executive Orders: An increase in the specific tax on the following products: Previous Rate New Rate Increase a. Premium gasoline P 1.5425/ltr. P 1.622/ltr. 08 b. Regular Gasoline 1.6625/ltr. 1.7425/ltr. .08 c. Naphtha 1.6625/ltr. 1.7425/ltr. .08 d. Aviation Gasoline 1.5425/ltr. 1.6225/ltr. .08 e. Avturbo 1.23/ltr. 1.37/ltr. .14 f. Kerosene 0.3275/ltr. 0.3775/ltr. .05 g. Diesel Fuel 0.575/ltr. 0.655/ltr. .08 h. Fuel Oil 0.335/ltr. 0.375/ltr. .04 i. Thinners/Solvents 0.915/ltr. 1.025/ltr. .11 j. LPG 0.85/kg. 0.975/kg. .125 k. Asphalts 0.46/ltr. 0.53/ltr. .07 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia RUBEN B. ANCHETA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-30-84 Revenue Memorandum Circular No. 13-84 May 30, 1984 REVENUE MEMORANDUM CIRCULAR NO. 13-84 Subject : Loss of Used Revenue Official Receipts (BIR Form 25.24) bearing serial nos. 5572051G to 5572074G; 5572151G to 5572153G; and 6162101G to 6162113G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of used Revenue Official Receipts, to wit: ---------------------------INCLUSIVE SERIAL NUMBER : QUANTITY ---------------------------5572051 G to 5572074 G : 24 pieces (Collecting Officer's : copy) 5572151 G to 5572153 G : 3 pieces (National Office copy) : 3 pieces (Auditor's copy) : 3 pieces (Collecting Officer's copy) 6162101 G to 6162113 G : 13 pieces (Collecting Officer's copy) ---------------------------The above copies of Revenue Official Receipts were reported as missing while in the possession and custody of Mr. Basher Naim, Revenue Collection Agent of Balo-i, Lanao del Norte. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned copies of receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-30-84 Revenue Memorandum Circular No. 14-84 May 30, 1984 REVENUE MEMORANDUM CIRCULAR NO. 14-84 Subject : Loss of Unused Revenue Official Receipts (BIR Form 25.24) bearing serial nos. 5572075 G to 5572100G; 5572154G to 5572200G and 6162114G to 6162150G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of unused Revenue Official Receipts, to wit: -------------------------

INCLUSIVE SERIAL NUMBER : QUANTITY ------------------------5572075 G to 5572100 G : 26 sets 5572154 G to 5572200 G : 47 sets 6162114 G to 6162150 G : 37 sets ------------------------The above Revenue Official Receipts which were reported as missing while in the possession and custody of Mr. Basher Naim, Revenue Collection Agent of Balo-i, Lanao del Norte, have been cancelled and all official transactions involving the use of the said forms are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-08-84 Revenue Memorandum Circular No. 15-84 June 8, 1984 REVENUE MEMORANDUM CIRCULAR NO. 15-84 Subject : Publishing Executive Order No. 958 revising the retail prices of local cigarettes. To : All Internal Revenue Officials, Employees and Others Concerned. For the information and guidance of all concerned, hereunder are the salient features of Executive Order No. 958. I. The revised maximum retail prices on cigarettes are as follows: (see chart) cdt A. Cigarettes packed in 30's: MAXIMUM RETAIL PRICE NO CHANGES ON SPECIFIC PER PACK TAX RATES EXCEEDING/EXCEEDING NOT PER THOUSAND/PER PACK P1.60 P3.00 P0.09 P1.60 2.00 5.00 0.15 2.00 8.00 0.24 B. Cigarettes packed in 20's: P3.65 P20.00 P0.40 P3.65 4.50 28.00 0.56 4.50 5.50 32.00 0.64 5.50 6.00 46.00 0.92 6.00 6.50 64.00 1.28

6.50 7.30 91.00 1.82 7.30 121.00 2.42 C. Cigarettes of foreign manufacture regardless of retail price or contents per pack P121.00 II. All cigarette manufacturers concerned shall be allowed to use their cigarette labels imprinted with the old maximum retail price per pack of their products for a period of one hundred twenty (120) days from June 7, 1984 up to October 5, 1984, after which date, they shall comply with the pertinent requirements of Section 149(b) of the National Internal Revenue Code, as amended, regarding the printing of the maximum retail price and specific tax due on each pack of cigarettes. acd III. The safeguards as well as the specific requirements under the existing provisions of Section 149 of the National Internal Revenue Code, as amended by Executive Order Nos. 863 and 924 were retained in Executive Order No. 958. IV. The provisions of Executive Order No. 958 shall take effect on June 7, 1984. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-27-84 Revenue Memorandum Circular No. 16-84 June 27, 1984 REVENUE MEMORANDUM CIRCULAR NO. 16-84 Subject : Loss of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Nos. 5344551 G to 5344700 G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of revenue official receipts, to wit: Inclusive Serial Number Quantity 5344551 G to 5344700 G 3 Booklets The above booklets of revenue official receipts which were reported as missing while in the possession of Mr. Alexander S. Paglinawan, Revenue Collection Agent of Baganga, Davao Oriental, are hereby cancelled and all official transactions involving the use of the abovementioned revenue official receipts are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned copies of receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

07-19-84 Revenue Memorandum Circular No. 17-84 July 19, 1984 REVENUE MEMORANDUM CIRCULAR NO. 17-84 Subject : Loss of one (1) booklet and three (3) sets of Apprehension Receipts (BIR Form 19.14) bearing serial numbers 120401 to 120450 and 119698 to 119700. To : All Internal Revenue Officials, Employees, and Others Concerned. Notice is hereby given of the loss of Apprehension Receipts (BIR Form 19.14) to wit: cdasia ------------------------INCLUSIVE SERIAL NUMBERS : QUANTITY ------------------------120401 - 120450 : 1 booklet 119698 - 119700 : 3 sets ------------------------The above apprehension receipts which were reported as missing while in the possession and custody of Ms. Teresita Gallangan, OIC of the Administrative Unit of the Intelligence Division and Mr. Saturnino Morales Jr., Revenue Intelligence Officer of the same Division, have been cancelled and transactions involving the use thereof are therefore invalidated. casia Internal revenue officials, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-19-84 Revenue Memorandum Circular No. 18-84 July 19, 1984 REVENUE MEMORANDUM CIRCULAR NO. 18-84 Subject : Loss of 47 copies of Apprehension Receipts bearing serial numbers 119651 to 119697. To : All Internal Revenue Officials, Employees, and Others Concerned. ------------------------INCLUSIVE SERIAL NUMBER : QUANTITY ------------------------119651 - 119697 : 47 copies (duplicate) : 47 copies (triplicate) -------------------------

The above copies of apprehension receipts were reported as missing while in the possession and custody of Mr. Saturnino Morales Jr., Revenue Intelligence Officer of the Intelligence Division. acd Internal revenue officials, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-23-84 Revenue Memorandum Circular No. 19-84 August 23, 1984 August 23, 1984 REVENUE MEMORANDUM CIRCULAR NO. 19-84 Subject : Additional Guidelines on Dropping from the Rolls To : All Regional Directors, Revenue District Officers and other officials concerned Quoted hereunder for your information and guidance, is Regional Circular NCRC No. 5, s. 1984, of the Civil Service Commission, prescribing additional guidelines on dropping of employees from the rolls. aisa dc "REGIONAL CIRCULAR "Pursuant to CSC Resolution No. 81-738, the Regional Offices of the Civil Service Commission have been delegated the authority to act on requests for dropping from the rolls of officers or employees within their respective regional jurisdiction whose appointments are processed and/or approved therein. "In the course of exercising the aforecited delegated authority, this Office observed that agencies have different procedural practices in relation to their requests for dropping from the rolls. In some instances, the request for confirmation of the dropping from the rolls is not accompanied with the proper Order of Dropping. It may be stated that the Order of Dropping from the rolls a particular officer or employee must be initiated by the appointing official as the power to appoint carries with it the power to discipline or drop from the rolls. This Office merely confirms the Order of dropping upon ascertainment that the conditions prescribed in Section 33 of Civil Service Rule XVI have been satisfactorily complied with and that proper notation in the service record of the particular officer or employees shall be made. "In order to ensure uniformity in the application for request for dropping employees emanating from different offices, the following additional guidelines are issued: "1. Request for an agency for the confirmation of the dropping from the rolls submitted to this Office shall be accompanied with the Order of dropping the particular officer or employee from the rolls, by the Officer who exercises the power to appoint and/or remove employee within a particular jurisdiction.

"2. This Office shall confirm, take note and keep record of the said Order upon ascertainment that the conditions prescribed under Sec. 33 of CSC Rule XVI have been complied with. cd i "Please be guided accordingly." By Authority of the Commission: (SGD) AURORA A. DE LEON Regional Director CSC-NCR Henceforth, this Office shall not give due course to orders for dropping which are not in accordance with the prescribed procedure. cda Please be guided accordingly. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-05-84 Revenue Memorandum Circular No. 20-84 September 5, 1984 REVENUE MEMORANDUM CIRCULAR NO. 20-84 Subject : Loss of one (1) set of Revenue Official Receipt (BIR Form No. 25.24) bearing serial no. 6180848. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Official Receipt, to wit: acd ------------------------SERIAL NUMBER : QUANTITY ------------------------6180848 : one (1) set ------------------------The above set of Revenue Official Receipt which was reported as missing while in the possession of Ms. Fe A. Velarde, Revenue Collection Agent of La Libertad, Negros Oriental, has been cancelled and all official transactions involving the use of the abovementioned revenue official receipt are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the abovementioned copies of receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-20-84 Revenue Memorandum Circular No. 21-84 September 20, 1984

REVENUE MEMORANDUM CIRCULAR NO. 21-84 Subject : Clarification of Revenue Memorandum Circular No. 1-84. To : All internal revenue officers and others concerned. Under Revenue Memorandum Circular No. 1-84, corporations otherwise qualifying as "closely-held corporations" whose taxable year ends after May 19, 1983 are no longer subject to the provisions of Section 24 (e) of the Tax Code. Corporations otherwise qualifying as 'closely-held corporations' whose fiscal year ends before May 19, 1983 are still liable to pay the corporate tax shall not apply anymore to corporations filing income tax returns beginning with the calendar year 1983 and to corporations filing income tax returns for fiscal year beginning June 1, 1982. cdtai All revenue officers and others concerned are enjoined to observe the provisions of this Revenue Memorandum Circular and give the same as wide a publicity as possible. cdtai RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-84 Revenue Memorandum Circular No. 22-84 September 7, 1984 REVENUE MEMORANDUM CIRCULAR NO. 22-84 Subject : Loss of the Original and Duplicate copies of Revenue Official Receipt No. 7033833 G. To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of the original and duplicate copies of Revenue Official Receipt, to wit: cdtai ------------------------SERIAL NUMBER : QUANTITY ------------------------7033833 G : One (1) Copy Original : One (1) Copy Duplicate ------------------------The set of Revenue Official Receipt bearing Serial No. 7033833 G including its original and duplicate copies which were reported as missing while in the possession of Miss Corazon Bacani, Revenue Collection Agent of Sto. Tomas, Pampanga, has been cancelled and all official transactions involving the use of the abovementioned receipts, are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the abovementioned copies of receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-02-84 Revenue Memorandum Circular No. 23-84 October 2, 1984 REVENUE MEMORANDUM CIRCULAR NO. 23-84 Subject : Publishing Letter of Instructions No. 1416, dated 17 July 1984 and Ministry of Trade Order No. 19, series of 1984, dated 24 July 1984. To : All Internal Revenue Officials, Employees and Others Concerned. For the information and guidance of all concerned, quoted hereunder are the pertinent provisions of Letter of Instructions No. 1416: "In view of the foregoing, it is therefore, in the national interest that the Government assist the copper industry and towards this end, I hereby order and direct the suspension of payment of all taxes, duties, fees, imposts and other charges, whether direct or indirect, due and payable by the copper mining companies in distress to the National and Local Governments under the following conditions: "1. Only copper mining companies as determined by the Minister of Trade and Industry who can demonstrate that their continued operations under the present operating conditions and market situation can not be viably sustained may avail of the suspension of payment privilege. cd "2. The suspension of payment privilege shall be lifted once the world market price of copper reaches a level adequate to sustain the operation of copper mines as determined by the Minister of Trade and Industry and subject to the approval of the President. "3. The repayment of taxes, duties, fees and imposts and collection of which have been suspended shall be scheduled according to the individual paying capacity of each mining company, the repayment of which shall commence after the world market price has stabilized at an economically viable level as determined by the Minister of Trade and Industry and subject to the approval of the President. "4. The Minister of Trade and Industry shall have the authority to certify copper mining companies as eligible for suspension of payments, subject to the approval of the President. "5. The Minister of Energy is authorized to permit the sale and delivery of petroleum products to copper-mining companies with tax suspension privilege, without payment of taxes, duties and imposts on the relevant products provided such unpaid amount forms part of the unpaid taxes of the particular mining company. "6. The Minister of Trade and Industry is authorized to promulgate the implementing rules for this Letter of Instructions." cdasia and Ministry of Trade Order No. 19, series of 1984: "Sec. 1. Scope of Privilege Payment of all taxes, duties, dues, imposts and other charges, whether direct or indirect due and payable by distressed copper mining companies to the national and local governments shall be suspended under such terms and conditions as the Minister of Trade and Industry may determine under these implementing rules and regulations. The privilege, shall not, however, apply to non-mining related activities. "Sec. 2. Application for Privilege -

2.1. A distressed copper mining company seeking to avail of the privilege for the suspension of taxes shall file their intention to avail with the Office of the Minister, Ministry of Trade and Industry, Industry and Investments Building, 385 Sen. Gil J. Puyat Avenue, Makati, Metro Manila. 2.2. The applicant shall provide sufficient documentation to demonstrate that its continued operations under present market and operating conditions cannot be viably sustained. These documents include, but are not limited to the following: a. Audited Financial Statements for the immediate Preceding Calendar Year (1983); b. Financial Statements for the 1st half of 1984; c. Projected Financial Statements for the 2nd half of '84 and Calendar Year 1985, on a quarterly basis, stating major assumptions used. Two (2) sets will be required at copper price levels at 60 and 70; d. Income Tax Return for 1983; Estimated Schedule of suspended Taxes and Duties, broken down by type and quarter. The initial quarter to be 3rd quarter of '84 up to 4th quarter '85; cdtai f. Calculation of Cash Break-Even Copper Prices, as duly certified by the Chief Financial Officer of the company, of three (3) levels - Cash Break-Even Before Debt Amortization - Cash Break-Even After Debt Amortization - Cash Break-Even Before Debt Amortization (Excluding provision for suspended taxes). "Sec. 3. Evaluation of Application The Ministry of Trade and Industry shall undertake a thorough and careful evaluation of the above documents. Should the documents be unclear of certain representations, the applicant may be called to explain, elaborate or justify these representations. "Sec. 4. Certificate of Eligibility Should the applicant be able to demonstrate that its operations can not be viably sustained under present market and operating conditions, the Ministry of Trade and Industry shall recommend the issuance of a Certificate of Eligibility to Suspend Payments (CESP) and terms and conditions of such availment for the approval of the President. "Sec. 5. Effectivity of Privilege The privilege shall commence on the date the Certificate of Eligibility to Suspend Payments is approved until such time that free market prices of copper has reached a level adequate to sustain the operation of the distressed copper mining companies as certified by the Ministry of Trade and Industry, subject to the approval of the President. "Sec. 6. Cancellation of Privilege Any above provision to the contrary notwithstanding, the CESP may be cancelled at any time for any of the following grounds: a. Application is found to have certain false misleading statements; b. Documents submitted in support of the application are found to be spurious; c. Failure to comply with the terms and conditions of the availment of the privilege. "Sec. 7. Requirements for Those Granted the Privilege 7.1. The Company which avails of the privilege to suspend tax payments shall submit: a. Monthly financial statements within 15 days from the end of every month; cd i b. Breakdown of actual taxes, duties and others, due and payments for the month immediately preceding, payment of which were suspended under LOI No. 416 within 15 days from the end of each month.

7.2. For the entire effectivity of the privilege and until full repayment of the "taxes and duties deferred under LOI No. 1416" the Minister of Trade and Industry or his authorized representatives, shall have the right to audit the books of the company which avails of the privilege to suspend tax payments. 7.3. The company shall declare any cash dividends on common shares for the entire effectivity of the privilege. "Sec. 8. Petroleum Products All distressed copper mining companies which have been granted the privilege of suspending tax payments are entitled to apply to the Minister of Energy for exemption from payment of all taxes, duties, imposts and other charges on petroleum products, who shall authorize to issue a permit exempting payment of all such taxes, duties, etc. under terms and conditions the Minister of Energy may impose. "Sec. 9. Schedule of Repayment 9.1. Upon immediate lifting of the state of suspension of tax payments as provided for in Sections 5 & 6 the company shall submit a proposed schedule of repayment within 15 days from above-lifting for consideration of the Ministry of Trade and Industry and other agencies involved. The company shall justify the schedule of repayment in relation to its projected cash flows and/or profits and losses. 9.2. The period allowed for repayment shall not exceed the equivalent period of suspension unless otherwise approved by the President upon recommendation of the Minister of Trade and Industry. cd 9.3. Repayments of taxes, duties, etc. suspended under LOI No. 1416 shall be applied pro rata to all the types of taxes, duties, etc. without preference or priority to any class of taxes, duties, etc. "Sec. 10. Penalties Any violation of LOI 1416, its implementing rules and regulations shall cause the immediate acceleration of all taxes, duties suspended under LOI No. 1416 as if these were due and payable." All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-84 Revenue Memorandum Circular No. 24-84 October 15, 1984 REVENUE MEMORANDUM CIRCULAR NO. 24-84 Subject : Publishing the revised specific tax rate on saccharine To : All Internal Revenue Officers and Others Concerned: For the information and guidance of all concerned, there is quoted hereunder the amendment of Section 158 of the Tax Code as provided for under Presidential Decree No. 1959 revising the rate of specific tax on saccharine. "Sec. 10. Section 158 of this Code, as amended, is hereby further amended to read as follows: cdasia

Sec. 158. Specific Tax on Saccharine. - On saccharine, sodium saccharinate and all its derivatives or salts of saccharine and other artificial sweetening agents, there shall be collected a tax of one hundred twenty-five pesos per kilogram. Features of the Amendment A. Rate Previous New Increase P75.00/kilogram P125./kg. P50.00 B. Date of Effectivity - October 15, 1984 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. acd (SGD.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-12-84 Revenue Memorandum Circular No. 25-84 October 12, 1984 REVENUE MEMORANDUM CIRCULAR NO. 25-84 Subject : Publishing Presidential Decree No. 1955 To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Presidential Decree No. 1955. "PRESIDENTIAL DECREE NO. 1955 "WITHDRAWING, SUBJECT TO CERTAIN CONDITIONS, THE DUTY AND TAX PRIVILEGES GRANTED TO PRIVATE BUSINESS ENTERPRISES AND/OR PERSONS ENGAGED IN ANY ECONOMIC ACTIVITY, AND FOR OTHER PURPOSES "WHEREAS, the current economic crisis amounts to a grave emergency which affects the stability of the nation and requires immediate action; cdasia "WHEREAS, the issuance of this decree is an essential and necessary component of the national economic recovery program formulated to meet and overcome the emergency; "WHEREAS, Section 20 of the Batas Pambansa Blg. 391, otherwise known as the Investment Incentives Policy Act of 1983, authorizes the President to restructure/rationalize all existing incentives systems/legislations to align them with overall economic development objectives and make them more responsive and meaningful to changing circumstances; cd "NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree: "Sec. 1. The provisions of any special or general law to the contrary notwithstanding, all exemptions from or any preferential treatment in the payment of duties, taxes, fees, imposts and other charges heretofore granted to private business enterprises and/or persons engaged in any economic activity, are hereby withdrawn, except those enjoyed by the following: "(a) Those registered by the Board of Investments under Presidential Decree No. 1789, as amended by Batas Pambansa Blg. 391, and those registered by the Export

Processing Zone Authority under Presidential Decree No. 66, as amended by Presidential Decree Nos. 1449, 1776, 1776-A and 1786; "(b) The copper mining industry in accordance with the provisions of LOI 1416; "(c) Those governed by international agreements to which the Philippines is a signatory; "(d) Those covered by the non-impairment clause of the Constitution; and "(e) Those that will be approved by the President of the Philippines upon the recommendation of the Minister of Finance. "Sec. 2. The Ministry of Finance shall promulgate the necessary rules and regulations to effectively implement the provisions of this Decree. "Sec. 3. All other laws, decrees, executive orders, administrative orders, rules, regulations or parts thereof which are inconsistent with this Decree are hereby repealed, amended or modified accordingly. cdtai "Sec. 4. This Decree shall take effect on October 15, 1984. "DONE in the City of Manila, this 10th day of October, in the year of Our Lord, nineteen hundred and eighty-four. acd (SGD.) FERDINAND E. MARCOS President of the Philippines Features of PD 1955: The Presidential Decree withdraws all exemptions from or any preferential treatment in the payment of duties, taxes, fees, imposts and other charges heretofore granted to private business enterprises and/or persons engaged in any economic activities. The withdrawal of the tax exemptions and/or preferential tax treatment does not apply to the following: (a) Those registered by the Board of Investments under Presidential Decree No. 1789, as amended by Batas Pambansa Blg. 391, and those registered by the Export Processing Zone Authority under Presidential Decree No. 66, as amended by Presidential Decree Nos. 1449, 1776, 1776-A and 1786; (b) The copper mining industry in accordance with the provisions of LOI 1416; (c) Those covered by international agreements to which the Philippines is a signatory; (d) Those covered by the non-impairment clause of the Constitution; and cd (e) Those that will be approved by the President of the Philippines upon the recommendation of the Minister of Finance. aisa dc Beginning October 15, 1984, all persons heretofore enjoying exemptions from or any preferential treatment in the payment of internal revenue taxes shall be liable to pay the full amount of taxes imposed under the National Internal Revenue Code. All items of gross income, gross receipts, sales, output, etc., as well as importations of any article, which are subject to the income, percentage and miscellaneous taxes imposed under the Code, derived, received or realized on or after October 15, 1984 shall be reported or declared for tax purposes in accordance with the appropriate provisions of the Tax Code. All internal revenue officers and others concerned are enjoined to be guided accordingly, and to give this Circular as wide a publicity as possible. RUBEN B. ANCHETA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-84 Revenue Memorandum Circular No. 26-84 October 15, 1984 REVENUE MEMORANDUM CIRCULAR NO. 26-84 Subject : Publishing Sections 263, 268 and 269 of the National Internal Revenue Code of 1977, as amended by PD 1959, Increasing the tax rates on insurance premiums, amusement places and winnings on horse races and Jai-alai. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the amended provisions of Sections 263, 268, and 269 of the National Internal Revenue Code of 1977, as amended by PD 1959. Sec. 43. Section 263 of this Code, as amended, is hereby further amended to read as follows: cd "Sec. 263. Tax on insurance premium. - There shall be collected from every person, company, or corporation (except purely cooperative companies or associations) doing insurance business of any sort in the Philippines, a tax of six per centum of the total premium collected, whether such premiums are paid in money, notes, credits or any substitute for money; but premiums refunded within six months after payment on account of rejection or risk or returned for other reason to a person insured shall not be included in the taxable receipts; nor shall any tax be paid upon reinsurance by a company that has already paid the tax; nor upon premiums collected or received by any branch of a domestic corporation, firm or association doing business outside the Philippines on account of any life insurance of the insured who is a non-resident, if any percentage tax on such premium is imposed by the foreign country where the branch is established nor upon premiums collected or received on account of any reinsurance, if the risk insured against covers property located outside the Philippines, or the insured, in case of personal insurance, resides outside the Philippines, if any percentage tax on such premiums is imposed by the foreign country where the original insurance has been issued or perfected; nor upon that portion of the premiums collected or received by the insurance companies on variable contracts (as defined in Sec. 232 (2) of Presidential Decree No. 612), in excess of the amounts necessary to insure the lives of the variable contract workers. "Cooperative companies or associations are such as are conducted by the members thereof with the money collected from among themselves and solely for their own protection and not for profit." cd i Sec. 44. Section 268 of this Code, as amended, is hereby further amended to read as follows: "Sec. 268. Amusement taxes. - There shall be collected from the proprietor, lessee of operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-alai, race tracks and bowling alleys, a tax equivalent to: "1. Eighteen per centum in the case of cockpits; "2. Eighteen per centum in the case of cabarets, night or day clubs; "3. Fifteen per centum in the case of boxing exhibitions; "4. Fifteen per centum in the case of professional basketball games as envisioned in Presidential Decree No. 871. Provided, however, that the tax herein shall be in lieu of all other percentage taxes of whatever nature and description.

"5. Thirty per centum in the case of Jai-alai and race tracks; and "6. Fifteen per centum in the case of bowling alleys of their gross receipts, irrespective of whether or not any amount is charged or paid for admission. For the purpose of the amusement tax, the term "gross receipts" embraces all the receipts of the proprietor, lessee or operator of the amusement place. Said gross receipts also include income from television, radio and motion picture rights, if any. (A person or entity or association conducting any activity subject to the tax herein imposed shall be similarly liable for said tax with respect to such portion of the receipts derived by him or it.) "The taxes imposed herein shall be payable at the end of each quarter and it shall be the duty of the proprietor, lessee, or operator concerned, as well as any party liable, within twenty days after the end of each quarter, to make a true and complete return of the amount of the gross receipts received during the preceding quarter and pay the tax due thereon. If the tax is not paid within the time prescribed above, the amount of the tax shall be increased by twenty-five per centum, the increment to be part of the tax. casia "In case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of the return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the falsity or fraud, in which case, the amount so assessed shall be collected in same manner as the tax." Sec. 45. Section 28 of this Code, as amended, is hereby further amended to read as follows: "Sec. 269. Tax on Winnings. - Every person who wins in horse races or Jai-Alai shall pay a tax equivalent to fifteen per cent of his winnings or 'dividends', the tax to be based on the actual amount paid to him for every winning ticket after deducting the cost of the ticket. The tax herein prescribed shall be deducted from the 'dividends' corresponding to each winning ticket and withheld by the operator, manager, or person in charge of the horse-races or Jai-Alai before paying the 'dividends' to the person entitling thereto. The same tax shall be collected from owners of winning race horses at the same time and in the same manner above. "Operator, manager, or person in charge of horse races or Jai-Alai shall, within twenty days from the date the tax was deducted and withheld in accordance with the first paragraph hereof, file a true and correct return with the Commissioner in the manner and form to be prescribed by the Minister of Finance, and pay within the same period the total amount of tax so deducted and withheld. "If the tax herein provided is not paid within the time prescribed above, or in case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of the return before the discovery of the falsity or fraud, the corresponding surcharges provide in Section 268 of this Code." cdtai Salient features of the amendments The amendatory sections have increased the tax rates on certain miscellaneous taxes. Said increases are shown in the tabular presentation below: Sections Tax Base Charges in Tax

Rate Sec. 263 Receipts of insurance companies Sec. 268 Gross receipts from the following amusement places From 4% to 6%

a) Cockpits From 12% to 18% b) Cabarets, night or day clubs From 12% to 18% c) Boxing exhibition From 10% to 15% d) Professional basketball games From 10% to 15% e) Jai-Alai and race tracks From 20% to 30% f) Bowling alleys From 20% to 30% Sec. 269 Winnings on horse races and Jai-AlaiFrom 10% to 15% The increases in tax rates take effect beginning October 15, 1984. All internal revenue officials, employees, and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. RUBEN ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-84 Revenue Memorandum Circular No. 27-84 October 15, 1984 October 15, 1984 REVENUE MEMORANDUM CIRCULAR NO. 27-84 Subject : Publishing Sections 223 to 246, inclusive of the National Internal Revenue Code of 1977, as amended by Presidential Decree No. 1959, increasing the Documentary Stamp Tax rates on certain documents. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are Sections 223 to 246 of the National Internal Revenue Code of 1977, as amended, by PD 1959. cd i Sec. 19. Section 223 of this Code, as amended, is hereby further amended to read as follows: "Sec. 223. Stamp tax on bonds, debentures, and certificate of indebtedness. - On all bonds, debentures and certificates of indebtedness issued by any association, company, or corporation, there shall be collected a documentary stamp tax of one peso on each two hundred pesos, or fractional part thereof, of the face value of such documents." Sec. 20. Section 224 of this Code, as emended, is hereby further amended to read as follows: "Sec. 224. Stamp tax on original issue of certificates of stock. - On every original issue, whether on organization, reorganization or for any lawful purpose, of certificates of stock by any association, company, or corporation, there shall be collected a documentary stamp tax of one peso and seventy centavos on each two hundred pesos, or fractional part thereof, of the par value of such certificates: Provided, That in the case of the original issue of stock without par value the amount of the documentary stamp tax herein prescribed shall be based upon the actual consideration received by the association,

company, or corporation for the issuance of such stock, and in the case of stock dividends, on the actual value represented by each share." cdasia Sec. 21. Section 225 of this Code, as amended, is hereby further amended to read as follows: "Sec. 225. Stamp tax on sales, agreements to sell, memoranda of sales, deliveries or transfer of bonds, due-bills, certificates of obligation, or shares or certificates of stocks. On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of bonds, due-bills, certificates of obligation, or shares or certificates of stock in any association, company, or corporation, or transfer of such securities by assignment in bank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such bonds, due-bills, certificates of obligation or stocks, or to secure the future payment of money, or for the future transfer of any bond, due-bill, certificates of obligation or stock, there shall be collected a documentary stamp tax of fifty centavos on each two hundred pesos, or fractional part thereof, of the par value of such bond, due-bills, certificates of obligation or stock: Provided, That only one tax shall be collected on each sale or transfer of stock or securities from one person to another, regardless of whether or not a certificate of stock or obligation is issued, indorsed, or delivered in pursuance of such sale or transfer: And provided, further, that in the case of stock without par value the amount of the documentary stamp tax herein prescribed shall be equivalent to twenty-five per centum of the documentary stamp tax paid upon the original issue of said stock." Sec. 22. Section 227 of this Code, as amended, is hereby further amended to read as follows: "Sec. 227. Stamp tax on certificates of profits or interest in property or accumulations. - On all certificates of profits, or any certificate or memorandum showing interest in the property or accumulations of any association, company, or corporation, and on all transfers of such certificates or memoranda, there shall be collected a documentary stamp tax of twenty centavos on each two hundred pesos, or fractional part thereof, of the face value of such certificate or memorandum." Sec. 23. Section 228 of this Code, as amended, is hereby further amended to read as follows: "Sec. 228. Stamp tax on bank checks, drafts, and other instruments. - On each bank check, draft, or order for the payment of any sum of money drawn upon or issued by any bank, trust company, or any person or persons, companies or corporation, at sight or on demand, there shall be collected a documentary stamp tax of twenty centavos." Sec. 24. Section 229 of this Code, as amended, is hereby further amended to read as follows: cd i "Sec. 229. Stamp tax on promissory notes, bills of exchange, drafts, certificates of deposit, debt instruments used for deposit substitutes and others not payable on sight or demand. - On all bills of exchange (between points within the Philippines), drafts, or certificates of deposits, debt instruments used for deposit substitutes or orders for the payment of any sum of money otherwise than at sight or on demand, on all promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation, and on each renewal of any such note, there shall be collected a documentary stamp tax of twenty centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange, draft, certificate of deposit, debt instrument, or note."

Sec. 25. Section 230 of this Code, as amended, is hereby further amended to read as follows: "Sec. 230. Stamp tax upon acceptance of bills of exchange and others. - Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines, there shall be collected a documentary stamp tax of thirty centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency." Sec. 26. Section 231 of this Code, as amended, is hereby further amended to read as follows: "Sec. 231. Stamp tax on foreign bills of exchange and letters of credit. - On all foreign bills of exchange and letters of credit (including orders, by telegraphic or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippines in a set of three or more according to the custom of merchants and bankers, there shall be collected a documentary stamp tax of thirty centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange or letter of credit, of the Philippine equivalent of such face value, if expressed in foreign currency." casia Sec. 27. Section 232 of this Code, as amended, is hereby further amended to read as follows: "Sec. 232. Stamp tax on life insurance policies. - On all policies of insurance or other instruments by whatever name the same may be called, whereby any insurance shall be made or renewed upon any life or lives, there shall be collected a documentary stamp tax of fifty centavos on each two hundred pesos or fractional part thereof, of the amount insured by any such policy." Sec. 28. Section 233 of this Code, as amended, is hereby further amended to read as follows: "Sec. 233. Stamp tax on policies of insurance upon property. - On all policies of insurance or other instruments by whatever name the same may be called, by which insurance shall be made or renewed upon property of any description, including rents or profits, against peril by sea or on inland waters, or by fire or lightning, there shall be collected documentary stamp tax of thirty centavos on each four pesos or fractional part thereof, of the amount of premium charged: Provided, however, That no documentary stamp tax shall be collected on reinsurance contracts or on any instruments by which cession or acceptance of insurance risks under any reinsurance agreement is effected or recorded." Sec. 29. Section 234 of this Code, as amended, is hereby further amended to read as follows: "Sec. 234. Stamp tax on fidelity bonds and other insurance policies. - On all policies of insurance or bonds or obligations of the nature of indemnity for loss, damage or liability made or renewed by any person, association, company or corporation transacting the business of accident, fidelity, employer's liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler, or other branch of insurance (except life, marine, inland, and fire insurance), and all bonds, undertakings, or recognizances, conditioned for the performance of the duties of any officer or position, for the doing, or not doing of anything therein specified, and on all obligations guaranteeing the validity or legality of

any bonds or other obligations issued by any province, city, municipality, or other public body or organization, and on all obligations guaranteeing the title to any real estate, or guaranteeing any mercantile credits, which may be made or renewed by any such person, company, or corporation, there shall be collected a documentary stamp tax of thirty centavos on each four pesos, or fractional part thereof, of the premium charged." cd Sec. 30. Section 235 of this Code, as amended, is hereby further amended to read as follows: "Sec. 235. Stamp tax on policies of annuities. - On all policies of annuities, or other instruments by whatever name the same may be called, whereby an annuity may be made, transferred, or redeemed, there shall be collected a documentary stamp tax of one peso on each two hundred pesos, or fractional part thereof, of the capital of the annuity, or should this be unknown, then on each two hundred pesos, or fractional part thereof, of thirty-three and one-third times the annual income." Sec. 31. Section 236 of this Code, as amended, is hereby further amended to read as follows: "Sec. 236. Stamp tax on indemnity bonds. - On all bonds for indemnifying any person, firm, or corporation who shall become bound or engaged as surety for the payment of any sum of money or for the due execution or performance of the duties of any office or position or to account for money received by virtue thereof, and on all other bonds of any description, except such as may be required in legal proceedings, or are otherwise provided for herein, there shall be collected a documentary stamp tax of three pesos and fifty centavos." Sec. 32. Section 237 of this Code, as amended, is hereby further amended to read as follows: "Sec. 237. Stamp tax on certificates. - On each certificate of damage or otherwise, and on every other certificate or document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of three pesos." acd Sec. 33. Section 238 of this Code, as amended, is hereby further amended to read as follows: "Sec. 238. Stamp tax on warehouse, motel, and hotel receipts' and others. - (a) On each warehouse receipt for property held in storage in a public or private warehouse or yard for any other person than the proprietor of such warehouse or yard himself, there shall be collected a documentary stamp tax of one peso and fifty centavos: Provided, That no tax shall be collected on each warehouse receipt issued to any one person in any one calendar month covering property the value of which does not exceed two hundred pesos. (b) On each hotel receipt issued by keepers of hotels, motels, resthouses, lodging houses, or resorts to a guest for lodging, there shall be collected a documentary stamp tax of three pesos: Provided, however, that if the amount of the receipt exceeds twenty pesos an additional tax of three pesos on each twenty pesos or fractional part thereof shall be collected. Sec. 34. Section 239 of this Code, as amended, is hereby further amended to read as follows:

"Sec. 239. Stamp tax on Jai-Alai or horse race tickets. - On each Jai-Alai or horse race ticket, there shall be collected a documentary stamp tax of twenty centavos: Provided, That if the cost of the ticket exceeds one peso, an additional tax of twenty centavos on every one peso or fractional thereof shall be collected." Sec. 35. Section 240 of this Code, as amended, is hereby further amended to read as follows: "Sec. 240. Stamp tax on bills of lading or receipts. - On each set of bills of lading or receipts (except charter party) for any goods, merchandise, or effects shipped from one port or place in the Philippines to another port or place in the Philippines (except on ferries across rivers), or to any foreign port, there shall be collected a documentary stamp tax in accordance with the following schedule: cd i If the value of goods: Exceeds P100 but does not exceed P1,000 P0.50 Exceeds P1,000 but does not exceed P10,000 P1.00 Exceeds P10,000 P3.00 Provided, however, That freight tickets covering goods, merchandise, or effects carried as accompanied baggage or passengers on land and water carries primarily engaged in the transportation of passengers are hereby exempt." Sec. 36. Section 241 of this Code, as amended, is hereby further amended to read as follows: "Sec. 241. Stamp tax on proxies. - On each proxy for voting at any election for officers of any company or association, or for any other purpose, except proxies issued affecting the affairs of associations or corporations organized for religious, charitable, or literary purposes, there shall be collected a documentary stamp tax of two pesos and fifty centavos." Sec. 37. Section 242 of this Code, as amended, is hereby further amended to read as follows: "Sec. 242. Stamp tax on powers of attorney. - On each power of attorney to perform any act whatsoever, except acts connected with the collection of claims due from or accruing to the Government of the Republic of the Philippines, or the government of any province, city or municipality, there shall be collected a documentary stamp tax of two pesos. Provided, however, That on each power of attorney which authorizes another to administer, sell, lease, or otherwise dispose of the property of a principal, there shall be collected a documentary stamp tax of three pesos." Sec. 38. Section 243 of this Code, as amended, is hereby further amended to read as follows: "Sec. 243. Stamp tax on leases and other hiring agreements. - On each lease, agreement, memorandum, or contract for hire, use or rent of any lands or tenements, or portions thereof, there shall be collected a documentary stamp of three pesos for each year of the term of said contracts or agreement." Sec. 39. Section 244 of this Code, as amended, is hereby further amended to read as follows: "Sec. 244. Stamp tax on mortgages, pledges, and deeds of trust. - On every mortgage or pledge of lands, estate, or property, real or personal, heritable or movable, whatsoever, where the same shall be made as a security for the payment of any definite and certain sum of money lent at the time or previously due and owing or forborne to be paid being

payable, and on any conveyance of land, estate, or property whatsoever, in trust or to be sold, or otherwise converted into money which shall be and intended only as security, either by express stipulation or otherwise, there shall be collected a documentary stamp at the following rates: (a) When the amount secured does not exceed five thousand pesos, ten pesos. (b) On each five thousand pesos, or fractional part thereof in excess of five thousand pesos, an additional tax of five pesos. On any mortgage, pledge, or deed of trust, where the same shall be made as a security for the payment of a fluctuating account or future advances without fixed limit, the documentary stamp tax on such mortgage, pledge or deed of trust shall be computed on the amount actually loaned or given at the time of the execution of the mortgage, pledge or deed of trust. However, if subsequent advances are made on such mortgage, pledge or deed of trust, additional documentary stamp tax shall be paid which shall be computed on the basis of the amount advanced or loaned at the rates specified above. Provided, however, That if the full amount of the loan or credit, granted under the mortgage, pledge or deed of trust is specified therein, the documentary stamp tax prescribed in this section shall be paid and computed on the said amount of the loan of credit granted. cd i Sec. 40. Section 245 of this Code, as amended, is hereby further amended to read as follows: "Sec. 245. Stamp tax on deed of sale and conveyance of real property. - On all conveyance, deeds, instruments, or writings, other than grants, patents, or original certificates of adjudication issued by the Government, whereby any lands, tenements or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers, there shall be collected a documentary stamp tax at the following rates: (a) When the consideration, or value received or contracted to be paid for such realty, after making proper allowance of any encumbrance, does not exceed one thousand pesos, ten pesos. (b) For each additional one thousand pesos, or fractional part thereof in excess of one thousand pesos of such consideration of value, ten pesos. When it appears that the amount of the documentary stamp tax hereunder has been reduced by an incorrect statement, of the consideration in any conveyance, deed, instrument, or writing subject to such tax, the Commissioner, provincial, or city treasurer or other revenue officer shall, from the assessment rolls or other reliable source of information, assess the property of its true market value and collect the proper tax thereon." Sec. 41. Section 246 of this Code, as amended, is hereby further amended to read as follows: "Sec. 246. Stamp tax on charter parties and similar instruments. - On every charter party, contract, or agreement for the charter of any ship, vessel, or steamer, or any letter or memorandum or other writing between the captain, master, or owner, or other person acting as agent of any ship, vessel, or streamer, and any other person or persons for or relating to the charter of any such ship, vessel, or steamer, and on any renewal or transfer of such charter, contract, agreement, letter or memorandum, there shall be collected a documentary stamp tax at the following rates:

(a) If the registered gross tonnage of the ship, vessel, or streamer does not exceed three hundred tons, and the duration of the charter or contract does not exceed six months, one hundred pesos, and for each month or fraction of a month in excess of six months, an additional tax of twenty pesos shall be paid. (b) If the registered gross tonnage exceeds three hundred tons and does not exceed six hundred tons, and the duration of the charter or contract does not exceed six months, two hundred pesos; and for each month or fraction of a month in excess of six months, an additional tax of forty pesos shall be paid. cda (c) If the registered gross tonnage exceeds six hundred tons and the duration of the charter or contract does not exceed six months, three hundred pesos; and for each month or fraction of a month in excess of six months, an additional tax of fifty four pesos." Salient features of the amended provisions The increases in tax rates maybe seen from the tabular presentation given on: OLD RATES NEW RATES Section 223 Stamp tax on bonds, debentures and certificates of indebtedness P0.65/P200 Section 224 Stamp tax on original issue of certificates of stocks P1.10/200 Section 225 Stamp tax on sale agreements to sell, memoranda of sales, deliveries or transfer of bonds, due-bills, certificates of obligation or shares or certificates of stock. P1.70/200

P1.00/P200

P0.25/P200

P0.50/P200

In the case of stock without par value 25% of the 25% of the documentary documentary stamp tax paid stamp tax paid upon the upon the original issue of original issue said stock of said stock Section 227 Stamp tax on certificates of profits or interest in property or accumulation. P0.10/P200

P0.20/P200

Section 228 Stamp tax on bank checks, drafts, certificates of deposit not bearing interest and other instruments. P0.15/document Section 229 Stamp tax on promissory notes bills of exchange, drafts, certificates of deposit bearing interest and others not payable on sight or demand. P0.10/P200 Section 230 Stamp tax upon acceptance of bills of exchange and others P0.15/P200 Section 231 Stamp tax on foreign bills of exchange and letters of credit Section 232 Stamp tax on life insurance policies. P0.35/P200 Section 233 Stamp tax on policies of insurance upon property Section 234 Stamp tax on fidelity bonds and other insurance policies P0.15/P4.00 Section 235 Stamp tax on policies of annuities (if known) P0.65/P200 If capital of the annuity P1.00/P200 P0.30/P4.00 P0.15/P4.00 P0.30/P4.00 P0.50/P200 P0.20/P200 P0.30/P200 P0.30/P200

P0.20/document

P0.20/P200

is unknown On each P200 or On each P200 or fractional part, fractional part, 33-1/3 times the 33-1/3 times the annual income annual income Section 236 Stamp tax on indemnity bonds. Section 237 Stamp tax on certificates Section 238 Stamp tax on warehouse, motel, hotel receipts and others. A. Warehouse Receipt: not over P200 ----- ----over P200 P0.90/receipt P1.50/receipt B. Hotel Receipt not over P200 P2.00/receipt P3.00/receipt over P200 additional tax of additional tax of P2.00 on every P3.00 on every P20.00 P20.00 Section 239 Stamp tax on Jai-Alai or horse race tickets not over P1.00 P0.10/ticket P0.20/ticket over P1.00 additional P0.10 additional tax of on every P1.00 P0.20/P1.00 Section 204 * Stamp tax on bills of lading or receipts If the value of goods If the value of goods P1.50/certificate P3.00/certificate P2.25/document P3.50/document

does not exceed P5.00 exceeds P100 but exceeds P 5.00 but does not exceed P200 P0.15 does not exceed exceeds P 200.00 but does not exceed P1,000 P0.35 P1,000-P0.50 exceeds P1,0000 but does not exceed P5,000P0.70 exceeds P1,000 exceeds P5,000.00 but does not exceed P10,000 P2.00 but does not exceed exceeds P10,000 P3.75 P10,000-P3.00 exceeds P10,000 Section 241 Stamp tax proxies voting Section 242 Stamp tax on power of attorney - power of attorney P1.00/document - power of attorney which authorizes another to administer, sell or lease, etc. P2.00/document Section 243* Stamp tax on lease and other hiring agreements a. b. c. Section 244* Stamp tax on mortgages, pledges, and deeds of trust If the amount for which mortgage or deed of trust is given Exceeds P1,000 but does not exceed P3,000 P3.50 does not exceed P5,000 -P10.00 executed not more than one year P2.00 --executed from 1 to 3 years P4.50 P3.00/year executed from more than 3 years P9.00 --P2.00/document P3.00/document P1.50/proxy for P2.50/proxy for voting

Exceeds 3,000 P3.50 on each Exceeds P5,000-P5.00 P3,000 or on each P5,000 or fractional part in fractional part in excess of excess of P5,000 P3,000 Payment of fluctuating account or future advances computed on the computed on the without fixed limit amount actually amount actually loaned at the loaned at the time of execution time of execution If subsequent advances computed on the computed on the are made amount advanced at amount advanced at the rates specified the rates specified If full amount is specified computed on the full computed on the full amount of the loan or amount of the loan or credit granted credit granted Section 245* Stamp tax on deeds of sale and conveyances of real property - if the amount is: P200 - P1,000 P2.00 P1,000 and below -P10.00 over P1,000 P8.00 additional over P1,000 - P10.00 tax on each additional tax on P1,000 each P1,000 Section 246 Stamp tax on charter parties and similar instruments a. 1 - 300 tons, 1 - 6 months P60.00 P100.00 6 months and over P9.00/each month P20./month 300 - 600 tons, 1-6 months P140.00 6 months and over P18.00/each month P40/month

additional tax of P200.00 additional tax of

b.

600 or more tons, 1 - 6 months P200.00 P300.00 6 months and over P36.00 additional tax of P54/month The above tax rate increases take effect beginning October 15, 1984, the effective date of the amendatory Decree. cd i All internal revenue officials, employees, and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-84 Revenue Memorandum Circular No. 28-84 October 15, 1984 REVENUE MEMORANDUM CIRCULAR NO. 28-84 Subject : Publishing Sections 203 to 209, inclusive of the National Internal Revenue Code of 1977, as amended by Presidential Decree No. 1959, increasing the percentage tax rates on services rendered by millers, contractors, carriers, brokers, and others. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of the amendments to Sections 203 to 209, inclusive, of the National Internal Revenue Code of 1977, as amended by PD 1959. Sec. 12. Section 203 of this Code, as amended, is hereby further amended to read as follows: "Sec. 203. Percentage tax upon proprietors or operators of rope factories, sugar centrals and mills, coconut oil mills, cassava mills, and desiccated coconut, factories. Proprietors or operators of rope factories, sugar centrals and mills, coconut oil mills, cassava mills, and desiccated coconut factories, shall pay a tax equivalent to three (3%) per centum of the gross value in money of all the rope, sugar, coconut oil, cassava flour or starch, desiccated coconut, manufactured, processed or milled by them, including the by-product of the raw materials from which said articles are produced, processed, or manufactured, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse: Provided, however, That this tax shall not apply to rope, coconut oil, and the by-product of copra from which it is produced or manufactured, and desiccated coconuts, if such rope, coconut oil, copra byproducts and desiccated coconuts, shall be removed for exportation and are actually exported without returning to the Philippines, whether so exported in their original state, or as an ingredient or part of any manufactured article or product. cd i In case the raw materials are processed, manufactured or milled in pursuance of a contract where the factory, central, or mill receives a share of the finished products, the tax on the share pertaining to the planter or owner and withheld by the proprietor or operator of the factory, central, or mill and paid by him to the Commissioner.

c.

A proprietor or operator of a refined sugar factory shall be subject to the tax imposed by this section but any percentage tax paid under this section on the raw sugar shall be credited against the tax due on the refined sugar. Where articles are manufactured out of materials subject to tax under this section, the percentage tax paid herein shall be credited against the sales tax due on the finished product. Sec. 13. Section 205 of this Code, as amended, is hereby further amended to read as follows: acd "Sec. 205. Contractors, proprietors, or operators of dockyards, and others. - A contractor's tax of four (4%) per centum of the gross receipts is hereby imposed on the following: (1) General engineering, general building, and specially contractors as defined in Republic Act Number 4566; (2) Filing, demolition and salvage work contractors, and proprietors or operators of mine drilling apparatus; (3) Proprietors or operators of dockyards; (4) Persons engaged in the installation of water systems and gas or electric light, heat, power; (5) Proprietors or operators of smelting plants, engraving plants, plating establishments, and plastic lamination establishments; (6) Proprietors or operators of establishments for upholstering, washing or greasing of motor vehicles, vulcanizing, recapping and battery charging; (7) Proprietors or operators of establishments for planing or surfacing and recutting of lumber, and sawmills under contract to saw or cut logs belonging to others; (8) Proprietors or operators of dry-cleaning or dyeing establishments, steam laundries, and laundries using washing machines; cda (9) Proprietors or owners of shops for the repair of any kind of bicycles, mechanical and electrical devices, instruments, apparatus or furniture and shoe repairing by machine or any mechanical contrivance; (10) Proprietors or operators of establishments or lots for parking purposes; (11) Proprietors or operators of tailor shops, dress shops, milliners and hatters, beauty parlors, barbershops, massage clinics, sauna turkish, and swedish baths, slendering and body building saloons and similar establishments, photographic studio, and funeral parlors; (12) Proprietors or operators of hotels, motels and lodging houses; (13) Proprietors or operators of arrastre and stevedoring, warehousing, or forwarding establishments; (14) Registered master plumbers, smiths, and house or sigh painters; (15) Printers, bookbinders, lithographers and publishers except those engaged in the publication or printing and publication of any newspaper, magazine, review or bulletin which appears at regular intervals, with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements; casia (16) Business agents and other independent contractors, including private detective or watchman agencies, except gross receipts of a pioneer enterprise registered with the Board of Investments under PD 1789, as amended by BP 391;

(17) Lessors of personal property, except non-resident owners of property subject to the final tax under Section 24(b) (viii) of this Code. The term "independent contractors" includes persons (juridical or natural) not enumerated above (but not including individuals subject to the occupation tax under Section 12 of the Local Tax Code) whose activity consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractors or their employees. The term "independent contractor" shall not include regional or area headquarters established in the Philippines by multinational corporations, including their alien executives, and which headquarters do not earn or derive income from the Philippines and which act as supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific Region. The term "gross receipts" means all amounts received by the prime or principal contractor as the total contract price, undiminished by any amount paid to the sub-contractor under a sub-contract arrangement. Any portion of the total contract price which is paid to the subcontractor, shall be excluded from the taxable gross receipts of the sub-contractor. Sec. 14. Section 205-A of this Code, as amended, is hereby further amended to read as follows: "Sec. 205-A. Percentage tax on hotels, motels and others. - There is hereby imposed on proprietors, operators or keepers of hotels, motels, resthouses, pension houses, lodging houses and resorts, a tax equivalent to twelve (12%) per centum of their gross receipts derived from room occupancy: Provided, That the foregoing tax shall be in lieu of the contractor's and the documentary stamp tax under Sections 205(12) and 238(b) of the National Internal Revenue Code of 1977, respectively." Sec. 15. Section 206 of this Code, as amended, is hereby further amended to read as follows: acd "Sec. 206. Caterers. - A caterer's tax is hereby imposed as follows: (1) On proprietors or operators of restaurants, refreshment parlors, and other eating places, including clubs and caterers, four (4%) per centum of their gross receipts. (2) On proprietors or operators of restaurants, bars, cafes and other eating places, including clubs where distilled spirits, fermented liquors in wines are served, four (4%) per centum of their gross receipts from the sale of food or refreshments and eight (8%) per centum of their gross receipts from sale of distilled spirits, fermented liquors or wines. Two sets of commercial invoices or receipts serially numbered in duplicate shall be separately prepared and issued, one for each sale of food or refreshment served and another for each sale of distilled spirits, fermented liquors or wines served, the originals of the invoices or receipts to be issued to the purchaser or customer; (3) On proprietors or operators of restaurants, refreshment parlors, bars, cafes, and other eating places which are maintained within the premises or compound of a cockpit, cabaret, night or day club, Jai-Alai, race track, or which are accessible to patrons of such cockpit, cabaret, night or day club, Jai-Alai, race track by means of a connecting door or passage, twelve (12%) per centum in the case of night or day club, and twenty-five (25%) per centum in the case of Jai-Alai and race track, of their gross receipts. Where the establishments enumerated above are operated or maintained by clubs of any kind or nature (irrespective of the disposition of their net income and whether or not they

cater exclusively to members of their guests), the keepers of the establishments shall pay the corresponding tax at the rates fixed above. casia Sec. 16. Section 207 of this Code, as amended, is hereby further amended to read as follows: "Sec. 207. Percentage tax on carriers and keepers of garages. - Keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, persons who transport passenger or freight for hire, and common carriers by land, air water, except owners of bancas and owners of animal-drawn two wheeled vehicles, shall pay a tax equivalent to three (3%) per centum of their quarterly gross receipts. In computing the percentage tax provided in this section, the following shall be considered the minimum quarterly gross receipts in each particular case: Autocalesa 1. 2. Manila and other cities Provincial 600.00 P1,200.00

Jeepney for hire 1. 2. Manila and other cities Provincial 1,200.00 2,400.00

Public utility bus Not exceeding 30 passengers P3,600.00 Exceeding 30 but not exceeding 50 passengers 6,000.00 Exceeding 50 passengers 7,200.00 Taxis 1. Manila and other cities P3,600.00 2. Provincial 2,400.00 Car for hire (with chauffeur) 3,000.00 Car for hire (without chauffeur) 1,800.00 Sec. 17. Section 208 of this Code, as amended, is hereby further amended to read as follows: aisa dc "Sec. 208. Percentage tax on stock, real estate, commercial, customs and immigration brokers and cinematographic film owners, lessors, or distributors. - Stock, real estate, commercial, customs, and immigration brokers shall pay a percentage tax equivalent to seven (7%) per centum of the gross compensation received by them. Cinematographic film owners, lessors, or distributors shall pay a percentage tax of three (3%) per centum of their gross receipts. The records kept by said brokers and cinematographic film owners, lessors or distributors may be used as evidence to determine the amount of percentage tax due from them, and the Commissioner may assess and collect the tax due on the compensation or gross receipts earned in accordance with said records.

In any case the amount of the compensation or gross monthly receipts of said brokers and cinematographic film owners, lessors, or distributors shall be declared for taxation within the time established for the other monthly sales or receipts. Sec. 18. Section 209 of this Code, as amended, as hereby further amended to read as follows: acd "Sec. 209. Percentage tax on dealers in securities; lending investors. - Dealers in securities and lending investors shall pay a tax equivalent to six (6%) per centum of their gross income. SALIENT FEATURES OF THE AMENDMENTS The amendatory sections have increased the tax rates on services. The changes in rates maybe seen from the tabular presentation given below: Tax Subject Brief Descriptions Change in Tax Rate - Increase in percentage tax on the following: Sec. 203 (Millers) 1. Proprietors or operators of rope factories, sugar centrals and mills, coconut oil mills, cassava mills, and desiccated coconut factories From 2% to 3% Sec. 205 2. Contractors, proprietors (Contractors) or operators of dockyards, and others From 3% to 4% Sec. 205-A 3. Hotels, motels and others From 10% to 12% (Hotels, motels, etc.) Sec. 206 4. Caterers (Caterers) a) Proprietors or operators of restaurants, refreshment parlors, and other eating places, including clubs and caterers From 3% to 4% b) Proprietors or operators of restaurants, bars, cafes and other eating places, including clubs, where distilled spirits fermented liquors or wines are served: On sale of food From 3% to 4% On sale of liquor From 7% to 8% c) Proprietors or operators

of restaurants, refreshment parlors, bars, cafes and other eating places within premises of cabarets, night or day clubs d)

From 10% to 12%

Proprietors or operators of restaurants, refreshment parlors, bars, cafes and other eating places within premises of JaiAlai and race tracks From 20% to 25%

Sec. 207 (common Carriers

5.

Common carriers by land, air or water, and keepers of garages

From 2% to 3%

Sec. 208 6. (Brokers, cinematographic film owners, lessors and distributors)

Stock, real estate, commercial customs, and immigration brokers. From 6% to 7% Cinematographic film owners, lessors and distributors From 2% to 3%

Sec. 209 7. Dealers in securities and (Dealers in lending investors From 5% to 6% securities, lending investors) The above increases in rates take effect beginning October 15, 1984. All Internal Revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-24-84 Revenue Memorandum Circular No. 29-84 September 24, 1984 REVENUE MEMORANDUM CIRCULAR NO. 29-84 Subject : Loss of Fifty-Five (55) Sets of Confirmation Receipts (BIR Form CB-82-02-03). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of Fifty-Five (55) sets of Confirmation Receipts, to wit: cdasia

-----------------------------SERIAL NUMBERS : QUANTITY -----------------------------B 3576750 : One (1) Set 3303600 : One (1) Set 3867233 : One (1) Set 4079171 - 4079172 : Two (2) Sets 4083726 - 4083750 : Twenty-Five (25) Sets 1803726 - 1803750 : Twenty-Five (25) Sets -----------------------------The above receipts which were reported missing by the Accredited Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdt Internal revenue officers, employees, and others concerned requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-19-84 Revenue Memorandum Circular No. 30-84 October 19, 1984 REVENUE MEMORANDUM CIRCULAR NO. 30-84 Subject : Publishing the Answers to the Questions Regarding the Interpretation of Section 260-A of Presidential Decree No. 1959, as implemented by Revenue Regulations No. 16-84. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder are the answers to the questions clarifying the provision of Section 260-A of Presidential Decree No. 1959 as implemented by Revenue Regulations No. 16-84. 1. Question: What are the foreign exchange transactions covered by the one per cent (1%) transaction tax? acd Answer: The additional one per cent (1) gross receipts tax shall be imposed on all transactions involving buying and selling of foreign exchange for peso by banks, nonbank financial intermediaries and other authorized foreign exchange dealers or agents. "Foreign exchange sale" is a transaction whereby the bank, non-bank financial intermediary or authorized foreign exchange dealer or agent delivers pesos and receives foreign exchange in return. "Foreign exchange purchase" is a transaction whereby the bank, non-bank financial intermediary or authorized foreign exchange dealer or agent delivers pesos and receives foreign exchange in return. Enumerated hereunder are the foreign exchange transactions subject to tax under this law.

(a) Transactions of banks 1. Buying transactions. - all purchases of foreign exchange earnings of residents arising from trade transactions, e.g., export sales and all types of non-trade inward remittances converted into peso as enumerated hereunder are considered as foreign exchange bought by banks. a. Foreign Exchange Earnings of Philippine Service Exporters. b. Foreign Exchange Earnings of Recruitment, Placement, Manning and Crewing Agencies; c. Foreign Exchange Earnings of Philippine Contractors; d. Foreign Exchange Receipts of Philippine Carriers: Local Agent of Foreign Carriers; e. Foreign Exchange Receipts of Insurance Companies; f. Foreign Exchange Receipts of Telecommunication Companies; g. Foreign Exchange Receipts of Tourist-Oriented Establishments; h. Foreign Exchange Receipts of Tour Operators and Travel Agents; acd i. Foreign Exchange Receipts of Foreign Firms; j. Operating Funds of Multinational Area Headquarters; k. Foreign Exchange Brought in by Transients; l. School Expenses of Foreign Students; m. Overseas Filipino Earners; n. Foreign Investments; and o. Foreign Deposit withdrawals. 2. Selling Transactions. - All sales of foreign exchange to cover trade transactions, e.g., imports, etc. and all non-trade outward remittances of foreign exchange paid for in pesos as enumerated hereunder are considered as foreign remittances by banks. a. Remittance of invisibles; b. Sale of travel funds; c. Remittance of funds to cover education, medical, support, gifts, and donation; d. Remittance of emigrant's assets; e. Remittance by temporary residents, tourists and transients; f. Remittance of profits, dividends and earnings; g. Remittance of royalties, fees or rentals; h. Remittance of management fees; i. Remittance of premium by insurance companies; and j. Remittance by international carriers. (b) Transactions of authorized foreign exchange dealers or agents The following transactions paid for in foreign exchange shall be considered as foreign exchange purchases of authorized foreign exchange dealers: casia a. Sales of goods; b. Sales of services; c. Sales of facilities; and d. Outright purchase of foreign currency. (c) Transactions of non-bank financial intermediaries In the case of non-bank financial intermediaries, presently, they are not authorized to engage in the buying and selling of foreign exchange. However, should they be

authorized to engage in the buying and selling of foreign exchange, their transactions shall be limited to those transactions embodied in their certificate of authority. 2. Questions: Are there any foreign exchange transaction exempt from the 1% gross receipts tax? Answer: The following transactions are exempted from the imposition of the one per cent (1%) gross receipts tax. 1. Foreign exchange transactions entered into by the Central Bank of the Philippines with local commercial banks and foreign banks; and 2. Foreign exchange transaction entered into by and among local banks (interbank transactions). 3. Questions: When are the foreign exchange transactions taxed? Answer: The tax of one per cent (1%) on foreign exchange transactions shall accrue once foreign exchange transactions of banks, non-banks financial intermediaries and other authorized, foreign exchange dealers or agents as enumerated in (1) above are actually converted into peso, the dates on which actual conversion into peso takes place as follows: Purchase of foreign exchange a. For spot transactions - upon payment of pesos and delivery of foreign exchange. cda b. For collections of export bills, checks and drafts - upon purchase. c. For forward transactions - upon delivery of foreign exchange. Sales of foreign exchange a. For spot transactions - upon issuance of manager's check, demand draft or telegraphic transfer and mail transfer. b. For letter of credit opened for importation - upon negotiation c. For forward contract transactions - upon delivery of foreign exchange. 4. Question: Who are liable to the payment of the tax ? Answer: The following are subject to tax on these foreign exchange transactions: 1. Banks; 2. Non-bank financial intermediaries; and 3. Other authorized foreign exchange dealers or agents. 5. Question: What is the tax based upon which the tax is imposed? Answer: For purposes of Revenue Regulations No. 16-84 and for purposes of preparing B.I.R. Form No. 33-02, as revised, the tax base shall be the Gross Peso Value. cdasia 6. Question: How do you compute the gross peso value? Answer: For gross peso value is arrived at by multiplying the foreign exchange sold or purchase at the prevailing interbank guiding rate for the day of the transaction. For purposes of the foreign exchange transaction tax return, the average buying or selling rate as the case may be, shall be the interbank guiding rate for the day. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide publicity as possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

10-30-84 Revenue Memorandum Circular No. 31-84 October 30, 1984 REVENUE MEMORANDUM CIRCULAR NO. 31-84 Subject : Publishing Section 21 21 (d), 24 (cc) and 53 (d) (1) of the National Internal Revenue Code, as amended by Presidential Decree No. 1959. To : All Internal Revenue Officers and Others Concerned. Sections 21 (d), 24 (cc) and 53 (d) (1) of the Tax Code, as further amended by P.D. No. 1959 (effective October 15, 1984) read as follows: "Sec. 21 (d) On interest from bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements. Interest from Philippine Currency Bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements whether received by citizens of the Philippines or by resident alien individuals, shall be subject to a 15% final tax to be collected and paid as provided in Sections 53 and 54 of this Code. "Sec. 24 (cc) Rates of tax on interest from deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements. - Interest on Philippine Currency Bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements received by domestic or resident foreign corporations shall be subject to a 15% final tax to be collected and paid as provided in sections 53 and 54 of this Code. "Section 53 (d) (1) Withholding of Final Tax. - Every bank or non-bank financial intermediary or commercial, industrial, finance companies, and other non-financial companies authorized by the Securities and Exchange Commission to issue deposit substitutes shall deduct and withhold from the interest on bank deposits or yield or any other monetary benefit from deposit substitutes a final tax equal to fifteen per centum (15%) of the interest on deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements." FEATURES OF THE AMENDMENTS The enactment of the foregoing provisions brought about the following amendments: 1. Beginning October 15, 1984, a final withholding tax of 15% shall now be imposed on interest income from Philippine currency bank deposits, whether savings or time deposits, and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements; cdasia 2. In the case of Philippine currency bank deposits maintained by an individual, the exemption from withholding tax if the aggregate amount of the interest at any time during the taxable year does not exceed P1,000 a year or P250.00 per quarter was abolished; and 3. The exemption from withholding tax, if the recipient (individual or corporation) of the interest income is exempt from income taxation; and the imposition of the preferential tax rates if the recipient of the income is enjoying preferential income tax treatment were both abolished. cd From the foregoing amendments, it is clear that interest income on savings, as well as time deposits, are now subject to the 15% final withholding tax. The interest income of an individual depositor is subject to tax regardless of the amount thereof. The interest income is also subject to tax at the full rate of 15% even if the depositor (individual or corporation) is exempt from income taxation or is enjoying preferential income tax treatment. The deletion of the exempting and preferential tax treatment provisions under

the old law is a clear manifestation that the single 15% rate is imposable on all interest incomes from deposits, deposit substitutes, trust funds and similar arrangement, regardless as to the tax status or character of the recipients thereof. Accordingly, the authority granted by this Office to depository banks to forego withholding of the tax on Philippine currency bank deposits and yield or any other monetary benefit from deposit substitutes maintained by trusteed retirement plans, persons, or entities exempt from income taxation is deemed revoked as of October 15, 1984, the effectivity date of P.D. No. 1959. Likewise, the authority granted to depository banks to withhold a preferential tax rate, e.g., 10% final tax on the interest income of private educational institutions, on the ground that the depositor enjoys preferential income tax treatment is also deemed revoked as of October 15, 1984. With respect to the non-trusteed deposit administration or insured retirement plan funds, their interest income from Philippine currency bank deposits and yield or any monetary benefit from deposit substitutes shall remain subject to the 15% final withholding tax under the aforesaid amendatory provisions of P.D. No. 1959. cdasia It is desired that this Circular be given as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-07-84 Revenue Memorandum Circular No. 32-84 November 7, 1984 REVENUE MEMORANDUM CIRCULAR NO. 32-84 Subject : Foreign exchange conversion rate. In determining (for income tax purposes) the cost basis of certain commodities imported beginning January 1, 1984, the value and prices thereof quoted in foreign currency shall be converted into the currency of the Philippines at the following rates of exchange plus additional financial charges, pursuant to Section 3 (b) of Revenue Regulations No. 11-84. cda Official Additional Exchange Rate Financial Charges Total Jan. - March, 1984 P14/$1 P6 P20.00 April - May, 1984 P14/$1 P5 P19.00 June, 1984 P18/$1 P4 P22.00 July - Sept., 1984 P18/$1 P3 P21.00 All internal revenue officers and others concerned are hereby enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. cd (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-12-84 Revenue Memorandum Circular No. 33-84 November 12, 1984

REVENUE MEMORANDUM CIRCULAR NO. 33-84 Subject : Publishing Batas Pambansa Blg. 700 Amending Sections 318 and 319 of the National Internal Revenue Code, as amended, reducing the period of limitation for assessment and collection of Internal Revenue Taxes from five to three years. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of Batas Pambansa Blg. 700. BATAS PAMBANSA BLG. 700 AN ACT AMENDING SECTIONS 318 AND 319 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, SO AS TO REDUCE THE PERIOD OF LIMITATION FOR ASSESSMENT/COLLECTION OF INTERNAL REVENUE TAXES FROM FIVE TO THREE (3) YEARS. Sec. 1. Section 318 of the National Internal Revenue Code, as amended, is hereby amended to read as follows: "Sec. 318. Period of limitation upon assessment and collection. Except as provided in the succeeding sections, internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided, That in a case where a return is filed beyond the period prescribed by law, the three-year period shall be counted from the day the return was filed. For the purposes of this section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day." cd Sec. 2. Section 319 of the same Code is hereby amended to read as follows: "Sec. 319. Exception as to period of limitation of assessment and collection taxes. (a) In the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the tax may be assessed, or a proceeding in court after the collection of such tax may be begun without assessment, at any time within ten years after the discovery of the falsity, fraud, or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof, "(b) If before the expiration of the time prescribed in the preceding section for the assessment of the tax, both the Commissioner and the taxpayer have agreed in writing to its assessment after such time, the tax may be assessed within the period agreed upon. The period so agreed upon may be extended by subsequent written agreement made before the expiration of the period previously agreed upon. "(c) Any internal revenue tax which has been assessed within the period of limitation above prescribed may be collected by distraint or levy or by a proceeding in court within three years following the assessment of the tax. cd "(d) any internal revenue tax which has been assessed within the period agreed upon as provided in paragraph (b) hereinabove may be collected by distraint or levy or by a proceeding in court within the period agreed upon in writing before the expiration of the three year period. The period so agreed upon may be extended by subsequent written agreements made before the expiration of the period previously agreed upon. "(e) Provided, however, That nothing in the immediately preceding section and paragraph (a) hereof shall be construed to authorize the examination and investigation or

inquiry into any tax returns filed in accordance with the provisions of any tax amnesty law or decree. Sec. 3. The period of limitation herein prescribed shall apply to assessments of internal revenue taxes beginning taxable year 1984. Approved. (Sgd.) QUERUBE C. MAKALINTAL Speaker This Act was passed by the Batasang Pambansa on February 22, 1984. (Sgd.) ANTONIO M. DE GUZMAN Secretary General Approved: April 5, 1984 (Sgd.) Ferdinand E. Marcos President of the Philippines SALIENT FEATURES OF BATAS PAMBANSA BLG. 700: A. Prescriptive Period of Assessment and collection. 1. The prescriptive period of assessment of internal revenue taxes has been reduced from five (5) to three (3) years, except (a) where false or fraudulent returns are filed or omission to file return in which case the tax maybe assessed within ten (10) years after discovery of the falsity, fraud, or omission, and (b) when there is a Waiver of the Statute of Limitations signed by the taxpayer, and accepted by the Commissioner before the lapse of the three-year period. 2. The three-year period for assessment commences to run "after the last day prescribed by law for the filing of the return" which means that if the return is filed before such due date, the prescriptive period begins to run only after said due date. It is also provided that "where a return is filed beyond the period prescribed by law, the three-year period shall be counted from the day the return was filed." Briefly, stated therefore, the rule on the commencement of the prescriptive period to assess is, in effect, the same as in the old law where the general rule was that the tax shall be assessed within five (5) years from date of filing of return or the deadline for filing return, whichever is later. 3. The prescriptive period for collection has also been reduced from five (5) to three (3) years, to be counted from date of assessment. The exception to this three-year period of collection is a Waiver of Statute of Limitation signed by the taxpayer and accepted by the Commissioner before the lapse of the three-year period. B. Effectivity of the Prescriptive Periods of Assessment and Collection. 1. Assessment made on or after April 5, 1984 (date of the approval of BP 700) will still be governed by the original five-year period if the taxes assessed thereby cover taxable years prior to January 1, 1984. aisa dc Corollarily, assessments made before April 5, 1984 shall still be governed by the original five-year period. However, assessments made on or April 5, 1984 covering taxable years beginning January 1, 1984 shall be under the new three-year period.

2. As regards collection, the institution of collection remedies either by judicial action or distraint and levy, if begun on or after April 5, 1984, shall still be governed by the five-year period if the taxes being collected are for taxable years prior to January 1, 1984. The collection of the three-year period shall apply to the collection of taxes for taxable years beginning January 1, 1984. In this connection, collection by judicial action is concerned instituted upon filing of the corresponding complaint in the court of competent jurisdiction, and in the case of summary remedies, upon service of the distraint and levy on the taxpayer or persons or entity authorized to receive the same. (See Clara Diluangco Palangca vs. Commissioner, 4 SCRA 253). cdt C. Immunity from Examination or Investigation. The amendatory law also removes the possibility of any examination, investigation or inquiry into any tax returns filed in accordance with any tax amnesty law should an examination or investigation be pursued in connection with the assessment of taxes. All internal revenue officials, employees, and other concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-16-84 Revenue Memorandum Circular No. 34-84 October 16, 1984 REVENUE MEMORANDUM CIRCULAR NO. 34-84 Subject : Loss of eleven (11) sets of BIR Form No. 1954, Certificate Authorizing Registration of Real Property (Taxable Capital Gains on Real Estate Transactions) bearing serial nos. 207771 to 207781. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of eleven (11) sets of BIR Form No. 1954, Certificate Authorizing Registration of Real Property (Taxable Capital Gains on Real Estate Transactions), to wit: cda ------------------------SERIAL NUMBER : QUANTITY ------------------------207771 to 207781 : 11 sets ------------------------The above sets of Certificates which were reported missing by Mr. Justo M. Reginaldo, Revenue District Officer, Revenue District No. 21, Valenzuela, Metro Manila, are hereby cancelled and all transactions involving the use of the abovementioned certificates are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the copies of the abovementioned certificates are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA

Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-09-84 Revenue Memorandum Circular No. 35-84 November 9, 1984 REVENUE MEMORANDUM CIRCULAR NO. 35-84 Subject: Clarifying Certain Compliance Requirements Under Presidential Decree No. 1959, Executive Order No. 990 and Revenue Regulations No. 19-84 and 2084. To : All Internal Revenue Officers and Others Concerned. 1. Applicability of the new percentage, amusement and withholding tax rates, which took effect on October 15, 1984. The following taxpayers shall, in the fiscal or calendar quarterly return which includes the month of October, 1984, segregate the gross receipts or gross income payments received or paid on or before October 14, 1984 and those received or paid on or after October 15, 1984. The segregation shall be made in an "Auxiliary Statement" to be attached to the return: a) millers, contractors, operators or proprietors of hotels, motels, etc., caterers, common carriers, workers, cinematographic film owners, lessors and distributors, dealers in securities and lending investors; b) persons doing insurance business in the Philippines; c) proprietors, lessees or operators of cockpits, cabarets, night or day clubs, boxing exhibitions, professional games, Jai-Alai, race tracks and bowling alleys; and d) banks, or non-bank financial intermediaries or commercial industrial, finance companies and other non-financial companies authorized by the Securities and Exchange Commission to issue deposit substitutes. Auxiliary Statement Example Tax Due Kind Period Amount Rate Tax Withheld Contractor's Gross Receipts Oct. 1-14 P1,000 3% P30.00 " " Oct. 15 & P1,000 4% P40.00 after Interest Payments on Time Deposits Oct. 1-14 P1,000 20% P200.00 " " Oct. 15 & after P1,000 15% P150.00

2. Filing of the old final annual cumulative percentage tax return and the noncumulative quarterly return. (a) Calendar Year Basic Taxpayers The final annual percentage tax return for taxable year 1984, shall be filed on cumulative basis not later than the 20th day of February, 1985 in accordance with Revenue Regulations No. 6-81. For the 1st quarter of 1985, the non-cumulative final quarterly percentage tax return shall be filed not later than the 20th day of April, 1985, and thereafter, every 20th day after the close of each quarter. cdtai b) Fiscal Year Basis Taxpayers Taxpayers whose fiscal years end before December 31, 1984, shall file the old final annual cumulative percentage tax return not later than the 20th day of the 2nd month after the close of the final quarter in accordance with the above-quoted Revenue Regulations No. 6-81. FY Ending Filing Date Sept. 30, 1984 Nov. 20, 1984 Oct. 31, 1984 Dec. 20, 1984 Nov. 30, 1984 Jan. 20, 1985 Taxpayers whose fiscal quarters commence before December 31, 1984, and extend to 1985, shall continue to file the cumulative quarterly returns in accordance with Revenue Regulations No. 6-81. Final Quarter Filing Date Oct. 1, Nov. & Dec. 31, 1984 Jan. 20, 1985 Nov. & Dec. 1984 & Jan. 31, 1985 Feb. 20, 1985 Dec. 1, 1984, Jan. & Feb. 28, 1985 March 20, 1985 except where the taxpayer's fiscal year ends Jan. 31 or Feb. 28, 1985, in which case, the last filing date of the return in March 20 or April 20, 1985, respectively. cdt The non-cumulative quarterly return shall be filed for the fiscal quarters commencing after December 31, 1984, not later than the 20th day after the close of each quarter. Fiscal Quarter Filing Date Jan. 1, Feb. & March 31 April 20, 1985 Feb. 1 April 30 May 20, 1985 March 1 May 31 June 20, 1985 3. Accounting for unused/accumulated tax credits. Irrespective of the taxpayer's taxable year, the total amount of accumulated or unused tax credit accruing on inventories of raw materials, work-in-process and finished goods as of Jan. 1, Feb. 1, or March 1, 1985, as the case may be, shall be debited to the "Deferred Sales Tax Credit - Beginning" account or equivalent account, which shall be applied in four (4) equal installments against the quarterly sales tax for the four (4) quarters immediately following December 31, 1984, pursuant to Section 7 of Revenue Regulations No. 19-84. In the transition period covering the first calendar or fiscal quarter after December 31, 1984, if it is not practicable for the manufacturer to take actual physical inventory of the raw materials, work-in-process and finished goods and the corresponding sales and

specific tax credits accruing thereon, including excess credits on unused raw materials, a sworn inventory of such raw materials and credits may be submitted not later than 30 days from the end of the previous quarter. The sworn list showing the quantity, description, value and the corresponding sales and specific tax credits, shall be filed with the Revenue District Office having jurisdiction of the city or municipality in which its principal place of business is located. In the said list, the amount of excess tax credits the claim for refund or credit for which have been filed with the Bureau may be indicated for information purposes only. This amount shall not be available for credits against sales taxes due per return. With respect to those whose fiscal years ended before December 31, 1984, the ending inventories shall be submitted in accordance with existing regulations. cda The supplier-dealer of raw materials for resale to manufacturers shall file a separate inventory of goods or articles showing the items of information as above stated, simultaneously with his application for accreditation. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. cdasia (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-06-84 Revenue Memorandum Circular No. 36-84 November 6, 1984 REVENUE MEMORANDUM CIRCULAR NO. 36-84 Subject : Loss of One (1) copy of BIR Form No. 1954 Certificate Authorizing Registration of Real Property (Taxable Capital Gains on Real Estate Transactions) bearing serial no. 012137. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) copy of BIR Form No. 1954, Certificate Authorizing Registration of Real Property (Taxable Capital Gain on Real Estate Transactions) to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------012137 : One (1) copy (Triplicate) ------------------------The whole set bearing serial no. 012137, including the triplicate copy thereof which was reported missing by Revenue District Officer Camid C. Gandamra and Revenue Cash Clerk Arlene C. Villarino of Revenue District No. 77, Ozamis City, has been cancelled and all transactions involving the use of the abovementioned certificate are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the missing copy of the abovementioned certificate is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA

Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-12-84 Revenue Memorandum Circular No. 37-84 December 12, 1984 REVENUE MEMORANDUM CIRCULAR NO. 37-84 Subject : Liability of taxpayers to the fixed tax resulting from the revocation of their tax exemption privilege. To : All Internal Revenue Officers and Others Concerned Under P.D. No. 1955, the tax exemption privileges granted to certain private business enterprises and/or persons engaged in any economic activity have been withdrawn. Examples are NACIDA manufacturers and rural banks. The question that has been raised, in this regard, is the amount of fixed tax payable by said taxpayers after their tax exemption privileges were withdrawn as of October 15, 1985, the effective date of P.D. No. 1955. Under Section 192 of the Tax Code, the amounts of fixed taxes are for the whole year so that a taxpayer starting his business at any time for the year should first pay the fixed tax for the whole year or for the remaining months of the year. aisa dc In the case of a taxpayer whose tax exemption privilege has been withdrawn but has continued doing business after October 15, 1984, said taxpayer if on the calendar year basis shall be subject to fixed tax for the period beginning from said date up to December 31, 1984. If the taxpayer is on the fiscal year basis, it shall be subject to the fixed tax for the period beginning from October 15, 1984 up to the end of the fiscal year. The fixed tax should be paid within thirty (30) days from October 15, 1984; otherwise, the taxpayer shall become delinquent thereby rendering him liable for the payment of the 25% surcharge and 20% annual interest under Sections 190 and 191 of the Tax Code. However, considering the fact that December 31, 1984 and fiscal-year periods are about to end and the further fact that P.D. No. 1955 is not yet known to many affected taxpayers, it would seem that the imposition of the 25% surcharge and 20% annual interest on taxpayers who failed to pay the fixed tax within thirty (30) days from October 15, 1984 might appear to be unjust. Such being the case, the 25% surcharge and 20% annual interest should not be imposed in case of late payments. This is in accordance with Section 295 of the Tax Code which authorizes the Commissioner to abate or cancel a tax liability which appears to be unjust or excessive. aisa dc However, for the calendar year 1984 or the succeeding fiscal year, as the case maybe, the taxpayer concerned should pay the fixed tax "on or before the last day of the first month of the taxable year adopted by the taxpayer for income tax purposes" (Section 190, Tax Code). In case of failure to pay the fixed tax within the said period, the taxpayer shall

become delinquent; hence, liable for the payment of the surcharge and interest incident to delinquency. All concerned are enjoined to give this Circular as wide a publicity as possible. (Sgd.) ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-21-84 Revenue Memorandum Circular No. 38-84 December 21, 1984 REVENUE MEMORANDUM CIRCULAR NO. 38-84 Subject : Publishing Section 9 of Presidential Decree No. 1959 revising the specific tax rates on cinematographic films. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is quoted hereunder the amendment of Sec. 157 of the Tax Code as provided for under Presidential Decree No. 1959 revising the specific tax rate on cinematographic films. Sec. 9. Section 157 of this Code, as amended, is hereby further amended to read as follows: cdt "Sec. 157. Specific tax on Cinematographic Films. - There shall be collected, once only, on cinematographic films including television films, regardless of width, the provision of the existing laws to the contrary notwithstanding, a tax amounting to seventy centavos per linear meter. Features of the amendment A. Rate Previous New Increase P0.45/1.m.

Local Films P0.35/1.m. P0.70 P0.35 Per 1.m Imported Films P0.70 P0.25 Per 1.m.

B. Date of Effectivity: January 1, 1985 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-21-84 Revenue Memorandum Circular No. 39-84 December 21, 1984 REVENUE MEMORANDUM CIRCULAR NO. 39-84 Subject : Publishing Sections 6, 7 and 50 of Presidential Decree No. 1950 revising the specific tax rate on distilled spirits and imposing an ad valorem tax on fermented liquors in addition to the specific tax levied thereon. To : All Internal Revenue Officers and Others Concerned

For the information and guidance of all concerned, there is quoted hereunder the pertinent provisions of Presidential Decree No. 1959 revising the specific tax rate on distilled spirits and imposing an ad valorem tax on fermented liquors in addition to the specific tax levied thereon. Sec. 6. Section 145 of this Code, as amended, is further amended to read as follows: "Sec. 145. Specific Tax on Distilled Spirits. - On distilled spirits there shall be collected, subject to the provisions of Section 139 of this Code, except as hereinafter provided specific taxes as follows: (a) If produced from the sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup or sugar of the cane, per proof liter, five pesos . . ." Sec. 7. Section 147 of this Code, as amended, is further amended to read as follows: "Sec. 147. Specific and Ad Valorem Tax on Fermented Liquors. (b) Ad Valorem Tax. - In addition to the specific tax herein imposed, there shall be levied, assessed and collected an ad valorem tax on fermented liquors of 20% of the brewer's or importer's gross selling price, net of specific tax. . . . Sec. 50. This Decree shall take effect on October 15, 1984; Provided, however, that with respect to the 20% ad valorem tax on fermented liquor under Section 7 of this Decree, 10% there of shall be imposed beginning October 15, 1984, and the remaining 10% ad valorem shall apply beginning January 1, 1985; and Provided, further, that the specific tax increases on distilled spirits . . . shall take effect beginning January 1, 1985. cdt Features of the Amendments: OLD RATE Sec. 145 (a) - Distilled Spirits. If produced from the sap of nipa, coconut, cassava, P4.20/p.l. camote or buri palm or from the juice, syrup or sugar of the cane. NEW RATE

P5.00/p.l.

Sec. 147 (b) - Fermented P2.10/p.l. plus Liquors P2.10/p.l. ad valorem tax With respect to the 20% ad valorem tax fermented liquors, 10% thereof was imposed beginning October 15, 1984 and the remaining 10% ad valorem shall apply beginning January 1, 1985. casia On distilled spirits, the increase in specific tax rate from P4.20 to P5.00 per proof liter shall take effect beginning January 1, 1985. cda All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-10-85 Revenue Memorandum Circular No. 1-85 January 10, 1985

REVENUE MEMORANDUM CIRCULAR NO. 1-85 Subject : Clarification of Presidential Decree No. 1931 To : All Internal Revenue Officers and Other Concerned. For the information and guidance of all concerned, there are quoted hereunder Sections 1 and 5 of P.D. No. 1931: casia "Sec. 1. The provisions of special or general law to the contrary notwithstanding, all exemptions from the payment of duties, taxes, fees, imposts and other charges heretofore granted in favor of government-owned or controlled corporations including their subsidiaries, are hereby withdrawn. "Sec. 5. The provisions of Presidential Decree No. 1177 as well as all other laws, decrees, executive orders, administrative orders, rules, regulations or parts thereof which are inconsistent with this Decree are hereby repealed amended or modified accordingly". Under the above-quoted provisions of Section 1 of P.D. No. 1931, the tax exemption granted in favor of government-owned or controlled corporations, including subsidiaries, are withdrawn. This withdrawal of tax exemption includes in its coverage all other units of government, as clearly manifested in the WHEREAS CLAUSE of P.D. No. 1931, quoted as follows: cdt "WHEREAS, there is a need for government-owned or controlled corporations and all other units of government enjoying tax privileges to share in the requirements of development, fiscal or otherwise, by paying the duties, taxes and other charges due from them" (underlining supplied). Under P.D. No. 1177, "All units of government, including government-owned or controlled corporations, shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws" (Section 23). P.D. No. 1931 reiterated the taxable status of units of government and government corporations. This law, however removed the government subsidy feature of P.D. No. 1177 which allows the payment of taxes, duties and fees thru "payment compliance certificate" in accordance with Joint Budget Circular No. 289 and pars. 4, 6 and 9, Finance Circular No. 2-78, implementing Sec. 23, P.D. No. 1177. Under P.D. No. 1931, government units and government-owned or controlled corporations are no longer entitled to tax subsidy or payments constituting equity contributions. They are now required to pay cash or its equivalent. Consequently, the revenue collecting agencies will no longer issue a "Payment Compliance Certificate" but the corresponding revenue tax receipts for cash payments of taxes. By reason of the taxability of government units, i.e., the National Government, its agencies and political subdivisions, as well as the government-owned or controlled corporations, as previously pointed out, the interests on their bank deposits as well as the yield on deposit substitutes are now subject to the 15% withholding tax. The depository bank should, therefore, withhold the tax and remit the same to this Bureau within the period provided by law. And this position is further bolstered by the provisions of P.D. No. 1959 which abolished all kinds of tax exemptions and preferential tax treatment on interests of bank deposits, deposit substitutes, trust funds and similar arrangements [Revenue Memorandum Circular No. 31-84 publishing Sections 21(d), 24(cc) and 53(a) (1), Tax Code, as amended by P.D. No. 1959]. acd All concerned are hereby enjoined to give this Circular as wide a publicity as possible. RUBEN B. ANCHETA

Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-15-85 Revenue Memorandum Circular No. 2-85 January 15, 1985 REVENUE MEMORANDUM CIRCULAR NO. 2-85 Subject : Loss of one (1) booklet containing used, canceled and unused Revenue Official Receipts (BIR Form No. 25.24) bearing serial numbers 5527901-G to 5527950-G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts to wit: cd ---------------------------Serial Number : Quantity ---------------------------Used Receipts : 5527901-G to 5527941-G : (Auditor's and Collecting 5527943-G Officer's copies only) Cancelled Receipt : 5527942-G : One (1) Set Unused Receipts : 5527944-G-5527950 : Seven (7) Sets ---------------------------The Above booklet of revenue official receipts were reported missing by Mrs. Elizabeth P. Vergo, Collection Agent of San Pablo, Zamboanga City. Accordingly, the seven (7) unused receipts are hereby canceled and all official transactions involving the use of said receipts are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-09-85 Revenue Memorandum Circular No. 3-85 January 9, 1985 REVENUE MEMORANDUM CIRCULAR NO. 3-85 Subject : Publishing BOE Order dated January 8, 1985 revising oil prices effective January 9, 1985.

To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new selling prices of gasoline and other petroleum products effective January 9, 1985: OIL CO. SPECIFIC AD TOTAL POSTED DEALER RETAIL PRODUCTS TAKE TAX VALOREM TAX PRICE MARGIN PRICE P. GASOLINE R. GASOLINE AVTURBO 6.099 KEROSENE 5.878 DIESEL 5.545 FUEL OIL 4.462 L P G 4.83 0.35 ASPHALTS 4.70 SOLVENTS 5.792 Features of the Changes SPECIFIC AD VALOREM PRODUCTS TAX PREVIOUS PRESENT TOTAL (DECREASE) TAX 6.041 5.621 1.20 0.25 0.676 1.20 1.185 1.29 1.525 0.823 1.220 0.312 1.026 0.658 1.448 1.510 1.405 2.725 0.823 1.220 0.562 5.856 0.658 2.648 2.695 2.695 8.824 6.701 6.765 5.024 .414 5.358 8.44 8.736 8.316 .2482 .2679 6.27 " .2723 P9.01/ltr. .2629 8.58 " 8.824 " 6.95 " 7.04 " 5.024 " 5.358 " 8.44 "

P. GASOLINE 1.185 1.535 1.510 (0.025)P2.695/ltr. R. GASOLINE 1.29 1.430 1.405 (0.025)2.695 " AVTURBO 1.20 1.550 1.525 (0.025)2.725 " KEROSENE 0.837 0.823 (0.014)0.823 " DIESEL 1.241 1.220 (0.021)1.220 " FUEL OIL 0.25 0.317 0.312 (0.005)0.562 " L P G 0.625 1.250 1.217 (0.033)1.842/kg. ASPHALTS 0.672 0.658 (0.014)0.658 " SOLVENTS 1.20 1.473 1.448 (0.025)2.648/ltr. A. Oil Company Take for each product has been reduced; B. The specific tax for each product is the same; C. The ad valorem tax for each product is reduced; D. The total tax for each product is reduced; E. The Oil Product Stabilization Fund (OPSF) of P0.10 for each product per kilo/liter is excluded; F. Posted price and retail price for each product are reduced; and G. Dealers margin is the same for all products except LPG which is raised from P0.38 per kilogram to P0.414. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

01-14-85 Revenue Memorandum Circular No. 4-85 January 14, 1985 REVENUE MEMORANDUM CIRCULAR NO. 4-85 Subject : Establishing a guideline in the determination of sales tax applicable to articles under Section 194 (b) of the Tax Code. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is established hereunder guidelines in the determination of tax applicable to articles taxed under the provisions of Section 194 (b) of the Tax Code in relation to Revenue Regulations No. 8-84 or the Cosmetic Products Regulations. cd i Sec. 1. Articles intended to beautify and improve the complexion, hair and skin shall be considered as cosmetic products and therefore, subject to the 50% sales tax such as: 1. Skin Care a) Vanishing Cream - Creams used as powder base or a complete beautifier to hide flaws of the skin. b) Skin Lightener/Bleaching Lotion - Cosmetic preparations intended for bleaching and skin lightening which functions in several ways such as: 1) Lightening of the skin 2) Reduction in formation of skin pigments 3) Bleaching of relatively fixed pigments. c) Wrinkle Smoother - Products which tighten the skin and smoothen the wrinkles. d) Beauty Mask - Preparations topically applied, primarily to the face area for the purpose of achieving a tightening sensation with a smoothening and refreshing effect in the areas to which the product is applied. e) Depilatories - Products which soften unsightly hair to facilitate removal by wiping or rinsing. cd i f) Bath Oils - Products used as beauty bath for dry skin, bath perfume and beauty oil for bath and come in the form of sprays, liquid, dry powder, capsules, towelettes or beads. g) Moisturizing Cream/Lotion - Products which soften and smoothen the skin. h) After Shaving Preparations - A product intended to cool and refresh the skin, allay irritation, relieve the feeling of tautness and soreness, disinfect and promote healing of the skin which may be damaged during the shaving process. 2. Hair Care a) Hair Setting Lotion - Products applied to the hair before setting to prepare it for styling, which to a large extent should remain, even after combing. b) Hair Lacquers/Spray Net - Products used for preserving hair style. These are formulated to coat the hair with a film which helps to keep the hair in place. c) Blow-Dry Lotion - Products used to improve the colorability and give good antistatic effect so that drying and forming with brush do not excessively strain the hair. d) Hair Tonic - Products for hair application, whether medicated or not, that gives a pleasant odor and refreshing effect. e) Hair Perming Lotion - Products that give the hair a durable wave or curl and luster. cdtai

f) Hair Strengthener - Products that have the ability to change configuration of the hair from a naturally kinky or wavy hair to a straight one. g) Hair Neutralizer - Products which remove the excess waving agent from the hair and restores hair to the original condition thus giving the wave the desired permanence. h) Hair Dyes/Bleaches/Tints - Preparations applied to the hair or scalp to restore and/or change the natural color of hair. i) Cold Waving Solution - Products that produce permanent waving without the application of heat. They give the hair a durable wave or curl and luster. j) Hairdressing - Products other than hair oils and pomades which are intended principally for good grooming, giving the hair a natural healthy appearance and giving luster without greasiness. 3. Make-up a) Foundation Make-up/Face Foundation - Products that cover blemishes/flaws on the skin and enhances one's complexion. b) Blush-on/Rouge/Blusher - Products used on top of the face powders and/or foundation make-up to highlight the cheeks or give the blushing effect to the wearer. cdasia c) Eye Make-up - Products designed for use on the areas and parts of the eyes such as the brows, the lids and the lashes. They are classified under the following categories: 1) Eye-shadow- intended mainly to create a color effect that would enhance the color of the eyes. 2) Mascara - intended mainly to thicken the lashes artificially. 3) Eye Liner - impart the desired color to the eyelids and shape it to whatever is desired. 4) Eyebrow Make-up - shapes or re-shapes the eyebrows. d) Lip Color/Lipstick/Lip Gloss - Products that give color or gloss to the lips. 4. Nail Preparations a) Cuticle Cream - Products used primarily to improve the appearance of the nails. It also prevents the nail from becoming brittle and ribbed. b) Nail Bleach - Products used to whiten the nail and remove discoloration. cd i c) Enamel Dryer - Oily preparations which facilitate faster evaporation of volatile substances in the nail enamel. d) Enamel Remover - are suitable solvent for washing away the applied nail enamel. e) Nail Extenders - Products also known as nail elongators, are mixtures which when applied over the nail surface produce a film that hardens on drying to simulate the nail. f) Nail Strengtheners - Products which promote the hardening of brittle nails. Articles, substances or preparations which are similar or analogous to the above enumerated products shall, likewise, be classified as cosmetic products. The similar or analogous article are those advertised or held out to be suitable for the same purposes mentioned above regardless of the name by which they may be known or distinguished. Sec. II. Articles which are used for personal hygiene and health shall be considered as ordinary and, therefore, subject to 10% sales tax such as: 1. a) Cleansing Lotion/Cream - Products used for the removal of surface grime, oil and facial make-up, from the face and throat. b) Facial Astringent Lotion - Products used for cleansing and to tighten the pores for the correction of the oily skin.

c) Hand and Body Lotion/Oil - Products used for treating/preventing dry, roughened and irritated skin by forming a smooth , dry continuous, flexible film on the skin and inducing rehydration of the stratum corneum. cdasia d) Sunscreen/Suntan Preparations - Are creams and lotions which protects the skin from the burning effect of the sun while permitting tanning. e) Facial and Body Powder - Powder containing talc and/or starch suitably perfumed, which cools the face and body and keeps the skin dry. Talc, starch and/or chemicals which are used in medicinal preparation should constitute 70% or more of the manufactured articles. f) Hand and Body Liquid Soaps - Cleansing preparations based on synthetic detergents with formulations containing more than 5% saponaceous matters. cd g) Hair Shampoo - Hair shampoo containing more than 5% saponaceous matters is a preparation of a surfactant or surface active materials which when used under the conditions specified will remove surface grease, dirt and skin debris from the hair shaft and scalp without affecting adversely the hair, scalp or health of the user. h) Hair Conditioner/Hair Treatment - Basically treatment products for the hair which lubricate the hair fiber for protection from further damage. i) Brilliantines - A type of pomade which replaces/ improves the deficient natural oil of the hair. j) Pre-Shaving Preparations - Preparation which aid shaving by facilitating removal of facial hair. cdtai k) Deodorants - Preparations which mask, remove or decrease perspiration odors, prevent their development or do all these. l) Anti-Perspirant - Products with astringent action which inhibit the flow of perspiration. All internal revenue officers are hereby enjoined to give this Circular the widest publicity possible. cd i RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-26-85 Revenue Memorandum Circular No. 5-85 February 26, 1985 REVENUE MEMORANDUM CIRCULAR NO. 5-85 Subject : Amending Revenue Memorandum Circular No. 33-83 dated October 6, 1983 on the Applicable Uniform Exchange Rate of U.S. Dollar to Philippine Peso for Internal Revenue Tax Purposes. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, the following rules as amended are hereby prescribed to govern the conversion of U. S. Dollar and other foreign currencies to Philippine peso contained in Revenue Memorandum Circular No. 33-83 dated October 6, 1983: cdtai a) January 1 to June 5, 1984 - The conversion rate to be applied shall be P14.00 to US $1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank whichever is higher;

b) June 6 to October 2, 1984- The conversion rate to be applied shall be P18.00 to US $1.00 or the guiding rate of exchange at the time of the transaction as quoted by the Central Bank whichever is higher; c) October 3 to December 31, 1984 - The conversion rate to be applied shall be P19.62 to US $1.00 or the average reference rate of exchange at the time of the transaction as quoted by the Central Bank whichever is higher; cdtai d) In the event that the foreign exchange rate as stated in the above paragraphs a), b) and c) is impractical or not feasible, the average exchange rate of P16.74 to US $1.00 shall apply. e) For the purposes of converting the tax liability in U.S. dollar to Philippine peso, the average reference rate as quoted by the Central Bank of the Philippine at the time of payment shall be applied when paid before the due date of the tax or the Average Reference Rate at the due date when paid on or after the due date of the tax. This circular does not apply to transactions covered by Revenue Memorandum Circular No. 30-84 dated October 19, 1984 regarding the imposition of additional one per cent (1%) gross receipt tax on buying and selling of foreign exchange for peso by banks, nonbank financial intermediaries and other authorized foreign exchange dealers or agents and Revenue Memorandum Circular No. 32-84 dated November 7, 1984, in determining (for income tax purposes) the cost basis of certain commodities imported beginning January 1, 1984 the value and prices thereof are quoted in foreign currency. ENFORCEMENT AND PUBLICITY All Internal Revenue Officers and Others charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and to give it the widest publicity possible. cd RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-04-85 Revenue Memorandum Circular No. 6-85 March 4, 1985 REVENUE MEMORANDUM CIRCULAR NO. 6-85 Subject : Revocation of Last Priority in Audit and Investigation To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the Memorandum dated 23 January, 1985 of the President to the Ministry of Finance and the Commissioner of Internal Revenue relative to the above subject: "23 January 1985 "MEMORANDUM TO: The Ministry of Finance The Commissioner of Internal Revenue "The last priority privilege in audit and investigation of returns embodied in a Presidential memorandum dated 27 January 1983, is hereby revoked as of taxable year beginning 1984, in view of the recommendation of the Bureau of Internal Revenue to terminate the same. cd

"Accordingly, the traditional processes in the investigation of income and percentage tax returns of all taxpayers, shall apply. cdtai "(SGD) FERDINAND E. MARCOS President of the Philippines" In view thereof, the benefit of last priority in audit and investigation shall no longer be available starting taxable year 1984, and the usual selective audit procedures to determine priority in the examination of tax returns shall be followed and give effect. However, valid availment of the last priority privilege covering taxable years 1982 and 1983 shall be recognized respected. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest possible publicity. aisa dc RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-01-85 Revenue Memorandum Circular No. 7-85 April 1, 1985 REVENUE MEMORANDUM CIRCULAR NO. 7-85 Subject : Processing of refund or tax of excess corporate income tax resulting from the filing of the final adjustment return To : All Internal Revenue Officers and Others Concerned Sections 85 and 86 of the National Internal Revenue Code provides: "Sec. 85. Declaration of Corporate Quarterly Income Tax. - Every corporation shall file in duplicate a quarterly summary declaration of its gross income and deductions on a cumulative basis of the preceding quarter or quarters upon which the income tax, as provided in Title II of this Code shall be levied, collected and paid. The tax so computed shall be decreased by the amount of tax previously paid or assessed during the preceding quarters and shall be paid not later than sixty (60) days from the close of each of the first three (3) quarters of the taxable year, whether calendar or fiscal year. cda "Sec. 86. Final Adjustment Return. - Every corporation liable to tax under Section 24 shall file a final adjustment return covering the total net income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable net income of that year the corporation shall either: (a) Pay the excess tax still due; or (b) Be refunded the excess amount paid, as the case may be. In case the corporation is entitled to a refund of the excess estimated quarterly taxes paid, the refundable amount shown on its final adjustment return may be credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable year. The foregoing provisions are implemented by Section 7 of Revenue Regulations No. 1077 which provides:

"Sec. 7. Filing of final or adjustment return and final payment of income tax. - A final or an adjustment return on B.I.R. Form No. 1702 covering the total taxable income of the corporation for the preceding calendar or fiscal year shall be filed on or before the 15th day of the fourth month following the close of the calendar or fiscal year. The return shall include all the items of gross income and deductions for the taxable year. The amount of income tax to be paid shall be the balance of the total income tax shown on the final or adjustment return after deducting therefrom the total quarterly income taxes paid during the preceding first three quarters of the same calendar of fiscal year. Any excess of the total quarterly payments over the actual income tax computed and shown in the adjustment or final corporate income tax return shall either (a) be refunded to the corporation, or (b) may be credited against the estimated quarterly income tax liabilities for the quarters of the succeeding taxable year. The corporation must signify in its annual corporate adjustment return its intention whether to request for the refund of the overpaid income tax or claim for automatic tax credit to be applied against its income tax liabilities for the quarter of the succeeding taxable year by filling up the appropriate box on the corporate tax return. (BIR Form No. 1702)" cdtai It has been observed, however, that because of the excess tax payments, corporations file claims for recovery of overpaid income tax with the Court of Tax Appeals within the two-year period from the date of payment, in accordance with Sections 292 and 295 of the National Internal Revenue Code. It is obvious that the filing of the case in court is to preserve the judicial right of the corporation to claim refund or tax credit. It should be noted, however, that this is not a case of erroneously or illegally paid tax under the provisions of Sections 292 and 295 of the Tax Code. In the above provision of the Regulations, the corporation may request for the refund of the overpaid income tax or claim for automatic tax credit. To insure prompt action on corporate annual income tax returns showing refundable amounts arising from overpaid quarterly income taxes, this Office has promulgated Revenue Memorandum Order No. 32-76 dated June 11, 1976, containing the procedures in processing said returns. Under these procedures, the returns are merely pre-audited which consist mainly of checking mathematical accuracy of the figures in the return. After which, the refund or tax credit is granted; and, this procedure was adopted to facilitate immediate action on cases like this. cda In this regard, therefore, there is no need to file petitions for review in the Court of Tax Appeals in order to preserve the right to claim refund or tax credit within the two-year period. As already stated, actions hereon by the Bureau are immediate after only a cursory pre-audit of the income tax returns. Moreover, a taxpayer may recover from the Bureau of Internal Revenue excess income tax paid under the provisions of Section 86 of the Tax Code within 10 years from the date of payment considering that it is an obligation created by law (Article 1144 of the Civil Code). It is desired that this Circular be given as wide a publicity as possible. casia TOMAS C. TOLEDO Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-25-85 Revenue Memorandum Circular No. 8-85

March 25, 1985 REVENUE MEMORANDUM CIRCULAR NO. 8-85 Subject : Loss for Thirteen (13) Sets of Payment Order (BIR Form CB RC82-02-02). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of Thirteen (13) Sets of Revenue Payment Order, to wit: cd ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------3396914 - 3396925 : Twelve (12) Sets ---------------------------3381275 : One (1) Set ---------------------------TOTAL : Thirteen (13) Sets ---------------------------The above receipts which were reported missing by the Collection Agents of RR# 4-B, Quezon City, have been canceled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees, and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner By: ROMULO N. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-25-85 Revenue Memorandum Circular No. 9-85 March 25, 1985 REVENUE MEMORANDUM CIRCULAR NO. 9-85 Subject : Loss of Thirty Three (33) Sets of Confirmation Receipt (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of Thirty Three (33) Sets of Confirmation Receipts, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B 2572811 : One (1) Set ---------------------------9932108 - 9932125 : Nineteen (19) Sets

---------------------------9932101 - 9932107 : Seven (7) Sets ---------------------------9932178 : One (1) Set ---------------------------9931925;9931931;9931933 : Three (3) Sets ---------------------------4923236 : One (1) Set ---------------------------4440432 : One (1) Set ---------------------------5216675 : One (1) Set ---------------------------The above receipts which were reported missing by the Accredited Banks to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-19-85 Revenue Memorandum Circular No. 10-85 April 19, 1985 REVENUE MEMORANDUM CIRCULAR NO. 10-85 Subject : Publishing Executive Order No. 1018 introducing a New Tax Bracket for Local Virginia Cigarettes Packed in Twenties and Providing the Specific Tax Due Thereon. To : All Internal Revenue Officials and Others Concerned. For the information and guidance of all concerned, hereunder are the salient features of Executive Order No. 1018, dated April 11, 1985: I. It restructured the present tax brackets of locally manufactured cigarettes packed in twenties without affecting however, native- type cigarettes packed in thirties (30's), by introducing a new tax rate of P12.00 per thousand on cigarettes with a maximum retail price of P3.50 per pack. The new tax rate is an intermediate specific tax bracket between the highest priced native cigarettes which is taxed at P9.00 per thousand and the lowest priced local virginia cigarettes taxes at P25.00 per thousand. cdtai

As revised by Executive Order No. 1018, the new tax brackets of locally manufactured cigarettes packed in twenties are as follows: Maximum Tax Rates Retail Price Per Pack Per Thousand/Per Pack Exceeding Not Exceeding P 3.50 P12.00 P 0.24 P3.50 4.50 25.00 0.50 4.50 5.60 35.00 0.70 5.60 6.80 40.00 0.80 6.80 7.50 57.50 1.15 7.50 8.00 80.00 1.60 8.00 9.00 114.00 2.28 9.00 151.00 3.02 Imported Cigarettes: Regardless of Retail Price 151.00 3.02 II. It also revised the maximum retail price of local virginia cigarettes under the P25.00 per thousand class which heretofore has a retail selling price in any amount for as long as it does not exceed P4.50 per pack. Under Executive Order No. 1018 the said selling price can no longer be possible because it has to be over P3.50 but not more than P4.50 per pack to remain in that tax bracket. cd i III. The safeguards and the specific requirements under the existing provisions of Section 149 as well as the imposition of the Ad valorem tax on cigarettes under Section 186-A of the National Internal Revenue Code, as amended, were retained in Executive Order No. 1018. IV. The provisions of Executive Order No. 1018 shall take effect immediately. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. cdt TOMAS C. TOLEDO Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-12-85 Revenue Memorandum Circular No. 11-85 April 12, 1985 REVENUE MEMORANDUM CIRCULAR NO. 11-85 Subject : Loss of Two (2) Sets of Payment Order (BIR Form CB RC-82-0202) To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of two (2) Sets of Revenue Payment Order, to wit: aisa dc ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------4731702 : One (1) Set ----------------------------

4653142 : One (1) Set ---------------------------TOTAL : Two (2) Sets ---------------------------The above receipts which were reported missing by the Collection Agents of RR# 4-B, Quezon City and RR# 4-C, San Pablo City, respectively, have been canceled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees, and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-15-85 Revenue Memorandum Circular No. 12-85 15 May 1985 REVENUE MEMORANDUM CIRCULAR NO. 12-85 Subject : Publishing a Supreme Court decision holding a construction firm which provides "technical services" in the construction of buildings as contractor pursuant to Section 191 (now 205) of the National Internal Revenue Code, as amended. To : All Internal Revenue Officers and Others Concerned. The Supreme Court in a decision dated 17 January 1985, rendered in the case of "Commissioner of Internal Revenue vs. Avecilla Building Corporation and the Court of Tax Appeals, G.R. No. L-42394, upheld the action of this Office in collecting the 3% (now 4%) contractor's tax imposed by Section 191 (now 205) of the Tax Code from a construction firm for providing "technical services," supervisory in nature, for a fixed fee in the construction of buildings, pertinent portions of the ruling hereunder quoted " . . . The lower court stated that Avecilla Corporation did not perform any construction work for PNB, DBP, or SSS. It was hired to supervise the construction of buildings but actual construction was done by other contractors. casia "It can be gleaned from its articles of incorporation that the respondent corporation is principally engaged in the construction of buildings and other structures. It offers actual as well as technical services through its 'work engineers' to the Philippine National Bank, Development Bank of the Philippines and the Social Security System in the construction of their buildings. The respondent corporation's 'work engineers' acted as overseers of the building constructors engaged by the three government agencies. The 'work engineers' rendered their professional services as employees of the respondent corporation. They did not render services in their individual capacities but as extensions of the firm which was hired to oversee the construction. Thus, licensed engineers did not go there as hired

professionals of the PNB, DBP, or SSS but as employees of Avecilla Building Corporation. The private respondent had a district personality from the work engineers tax wise and in other aspects. cdasia xxx xxx xxx "The contractor's tax as contemplated by the Revenue Code is in the nature of an excise tax on the exercise of a privilege. The tax is imposed on the sale of services or labor. It is an indirect tax and whether or not the contractor is exempt from internal revenue taxes is immaterial. The tax imposed on Avecilla Building Corporation is, therefore, a tax on its business and privilege of selling the services and labor of its employees and not on the professional services of those employees themselves. (Emphasis, supplied) xxx xxx xxx The law imposes a 3% percentage tax on among others, 'building . . . and other construction work contractors'. (emphasis supplied). The law does not distinguish actual from technical services performed by the contractor. Where the law does not distinguish the court should not distinguish. (Robles v. Zambales Chromite Mining Co., 104 Phil 688) Hence, a building or any other construction work contractor like the Avecilla Building Corporation whether engaged in actual or technical services in relation to its construction business is liable to the contractor's tax under Section 191 of the National Internal Revenue Code, as amended." It is desired that this Circular be given the widest publicity possible. cda RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-15-85 Revenue Memorandum Circular No. 13-85 May 15, 1985 REVENUE MEMORANDUM CIRCULAR NO. 13-85 Subject : Publishing Executive Order No. 1026, amending Section 78 of the National Internal Revenue Code of 1977, to require dissolving corporations to file information returns and secure tax clearance from the Commissioner of Internal Revenue, and providing adequate penalties for violation thereof . To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of Executive Order No. 1026: "EXECUTIVE ORDER NO. 1026 AMENDING SECTION 78 OF THE NATIONAL INTERNAL REVENUE CODE OF 1977, TO REQUIRE DISSOLVING CORPORATIONS TO FILE INFORMATION RETURNS AND SECURE TAX CLEARANCE FROM THE COMMISSIONER OF INTERNAL REVENUE, AND PROVIDING ADEQUATE PENALTIES FOR VIOLATION THEREOF. acd WHEREAS, corporations, particularly those with unpaid tax liabilities to the Government dissolve without prior notice to the Bureau of Internal Revenue, to the detriment of tax collection; WHEREAS, the requirement under existing law making it obligatory for said corporations to notify the Commissioner of Internal Revenue of corporate dissolution is

inadequate for aside from the imposition of relatively light penalties in case of violation, no BIR tax clearance as a prerequisite to dissolution is prescribed; WHEREAS, in order to remedy this defect and thus insure adequate collection of taxes amendment of the aforecited provision of the Internal Revenue Code is necessary. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me under Sec. 290-B of the National Internal Revenue Code, as amended, do hereby order as follows: cdt Sec. 1. Section 78 of the National Internal Revenue Code, as amended, is hereby amended to read as follows: "Sec. 78. Return of corporation contemplating dissolution. - Every corporation shall, within thirty days after the adoption by the corporation of a resolution or plan for the dissolution of the corporation or for the liquidation of the whole or any part of its capital stock, including corporations which have been notified of possible involuntary dissolution by the Securities and Exchange Commission, render a correct return to the Commissioner of Internal Revenue, verified under oath, setting forth the terms of such resolution or plan and such other information as the Minister of Finance shall, by regulations, prescribe. The dissolving corporation prior to the issuance of the Certificate of Dissolution by the Securities and Exchange Commission shall secure a certificate of tax clearance from the Bureau of Internal Revenue which certificate shall be submitted to the Securities and Exchange Commission. Failure to render the return and secure the certificate of tax clearance as above-mentioned shall subject the officer(s) of the corporation required by law to file the return under Section 46(a) of this Code, to a fine of not less than Five Thousand pesos or imprisonment of not less than two years and shall make them liable for all outstanding or unpaid tax liabilities of the dissolving corporation." Sec. 2. The Minister of Finance shall issue such rules and regulations as are necessary to implement the provisions of this Act. cdtai Sec. 3. Rules and Regulations. - All Acts, Executive Orders, rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby repealed or amended accordingly. Sec. 4. Effectivity . - This Order shall take effect upon its approval. DONE in the City of Manila, this 14th day of May in the year of Our Lord, nineteen hundred and eighty-five. (SGD.) FERDINAND E. MARCOS President of the Philippines By the President: (SGD.) JUAN C. TUVERA Presidential Executive Assistant" SALIENT FEATURES OF EXECUTIVE ORDER NO. 1026. 1. The requirement on the filing of an information return relative to corporate dissolution, and the tax clearance certificate, applies not only to voluntary dissolution but even to corporations notified by the Securities & Exchange Commission of involuntary dissolution. Previous to the amendment, only voluntary corporate dissolutions were covered.

2. The tax clearance certificate from the Bureau of Internal Revenue is now required for submission to the SEC. cd i Formerly, only the information return was necessary. 3. For failure to comply with the abovementioned requirement, the penalty is a fine of not less than P5,000 or imprisonment of not less than two (2) years. Furthermore, the corporate officials under obligation to comply as aforementioned shall be personally liable for all outstanding or unpaid tax liabilities of the dissolving corporation. Also, inasmuch as Section 78 before the amendment contained no specific penalty for violation, the penalty in Sec. 337 was made applicable, consisting only of a fine not over P300 or imprisonment of six months. cd Moreover, the corporate officials responsible for the violation were not made personally liable for any unpaid corporate tax. 4. The Order took effect on May 14, 1985. Hence, all corporate dissolutions taking place on or after said date shall be governed by the new requirement. All internal revenue officials, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. aisa dc RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-24-85 Revenue Memorandum Circular No. 14-85 April 24, 1985 REVENUE MEMORANDUM CIRCULAR NO. 14-85 Subject : Loss of three (3) booklets of unused Revenue Official Receipts (BIR Form No. 25.24) bearing serial numbers 5344551 G- 5344700 G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of unused Revenue Official Receipts to wit: ---------------------------Serial Number : Quantity ---------------------------5344551 G - 5344700 G : Three (3) Booklets ---------------------------The above booklets of unused revenue official receipts which were reported missing by Mr. Alexander G. Paglinawan, Revenue Collection Agent of Baganga, Davao Oriental, are hereby canceled and all official transactions involving the use of the above-mentioned receipts are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case of the above- mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia TOMAS C. TOLEDO Acting Commissioner By:

ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-02-85 Revenue Memorandum Circular No. 15-85 May 2, 1985 REVENUE MEMORANDUM CIRCULAR NO. 15-85 Subject : Loss of one (1) complete set of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions), (BIR Form No. 1954) bearing serial number 095242. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions) bearing serial number 095242, to wit: ---------------------------Serial Number : Quantity ---------------------------095242 : One (1) Set ---------------------------The above set of Certificate Authorizing Registration which was reported missing by Mr. Ramon I. Yago, Revenue Clerk I of Revenue District No. 29, Caloocan City, has been canceled and all transactions involving the use of the said set, are therefore invalidated. casia Internal revenue officials, employees and others concerned are requested to promptly notify this Office in case any of the copy of the abovementioned Certificate is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN - V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-27-85 Revenue Memorandum Circular No. 16-85 March 27, 1985 March 27, 1985 REVENUE MEMORANDUM CIRCULAR NO. 16-85 Subject : Guidelines on the Filing of Application for Vacation Leave of Absence To : All Revenue Officials and Employees

For the guidance of all revenue officials and employees, quoted hereunder is Civil Service Memorandum Circular No. 2, s. 1985, on the filing of applications for vacation leave. "MEMORANDUM CIRCULAR NO. 2, s. 1985 "Subject : Guidelines on the Filing of Application for Vacation Leave of Absence "To All Heads of Ministries, Bureaus, Offices, Agencies and other Instrumentalities of the National and Local Governments, Including Government-Owned and Controlled Corporation "Government employees, as mandated in the 1973 Constitution, are expected to serve with the highest degree of responsibility, integrity, loyalty and efficiency. "Under existing Civil Service Law and Rules, an employee who has been subjected to long and continuous work needs rest and recuperation, so he may return to his job with renewed vigor and energy. "There have been reported cases of circumvention thereof, such as an employee proceeding with his vacation leave prior to the approval of his application, seeking employment in other organization while on leave, either locally or abroad, and taking leave of absence for the purpose of maintaining immigrant status and the like. acd "Such practices are considered inimical to the public service and availment of leave benefits in instances mentioned above is not in accordance with the philosophy behind the granting of the same. "To protect the interest of the public service, the Commission as the central personnel agency of the government, charged with the responsibility of promulgating policies, standards and guidelines and of adopting plans and programs to promote economical, efficient, and effective personnel administration in the government, issues the following guidelines on the filing of application for vacation leave of absence: "1. Pursuant to the Civil Service Rules, leave of absence, for any reason other than serious illness of an officer or employee or any member of his family, must be contingent upon the needs of the service. Hence, the grant of vacation leave is discretionary on the part of the agency head or authority concerned. Thus, the mere filing of such leave application does not entitle an officer or employee to go on leave outright. "2. An application for leave shall be properly cleared with the immediate supervisor and the Director/Department Heads concerned, who shall determine the contingency of the officer's and employee's service. An employee who is absent without approved leave shall not be entitled to receive his salary corresponding to the period of his unauthorized leave of absence but this absence shall not be deducted from his accredited leave credits, if there are any. "3. An application for leave of absence for thirty (30) days or more shall be accompanied by a clearance. The Director concerned shall see to it that the said clearance has been duly recommended by the Division Chief concerned before approval of such leave application or recommendation of the same to higher authorities. aisa dc "4. The agency should notify in writing the employee, who is absent without leave (AWOL) for thirty (30) days, to report within five (5) days from receipt of notice, otherwise, he shall be dropped from the rolls. :

"5. All proposals for trips abroad of government officials and employees including those which are classified as all expenses free shall be submitted to the Office of the President for final action. "6. Before going on vacation leave of absence, the officer or employee concerned shall see to it that his application for leave was approved by proper authorities. The Personnel Officer or other officer-in-charge thereof shall furnish the said officer or employee with copy of his approved or disapproved application. "7. In the application for leave of absence, the purpose or reason thereof shall be clearly indicated, and where the purpose or reason for such leave is for employment in private or other government offices, either inside or outside the country, such application shall be denied outright. cd i "8. Any misrepresentation made in the application for leave shall be ground for disciplinary action. "9. The attached CS Form No. 6, s. 1968, known as the "APPLICATION FOR LEAVE" form is hereby revised to conform with new guidelines. "This Memorandum Circular shall take effect immediately. (Sgd.) ALEJANDRO A. MADAMBA Commissioner" Strict compliance with the foregoing is hereby enjoined. RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-17-85 Revenue Memorandum Circular No. 17-85 May 17, 1985 REVENUE MEMORANDUM CIRCULAR NO. 17-85 Subject : Publishing the revised ad valorem taxes on certain petroleum products per BOE Order dated May 11, 1985 reducing the Oil Company Take. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective May 11, 1985: Previous PresentAd Previous tax Present Tax PRODUCTS OCT Less OCT Valorem Specific Ad Total Specific Ad Total DiffeRate Tax Valorem Tax Tax Valorem Tax rence Tax Tax PREMIUM P5.553 0.038 5.515 25% P2.563 (.010) REGULAR 5.181 0.038 5.143 25% (.010) 1.185 1.388 P2.573 1.29 1.295 2.585 1.29 1.185 1.378 1.285 2.575

AVTURBO 5.611 0.038 5.573 25% 1.20 1.403 2.603 1.2 1.393 2.593 (.010) KEROSENE 5.344 0.038 5.306 14% 0.748 0.748 0.742 0.742 (.006) DIESEL 5.045 0.038 5.007 22% 1.110 1.110 1.101 1.101 (.009) FUEL OIL 4.128 0.038 4.090 7% 0.25 0.289 0.539 0.25 0.286 0.536 (.003) L P G 4.458 0.038 4.420 14% 0.625* 1.124* 1.749* 0.625* 1.112* 1.737* (.012) ASPHALTS 0.533 0.038 4.495 14% 0.635 0.635 0.629 0.629 (.006) SOLVENTS 5.304 0.038 5.266 25% 1.20 1.326 2.526 1.20 1.316 2.516 (.010) All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd (Sgd.) RUBEN B. ANCHETA Acting Commissioner * converted to kilogram Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-18-85 Revenue Memorandum Circular No. 18-85 May 18, 1985 REVENUE MEMORANDUM CIRCULAR NO. 18-85 Subject : Loss of One (1) Set of Payment Order (BIR Form CB RC-82-0202) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------4899985 : One (1) Set ---------------------------The above receipts which was reported missing by Mr. Tomas T. Que, Group Supervisor, Revenue District No. 23, Sta. Cruz, Binondo, Manila, have been canceled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA

Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-05-85 Revenue Memorandum Circular No. 19-85 June 5, 1985 REVENUE MEMORANDUM CIRCULAR NO. 19-85 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Two (2) Sets of Confirmation Receipts, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------6137640 & 6137641 : Two (2) Sets ---------------------------The above receipts which were reported missing by the Accredited Bank of this office have been canceled and any official transactions involving the use of said forms are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-21-85 Revenue Memorandum Circular No. 20-85 May 21, 1985 REVENUE MEMORANDUM CIRCULAR NO. 20-85 Subject : Loss of one (1) booklet of Apprehension Receipt (BIR Form 19.14) bearing serial number 120751 - 120800. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) booklet of Apprehension Receipts (BIR Form 19.14) to wit: cdt ---------------------------Inclusive Serial No. : Quantity ---------------------------120751 - 120800 : One (1) booklet ----------------------------

The above booklet of Apprehension Receipts which was reported as missing while in the possession of Mr. Raul G. Gorospe of the Intelligence Division, has been canceled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the above-mentioned apprehension receipts is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN - V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-16-85 Revenue Memorandum Circular No. 21-85 February 16, 1985 REVENUE MEMORANDUM CIRCULAR NO. 21-85 Subject : Repeal of Section 4(a) of Revenue Regulations No. 13-78 as amended by Revenue Regulations No. 6-79 or the Expanded Withholding Tax Regulations; and the Filing of Returns for Public Corporations To : All Internal Revenue Officers and Others Concerned Section 4(a) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, reads as follows: cdasia "Sec. 4. Exemption from withholding - The withholding of tax herein prescribed shall not apply to income payments to the following: (a) National government and its instrumentalities, including provincial, city or municipal governments, as well as government-owned or controlled corporations casia xxx xxx xxx" Under P.D. No. 1931, the tax exemptions and/or preferential tax treatment in favor of government-owned or controlled corporations, including their subsidiaries, and all other units of government, are withdrawn. (Revenue Memorandum Circular No. 1-85) Such being the case, the above-quoted paragraph (a) is considered repealed. Hence, income payments to the national government and its instrumentalities, including provincial, city or municipal governments, as well as government-owned or controlled corporations are now subject to the withholding provisions of the Expanded Withholding Tax Regulations. Public corporations, i.e., the provinces, cities and municipalities are now subject to internal revenue taxes on income/transactions arising out of their proprietary activities or when they are engaged in economic activities or businesses. Consequently, their respective treasurers are held responsible for the filing of the returns and payment of the taxes due on said taxable activities. cd All concerned are hereby enjoined to give this Circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA

Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-19-85 Revenue Memorandum Circular No. 22-85 June 19, 1985 REVENUE MEMORANDUM CIRCULAR NO. 22-85 Subject : Loss of One (1) Set of Payment Order (BIR Form CB RC-82-0202) To : All Internal Revenue Officers, Employees and Others concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------10613248 : One (1) Set ---------------------------The above receipt which was reported missing by the Asst. Regional Director, Revenue Region #4-C, San Pablo City, had been canceled and any official transactions involving the use of said form is therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-11-85 Revenue Memorandum Circular No. 23-85 July 11, 1985 REVENUE MEMORANDUM CIRCULAR NO. 23-85 Subject : Loss of One (1) Set of Payment Order (BIR Form CB RC-82-0202) To : All Internal Revenue Officer, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------4532311 : One (1) Set ---------------------------The above receipt which was reported missing by Ms. Ma. Gracia C. Balgos, Clerk I, Office of Collection Agent, Pasay City, had been canceled and any official transactions involving the use of said form is therefore invalidated. cd i

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-01-85 Revenue Memorandum Circular No. 24-85 July 1, 1985 REVENUE MEMORANDUM CIRCULAR NO. 24-85 Subject : Loss of one (1) set of Revenue Official Receipts (BIR Form No. 25.24) bearing serial numbers 6709900-G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts to wit: cdt ---------------------------Serial Number : Quantity ---------------------------6709900 G : One (1) Set ---------------------------The above set of revenue official receipt which was reported missing by Mr. Jaime Madridejos, Revenue Collection Agent of Mabitac, Laguna, is hereby canceled and all official transactions involving the use of the abovementioned receipts is therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the copies of the said receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN - V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-16-85 Revenue Memorandum Circular No. 25-85 July 16, 1985 REVENUE MEMORANDUM CIRCULAR NO. 25-85 Subject : Publishing Letter of Instruction No. 1467

To

All Internal Revenue Officers and Others Concerned.

For the information and guidance of all concerned, hereunder is the full text of Letter of Instruction No. 1467 dated 14 June 1985 of the President to the Ministry of Finance and the Commissioner of Internal Revenue: "LETTER OF INSTRUCTION NO. 1467 To: The Minister of Finance Commissioner of Customs Commissioner of Internal Revenue All Concerned WHEREAS, domestic manufacturers of articles, materials or supplies required for the construction of the Asian Development Bank building would not be in a position to compete with foreign suppliers to the said project, in view of the exemption of the Asian Development Bank from import duties and taxes; WHEREAS, the President is empowered by virtue of P.D. No. 1816 to modify and/or revise fiscal incentives statutes in order to make them responsive and meaningful to changing times; cdtai WHEREAS, pursuant to this authority, Executive Order No. 765, Series of 1982 was promulgated authorizing every domestic manufacturer who has been awarded the bid to supply articles, materials or supplies for government projects financed out of the proceeds of foreign loans to a tax credit equivalent to the sales, compensating and specific taxes and duties on imported supplies, raw materials and semi-manufactured components used in the manufacture, processing or production of the articles, materials or supplies, subject of an international competitive bidding: Provided, that the tax credit shall accrue to the manufacturer only after actual sales of said articles, materials or supplies to the government agency implementing the project; WHEREAS, Executive Order No. 765, Series of 1982 would not apply to domestic manufacturers of articles, materials or supplies for the Asian Development Bank building as said project is not a government project financed out of the proceeds of a foreign loan to the Philippines; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, do hereby order and direct: 1. That the provisions of Executive Order No. 765, Series of 1982 be extended to all domestic manufacturers who will be awarded bids to supply articles, materials and supplies in the construction of the Asian Development Bank building. 2. The Minister of Finance shall issue the rules and regulations on the implementation of this Letter of Instruction. aisa dc DONE IN THE CITY OF MANILA, this 14th day of June in the Year of Our Lord nineteen hundred and eighty-five. (Sgd.) FERDINAND E. MARCOS President of the Philippines" Features of the Letter of Instruction: Under this Letter of Instruction, the privilege of tax credit granted to domestic manufacturers bidding in government projects financed out of foreign loans which is under Executive Order No. 765, Series of 1982, equivalent to sales, compensating and

specific taxes as well as import duties on the supplies and raw materials used in the manufacture of the materials supplied to the aforesaid projects, is likewise extended to all domestic manufacturers who might be awarded bids to supply articles, materials and supplies in the construction of the Asian Development Bank building. cd i All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-15-85 Revenue Memorandum Circular No. 26-85 July 15, 1985 REVENUE MEMORANDUM CIRCULAR NO. 26-85 Subject : Amending Revenue Memorandum Circular No. 5-85 dated February 26, 1985 on the Applicable Uniform Exchange Rate of U.S. Dollar to Philippine Peso for Internal Revenue Tax Purposes. To : All Internal Revenue Offices and Other Concerned For the information and guidance of all concerned, the following rules as amended are hereby prescribed to govern the conversion of U.S. dollar and other foreign currencies to Philippine pesos contained in Revenue Memorandum Circular No. 5-85 dated February 26, 1985: a) Beginning January 1, 1985, the conversion rate to be applied shall be the prevailing interbank reference rate for the day of the transaction. b) In the event that the foreign exchange rate as stated in the above paragraph (a) is impractical or not feasible, the average interbank reference during the year shall apply. aisa dc c) For the purpose of converting the tax liability in U.S. dollar to Philippine Peso, the prevailing interbank rate at the time of payment shall be applied when paid before the due date of the tax or the prevailing interbank reference rate at the due date of tax when paid on or after the due date of the tax. d) When currency involved is other than U.S. dollar, the foreign currency shall first be converted to U.S. dollar at the prevailing exchanges rate between the two currencies. This circular does not apply to transaction covered by Revenue Memorandum Circular No. 30-84 dated October 19, 1984, regarding the imposition of additional one per cent (1%) gross receipt tax on buying and selling of foreign exchange for peso by bank, nonbank financial intermediaries and other authorized foreign exchange dealers or agents and Revenue Memorandum Circular No. 32-84 dated November 7, 1984, in determining (for income tax purposes) the cost basis of certain commodities imported beginning January 1, 1984, the value and prices thereof are quoted in the foreign currency. cdtai ENFORCEMENT AND PUBLICITY All internal revenue officers and other charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this circular and to give it the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-85 Revenue Memorandum Circular No. 27-85 July 23, 1985 REVENUE MEMORANDUM CIRCULAR NO. 27-85 Subject : Loss of Two (2) Sets of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Payment Orders, to wit: cd i ---------------------------SERIAL NUMBER : QUANTITY ---------------------------3473674 - 3473675 : Two (2) Sets ---------------------------The above receipts which were reported missing by Ms. Silverina P. Macaldo, Revenue Collection Agent of Surigao City, RR#10-B, Butuan City, have been canceled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above- mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-12-85 Revenue Memorandum Circular No. 28-85 July 12, 1985 REVENUE MEMORANDUM CIRCULAR NO. 28-85 Subject : Loss of the original and duplicate copies of Official Delivery Invoice (BIR Form No. 31.48) bearing serial number 00041737. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Official Delivery Invoice to wit: acd ---------------------------Serial Number : Quantity ---------------------------00041737 : Original and Duplicate Copies ---------------------------The above copies of official delivery invoice which were reported missing by Revenue Inspector Domingo Alba of the Tobacco Tax Division, are hereby canceled together with the triplicate copy. All official transactions involving the use of the above-mentioned set are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the copies of the said invoice is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-17-85 Revenue Memorandum Circular No. 29-85 July 17, 1985 REVENUE MEMORANDUM CIRCULAR NO. 29-85 Subject : Publication of Burned Revenue Official Receipts (BIR Form No. 25.24) nos. 8052840 G - 8053000 G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the burning of Revenue Official Receipts to wit: ---------------------------Serial Number : Quantity ---------------------------8052840 G - 8053000-G : 3 booklets and 11 sets ---------------------------The above revenue official receipts which were reported by Mrs. Filomena Dulay, Acting Collection Agent of Kabugao, Kalinga, Apayao, as burned, are hereby canceled and all official transactions involving the use of the abovementioned receipts are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the copies of the said receipts is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-25-85 Revenue Memorandum Circular No. 30-85

July 25, 1985 REVENUE MEMORANDUM CIRCULAR NO. 30-85 Subject : Nullification of Section 4(a) of Revenue Regulations No. 6-85 or the Revised and Consolidated Expanded Withholding Tax Regulations To : All Internal Revenue Officers and Others Concerned Under Revenue Memorandum Circular No. 21-85 dated February 26, 1985, this Office ruled that in view of P.D. No. 1931, Section 4(a) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, reading as follows: cd i "Sec. 4. Exemption from Withholding. - The withholding of tax herein prescribed shall not apply to income payments to the following: (a) National government and instrumentalities, including provincial, city or municipal governments, as well as government-owned or controlled corporations xxx xxx xxx should be considered a nullity." However, the above-quoted provision of Revenue Regulations No. 13-78, as amended, has been inadvertently reiterated in Section 4(a) of Revenue Regulations No. 6-85 dated May 2, 1985. Accordingly in view of Revenue Memorandum Circular No. 21-85, said Section 4(a) of Revenue Regulations No. 6-85 should also be construed as without any binding force and effect. cd i All concerned are hereby enjoined to give this Circular as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-10-85 Revenue Memorandum Circular No. 31-85 July 10, 1985 REVENUE MEMORANDUM CIRCULAR NO. 31-85 Subject : Circularizing Resolution No. 85-132 dated April 11, 1985 of the Civil Service Commission on certain modifications of the qualification standards for service wide positions. To : All Regional Directors, Revenue Service Chiefs, and all Bureau Officials and Employees For the information and guidance of all concerned quoted hereunder is Resolution No. 85-132 of the Civil Service Commission: "WHEREAS, Section 4, Rule II of the Civil Service Rules on Personnel Actions and Policies provided that: "The Commission shall adopt qualification standards for servicewide positions in the first and second levels and shall review and update, whenever necessary, those already established; aisa dc "WHEREAS, a qualification standard is a statement of the minimum qualifications for a position which shall include education, experience, training civil service eligibility, physical characteristics and personality traits required by the job, and which is used as basis for civil service examination, as guide in appointments and other personnel actions, in the adjudication of protested appointments, in determining training needs, and as aid in the evaluation of the personnel work programs of an agency.

"WHEREAS, the Qualification Standards for Service-Wide Positions which were revised and adopted by the Commission in 1977 has been reamended to make it current and to conform to progressive trends in personnel administration, and changes in personnel actions policies; "WHEREAS, to promote professionalism and the development of efficient work force in the government service, the need to amend the existing policies on substitution for deficiencies in education, training, and experience requirements have also become necessary; and "WHEREAS, pursuant to Section 6, Rule II of Civil Service Rules on Personnel Actions and Policies the Commission has adopted new guidelines on substitution. "NOW, THEREFORE, the Commission RESOLVED, as it hereby RESOLVES, to approve and adopt all amendments made in the attached revised Qualification Standards for Service-Wide First and Second Level Positions in the Career Service. The major amendments are: cda "1. Positions elevated from First to Second Level - The following positions have been elevated from the first to second level: Administrative Assistant I Budget Examiner I Cashier I, II and III Records Officer, I, II, and III Supply Officer I and II The elevation of these positions to second level was based on the significant changes in the job content and additional responsibilities which are assumed by incumbents of the position. "2. Compression of Position Titles - The positions of Administrative Assistant I, II and III; and Budget Examiner I, II and III, have been compressed to Administrative Assistant and Budget Examiner, respectively. Hence, only one qualification standard was established for each of these positions. "3. Alternative Education and Experience Requirements - Alternative requirements under education and experience requirements were provided for some positions in order to have more flexible qualification standards such as those in the Economics/Statistical/Public Information Groups, etc. "4. Simplified/Expanded Experience Requirements - Description of experience required for the positions have been simplified/modified/expanded to provide a wider field of selection in the placement/promotion of personnel. "5. Number of experience Requirements Reduced to the Minimum - Experience requirements for most positions have been reduced to the minimum to encourage the placement/promotion of qualified employees with potential/special qualifications to positions in the career service. acd "6. Deletion of Civil Service Eligibilities with no more Available eligibles - First Grade, Supervisor, Second Grade, General Clerical, Personnel Clerk, Third Grade, and municipal Clerk eligibilities which may no more have available eligibles for certification have been deleted and replaced by "Relevant Eligibility for Second Level Positions" or "Relevant Eligibility for First Level Positions," as the case may be. "7. Deletion of Unique Positions - Positions such as Medical Records Librarian, Philatelic Designer, etc. which are considered unique to certain agencies have also been

deleted from the Q.S. Manual for Service-Wide Positions. The qualification standards for these positions shall be prepared/ established by the respective agencies where the positions are located. "8. Deletion of Non-Career Service Positions - Positions considered as non-career service have been deleted as these positions are usually not covered by qualification standards. Example: Assistant Private Secretary, Private Secretary I & II, among others. "RESOLVED FURTHER to approve and adopt the amended Guidelines on Substitution of the Education/Training/Experience Requirements which shall form as an integral part of the Qualification Standards. The major provisions of the Guidelines are: "1. For appointment to positions covered by bar or board examinations, and other positions for which the law prescribes the specific minimum education/experience requirements, no substitution shall be allowed for deficiency in the education requirements, unless otherwise provided for by law. "2. For appointment to second level positions, no substitution for deficiency in the college education requirement shall be allowed except in cases of promotion where a minimum of two years college education requirements may be substituted. "3. For appointment to first level positions, substitution for deficiency in the education requirement shall be allowed but only to a minimum of two years. casia "4. For appointment to positions covered by CSC Resolution No. 435, series of 1980, MC No. 10, series of 1977, and other positions not requiring civil service eligibilities, substitution for deficiency in the education requirement shall be allowed. "5. Only education, relevant experience and/or training in excess of the minimum required may be used to offset any of the deficiencies, in accordance with the rate herein prescribed. "6. In instances where the quantity or quality of the experience, education and/training used to offset deficiencies may not be sufficient, such factors like outstanding accomplishments/qualifications, personality traits and potential may be considered. "7. For appointment to entrance positions in any agency, experience may not be required of those who meet the education requirement. Example: If the entrance position under the Administrative group in any agency is Administrative Officer II, the required 6 months of experience may be waived/disregarded, provided that the proposed appointee meets the education requirement. cdt "8. Other details on Substitution are fully discussed in the attached Guidelines on Substitution of the Education/ Training/Experience Requirements." Please be guided accordingly. (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-08-85 Revenue Memorandum Circular No. 32-85 August 8, 1985 REVENUE MEMORANDUM CIRCULAR NO. 32-85

Subject : Publishing the effectivity of the increased rate of tax on insurance premiums and documentary stamp tax on insurance policies. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder is the full text of the letter of the Commissioner of Internal Revenue, dated June 27, 1985 addressed to the Insurance Commissioner prescribing the effectivity of increased rate of the tax on insurance premiums and documentary stamp tax on insurance policies. "27 June 1985 The Insurance Commissioner Insurance Commission United Nations Avenue Metro Manila Madam: Reference is made to your letter dated 7 February 1985, informing this Office that representatives of the Insurance Commission, the National Tax Research Center, the Insurance Industry and this Bureau agreed on the manner of implementing the effectivity of the increased rates of premium tax and documentary stamp tax on life insurance policies. cd i Section 50 of Presidential Decree No. 1959 expressly provides that the said decree "shall take effect on October 15, 1984". It was explained, however, that life insurance policies are issued out of approved insurance plans with premium rates actuarially determined beforehand. In the light of the above explanation as to the nature of life insurance policies, this Office will implement the relevant provisions of Presidential Decree No. 1959 as follows: 1. Effectivity of the increased tax on insurance premium. - The increased premium tax rate imposed under Section 263 of the National Internal Revenue Code, as amended by Presidential Decree No. 1959, shall be applied on: 1.1 Premiums received from life insurance policies which are issued under new life insurance plans. "New life insurance plans" means life insurance plans which are approved by the Insurance Commissioner on or after October 15, 1984 and all life insurance plans for which life insurance companies were enjoined to submit revised premium rates under IC Circular Letter dated January 30, 1985, whether or not the premium rates were submitted for revision. 1.2 Premiums received from non-life insurance policies issued on or after October 15, 1984. aisa dc 2. Effectivity of the increased rates of documentary stamp tax. - The increased rates of documentary stamp tax imposed under Sections 232 and 233 of the National Internal Revenue Code, as amended by Presidential Decree No. 1959, shall be collected respectively on: 2.1. Life insurance policies issued in the same manner as provided in paragraph 1.1 above. cd 2.2. Non-life insurance policies issued on or after October 15, 1984. Very truly yours, (Sgd.) RUBEN B. ANCHETA Acting Commissioner

All internal revenue officials, employees and others concerned are hereby enjoined to give this Circular the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-04-85 Revenue Memorandum Circular No. 33-85 September 4, 1985 REVENUE MEMORANDUM CIRCULAR NO. 33-85 Subject : Loss of Two (2) Sets of Payment Order (BIR Form RC-82-02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Payment Orders, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B5499737 - B5499738 : Two (2) Sets ---------------------------The above receipts which were reported missing by Mrs. Maria O'Bulaclac-Aniel, Revenue Collector III, RDO #33, Pasay City, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-12-85 Revenue Memorandum Circular No. 34-85 September 12, 1985 REVENUE MEMORANDUM CIRCULAR NO. 34-85 Subject : Loss of Fourteen (14) Sets of Confirmation Receipts (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of fourteen (14) sets of Confirmation Receipts, to wit: casia ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------5412287 - 5412300 : Thirteen (13) Sets

6027075 : One (1) Set ---------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-12-85 Revenue Memorandum Circular No. 35-85 September 12, 1985 REVENUE MEMORANDUM CIRCULAR NO. 35-85 Subject : Loss of Thirty Four (34) Sets of Payment Order (BIR Form RC82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of thirty four (34) sets of Revenue Payment Orders, to wit: cd ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------4714908 ; 4759452 : Two (2) Sets 4759457 ; 4759470 : Two (2) Sets 4759492 ; 4759553 : Two (2) Sets 4759815 ; 4762645 : Two (2) Sets 4762647 ; 4762991 : Two (2) Sets 4763194 ; 4763349 : Two (2) Sets 4763496 ; 4763669 : Two (2) Sets 4763703 ; 4763705 : Two (2) Sets 4763759 ; 4763762 : Two (2) Sets 4763795 ; 4763878 : Two (2) Sets 4763879 ; 4763880 : Two (2) Sets 4763949 ; 4764024 : Two (2) Sets 4764038 ; 4764382 : Two (2) Sets 4764387 ; 4764409 : Two (2) Sets 4764471 ; 4764511 : Two (2) Sets 4764599 ; 4764671 : Two (2) Sets 4764721 ; 4765431 : Two (2) Sets

---------------------------The above receipts which were reported missing by Ms. Cecilia A. Francisco, Actg. Collection Agent, RDO #35, Pasig, Metro-Manila, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-13-85 Revenue Memorandum Circular No. 36-85 August 13, 1985 REVENUE MEMORANDUM CIRCULAR NO. 36-85 Subject : Loss of one (1) booklet containing used and unused Revenue Official Receipts (BIR Form No. 25.24) bearing serial numbers 5907401 G - 5907450 G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts to wit: ---------------------------Serial Number : Quantity ---------------------------Used Receipts 5907401 G - 5907445 G : 45 pcs. Collecting Officer's Copy 5907446 G : 1 pc. BIR National Office Copy 1 pc. Auditor's Copy 1 pc. Collecting Officer's Copy Unused Receipts 5907447 G - 5907450 G : 4 sets ---------------------------The above booklet of revenue official receipts was reported missing by Mr. Raul A. Pablico, Revenue Collection Agent of San Vicente, Palawan. Accordingly, the four (4) unused sets are hereby cancelled and all official transactions involving the use of said receipts are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By:

ROMULO M. VILLA Deputy Commissioner TAN-V4656-G-636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-13-85 Revenue Memorandum Circular No. 37-85 August 13, 1985 REVENUE MEMORANDUM CIRCULAR NO. 37-85 Subject : Loss of BIR National Office Copy and Taxpayer's Copy of revenue official receipt (BIR Form No. 25.24) bearing serial number 8485351 G. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipt to wit: ---------------------------Serial Number : Quantity ---------------------------8485351 G : BIR National Office Copy and : Taxpayer's Copy ---------------------------The above copies of revenue official receipt which were reported missing by Ms. Emilia R. Gabinete, Revenue Collection Agent of Quezon, Palawan, together with the other copies of the said set are hereby cancelled and all official transactions involving the use of the abovementioned receipts is therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the copies of the said receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-04-85 Revenue Memorandum Circular No. 38-85 September 4, 1985 REVENUE MEMORANDUM CIRCULAR NO. 38-85 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: aisa dc ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------6566725 and 6820955: Two (2) Sets ---------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RUBEN B. ANCHETA Acting Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-16-85 Revenue Memorandum Circular No. 39-85 September 16, 1985 REVENUE MEMORANDUM CIRCULAR NO. 39-85 Subject : Publishing Additional Questions and Answers On the Interpretation of the Provisions of the National Internal Revenue Code, as Implemented by Revenue Regulations Nos. 16-84 and 17-84 and, Revenue Memorandum Circular No. 27-84. To : All Internal Revenue Officers and Others Concerned. The following are additional questions and answers on each particular topic enumerated below, which were taken up in a series of conferences between Banker's Association of the Philippines (BAP), the Philippine Association of Finance Companies, Inc., the Philippine Association of Securities, Brokers and Dealers, the Investment Houses Association of the Philippines and the BIR Committee on Banks. I. On Documentary Stamp Tax (DST) Question 1. - What is the DST on the sale (with or without recourse) of government securities or promissory notes? Ans. - Sec. 225, NIRC provides for the stamp tax on sales, agreements to sell, memoranda of sales, deliveries or transfers of bonds, due bills, certificates of obligation (including government securities, like T-bills) or shares of certificates of stock of P0.50 on each P200.00, or fractional part of the value of the instrument. casia Question 2. - Are all deposit substitutes/debt instruments, whether or not payable at sight or demand, subject to DST under Sec. 229, NIRC, as amended?

Ans. - Yes, except as provided for in Sec. 248 to the effect that "when any bond, note or other obligation is secured by a mortgage, pledge, deed of trust, or by the assignment or transfer of any documentary security, one tax only shall be collected upon these papers, the tax to be at the highest rate imposed on the mortgage, bond, note, obligation or other documents, as the case may be." Question 3. - What is the new DST rate for deeds of assignment? Ans. - Same answer as to Question No. 1, above. Question 4. - Has Sec. 248, NIRC been amended by P.D. 1959? Ans. - No. Sec. 248 of the NIRC, has not been amended by P.D. 1959. Question 5. - Are forward contracts executed between the Central Bank or local banks with corporations or individuals subject to DST? Ans. - Yes. Sec. 231, NIRC, provides for a stamp tax on foreign bills of exchange and letters of credit at P0.30 on each P200.00 or fractional part thereof of the face value of the instrument. cd i Question 6. - Are foreign currency contracts executed by FCDUs/OBUs still exempt from DST? Ans. - Yes. Finance Ministry Order No. 39-84 states that "the withdrawal of exemptions from, or any preferential treatment in, the payment of duties, taxes, fees, imposts and other charges as provided for under P.D. 1955, does not apply to exemptions or preferential treatment embodied in the following laws: a. The National Internal Revenue Code, as amended; b. The Tariff and Customs Code, as amended; c. The Local Tax Code, as amended; and d. The Real Property Tax Code." However, notwithstanding the above, the same order also stated that "any exemption from or preferential treatment in the tax on interest income from bank deposits and yield or any other monetary benefit from deposit substitutes, trust funds and other similar arrangements shall remain withdrawn" and therefore, taxable under Sections 21 (d), 24(cc) and 53(d) (1) of the Tax Code, effective October 15, 1984. II. On Revenue Regulations No. 16-84 re: The Additional One Percent (1%) Tax on the Gross Value Received by Banks, Non-Bank Financial Intermediaries and Authorized Foreign Exchange Dealers. Question 1. - On a foreign draft drawn in a local bank but presented or negotiated by the beneficiary in another local bank, which bank shall be liable to the 1% excise tax on foreign exchange transactions? Ans. - The bank which exchanges pesos for the foreign currency draft. Question 2. - Are expenses of seconded bank officers in overseas subsidiaries (i.e. amortizations of local accounts, SSS, Medicare, etc.) paid by the local parent company, and reimbursed by the foreign subsidiary via its foreign currency deposit with the local company or issuance of a foreign currency draft, subject to the 1% tax? Ans. - Yes, upon reimbursement in foreign currency of the peso expenses, based on gross and on a per transaction basis. cda Question 3. - Are foreign currency contracts booked prior to October 15, 1984, but had to be rolled over because of moratorium and payment which will be made after October 15, 1984 be subject to the 1% tax? Ans. - Yes. Payments on or after October 15, 1984 are subject to the 1% tax.

Question 4. - If the buyer or seller in the purchase or sale of foreign currency for pesos are quasi-banks or financing companies, will the 1% tax be applicable? Ans. - Yes. Only transactions entered into by the Central Bank with local commercial banks and foreign banks, as well as transaction by and among such banks are exempt. Question 5. - Are transactions involving financial futures of the like, wherein the bank takes a position in a certain foreign currency through a foreign exchange broker subject to the 1% tax? This usually involve an actual inflow or outflow of foreign currency with the recognition of gain or loss item in pesos in our book of accounts. Ans. - No. Only transactions in foreign currency where there is an actual sale/purchase of foreign currency for pesos are covered by the 1% tax. Mere conversion to pesos for financial accounting purposes is not subject to the 1% tax. Question 6. - Is the purchase or sale of foreign currency denominated securities made by banks subject to the 1% tax? Ans. - Yes, if said purchases or sale of foreign currency denominated securities is made in peso and no, if the purchase or sale is also in foreign currency. Question 7. - If foreign currency denominated notes/securities are purchased by a bank from a non-bank foreign exchange dealer, will the transaction be subject to the 1% tax? If so, the same foreign currency denominated securities would have been taxed twice, i.e.; purchases of foreign currency by a foreign exchange dealer and again when these are sold by the same foreign exchange dealer to the bank. Ans. - The sale or purchase of foreign currency notes/securities by a non-bank foreign exchange dealer are subject to the 1% tax for every sale or purchase where the peso is the medium of exchange because these are not the exempt cases, i.e., interbanks transactions between and among Central Bank, local commercial banks and other foreign banks. In the case, however, of an authorized foreign exchange Agent, acting as agent of the Central Bank when it purchases foreign currency notes/securities then surrenders the same to the Central Bank thru the authorized agent bank, as required by law, the authorized foreign exchange agent shall be taxable only upon purchase of the foreign exchange notes/securities and shall no longer be liable to the 1% tax when it sells to the Central Bank thru the authorized agent bank in exchange for pesos. Question 8. - Are export bills sent on collection (due to discrepancies or due to usance terms) shipped prior to September 24, 1984 which were subjected to the economic stabilization tax also subject to the transaction tax when payment is received after October 15, 1984? acd Ans. - If said export bills have been subjected to the 30% economic stabilization tax, there is no need to subject it to the 1% tax. Question 9. - For foreign correspondent bank's charges debited to our accounts (in foreign currency) prior to October 15, 1984 by the debit advices of which were received by the local bank after October 15, 1984, will such foreign currency charges be subject to the 1% tax? Ans. - No, since the payments are made in foreign currency, and the transactions are considered interbank transactions. Question 10. - What about foreign correspondent bank's charges which are passed on by the local bank to the importer/borrower, are these charges subject to the 1% tax?

Ans. - Yes, because there is an actual sale of foreign exchange to the importer/borrower for which pesos were paid. Question 11. - Does the 1% tax apply to the proceeds of forward exchange contracts executed before October 15, 1984 and delivered after this date, considering that actual delivery of contract proceeds consummates the sale? Ans. - Yes. The tax shall be based on the contracted rate, both for foreign exchange forward contracts executed prior to or after October 15, 1984, and the tax is due upon delivery of the proceeds on or after October 15, 1984. Question 12. - In the case of export bills purchased, will the tax be due on the date of purchase or on the date of actual credit or export proceeds to the account of the negotiating bank? In any case what rate shall be used in determining the gross peso value? Ans. - For Onsight EBs - the tax is due on the date of purchase. For Usance EBs - the tax is due upon credit of the proceeds. In both cases, the reference rate of date purchase shall be used in determining the gross peso value. Question 13. - Are FCDU transactions subject to the 1% tax? Ans. - Yes, if the withdrawal is made in pesos, but if the withdrawal is in foreign currency, it is not subject to the 1% tax. Question 14. - As provided for in Rev. Reg. No. 16-84, the tax is payable on the first banking day of the succeeding week covering the transactions of the previous week. We find the remittance deadline too stiff and would request for a more reasonable deadline. Ans. - Our recommendation has been approved by the Commissioner that for purposes of filing the required return and paying the 1% tax, a week is defined to be the period beginning on Thursday and ending on Wednesday of the succeeding calendar week, instead of from Monday to Friday. The filing of the return and payment of the 1% tax shall be made on the Monday or first banking day following the transaction period from Thursday to Wednesday. Question 15. - Are forward transactions by oil and steel companies subject to the 1% transaction tax? Ans. - Yes, effective October 15, 1984 on the sale/purchase of foreign exchange made in pesos. acd Question 16. - Are forward exchange purchases in relation to swap loans extended by the bank, subject to transaction tax? Ans. - No, because said transactions are considered interbank transactions between Banks and Central Bank. Question 17. - Are there reports required other than the weekly return and remittance of taxes? Ans. - None, so far. Question 18. - Are foreign exchange purchases from correspondent banks abroad against pesos credited to their non-resident peso account with the local bank fall within the category of interbank transactions which are exempt from the 1% tax? Ans. - Yes. Question 19. - Are L/Cs opened prior to October 15, 1984 but negotiated on or after October 15, 1984 subject to the 1% tax?

Ans. - Yes, if payment (foreign currency purchased for pesos) is effected on or after October 15, 1984. Question 20. - Are U.S. Treasury Warrants subject to the 1% tax? Ans. - Yes, when converted to pesos. Question 21. - In certain cases, negotiations under export letters of credit are restricted at the counters of the bank, say XYZ Bank. In this particular case, the exporter negotiates his export bill thru his own bank, say ABC Bank. As a matter of reciprocity, ABC Bank negotiates the export documents and pays the exporter the peso equivalent of the export bills. In turn, ABC Bank presents the documents to XYZ Bank and the latter issues its dollar draft in favor of the former. XYZ Bank then sends the documents to the L/C issuing Bank for collection. In the above case, it is clear that the ABC Bank is liable for the 1% tax at the time of original negotiation of the export documents. - Will the export proceeds (upon final collection by XYZ Bank from the L/C issuing Bank still be subject to the 1% tax? In the affirmative, who shall shoulder the tax? Ans. - Whoever receives the foreign currency and exchanges it for pesos. Question 22. - Banks are now allowed to open cash Letters of Credit (spot sales of foreign exchange to importer clients). When is the 1% tax due? On the date of opening of the L/C or on the negotiation date? Ans. - The 1% tax is due upon payment in pesos of the foreign exchange value of the L/C. Question 23. - Are deposits/withdrawals of airline/shipping companies maintaining special dollar accounts with Central Bank subject to 1% tax? Ans. - If the withdrawal is in foreign exchange, it is not subject, but if the deposits/withdrawals involve a peso equivalence, it is subject to the 1% tax. Question 24. - Is the conversion of a foreign currency to another foreign currency subject to the 1% tax? Ans. - No. It is only when the peso is involved in the exchange that the 1% tax attach. Question 25. - Are embassies and their personnel subject to pay the 1% tax? Ans. - The 1% tax is a tax on banks, non-bank financial intermediaries and foreign exchange dealers. The sale as purchase of foreign currency for pesos to or from embassies and its personnel are subject to the 1% tax. Question 26. - If for some reason, a bill purchased by the bank is refused or rejected by the drawee/drawer and we have already paid the 1% tax, what is the procedure to follow in requesting for a refund? Ans. - The claim for refund or tax credit should be pursued in accordance with Sec. 292. NIRC. Question 27. - If the Republic of the Philippines and the Federal Republic of Germany have signed a Technical Cooperation Agreement whereby "the Government of the Republic of the Philippines shall levy no taxes or other fiscal charges on any emoluments paid from German public funds to German specialists or German construction and consulting firms for services rendered within the framework of the present agreement," will this provision be construed as an exception to the 1% Tax? Ans. - No. The 1% tax is a tax on banks, non-bank financial intermediaries and foreign exchange dealers on the sale/purchase of foreign exchange and services for pesos. cdt

Question 28. - If a standby L/C has been issued by a German Bank such that funds will be disbursed by means of drawing under the L/C are, such drawings to be exempted from the 1% tax if the proceeds will be credited to the German entity's FCDU account? Ans. - Drawings/withdrawals in pesos are subject to 1% tax. However, the transactions are not subject, if made also in foreign currency. Question 29. - Are franchise holders, like the Tourist Duty Free Shops exempted from the 1% tax? Ans. - No. Same answer as in Question No. II - 7 and 27, above, as may be applicable. Question 30. - In the light of P.D. 1955 are transactions of EPZA registered companies exempted from the 1% tax? Ans. - No. Same answer as in Question No. II - 7 and 27, above, as may be applicable. Question 31. - Without charging grossed-up rates, can financial institutions be allowed to report for gross receipts tax and net income tax purposes only the actual amount earned, without adding the 1% tax assumed by the client? Ans. - Yes. There will be no pyramiding of the 1% tax passed on to the client for the financial institution. Question 32. - Since U.S. dollar interest income paid on U.S. dollar time deposits are exempt from the 1% tax, then an outright U.S. dollar payment remitted abroad by the local bank will likewise be exempt from said tax? Ans. - Yes, so long as there is no peso conversion of the U.S. dollar remitted abroad. Question 33. - What is meant by the term "official rate of exchange" mentioned in Sec. 2 of Rev. Reg. No. 16-84? Does this refer to the "buying rate" for exports and "selling rate" in the case of imports transactions? Ans. - The official rate in the "guiding rate/reference rate" as determined by the Banker's Association of the Philippines on a day to day basis. Question 34. - Can Banks pass on to its clients 1% tax, in the same way that hotels, contractors and restaurants pass on their percentage tax to their customers? Ans. - The 1% tax is a tax on banks (see answer to Question No. II - 27, above). There is no prohibition for banks to pass on the 1% tax to their clients. III. On Revenue Regulations No. 17-84 re: Income Taxation of Interest Income Derived From Deposits and Yield From Deposit Substitutes: Question No. 1. - How do you determine the effective date of 15% final withholding tax on investment management accounts, trust fund and similar arrangements? Is the date of execution/issue of the investment management/trust agreement, the date of receipt of the investment income by the trustee bank or investment manager, or the date of withdrawal/payment to the trustor/beneficiary or investors? Ans. - The 15% final withholding tax shall be applied to all income paid, accrued or earned from or after October 15, 1984. Question 2. - Are certificates of assignment/participation (with or without recourse) or confirmation of sale covering government securities, Treasury Bills and Central Bank Bills and commercial papers/promissory notes still subject to 15% final withholding tax, even if said government securities have been previously subjected to the 15% final withholding tax at the initial/original issuance? Ans. - Income/yield of government securities, i.e., Treasury Bills and Central Bank Bills, which have already been subjected to the 15% final withholding tax at the initial/original issuance shall no longer be subject to the 15% final withholding tax under Rev. Reg. No.

17-84 when these are sold or assigned by the financial institution in the secondary market. Likewise, SEC registered commercial papers/promissory notes which are traded in the secondary market, shall be taxed only once, i.e., at initial original issuance, subject to an undertaking by the issuer and the selling agent, that the 15% final withholding tax has already been paid. Question. 3. - Are traditional lendings by banks, investment companies and finance companies to the public be subject to the 15% final withholding tax? Ans. - Yield or monetary benefit derived by banks, investment and finance companies on their traditional lendings are not subject to the 15% final withholding tax imposed by Sec. 24(cc) of the Tax Code, as amended by P.D. 1959, as implemented by Rev. Reg. No. 1784. acd "Traditional lending" has been defined as one whereby a loan granted is evidenced by the lending institution's non-negotiable promissory note, as well as those evidenced by negotiable promissory notes required for re-discounting with the Central Bank and the Development Bank of the Philippines. Likewise, the following traditional finance company activities are exempt from the 15% final withholding tax: 1. Extending credit facilities to consumers and to industrial, commercial or agricultural enterprises by: 1.1 granting direct loans or by discounting or factoring commercial papers or account receivables for profit; or 1.2 buying and selling contracts, leases chattel mortgages, account receivables and other evidence of indebtedness; or 1.3 leasing of motor vehicles, heavy equipment and industrial machinery, business and office machines and equipment, appliances and other movable or immovable property. Question 4. - Section 12 of Rev. Reg. No. 17-84 states that said regulations shall take effect as to "interest and/or yield on deposit substitute instruments issued beginning October 15, 1984." However, we received a clarificatory letter, dated October 22, 1984 from BAP saying that the 15% final tax is applicable to transactions beginning October 15, 1984. We take it to mean that if you have a placement, say October 1 to October 14, 1984 the rate is 20%, then from October 15 to 31, 1984 the rate applicable is 15%. Please clarify. Ans. - The 15% final withholding tax is applicable to transactions beginning October 15, 1984. Meaning that if you have a placement say October 1 to 31, 1984, the tax rate applicable from October 1 to October 14 is 20%; and from October 15 to 31, 1984 the tax rate applicable is 15%. Question 5. - Are lendings by banks to the public evidenced by commercial papers subject to the 15% final withholding tax? Ans. - Yes, except on "traditional lendings", as defined (See answer to Question No. 3, above). Question 6. - Is the withholding tax based on the number of times a paper is turned around or is the paper taxed only once and that is an original issue? Ans. - Same answer as in Question No. III - 2, above.

Question 7. - Will all issuers of commercial papers (defined as any evidence of indebtedness less than 360 days) and other evidences of indebtedness (long-term as 361 day or over) withhold the 15% final withholding tax? Ans. - Yes, except "traditional lendings" by banks and financial institutions, as well as negotiable promissory notes of lending institutions used for rediscounting with the Central Bank and the Development Bank of the Philippines. Question 8. - Are previously exempt entities also exempted from Rev. Reg. No. 17-84? Ans. - No. As stated in Ministry of Finance Order No. 39-84, any exemption from or preferential treatment in the tax on interest income from bank deposits and yield or any monetary benefit from deposit substitutes, trust funds and similar arrangements shall remain withdrawn pursuant to Sections 21(d), 24(cc) and 53(d) (1) of the Tax Code. Question 9. - Are there depositors who are not subject to the payment a final tax on interest from deposits and yield or any monetary benefit from deposit substitutes and from trust funds and similar arrangements? Ans. - None, except income from deposits maintained in foreign currency. See Ministry of Finance Order No. 39-84 in answer to Question No. III-11, below. acd Question 10. - Will there be new BIR forms of Withholding tax returns? Ans. - BIR forms are being revised. Question 11. - Will educational foundations, trust funds, retirement plans and other organizations of the same objectives/goals still enjoy any tax privilege? If there are any, to what extent? Ans. - Ministry of Finance Order No. 39-84 provides that the withdrawal of exemptions from, or any preferential treatment in the payment of duties, taxes, fees, imposts and other charges as provided for under P.D. 1955 does not apply to exemptions or preferential treatment embodied in (a) the National Internal Revenue Code (b) Tariff and Customs Code, (c) Local Tax Code, and (d) Real Property Tax Code. However, in the case of income from interest from bank deposits and yield or any monetary benefit from deposit substitutes, the exemptions and preferential tax treatments shall remain withdrawn. They shall be subject to the 15% final withholding tax (See Rev. Memorandum Circular No. 31-84). Question 12. - Is there a new payment/remittance procedure? Ans. - Rev. Regulations No. 3-85 is the latest. Question 13. - Can there be a reconsideration for interbank borrowings as to the term of loan? In practice there are term transactions for about 7 to 15 days which are also sourced to meet reserve deficiencies so as to avoid daily borrowings at the market. Ans. - No. None as of date. cda Question 14. (a) How will the 15% final withholding tax apply to money market as deposit substitute placements made prior to October 15, 1984, the maturity date of which is after October 15, 1984? (b) Will the interest/discount of tax-exempt government securities issued prior to October 15, 1984 and presently still outstanding be subject to the 15% final withholding tax? Ans. - For money market as deposit substitute placement made prior to October 15, 1984, the maturity of which is after October 15, 1984, the tax shall be applied as follows:

a) For those placements not previously classified as deposit substitutes under the old law/regulations and therefore the income thereon is not subject to the 20% final withholding tax shall continue to be not subject to the final withholding tax whether the income were earned prior to or after October 15, 1984, so long as said placements were made prior to October 15, 1984. b) Those placements classified as deposit substitutes under the old law/regulation and therefore were subject to the 20% final withholding tax on income earned or accrued up to October 14, 1984. On income earned or accrued on or after October 15, 1984, the same shall be subject to the 15% final withholding tax. Question 15. - How does the 15% final withholding tax apply to income/revenue from bonds/bills/securities (CBCI, PWED, EPZA, MERALCO, CFC, etc.) issued prior to October 15, 1984 and were subject to 15% creditable withholding tax? Ans. - Income/revenue earned or accrued from October 15, 1984 until maturity of said public or private bonds/securities, shall be subject to 15% final withholding tax and therefore no longer subject to Net Income Tax. However, such income/revenue shall remain subject to GRT. acd All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner TAN A5239-J1139-A-O Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-12-85 Revenue Memorandum Circular No. 40-85 September 12, 1985 REVENUE MEMORANDUM CIRCULAR NO. 40-85 Subject : Publishing the revised ad valorem taxes on certain petroleum products per BOE Order dated September 9, 1985 reducing the Oil Company Take. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective September 9, 1985: cdtai Previous PresentAd Previous tax Present Tax PRODUCTS OCT Less OCT Valorem Specific Ad Total Specific Ad Total DiffeRate Tax Valorem Tax Tax Valorem Tax rence Tax Tax PREMIUM P5.515 .105 P2.538 (.025) REGULAR 5.143 .105 (.025) AVTURBO 5.573 .105 (.026) P5.41 25% 5.038 25% 5.468 25% P1.185 P2.563 1.378 P1.185 P1.353 1.29 1.26 2.55

1.285 2.575 1.29

1.393 1.403 2.593 1.20

1.367 2.567

KEROSENE 5.306 .105 5.201 14% 0.742 0.748 0.742 0.728 0.728 (.014) DIESEL 5.007 .105 5.902 22% 1.101 1.110 1.101 1.078 1.078 (.023) FUEL OIL 4.090 .105 3.985 7% 0.286 0.289 0.536 0.25 0.279 0.529 (.007) L P G 4.420 .105 4.315 14% 1.112* 1.124* 1.737* 0.625* 1.08* 1.705* (.032) ASPHALTS 0.495 .105 4.39 14% 0.629 0.635 0.629 0.615 0.615 (.014) SOLVENTS 5.266 .105 5.161 25% 1.316 1.326 2.516 1.20 1.29 2.490 (.026) All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. acd (Sgd.) RUBEN B. ANCHETA Acting Commissioner * converted to kilogram

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-03-85 Revenue Memorandum Circular No. 41-85 October 3, 1985 REVENUE MEMORANDUM CIRCULAR NO. 41-85 Subject : Dissemination of FIRB Resolutions To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, hereinbelow is a list of FIRB resolutions restoring the tax and duty exemption privileges of government agencies, corporations, and private persons and entities (previously abolished by P.D. Nos. 1931 and 1955) together with the copies of the individual resolutions, for immediate dissemination. cdtai FIRB Resolution Date of Issuance 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. FIRB Res. 1-84 FIRB Res. 2-85 FIRB Res. 3-84 FIRB Res. 1-85 FIRB Res. 4-85 FIRB Res. 5-85 FIRB Res. 7-85 FIRB Res. 8-85 FIRB Res. 9-85 FIRB Res. 10-85 FIRB Res. 11-85 FIRB Res. 15-85 FIRB Res. 16-85 November 27, 1984 December 21, 1984 December 21, 1984 January 1, 1985 January 22, 1985 January 21, 1985 January 21, 1985 January 21, 1985 February 7, 1985 February 7, 1985 February 7, 1985 February 7, 1985 February 27, 1985

14. FIRB Res. 17-85 February 27, 1985 15. FIRB Res. 18-85 February 27, 1985 16. FIRB Res. 19-85 February 27, 1985 17. FIRB Res. 20-85 February 27, 1985 18. FIRB Res. 21-85 February 27, 1985 19. FIRB Res. 22-85 February 27, 1985 20. FIRB Res. 25-85 March 28, 1985 21. FIRB Res. 29-85 March 28, 1985 22. FIRB Res. 30-85 April 19, 1985 23. FIRB Res. 32-85 April 26, 1985 24. FIRB Res. 33-85 May 3, 1985 25. FIRB Res. 34-85 May 3, 1985 26. FIRB Res. 46-85 May 24, 1985 27. FIRB Res. 47-85 July 17, 1985 28. FIRB Res. 48-85 July 17, 1985 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this Circular and the attached resolutions, as wide a publicity as possible. cdasia (Sgd.) TOMAS C. TOLEDO Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-16-85 Revenue Memorandum Circular No. 42-85 October 16, 1985 REVENUE MEMORANDUM CIRCULAR NO. 42-85 Subject : Publishing the new BIR Form No. 1743-W, revising BIR Forms W-1A, W-1, 1743-A1, 1743-A and 1743-C. To : All Internal Revenue Officers For the information and guidance of all concerned published as Annex A hereof is the revised form for the Monthly Remittance of Income Taxes Withheld pursuant to the monthly synchronization of remittance of taxes withheld on compensation, creditable (expanded) withholding taxes and final taxes, except taxes withheld on interest on Philippine currency bank deposits and yield or any other monetary benefit from deposits substitutes and from trust funds and similar arrangements in accordance with the pertinent provisions of Revenue Regulations 5-85. acd It is hereby further informed that BIR Form 1743-W, shall be used effective Jan. 1, 1986. From this date, BIR Forms W-1A, W-1, 1743-A1, 1743-A, 1743-C are hereby rendered obsolete. (Sgd.) TOMAS C. TOLEDO Acting Commissioner TAN: T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

09-23-85 Revenue Memorandum Circular No. 43-85 September 23, 1985 REVENUE MEMORANDUM CIRCULAR NO. 43-85 Subject : Loss of One (1) Set of Payment order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------B-5449219 : One (1) Set ---------------------------The above receipt which was reported missing by Ms. Teofila C. Sebastian, Revenue Collection Agent of Valenzuela, Metro Manila, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition of use thereof. aisa dc RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-24-85 Revenue Memorandum Circular No. 44-85 September 24, 1985 REVENUE MEMORANDUM CIRCULAR NO. 44-85 Subject : Loss of Fifty Eight (58) Sets of Confirmation Receipts (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of fifty eight (58) sets of Confirmation Receipts, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B7107776 - 7107800 : 25 Sets 7107801 - 7107825 : 25 Sets 7107769 - 7107775 : 7 Sets 5948801 : 1 Set ---------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary

steps in the meantime to prevent the improper of fraudulent disposition or use thereof. cda RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-01-85 Revenue Memorandum Circular No. 45-85 October 1, 1985 REVENUE MEMORANDUM CIRCULAR NO. 45-85 Subject : Publishing BIR Ruling No. 132-85, which subjects carpets and rugs to 25% sales tax pursuant to Section 196(g) of the Tax Code. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, hereunder are the salient features of BIR Ruling No. 132-85 dated August 22, 1985, to wit: 1. Holding carpets and rugs as "textile" based on the definitions of the terms "carpet", which means a heavy woven fabric usually made of wool for covering floors and stairs; and "rugs", being a thick woven cloth used as covering, and the term textile means woven fabric or cloth. Consequently, the manufactured carpets and rugs are "textile" within the purview of Section 196(g) of the Tax Code, quoted as follows: casia "(g) Textiles wholly or in chief value of silk, wool, linen, nylon or other synthetic and/or chemical fabrics except those primarily intended for clothing; wool and silk halt; and furs and manufacturers thereof;" and, therefore, subject to the 25% sales tax as provided under said Section 196 of the Tax Code, as amended. BIR Ruling dated January 19, 1967, which subjected carpets and rugs to 7% (now 10%) sales tax on the ground that same articles are not enumerated under Section 185(p) (now section 196(g) is, therefore, deemed revoked by the provisions of P.D. No. 1358, effective April 21, 1978. cdasia All internal revenue officers, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the evident possible publicity. (Sgd.) TOMAS C. TOLEDO Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-18-85 Revenue Memorandum Circular No. 46-85 October 18, 1985 October 18, 1985 REVENUE MEMORANDUM CIRCULAR NO. 46-85 To : All Regional Directors, Revenue Service Chiefs (Assistant Commissioners), and all Bureau Officials and Employees

Subject : Circularizing Civil Service Commission Memorandum Circular No. 7, Series of 1985 on NISA Clearance For the information and guidance of all officials and employees, quoted hereunder is the aforesaid memorandum circular of the Civil Service Commission dated August 18, 1985. cdtai "Pursuant to the authority vested in it under the Civil Service Decree of the Philippines, the Commission, in response to the requirements of national security, hereby prescribes that henceforth, all appointments in the Civil Service, whether in the Career or NonCareer service shall not be forwarded to this Commission or its regional offices for approval unless a NISA clearance or the request for NISA clearance bearing the stamp of receipt of the NISA, in case said clearance has not yet been issued, is attached to the appointment. cd i "All previous memorandum circulars or issuances of this Commission inconsistent thereto are hereby amended or modified accordingly. "This Circular takes effect immediately." (Sgd.) JESUS N. BORROMEO Chairman Please be guided accordingly. (Sgd.) TOMAS C. TOLEDO Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-04-85 Revenue Memorandum Circular No. 47-85 November 4, 1985 REVENUE MEMORANDUM CIRCULAR NO. 47-85 Subject : Publication of missing triplicate copy of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transaction (BIR Form No. 19.54) bearing serial number 281550. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transaction, to wit: cd i ---------------------------Serial Number : Quantity ---------------------------281550 : Triplicate Copy ---------------------------The above copy of Certificate Authorizing Registration which was reported missing by Mr. Epifanio Gonzales, Assistant Regional Director of Revenue Region No. 4-C, San Pablo City, and the other copies of the set are hereby cancelled and all official transactions involving the use of the abovementioned certificate is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the triplicate copy of the said certificate is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia

RUBEN B. ANCHETA Acting Commissioner TAN-A5239-J1139-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-18-85 Revenue Memorandum Circular No. 48-85 October 18, 1985 REVENUE MEMORANDUM CIRCULAR NO. 48-85 Subject : Loss of Four (4) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of four (4) sets of Confirmation Receipts, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------7303889 and 7303890: Two (2) Sets 7098722 and 7098724: Two (2) Sets ---------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-14-85 Revenue Memorandum Circular No. 49-85 November 14, 1985 REVENUE MEMORANDUM CIRCULAR NO. 49-85 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officer, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: cdtai ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------6635417-6635418 : Two (2) Sets ---------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-14-85 Revenue Memorandum Circular No. 50-85 November 14, 1985 REVENUE MEMORANDUM CIRCULAR NO. 50-85 Subject : Loss of Two (2) Sets of Payment Order (BIR Form RC-8-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------4939166-4939167 : Two (2) Sets ---------------------------The above receipts which were reported missing by Mr. Jose Buquid, Revenue Collection Agent of Batangas City, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt RUBEN B. ANCHETA Commissioner of Internal Revenue By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-02-86 Revenue Memorandum Circular No. 1-86 January 2, 1986 REVENUE MEMORANDUM CIRCULAR NO. 1-86 Subject : Abolition of the 1% foreign currency transaction tax: To : All internal revenue officers and others concerned

The provisions of Section 260A of the National Internal Revenue Code as added by Presidential Decree No. 1959 imposing the tax of 1% based on gross value of every sale or purchase of foreign exchange by all banks non-bank financial intermediaries and all authorized foreign exchange dealers was repealed Section 44 of Presidential Decree 1994. cda Henceforth, beginning January 1, 1986 the said 1% foreign exchange tax shall no longer be collected on every sale or purchase of foreign exchange by the said persons and/or institutions. All internal revenue officers and others concerned are hereby enjoined to give this circular the widest publicity. cdt (Sgd.) RUBEN B. ANCHETA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-15-86 Revenue Memorandum Circular No. 2-86 January 15, 1986 REVENUE MEMORANDUM CIRCULAR NO. 2-86 Subject : Liability to the C-13 Graduated Annual Fixed Tax Under P.D. 2006 To : All Internal Revenue Officers and Others Concerned Persons or entities engaged in subsequent sale, i.e., sale of domestically acquired article which has not undergone any processing or transformation, are subject to the privilege tax of P200.00 beginning 1986. (Sec. 10, Revenue Regulations No.1-86) They are also subject to the 1.5% sales tax based on the gross selling price or gross value in money of the articles sold. (Secs. 4 and 5, Ibid) The question is whether beginning the year 1986, said persons are still subject to the C-13 graduated annual fixed tax imposed by the provisions of Section 162(2) (formerly Section 192(2) ) of the Tax Code. cd The C-13 graduated annual fixed tax payable within the first month of the taxable year adopted by the taxpayer is based on the gross annual sales during the preceding taxable year. It is imposed on a person not required to pay the percentage tax, i.e., a dealer who buys and sells merchandise good and chattel, accordingly, it seems clear that requiring a person to pay the C-13 graduated annual fixed tax appears to be inconsistent with the new requirement that he is subject to the fixed and percentage taxes imposed on subsequent sale of articles. Such being the case, a person subject to fixed and percentage taxes on subsequent sale, is no longer subject to the C-13 graduated annual fixed tax. However, if a person is not subject to tax on subsequent sale, e.g., dealer of agricultural products (rice and corn) he will be subject to the C-13 graduated annual fixed tax. Operators or owners of rice and corn mills as well as dealers of gasoline and/or petroleum products shall be subject to the annual fixed tax prescribed by Sections 161 (3) (nn) and (pp) (formerly Sections 192(3) (nn) and (pp) ) of the Tax Code. casia It is desired that this Circular be given as wide a publicity as possible. (Sgd.) RUBEN B. ANCHETA Acting Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-17-86 Revenue Memorandum Circular No. 3-86 February 17, 1986 REVENUE MEMORANDUM CIRCULAR NO. 3-86 Subject : Publication of missing Original Copy of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transaction (BIR Form No. 19.54) bearing Serial No. 210007. To : ALL Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of a Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transaction, to wit: ---------------------------Serial Number : Quantity ---------------------------210007 : One (1) copy (Original Copy) ---------------------------The above copy of Certificate Authorizing Registration which was reported missing by Mr. Eustaquio G. Dahiroc, Revenue District Officer, Revenue District No. 75, Cagayan de Oro City, together with the other copies of the set which are in the possession of Mr. Dahiroc, are hereby cancelled and all official transactions involving the use of the abovementioned certificate are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the original copy of the said certificate is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RUBEN B. ANCHETA Acting Commissioner By: TOMAS C. TOLEDO Deputy Commissioner TAN-T4338-J2227-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-20-86 Revenue Memorandum Circular No. 4-86 February 20, 1986 REVENUE MEMORANDUM CIRCULAR NO. 4-86 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: acd ---------------------------SERIAL NUMBER : QUANTITY ---------------------------B4927553 : One (1) Set ----------------------------

The above receipt which was reported missing by Ms. Angelita Ignacio, Revenue Collection Agent of Gumaca, Quezon, has been cancelled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd RUBEN B. ANCHETA Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-04-86 Revenue Memorandum Circular No. 5-86 April 4, 1986 REVENUE MEMORANDUM CIRCULAR NO. 5-86 Subject : Publishing the revised ad valorem taxes on certain petroleum products per Presidential Order dated March 20, 1986 reducing the prices on regulated petroleum products. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective March 20, 1986: cdt Previous PresentAd Previous tax Present Tax PRODUCTS OCT Less OCT Valorem Ad Total Specific Ad Total DiffeRate Specific Valorem Tax Tax Valorem Tax rence tax Tax Tax PREMIUM (.050) REGULAR (.050) AVTURBO (.099) KEROSENE (.055) DIESEL (.083) FUEL OIL (.043) L P G 3.753 ASPHALTS (.056) SOLVENTS (.098) P4.509 0.20 4.153 0.20 P4.309 25% 3.953 25% 25% P1.49 P1.127 P2.617 P1.49 P1.077 P2.567 1.575 1.038 2.613 1.575 0.988 2.563 1.509 1.214 2.723 1.509 1.115 2.624 0.268 0.644 0.912 0.268 0.589 0.857 0.269 0.935 1.204 0.269 0.852 1.121 0.443 0.241 0.684 0.443 0.198 0.641

4.854 0.394 4.46

4.591 0.386 4.205 14% 4.25 0.377 3.873 22%

3.438 0.607 2.831 7%

0.527 3.226 14% 1.029* 0.945* 1.974* 1.029* 0.814* 1.843* (.131) 3.825 0.394 3.431 14% 0.226 0.536 0.762 0.226 0.48 0.706 4.561 0.394 4.167 25% 1.491 1.14 2.631 1.491 1.042 2.533

All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia

converted to kilogram

(Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-03-86 Revenue Memorandum Circular No. 6-86 April 3, 1986 REVENUE MEMORANDUM CIRCULAR NO. 6-86 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cdt ---------------------------SERIAL NUMBER : QUANTITY ---------------------------6192568 : one (1) set ---------------------------The above receipt which was reported missing by Ms. Fe G. Gustilo, Senior Collection Agent, Revenue District No. 55, Victorias, Negros del Norte, had been cancelled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-09-86 Revenue Memorandum Circular No. 7-86 April 9, 1986 REVENUE MEMORANDUM CIRCULAR NO. 7-86 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: cda ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------6252500 : one (1) set 7722332 : one (1) set ---------------------------The above receipts which were reported missing by Accredited Bank to this Office had been cancelled and any official transactions involving the use of said forms are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-23-86 Revenue Memorandum Circular No. 8-86 April 23, 1986 REVENUE MEMORANDUM CIRCULAR NO. 8-86 Subject : Publishing Questions and Answers on the Classification of Certain Articles for Sales Tax Purposes To : All Internal Revenue Officers and Others Concerned The following are questions and answers clarifying the provisions of the Tax Code, as amended, on particular topics which were discussed among the members of the BIRCustoms Working Group, pursuant to Revenue Special Order No. 7-86. 1. Question: When is the effectivity of the new rates of sales tax for purposes of advance sales tax and compensating tax? casia Answer: The new rates of sales tax prescribed in the Tax Code, as amended, are applicable to all importations entered or withdrawn on or after January 1, 1986, as determined by the Bureau of Customs in accordance with the Tariff and Customs Code of the Philippines and its implementing regulations. 2. Question: What is meant by the word "processed" as used in Sec. 165(A)(3) of the Tax Code, as amended? Answer: For purposes of Sec. 165(A)(3) of the Tax Code, as amended, the word "processed" means that such products/articles as meat, milk, fruits, vegetables, fish, etc. have undergone the process of curing, canning, bottling or other manufacturing process, but excludes such simple processes as freezing, refrigerating, drying, salting or smoking. 3. Question: What are the rates of advance sales tax or compensating tax on the importation of the following articles? (a) Live hogs, piglets, chicken and cattle; (b) Processed fish, such as fishmeal; (c) Processed agricultural products of the soil which are either fruits or vegetables, such as soya-bean meal, feed barley and oats; (d) Processed (chopped or granulated) meat and bone, but free of big bone chips and not adulterated with foreign materials, and (e) Natural sun-dried and salted seeds of watermelon. Answer: For sales tax purposes (a) For live hogs, piglets, chicken and cattle - 0% as agricultural products. (b) Processed fish/fishmeal - 10% under Sec. 162(c) of the Tax Code, as amended by PD 2031. acd (c) Processed agricultural products of the soil (fruits or vegetables) such as soybean meal, barley or oats - 10% under Sec. 162(c) of the Tax Code, as amended by PD 2031.

(d) Processed meat and bone - 10% under Sec. 162(c) of the Tax Code, as amended by PD 2031. (e) Natural sundried and salted seeds of watermelon, not having undergone the process of curing, canning, bottling or other process of manufacturing, other than the simple process of freezing, refrigerating, drying, salting or smoking - 0% as an agricultural product in its original state. All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. cdasia (Sgd.) BIENVENIDO A. TAN, JR. Commissioner TAN - T-5150-J0923-A-4 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-08-86 Revenue Memorandum Circular No. 9-86 May 8, 1986 REVENUE MEMORANDUM CIRCULAR NO. 9-86 Subject : Publishing Presidential Decree No. 2026, restoring the tax privileges granted to rural banks, and amending for the purpose Section 1 of Presidential Decree No. 1955. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of Presidential Decree No. 2026. "PRESIDENTIAL DECREE NO. 2026 RESTORING THE TAX PRIVILEGES GRANTED TO RURAL BANKS, AND AMENDING FOR THE PURPOSE SECTION 1 OF PRESIDENTIAL DECREE NO. 1955 WHEREAS, rural banks play a vital role in the agricultural development program of the Government, as they serve the vast majority of the population in the rural areas; cd i WHEREAS, rural banks had earlier been granted tax privileges to strengthen and ensure their viability; WHEREAS, however, Presidential Decree No. 1955 withdrew the duty and tax privileges granted to private business enterprises and/or persons engaged in any economy activity, including rural banks; WHEREAS, the withdrawal of the tax exemption previously extended to rural banks, has adversely affected the profitability and viability of more than ninety percent (90%) of all rural banks operating throughout the country, especially in view of the prevailing economic conditions; WHEREAS, the restoration of the tax exemption of rural banks, will certainly help them weather the present economic crisis; WHEREAS, Parliamentary Bill No. 4531 introduced by MPs Emilio C. Macias II and Ricardo D. Abiera, was pending in the Batasang Pambansa, but was not passed before the Batasan's adjournment, for lack of material time; WHEREAS, considering the urgent representations of the rural bankers, and in order to ensure their survival in the face of the grave emergency caused by present economic

difficulties, there is a need to act expeditiously to save the rural banking system from total collapse; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested upon me by the Constitution, do hereby decree: cdt Sec. 1. Section of Presidential Decree No. 1955, is hereby amended by adding a new paragraph thereto, as follows: "(f) Rural banks whose net assets are less than thirty Million Pesos (P30,000,000); Provided, That the tax privileges shall be extended only for a period of five years from the date of the effectivity of this Decree, subject to further extension as may be recommended by the Minister of Finance." Sec. 2. All laws, orders, rules, regulations and issuances inconsistent with the provisions of this Decree, are hereby repealed, amended, or modified accordingly. cda Sec. 3. This Decree shall take effect immediately. Done in the City of Manila, this 3rd day of February, in the year of Our Lord nineteen hundred and eighty-six. (Sgd.) FERDINAND E. MARCOS President of the Philippines By the President: (Sgd.) JUAN C. TUVERA Presidential Executive Assistant SALIENT FEATURES OF PRESIDENTIAL DECREE NO. 2026: 1. The Decree adds paragraph (f) to the enumeration of PD No. 1955 of the several tax exemptions and privileges not abolished by the aforesaid legislation, in effect restoring all tax exemptions and/or preferential tax treatment previously enjoyed by rural banks prior to their abolition on October 15, 1984 (date of effectivity of PD No. 1955). cd 2. However, since PD No. 2026 took effect on 3 February 1986, it follows that restoration of the aforementioned tax exemptions and/or preferential tax privileges shall be effective only from and after the abovestated date. 3. The Decree furthermore makes it explicit that the tax exemption benefits therein restored shall apply only to rural banks whose net assets are less than P30,000,000 and that the same shall only be enjoyed for a period of five (5) years from date of effectivity thereof, subject to further extension as may be recommended by the Minister of Finance. All internal revenue officials, employees, and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) BIENVENIDO A. TAN Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-12-86 Revenue Memorandum Circular No. 10-86 May 12, 1986 REVENUE MEMORANDUM CIRCULAR NO. 10-86

Subject : Publishing pertinent portions of P.D. 2008, amending P.D. 1955 to restore the tax exemption of Cooperatives under P.D. 175, as amended. To : All Internal Revenue Officers and Others Concerned. Pertinent portions of Presidential Decree No. 2008, issued on January 8, 1986, are hereby published for the information and guidance of all concerned. "PRESIDENTIAL DECREE NO. 2008 FURTHER STRENGTHENING THE COOPERATIVE MOVEMENT BY AMENDING CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NUMBERED ONE HUNDRED SEVENTY-FIVE, AS AMENDED BY PRESIDENTIAL DECREE NUMBERED NINETEEN HUNDRED AND FIFTY FIVE xxx xxx xxx Sec. 2. Section 5 of the same Decree is amended to read as follows: 'Sec. 5. Privileges of Cooperatives. Cooperatives which are in good standing as certified by the BCOD/MAF shall enjoy the following privileges: cdasia (a) Exemption from income and sales taxes until December 31, 1991: Provided, That a substantial portion of the net income of the Cooperative is returned to members in the form of interests and/or patronage refunds: Provided, further that those cooperatives whose tax exemption privileges under this Decree have already expired shall continue to enjoy such privileges but in no case shall extension go beyond December 31, 1991: Provided, finally, that the cooperative's taxable income shall mean that portion of the Cooperative's income after deducting the interest and patronage funds paid to its members; xxx xxx xxx SALIENT FEATURES OF PRESIDENTIAL DECREE NO. 2008: 1. The Decree restored the tax exemption of Cooperatives previously enjoyed under P.D. 175 which had been abolished by P.D. 1955 which took effect on October 15, 1984. 2. However, since P.D. 2008 took effect on January 8, 1986, it follows that restoration of the tax exemption shall be effective only from and after the abovestated date. 3. The Decree further provides that the Cooperative's exemption from income and sales taxes shall be effective only until December 31, 1991. acd All Internal Revenue Officials, employees, and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-20-86 Revenue Memorandum Circular No. 11-86 May 20, 1986 REVENUE MEMORANDUM CIRCULAR NO. 11-86

Subject : Revision of "Insurance Premium Tax Return" Form (BIR Form 2001) and corresponding premium tax procedures to conform with the provisions of the premium tax law. To : All Insurance Companies authorized to transact business in the Philippines and all Internal Revenue Officers concerned. It has been observed that in computing the premium tax payable by insurance companies (domestic or resident foreign corporations), reinsurance premiums ceded to a domestic insurance company is deducted from total premiums collected. The more apparent reason for this practice may be traced to the "Insurance Premium Tax Return" from (BIR FORM 2001) where this item is shown as allowable deduction in computing the tax base. acd This tax procedure has no authority in law. The tax procedure outlined in Section 223 of the National Internal Revenue Code, as amended, does not allow deduction of reinsurance premiums ceded to another insurance company. Rather, the law provides that the taxable base, for premium tax purposes, shall be "Gross Premium collected" after deduction of the following items: 1. Premiums refunded within six (6) months after payment on account of rejection of risk or returned for other reason to a person insured; 2. Reinsurance premiums received from another insurance company which has already paid premium tax on the premiums being ceded; 3. Premiums collected or received by any branch of a domestic corporation, firm or association doing business outside the Philippines on account of any life insurance of the insured who is a non-resident, if any tax on such premium is imposed by the foreign country where the branch is established; 4. Premiums collected or received on account of any reinsurance, if the risk insured against covers property located outside the Philippines, or the insured in case of personal insurance, resides outside the Philippines, if any tax on such premiums is imposed by the foreign country where the original insurance has been issued or perfected; and 5. Portion of the premiums collected or received by the insurance company on variable contracts (as defined in Sec. 232(2), PD 612) in excess of the amounts necessary to insure the lives of the variable contract owners. It has also been observed that some insurance companies withhold premium tax on reinsurance premiums ceded to other insurance companies and such reinsuring companies in turn deduct the premium taxes withheld in computing their premium tax liabilities. aisa dc Likewise, this practice has no legal authority. The premium tax law (Sections 223 to 226, Chap. II, Title VIII, NIRC, as amended) provides no authority for the withholding of premium taxes. Considering the foregoing premises: 1. The "Insurance Premium Tax Return" form (BIR FORM 2001) is hereby revised to conform with the provisions of Section 223 of the National Internal Revenue Code, as amended. cd i 2. The Chief, Personnel and Administrative Services, is hereby instructed to cause the immediate printing of the revised "Insurance Premium Tax Return" form (BIR FORM 2001) which is attached herewith and marked "ANNEX" "A". 3. The practice of deducting reinsurance premiums ceded in computing the premium tax due is hereby ordered to be immediately stopped. aisa dc

4. The practice of some insurance companies withholding premium taxes on reinsurance premiums ceded shall likewise be immediately stopped. cdtai (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-14-86 Revenue Memorandum Circular No. 12-86 May 14, 1986 REVENUE MEMORANDUM CIRCULAR NO. 12-86 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------B-5644480 : one (1) set ---------------------------The above receipt which was reported missing by Mr. Ramon G. Santiago, Acting Collection Agent of Tagum, Davao, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-21-86 Revenue Memorandum Circular No. 13-86 May 21, 1986 REVENUE MEMORANDUM CIRCULAR NO. 13-86 Subject : Loss of Four (4) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of four (4) sets of Confirmation Receipts, to wit: cd i ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------7603750 : one (1) set 7602266 : one (1) set 8206890 : one (1) set 8762888 : one (1) set ----------------------------

The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-30-86 Revenue Memorandum Circular No. 14-86 May 30, 1986 REVENUE MEMORANDUM CIRCULAR NO. 14-86 Subject : Publishing National Budget Circular No. 383 To : All Service Heads, Regional Directors, Division Chief, Branch Chiefs, Revenue District Officers and Others Concerned. For the guidance and compliance of all concerned, there is hereby published the full text of National Budget Circular No. 383 dated March 26, 1986, revising the due dates for the submission of the accountability reports, provided in Joint Circular No. 2-84 of the Ministry of Finance, Commission on Audit and the Ministry of the Budget dated June 29, 1984 as amended by Joint Circular No. 2-84-A dated September 5, 1984: cda "National Budget Circular No. 383 March 26, 1986 To : Heads of Ministries, Bureaus and Offices, Self-Governing Boards and Commissions, State Universities and Colleges, Government-Owned and Controlled Corporations, Chiefs, Financial and Management Services, Budget Officers, Chief Accountants/Heads of Accounting Units, Property Officers/Custodians, COA Unit Auditors and Others Concerned. Subject : Revision of the due dates for submission of accountability reports provided under Joint Circular No. 2-84 dated June 29, 1984 1.0 Rationale Accountability reports should be timely if they serve their usefulness in decision-making. The usefulness of performance evaluation results is negated if there is a delay in the submission of these reports. Hence, this circular is used requiring all government agencies to submit their reports promptly. 2.0 Purpose This circular is issued to revise the due dates prescribed under Joint Circular No. 2-84 in the submission of accountability reports by government agencies. 3.0 Henceforth, agencies shall submit the accountability reports prescribed under item 6.2 of Joint Circular No. 2-84 on or before the twentieth (20th) day of the month following the end of the month/quarter/year covered by the report. The grace period of sixty (60) days provided under item 3.5 of the aforementioned circular for submission of accountability reports is hereby revised and shall no longer apply. cdtai 4.0 Consequently, the prescribed accountability reports shall be submitted as follows:

Title of Reports

Due Date

Monthly report of Income On or before the 20th BF no. 300 day of the month following the end of the month covered by the report. Monthly Report of CDC Utilization/Non-cash Availment BF No. 303 Trial Balance - do Quarterly Physical On or before the 20th Report of Operations day of the month following BF No. 302 the end of the quarter covered by the report Quarterly Financial - do Report of Operations BF No. 301 Semi-Annual Physical Report of Operations (For State University/ College/School) BF No. 302-A Statement of Accounts Payable BF No. 304 Annual Report of Accomplishment - do On or before the 20th day of July - do -

On or before the 20th day of January

5.0 To monitor on a monthly basis the status of funds of the national government, agencies are also required to submit to the Office of Budget and Management - National Accounting Office (OBM-NAO) on or before the 5th day of the month following the end of the month covered by the report, the obligations incurred, obligations liquidated, CDC utilized (both for current operations and prior years' accounts payable) and income realized on an aggregate basis as shown in Annexes "A" and "B". However, the initial reports due on April 5, 1986 shall cover the agency financial operation for the 1st quarter of the current fiscal year 1986. 6.0 Reports required under Circular Letter No. 86-5 dated March 7, 1986 regarding the actual availments made in the payment of additional compensation authorized under Circular Letter No. 86-3 dated January 22, 1986 (i.e., salary adjustments, COLA, etc.)

shall be reported as a separate item under the caption Personal Services duly identified as such. 7.0 To facilitate consolidation, central offices (COs) of regionalized agencies shall request their regional offices to submit within the 1st three (3) days after the end of each month thru the fastest means of communications available in the area (telex, telephone, radio, telegram, etc.), to their respective COs the required data under item 5.0 above. On 4th day, agency COs shall consolidate their respective agency operations with ROs. On the 5th day, the agency COs shall submit these consolidated accountability reports to the NAO. For State Universities and Colleges, reports shall be submitted directly to the OBM-NAO. cda 8.0 In reporting the CDC utilized, agency ROs shall include utilization made by journal vouchers pertaining to withholdings from the salaries of employees for remittance to the GSIS, BIR, etc., pursuant to Joint Circular No. 9-81A dated November 30, 1983. 9.0 The provisions of Joint Circular No. 2-84 under item 3.5 that "allotment and CDC for any given quarter shall not be released by the OBM unless the required accountability reports shall have been submitted" shall be strictly observed. 10.0 No appropriation authorized in the General Appropriations Act shall be made available to pay the salary of any official or employee who failed to submit on time the required reports, in addition to any disciplinary action that may be instituted against such erring official or employee pursuant to Section 63 of PD 1177 dated July 30, 1977. The auditor shall be responsible for the strict implementation of this provision. 11.0 Repealing Clause The provision of any circular and other issuances which are inconsistent with this circular are hereby rescinded/repealed and/or modified accordingly. cdt 12.0 Effectivity This circular shall take effect immediately. (Sgd.) ALBERTO G. ROMULO Minister of Budget" Considering the stiff penal provisions of the Budget Circular indicated in paragraphs 9.0 and 10.0 and considering further that the consolidating units in the Central Office of the Bureau can only prepare the required accountability reports and submit the same to the Budget Ministry on time if all the basis for consolidation are transmitted to them within the prescribed deadlines, all officials and employees concerned are directed to comply strictly with the provisions of this Circular. The Service Heads of the Financial and Management, Personnel and Administrative, Collection and Specific Tax, as well as all Regional Directors are instructed to see to it that the respective accountability reports of the divisions, branches, district offices and units within their jurisdiction are prepared and submitted on due dates, particularly the following reports: cdasia a. Report of TCCA issued and cancelled by deputized disbursing officers; b. Report of disbursements (liquidations) by cashiers and disbursing officers; c. Report of Commercial checks issued and cancelled from BTR funded accounts; d. Report of collections by special collecting officers both in the Central and Regional Offices; e. Report of Treasury Warrants issued and cancelled by Central Office accountable officers; casia

f. Monthly 40.21 report of Regional offices; g. Monthly reports of collections of collection agents (BIR Form 12.31) Failure of any official or employee concerned to submit their respective accountability reports on time without any valid reason for the delay shall mean the automatic suspension of their salaries until the reports are finally submitted and the filing of appropriate administrative charges against the erring officials and employees. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-13-86 Revenue Memorandum Circular No. 15-86 June 13, 1986 REVENUE MEMORANDUM CIRCULAR NO. 15-86 Subject : Handbook on Tax Numeric Codes of Revenue Sources - Addition of Other Sources of Internal Revenue. To : All Collection Agents, RPO-Issuing Officers, Cash Clerks and Others Concerned. Since the third revision of the Handbook on Tax Numeric Codes of Revenue Sources in 1983, several tax legislations amended the National Internal Revenue Code. Amendments include increases in tax rates changes in the manner of taxation, i.e. from sales tax to excise tax, and creation of additional sources of revenue. It is essential that these amendments be reflected in the handbook of tax numeric codes to ensure the proper accounting of internal revenue sources and the new numeric tax codes, respectively: cdtai KINDS OF TAXES TAX NUMERIC CODES I. Excise Tax

Ad valorem tax on compounded liquors 3023-2001 Ad valorem tax on beer, lager beer, ale, porter and other fermented liquors 3031-2001 Cigarettes packed in 20's when the retail price per pack exceeds P12, on each thousand

3061-1111

Ad valorem tax on cigarettes 3061-2001 Ad valorem tax on matches 3070-2001

Ad valorem tax on kerosene 3090-2001

Ad valorem tax on naphtha, regular gasoline and similar products of distillation 3110-2001 Ad valorem tax on premium gasoline acd 3120-2002 Ad valorem tax on aviation gasoline 3120-2003 Ad valorem tax on thinners and solvents 3160-2001 Ad valorem tax on liquefied petroleum gas 3170-2001 Ad valorem tax on liquefied petroleum gas used for motive power 3180-2001 Ad valorem tax on asphalts Ad valorem tax on aviation turbo jet fuel 3210-2001 Ad valorem tax on bunker fuel oil, and on all similar fuel oils having more or less the same generating power 3230-2001 Ad valorem tax on diesel fuel oil; and on all similar fuel oils having more or less the same generating power 3240-2001 Annual tax on processed videotape cassette, ready for playback, regardless of length 3253-0001 Indigenous petroleum 3270-0001 II. Business Taxes 3190-2001

Fixed Taxes: - On persons subject to percentage

tax - Proprietors or operators of palm oil mills 4011-0902 - Contractors, proprietors or operators of dockyards and others - Business agents and private detective or watchman agencies* 4011-1222 - Other independent contractors 4011-1224

- On persons subject to percentage tax on subsequent sales 4011-1602 Other fixed taxes: - Persons dealing in firearms or ammunition 4013-4901 - Wholesale dealers of petroleum products other than liquefied petroleum gas 4013-5001 - Producer or processor of videotape cassettes 4013-6001 - Lessor or distributor of video-tape cassettes 4013-6002 - Forest or logging operators or concessionaires 4013-7001 - Producers of minor forest products 4013-8001 - Producers of minerals and mineral products cda 4013-8002 - Producers of quarry resources - Manufacturers of non-essential articles 4013-9001 - Manufacturers or importers of 4013-8003

automobiles *

4013-9002

Replaced "Business agents and other independent contractors".

Percentage taxes: - Sales taxes - Sales tax on non-essential articles - Manufactured parts and accessories of automobiles which are principally for ornamentation or embellishment 4021-1108 - Sales tax on semi-essential articles - Fountain pens 4023-1015

- Chains, sofas, beds, showcases, lockers, cabinets, except filing cabinets and dental chairs 4023-1016 - Watches, clocks, cases and movements therefor 4023-1017 - Electric fans and exhaust fans 4023-1018

- Television sets, phonographs or gramophones; combination radiophonograph set; tape recorders, video tape recorders, tape decks, car stereo, cassette-radio; and similar articles for reproducing and/or recording music, sound and image and any combination thereof 4023-1019 - Household type refrigerators and freezers 4023-1020 - Essential articles - Processed meat, fruits, vegetables, fish and other sea food* 4032-1001 - Beverages and concentrates

thereof, whether in liquid, powder or granulated form, intended for consumption as a drink, including but not limited to processed coffee, cocoa, tea or ginger 4032-1009 - Processed milk, dairy products, butter and its substitutes like margarine 4032-1010 - Cooking oil 4032-1011 - Fertilizers 4032-1012

- Sales tax on every subsequent sale of articles 4034-1001 - Sales tax on automobiles * Replaced "Processed meat, milk, fish and other seafoods".

Engine Displacement Gasoline Diesel up to 1200cc. up to 1850cc. 4022-3001 1201 to 1600cc. 1851 to 2050cc. 1601 to 1800cc. 2051 to 2250cc. 1801 cc. or over 2251 cc. or over - Proprietors or operators of palm oil mills

4022-3002 4022-3003 4022-3004

4033-0006

- Contractor's tax on business agents and private detective or watchman agencies* 4400-0021 - Contractor's tax on other independent contractors 4400-0023 * Replaced "Business agents and other independent contractor including private detective or watchman agencies cdtai III. Income Tax

On royalties received by corporations 1042-2009 In accordance with the above changes, the following tax numeric codes are hereby cancelled: 4011-0101

4011-0201 4021-1201 4021-1202 4031-1001 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-16-86 Revenue Memorandum Circular No. 16-86 June 16, 1986 REVENUE MEMORANDUM CIRCULAR NO. 16-86 Subject : Loss of Forty (Six (46) Sets of Payment Order (BIR Form RC-8202-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of forty six (46) sets of Revenue Payment Order, to wit: cd ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B7677780 - B7677825 : Forty Six (46) Sets ---------------------------The above receipts which were reported missing by Examiner Edgardo P. Morales, Revenue District Office, #33, Pasay City, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia BIENVENIDO A. TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-18-86 Revenue Memorandum Circular No. 17-86 June 18, 1986 REVENUE MEMORANDUM CIRCULAR NO. 17-86 Subject : Loss of Two Hundred Fifty Three (253) sets of Confirmation Receipts. (BIR Form CB 82-02-03) To : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the loss of two hundred fifty three (253) sets of Confirmation Receipts, to wit: cd ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------8959450 : One (1) Set 3807650 : One (1) Set 8959485 : One (1) Set 9680001 - 9680250 : Two Hundred Fifty (250) Sets ---------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai BIENVENIDO A. TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-24-86 Revenue Memorandum Circular No. 18-86 June 24, 1986 REVENUE MEMORANDUM CIRCULAR NO. 18-86 Subject : Availment of Privilege to Pay Correct Sales Tax on Subsequent Sales without Penalties and Surcharges. To : All Internal Revenue Officers and Others Concerned In the interest of emphasizing and promoting the positive in tax collection, and in view of the encouraging response of taxpayers in the payment of the sales tax on subsequent sales, this circular is issued to reach taxpayers who are still uninformed or undecided in the payment of the said tax. aisa dc 1. PRIVILEGE AND SCOPE All taxpayers liable to the "sales tax on second sale" and/or the "sales tax on subsequent sale" at 3% and 1.5%, respectively, are allowed to amend their returns and pay the correct sales tax due without the imposition of penalties and surcharges, for the months of November, 1985 to June, 1986 (originally limited to the period from November, 1985 to April, 1986 under memorandum dated May 20, 1986). The privilege is hereby expanded to cover non-filing of the required returns and non-payment of the said tax. 2. DEADLINE The privilege, however, should be availed of not later than July 31, 1986.

3. MANNER OF AVAILMENT The privilege may be availed of by declaring the correct amount of taxable subsequent sales or second sales in the amended return (BIR Form 2529D) and paying the amount of tax still due after crediting the sales tax paid on the original return. The words "amended return" should be written or typed on the upper right hand side of the return to distinguish it from the original return previously filed. To illustrate: - Mr. Juan de la Cruz declared in his original return the amount of P50,000 as his gross sales for the month of January, 1986. However, for the same month, his true amount of sales subject to 1.5% is P100,000. Gross Sales P100,000 Less: 1) Sales to subject to zero rate 2) Exempt Sales Taxable Subsequent Sales 100,000 Less: Sales Returns & Allowances Net Taxable Subsequent Sales 100,000 Tax Due 1,500 Less: Tax Paid Under CR/ROR-0001750 SALES TAX STILL DUE P750 In the case where the taxpayer failed to file the return and pay the tax, the filing of a separate or consolidated return and the payment of tax will be sufficient availment of the privilege. However, the returns for the period from November to December, 1985 and the returns for January to June, 1986 shall be separately filed in order to avoid confusion in the application of the tax rates of 3% or 1.5%. cd All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-18-86 Revenue Memorandum Circular No. 19-86 July 18, 1986 REVENUE MEMORANDUM CIRCULAR NO. 19-86 Subject : Effectivity for implementation of the new form for Premium Tax Return (BIR FORM 2001) To : All insurance companies authorized to transact business in the Philippines, Internal Revenue Officers and Others concerned. Due to valid representations made by the Insurance Commission and representatives of insurance companies in the Philippines, Revenue Memorandum Circular No. 11-86 dated May 20, 1986, bearing on the revised Premium Tax Return Form (BIR FORM NO. 2001) is hereby amended. aisa dc The requirement for the use of this revised BIR form, including computations of the premium tax required thereunder, shall take effect beginning the first quarter of Calendar Year 1987. Strict enforcement of this Circular is enjoined. (Sgd.) BIENVENIDO A. TAN, JR.

Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-86 Revenue Memorandum Circular No. 20-86 July 24, 1986 July 24, 1986 REVENUE MEMORANDUM CIRCULAR NO. 20-86 Subject : Notice, publication and effectivity of internal revenue tax rules and regulations. To : All Internal Revenue Officers and Others concerned. It has been observed that one of the problem areas bearing on compliance with internal revenue tax rules and regulations is lack or insufficiency of due notice to the tax-paying public. Unless there is due notice, due compliance therewith may not be reasonably expected. And most importantly, their strict enforcement could possibly suffer from legal infirmity in the light of the Constitutional provision on "due process of law" and the essence of the Civil Code provision concerning effectivity of laws, whereby due notice is a basic requirement (Sec. 1, ART. IV, Constitution; ART. 2, New Civil Code). acd In order that there shall be a just enforcement of rules and regulations, in conformity with the said basic element of due process, the following procedures are hereby prescribed for the drafting, issuance and implementation of the said Revenue Tax Issuances: 1. This circular shall apply only to (a) Revenue Regulations; (b) Revenue Audit Memorandum Orders; and (c) Revenue Memorandum Circulars and Revenue Memorandum Orders bearing on internal revenue tax rules and regulations. 2. Except when the law otherwise expressly provides, the aforesaid internal revenue tax issuances shall not begin to be operative until after due notice thereof may be fairly presumed. Due notice of the said issuances may be fairly presumed only after the following procedures have been taken: 2.1 The Records Division of the National Office shall furnish, thru registered mail, all of the following business and professional organizations with the corresponding revenue tax issuance: a. Philippine Institute of Certified Public Accountants; b. Integrated Bar of the Philippines; c. Philippine Chamber of Commerce and Industry; d. American Chamber of Commerce; e. Federation of Filipino-Chinese Chamber of Commerce and Industry; and cdtai f. The Japanese Chamber of Commerce & Industry of the Philippines, Inc. 2.2 The provisions of paragraph 2.1 shall not be deemed an exclusion of other person or persons who may request for a copy of the corresponding revenue issuance from the Bureau of Internal Revenue. 2.3 The Bureau shall issue a press release about the new revenue issuance in any newspaper or newspapers of general circulation. The press release shall cover the highlights or features thereof. 2.4 Effectivity date for enforcement of the new revenue issuance shall take place thirty (30) days from the date the revenue issuance has been sent thru registered mail to the organizations enumerated under paragraph 2.1 hereof.

3. Procedures for dating of revenue tax issuances. - Per ANNEX "A" hereof, the revenue issuance shall be dated as follows: 3.1 The following information shall be shown at the upper left hand portion, first page, of the revenue issuance: a. Date drafted b. Date signed by Commissioner c. Date signed by Minister of Finance (for Revenue Regulations only) d. Date sent to organizations enumerated under par. 2.1 of RMC No. 20-86. 3.2 The Records Division shall indicate in the upper right hand portion, first page, or the revenue issuance the effectivity date thereof which shall be thirty (30) days from the date copies of the issuance have been sent to the organizations enumerated under paragraph 2.1 hereof. cdtai Before sending copies of the revenue issuance, the Records Division shall already indicate its effectivity date in the manner and form as shown in ANNEX "A" hereof. 4. Proof of (a) mailing of the revenue issuance to the organizations enumerated under paragraph 2.1 hereof, and (b) copy of the required press release, shall be attached to the original copy of the revenue issuance, which shall be filed by the Records Division for future reference. 5. Strict compliance with the foregoing procedures is enjoined. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-86 Revenue Memorandum Circular No. 21-86 July 24, 1986 REVENUE MEMORANDUM CIRCULAR NO. 21-86 Subject : Loss of one (1) sheet (Taxpayer's Copy) of Revenue Official Receipt (BIR Form No. 25.24) bearing Serial No. 0445672-H . To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipt (BIR Form No. 25.24), to wit: cdt ---------------------------Serial Number : Quantity ---------------------------0445672-H : One (1) sheet (Taxpayer's Copy) ---------------------------The above sheet (taxpayer's copy) of revenue official receipt was reported missing by Mr. Nonilon P. So, Officer-in-Charge of the Government Printing Office. The said copy together with the other copies of the set and the entire pad bearing serial nos, 0445651-H to 0445700-H have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned official receipts is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia

BIENVENIDO A. TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner TAN-V4656-G0636-A-3 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-18-86 Revenue Memorandum Circular No. 22-86 July 18, 1986 REVENUE MEMORANDUM CIRCULAR NO. 22-86 Subject : Publishing Executive Order No. 21, Amending Section 128 of the National Internal Revenue Code. As Amended, Revising the Specific Tax Rates on Petroleum Products. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder is the full text of Executive Order No. 21. "EXECUTIVE ORDER NO. 21 AMENDING SECTION 128 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, BY REVISING THE SPECIFIC TAX RATES ON PETROLEUM PRODUCTS WHEREAS, the recent rollbacks in the prices of petroleum products have resulted in a substantial loss of revenue due to the reduction in the ad valorem tax collections; cd i WHEREAS, considering the expected budgetary deficits for the current year, it becomes imperative to revise the specific tax rates on these products to recoup the aforecited revenue loss; NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Republic of the Philippines, do hereby direct and order that: Sec. 1. Section 128 of the National Internal Revenue Code, as amended, is hereby further amended to read in its entirety as follows: "Sec. 128. Manufactured Oils and Other Fuels. There shall be collected on refined and manufactured mineral oils and motor fuels, the following excise taxes which shall attach to the articles hereunder enumerated as soon as they are in existence as such: "(a) For products subject to specific tax only: "(1) Lubricating oils, per liter of volume capacity, four pesos and fifty centavos; "(2) "(3) Processed gas, per liter of volume capacity, five centavos; Greases, waxes and petrolatum, per kilogram, four pesos and fifty centavos; and

"(4) On denatured alcohol to be used for motive power per liter of volume capacity, five centavos: Provided, That unless otherwise provided by special laws, if the denatured

alcohol is mixed with gasoline, the excise tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For purposes of this subsection, the removal of denatured alcohol of not less than one hundred eighty degrees proof (ninety per cent absolute alcohol) shall be deemed to have been removed from motive power, unless shown otherwise. cd i "(b) For products subject to both specific and ad valorem taxes: Specific Ad Valorem "(1) Naphtha, regular gasoline and similar product of distillation - P2.604/liter Premium and aviation gasoline P2.489/liter Kerosene P.628/liter

25% 25% 14%

"(2) "(3) "(4)

Fuel oil commercially known as diesel fuel oil, and on similar fuel oils, having more or less the same generating capacity, and liquefied petroleum gas used for motive power P.523/liter 22% Thinners and solvents P2.472/liter 25%

"(5) "(6)

Liquefied petroleum gas except those used for motive power P.697/liter or 1.247/kilogram 14% Aviation Turbo Fuel - P2.5671/liter 25% Fuel oil commercially known as bunker fuel oil and oils having more or less the same generating power P.511/liter 7%

"(7) "(8)

"(9) Asphalts P.581/liter 14% "The ad valorem tax shall be based on the wholesale posted price, net of specific and domestic ad valorem taxes on the oil products as approved by the Board of Energy." Sec. 2. This Executive Order shall take effect beginning May 22, 1986. cdt

Done in the City of Manila, this 19th day of June, in the year of Our Lord, nineteen hundred and eighty-six. (Sgd.) CORAZON C. AQUINO President of the Philippines By the President: (Sgd.) JOKER P. ARROYO Executive Secretary" SALIENT FEATURES: As a result of the revision of specific tax rates under Executive Order No. 21, the new excise taxes on certain petroleum products, effective May 22, 1986, are as follows: PRODUCTS Specific Tax/liter Ad Valorem Tax/liter Total Tax Naphtha, regular P2.604 P0.684 P3.288 gasoline Premium and aviation 2.489 0.787 3.276 gasoline Kerosene 0.628 0.424 1.052 Diesel 0.523 0.598 1.121 Thinners, solvents 2.472 0.748 3.22 LPG 0.697 0.369 1.066 or 1.247/kg. 0.660/kg 1.907/kg Aviation Turbo Fuel 2.567 0.769 3.336 Fuel Oil 0.511 0.13 0.641 Asphalts 0.581 0.344 0.925 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-30-86 Revenue Memorandum Circular No. 23-86 July 30, 1986 July 1, 1986 REVENUE MEMORANDUM CIRCULAR NO. 23-86 Subject : Publishing the Provisions of Executive Order No. 22, dated June 25, 1986, amending Sections 110, 124 and 126 of the National Internal Revenue Code, as amended. To : All Internal Revenue Officers Concerned. For the information and guidance of all concerned, the pertinent provisions of Executive Order No. 22 are hereunder quoted: "Sec. 2. Section 110 of the National Internal Revenue Code, as amended, is hereby further amended by adding the following paragraph:

"(d) Credit for excise tax on articles actually exported. - When articles locally produced or manufactured are removed and actually exported without returning to the Philippines, whether so exported in their original state or as ingredients or parts of any manufactured articles or products, any excise tax paid thereon shall be credited or refunded upon submission of the proof of actual exportation and upon receipt of the corresponding foreign exchange." casia "Sec. 4. Section 124 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 124. Ad valorem tax on fermented liquors. - There shall be levied, assessed and collected an ad valorem tax equivalent to fifty (50%) percent of the brewer's wholesale selling price, excluding the ad valorem tax imposed under this Section, on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar domestic fermented liquors, but in no case shall the said ad valorem tax be less than P1.00 per regular 320 cc. bottle." "Sec. 5. Section 126 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 126. Cigars and Cigarettes. - (a) Cigars - There shall be levied, assessed and collected an ad valorem tax of fifteen (15%) percent of the manufacturer's or importer's registered wholesale price including the ad valorem tax imposed under this Section on all cigars manufactured in or imported into the Philippines. "(b) Cigarettes packed in thirties. - There shall be levied, assessed and collected an ad valorem tax of twenty (20)% percent of the manufacturer's registered wholesale price including the ad valorem tax imposed under this Section on all cigarettes packed in thirties: Provided, however, that the rate prescribed in this paragraph shall be increased to twenty-five (25%) percent beginning July 1, 1987. "(c) Cigarettes packed in twenties. - There shall be levied, assessed and collected an ad valorem tax at the rates prescribed below based on the manufacturer's registered wholesale price, including the ad valorem tax herein imposed on all cigarettes packed in twenties: casia (1) On locally manufactured cigarettes bearing a foreign brand, fifty (50%) percent beginning July 1, 1986 and sixty (60%) percent beginning January 1, 1987; Provided, that this rate shall apply regardless of whether or not the right to use of title to the foreign brand was sold or transferred by its owner to the local manufacturer. Whenever it has to be determined whether or not a cigarette is a foreign brand, the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern. (2) On other locally manufactured cigarettes forty (40%) percent beginning July 1, 1986 and fifty (50%) percent beginning January 1, 1987. Duly registered or existing brands of cigarettes packed in twenties shall not be allowed to be packed in thirties. Where the existing registered wholesale price, including tax, of cigarettes packed in 20's does not exceed P3.60 per pack, the rate for the cigarettes packed in 30's shall apply. "(d) Imported cigarettes. - If the cigarettes are of foreign manufacture, regardless of the retail price and contents per pack, there shall be levied, assessed and collected an ad valorem tax of seventy-five (75%) percent of the importer's wholesale price including the tax imposed in this paragraph. . . ."

"(e) Printing of rates of tax. - There shall be printed on all packs of locally manufactured cigarettes the amount of the ad valorem tax per pack, except those to be used as samples. No cigarettes shall be allowed to be removed from any factory unless this requirement has been complied with." cd i Sec. 6. All orders, issuances, rules and regulations or any part thereof which are inconsistent with the provisions of this Executive Order are hereby repealed or modified accordingly. Sec. 7. This Executive Order shall take effect on July 1, 1986. Done in the City of Manila, this 25th day of June, in the Year of Our Lord, nineteen hundred and eighty-six. (Sgd.) CORAZON C. AQUINO President of the Philippines By the President: (Sgd.) JOKER P. ARROYO Executive Secretary SALIENT FEATURES: 1. The Executive Order provides for a credit or refund under Section 110(d) of any excise tax paid on articles actually exported upon submission of the proof of actual exportation and upon receipt of the corresponding foreign exchange. cdtai 2. The specific tax of P1.80 per gauge liter previously imposed on fermented liquors was eliminated. In lieu thereof, a single tax on ad valorem basis at a higher rate is adopted. The ad valorem tax on fermented liquors is increased from 5% to 50% of the brewer's wholesale selling price, excluding the ad valorem tax imposed herein on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar domestic fermented liquors, but in no case shall the said ad valorem tax be less than P1.00 per regular 320 cc. bottle. 3. A single tax has been adopted for all cigars and cigarettes both locally manufactured and imported by eliminating the specific tax previously imposed thereon and in lieu thereof by imposing the ad valorem tax on the wholesale price, including in the computation the tax as a component of the wholesale price, viz: a. On all cigars locally manufactured or imported there is levied an ad valorem tax of 15% of the manufacturer's or importer's wholesale price, including the ad valorem tax imposed herein. b. On cigarettes packed in thirties there is levied an ad valorem tax of 20% of the manufacturer's registered wholesale price, including the ad valorem tax imposed herein effective July 1, 1986 and 25% beginning July 1, 1987. c. On cigarettes locally manufactured bearing local brands is levied an ad valorem tax of 40% effective July 1, 1986 and 50% beginning January 1, 1987 and those whose wholesale price does not exceed P3.60 per pack shall be taxed at the same rate and manner as cigarettes packed in thirties. d. On locally manufactured cigarettes bearing a foreign brand, is levied an ad valorem tax of 50% effective July 1, 1986 and 60% beginning January 1, 1987 including the tax.

In determining whether or not a cigarette bears a foreign brand, the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern, regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. cdtai Duly registered or existing brands of cigarettes packed twenties shall not be allowed to be packed in thirties. The foregoing amendments shall take effect on July 1, 1986. All internal revenue officers and others concerned are hereby enjoined to give this Memorandum Circular as wide publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-01-86 Revenue Memorandum Circular No. 24-86 August 1, 1986 REVENUE MEMORANDUM CIRCULAR NO. 24-86 Subject : Publishing the revised ad valorem taxes on certain petroleum products per Board of Energy Order dated July 31, 1986. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective August 1, 1986: cdt Previous PresentAd Previous tax Present Tax PRODUCTS OCT Less OCT Valorem Specific Ad Total Specific Ad Total DiffeRate Tax Valorem Tax Tax Valorem Tax rence Tax Tax PREMIUM (.037) REGULAR (.036) AVTURBO (.037) KEROSENE (.021) DIESEL (.035) FUEL OIL L P G 2.634 P3.148 .149 2.739 .149 3.078 .149 3.028 .149 2.719 .149 1.862 .149 /kg. P2.999 25% 2.59 25% P2.489 P0.787 P3.276 P2.489 P0.75 P3.239 2.604 0.684 3.288 2.604 0.648 3.252 2.567 0.769 3.336 2.567 0.732 3.299 0.628 0.424 1.052 0.628 0.403 1.031 0.523 0.598 1.121 0.523 0.563 1.086 0.511 0.13 0.641 0.511 0.13 0.641

2.929 25% 2.879 14% 2.57 22%

1.862 7%

2.485 14% or /kg.

0.697 0.369 1.066 0.697 0.348 1.045 (.021) 1.247 0.660 1.907 1.24 0.623 1.87 (.037) /kg. /kg. /kg. /kg.

ASPHALTS 2.462 .149 2.313 14% 0.581 0.344 0.925 0.581 0.324 0.905 (.020) SOLVENTS 2.99 .149 2.841 25% 2.472 0.748 3.22 2.492 0.71 3.182 (.038) All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-31-86 Revenue Memorandum Circular No. 25-86 July 31, 1986 REVENUE MEMORANDUM CIRCULAR NO. 25-86 Subject : Publishing Executive Order No. 36 Further Amending Certain Sections of the National Internal Code, As Amended. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 36. MALACAANG Manila EXECUTIVE ORDER NO. 36 FURTHER AMENDING CERTAIN SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. WHEREAS, there is a need to simplify the sales tax structure to effect better compliance and administration; cd WHEREAS, to recoup the differential arising from the simplification of the sales tax structure with respect to automobiles, there is a need to impose an additional excise tax on certain automobiles; NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: Sec. 1. Section 162, subparagraph (c), of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "(c) Imported articles. - When the articles are imported, the percentage taxes established in Section 163 of this Code shall be paid in advance by the importer prior to the release of such articles from customs custody, based on the total value used by the Bureau of Customs in determining tariff and customs duties, including customs duties and other charges. On the original sale, barter, exchange or transfer of such imported articles by the importer himself, there shall be levied, assessed and collected a sales tax at the same rate on the gross value in money of the articles so sold, bartered, exchanged or transferred: Provided, That the tax paid in advance by the importer shall be credited against the sales tax due on the original sale. The tax required to be paid herein shall not apply to articles to be used by the importer himself in the manufacture of preparation or articles subject to excise tax (except automobiles) under Title IV of this Code: Provided,

further, That where the National Economic and Development Authority certifies to the availability of local raw materials of sufficient quantity, comparable quality and price to meet the needs of manufacturers subject to excise tax, the importation of such raw materials shall be subject to the tax herein imposed." Sec. 2. Section 163 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 163. Percentage tax on original sales of articles - There shall be levied, assessed and collected once only on every original sale, barter, exchange, or similar transaction for nominal or valuable consideration intended to transfer ownership of, or title to, the articles herein below enumerated a tax based on the gross selling price or gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer, producer or importer: (1) Thirty percent (30%), on the following nonessential articles: (a) All articles commonly or commercially known as jewelry, whether real or imitation, pearls, precious and semi-precious stones and imitations thereof; articles made of, or ornamented, mounted or fitted with, precious metals or imitations thereof or ivory (not including surgical and dental instruments, silver-plated wares, frames or mountings for spectacles or eyeglasses, and dental gold or gold alloys and other precious metals used in filling, mounting or fitting of the teeth); opera glasses and lorgnettes. The term 'precious metals' shall include platinum, gold, silver, and other metals of similar or greater value. The term "imitations thereof" shall include platings and alloys of such metals. acd (b) Perfumes, essences, extracts, toilet waters, cosmetics, hair dressings, hair dyes, hair restoratives, aromatic cachous, toilet powders, (except tooth and mouth washes, dentifrice, talcum and medicated toilet powders, hair oils and pomades). (c) Dice, mahjong sets and playing cards. (d) Jukeboxes. (e) Automobiles, (except motor vehicles classified as trucks, jeeps and utility vehicles). A sale of an automobile shall, for purposes of this section, be considered as a sale of the chassis and of the body, together with parts and accessories with which the same is usually equipped, including the other parts and accessories permanently attached thereto at the time of the original sale. (f) Parts and accessories of automobiles which are primarily for ornamentation or embellishment. (g) Yachts and other vessels, intended for pleasure or sports. (h) Harpsichords, accordions, pianos and electric or electronic musical organs. (i) Firearms and cartridges or other forms of ammunition. (j) Household-type electric vacuum cleaners or polishers. (k) Washing machines, clothes dryers and combination washing machine and clothes dryers of all types. (l) Textiles wholly or in chief value of silk wool, or linen; nylon or other synthetic and/or chemical fabric not intended for clothing; wool and silk hats; and furs and manufactures thereof. (m) Electricity and/or battery operated beauty equipment and accessories. (n) Electricity and/or battery operated toys.

(o) Television sets, phonographs or gramophones, combination radio-phonograph sets, tape recorders, video tape recorders, tape decks, car stereos, cassette radios, and similar articles for reproducing and/or recording music, sound and images and any combination thereof. (p) Air-conditioning units. (q) Similar or analogous articles, substances or preparations to those enumerated above as determined by the Commissioner of Internal Revenue based on the essentiality of the articles. Any material, part or accessory of the above mentioned articles shall be taxed under this section. (2) Ten per cent (10%) on the following essential articles: (a) Processed meat, fruits, vegetables, fish and other sea foods and other processed food products for human consumption. (b) Processed milk, creamers, dairy products, butter and its substitutes like margarine. (c) Bread and baker products. (d) Lard, shortening and cooking oil. (e) Beverages and concentrates thereof, whether in liquid, powder or granulated form, intended for consumption as a drink, including but not limited to, processed coffee, cocoa, tea or ginger. (f) Wheat flour. (g) Clothes and textiles intended for clothing. (h) Medicines and articles primarily intended for the administration thereof. (i) Soaps, detergents, toothbrushes and toothpastes. (j) Writing pads, notebooks, ordinary lead pencils and disposable ballpens (k) Cement, hollow blocks, logs, lumber, plywood, plyboard, fiberboard, glass, roofing materials, steel bars, nails, sand and gravel, woven bamboo splits (sawali), nipa shingles, bamboo, basic sanitary and plumbing fixtures and fittings. acd (l) Fish, poultry, swine and cattle feeds. (m) Fertilizers, pesticides and technical materials for use in the formulation of pesticides. (n) Spare parts and accessories of motor vehicles, except tires. For purposes of sub-paragraphs (a) and (b) above, the term "Processed" as applied to the food products mentioned therein means that such products have undergone the process of curing, canning, bottling or other manufacturing process. It does not include those which have merely undergone the simple process of preservation such as freezing, refrigeration, drying, salting or smoking. Any article subject to the original sales tax, when used as a raw material in the manufacture or preparation of the above essential articles, shall be taxed at the same rate as the finished product, except when such material is taxed under sub-section (3) hereof or under Title IV of this Code: Provided, (1) the purchaser of such material inputs shall certify to the domestic supplier-importer or manufacturer, in the case of local purchase, or to the Bureau, in the case of direct importation, that the articles shall be used exclusively in the manufacture or preparation of any of the essential articles above enumerated, for resale in the case of an agricultural producer; and (2) the suppliermanufacturer/importer shall maintain accounting records in a manner prescribed in the

regulations to be issued by the Bureau whereby the sales can be classified according to different rates of tax. (3) Zero percent (0%), on the following agricultural products: (a) Agricultural food products, including ordinary salt and all kinds of fish and its byproducts in their original state. (b) Agricultural non-food products in their original state. Agricultural products shall still be considered in their original state even if they have undergone the simple processes of preservation such as freezing, drying, salting, smoking or stripping. Rice and corn shall be considered in their original state even when milled. (4) Twenty per cent (20%), on other articles not covered by subsections (1), (2) and (3) of this section." Sec. 3. The provisions of section 164 of the National Internal Revenue Code, as amended, are hereby superseded by new provisions to read as follows: "Sec. 164. Percentage tax on every subsequent sale of articles. - Except as provided in Section 167 this code there shall be levied, assessed, and collected on every subsequent sale, barter, exchange or similar transaction for nominal or valuable consideration intended to transfer ownership of, or title to, any article a tax equivalent to one and one half percent (1.5%) of the gross selling price or gross value in money of the article so sold, bartered, exchanged or transferred, such tax to be paid by the seller or the transferor thereof: Provided, however, That the subsequent sale of agricultural products in their original state shall be subject to zero per cent (0%) rate. Unless the tax under this section is billed to the purchaser as a separate item in the invoice, the amount intended to cover the sales tax shall be considered as part of the gross selling price. Sec. 4. Section 165 of the National Internal Revenue Code, as amended, is hereby repealed. Sec. 5. Sec. 166 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 166. Tax Credit. - (a) Creditable Taxes. - Any excise, sales or miller's tax paid under this Title and Title V of this Code on domestically manufactured processed, produced or imported raw materials, part, accessory or other articles locally purchased or imported by the manufacturer for conversion into or intended to form part of any finished product for sale shall be credited against the sales tax on the original sale of the finished product, except agricultural products: Provided, however, That the amount of sales tax or domestically purchased raw material, part or accessory, is separately indicated in the sales invoice. aisa dc In the case of purchase of raw materials, parts and accessories by a manufacturer from a duly registered and credited dealer, the amount of tax passed on to the dealer as well as the sales tax on subsequent sale, if indicated as separate items in the dealer's sales invoice shall be allowed as credits against the sales tax due on the finished product. Any advance sales tax paid on imported articles shall be allowed as credits against the sales tax due on the original sale of such imported articles. (b) Tax credit on articles exported. - Any excise, sales miller's or advance sales tax paid under this Title or Title IV of this Code on domestically manufactured or imported raw materials used in the manufacture and forming part of the finished products subject to tax under Section 163(1), (2) and (4) hereof shall be allowed as a tax credit against any

internal revenue tax liability directly due from the manufacturer exporting said products: Provided; That the amount of the tax on locally purchased raw material, part, accessory or other article is indicated as a separate item in the sales invoice of the supplier from whom it was last purchased; and Provided, further, That the direct exporter shall file an application for tax credit within one year from the close of the taxable year in which the export was effected. In case finished products are exported by an export trader other than the manufacturer or producer, the entire amount of sales and excise taxes separately indicated in the sales invoice of the immediate seller of the finished products exported shall be allowed to be credited against other tax liabilities of the export trader subject to the filing of an application as prescribed by the Bureau. (c) Excess tax credit. - If at the end of a taxable year, the total tax paid on the raw material, part, accessory or other article exceeds the amount of the sales tax due on the finished product, the manufacturer or producer may elect to: 1. Carry over such excess or a portion thereof to be credited against his sales tax liability in the succeeding taxable quarter or quarters; and/or 2. File an application for the issuance of a tax credit certificate for such excess or a portion thereof which can be used in payment of any advance sales tax; and/or 3. Deduct such excess or a portion thereof from gross income for income tax purposes: Provided, That the amount of the tax on raw material, part, accessory, or other article shall be indicated as a separate item in the sales invoice; Provided, further, That the amount of tax credits opted for and any tax credit corresponding to the raw materials which are subsequently sold, transferred, disposed of, or for any other reason, can no longer be used in the manufacture of the finished product for sale, shall either be deducted from any unused tax credit or paid as a part of the tax due in the quarter following the disposal; and Provided, finally, That in the case of an importer, if the advance sales tax paid on imported articles exceeds the sales tax due on the original sale of the imported articles in any quarter, the excess shall be credited against the sales tax liability of the importer in the succeeding taxable quarter or quarters." Sec. 6. Section 167 of the National Internal Revenue Code, as amended, is hereby further amended, to read as follows: "Sec. 167. Articles and transactions not subject to sales tax. - The following shall be exempt from the sales tax imposed in Section 163 hereof: (a) Original sale by a manufacturer, producer or importer of articles subject to excise tax (except automobiles) imposed under Title IV and to miller's tax under Section 168 of this Code. (b) Subsequent sale of manufactured oils and other fuels, except lubricating oil, processed gas, grease, wax and petroleum. (c) Subsequent sale of any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to publication of advertisements. cdt (d) Articles shipped or exported by the manufacturer, producer, or trader, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the articles so exported. (e) Sales by a registered export producer to another export producer or to a registered export trader."

Sec. 7. Section 169, paragraph (a) and sub-paragraphs (1) and (2) of paragraph (b) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "(a) Taxable articles. - There shall be imposed upon the importer of commodities, goods, wares, or merchandise brought into the Philippines, a compensating tax equivalent to the rates prescribed in Section 163 based on the total value used by the Bureau of Customs in determining tariff and customs duties, including customs duty and all other charges, such tax to be paid before the withdrawal of the said commodities, goods, wares, or merchandise from the customs house or the post office. "(1) Articles subject to the tax under Section 163 of this Code; "(2) Articles subject to the excise tax under Title IV of this Code (except automobiles) and articles to be used by the importer himself in the manufacture or preparation of articles subject to excise tax (except automobiles)." Sec. 8. A new section, to be known as Section 135-A is hereby added to Chapter VI of Title IV of the National Internal Revenue Code, as amended, to read as follows: "Sec. 135-A. Automobiles. - There shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer's or importer's selling price net of excise and sales taxes, in accordance with the following schedule: Engine Displacement Tax Rate Gasoline Diesel 5% 1201 to 1600 cc 1851 to 2050 cc 10% 1601 to 1800 cc 2051 to 2250 cc 20% 1801 or over 2251 cc or over Provided, That in the case of imported automobiles not for resale, the tax imposed herein shall be based on the total value used by the Bureau of Customs in determining tariff and customs duties, including customs duty and all other charges, plus (10%) of the total thereof." Sec. 9. All laws, orders, issuances, rules and regulations, or parts thereof, inconsistent with this Executive Order are hereby repealed or modified accordingly. Sec. 10. This Executive Order shall take effect on August 1, 1986. DONE, in the City of Manila this 30th day of July in the year of our Lord, nineteen hundred and eighty six. SGD. CORAZON C. AQUINO President of the Philippines By the President: SGD. JOKER P. ARROYO Executive Secretary SALIENT FEATURES OF EXECUTIVE ORDER NO. 36 1. As part of the implementation of the Tax Reform Program of 1986, Executive Order No. 36 provides for: cd i 1.1 Reduction of the number of sales tax rates from five (5) to four (4) levels: 1.2 Reclassification of certain articles subject to sales tax; 1.3 Imposition of additional excise tax on the sale/importation of automobiles;

1.4 Taxation of raw materials at the same rate as the finished essential article, if the former is subject to higher rate; and 1.5 Other amendments to effect better tax compliance and administration. 2. Tax rates on original sales and importation under the tax code, as amended. 2.1 The tax rate for non-essential articles was reduced from 50% to 30% 2.2 10% for essential articles. 2.3 Zero percent for agricultural products in their original state. 2.4 20% for other articles (ordinary) which are not classified under Nos. 2.1, 2.2. and 2.3, above. 3. Classification of Articles. - Articles subject to sales tax are enumerated in Section 163 of the Tax Code, as amended with the corresponding applicable tax rates. The following are the significant changes in the classification of articles: a. Automobiles (except motor vehicles classified as trucks, jeeps and utility vehicles) are classified as nonessential, subject to 30% sales tax. Notwithstanding the provision in Section 163 (1) of the Tax Code that any material, part or accessory of the articles enumerated therein, which includes automobiles, shall be taxed under said section, only materials, spare parts and accessories or automobiles which are primarily for ornamentation or embellishment are taxable at 30%, as provided for in Section 163(1) (f). All other spare parts and accessories, except tires, are subject to 10% sales tax by virtue of the specific provision of Section 163(2) (n) of the Tax Code, as amended. Since tires are neither for ornamentation nor embellishment and not among the articles enumerated, it is therefore subject to 20% sales tax as an ordinary article. b. Yachts and other vessels intended for pleasure or sports are now subject to 30%. c. Certain articles previously classified as "semi-essential, taxable at 30% were reclassified as "ordinary articles" subject to 20%. 1. Luggage, trunks, valises, travelling bags, suitcases, satchels, overnight bags, hat boxes for use of travelers, beach bags, bathing suit bags, brief cases made of leather or imitation leather, and salesman's sample and display cases; handbags, cards, pass and key cases, toilet cases and other cases, bags and kits (without regard to size, shape, construction, or material from which made) for use in carrying toilet articles or articles of wearing apparel; 2. Electric, gas or oil water heaters. 3. Electric, gas or oil appliances, stoves and ranges. 4. Electric mixers, whippers and juicers. 5. Mechanical lighters. 6. Beverage coolers, ice cream cabinets, water coolers, food and beverage storage cabinets, ice-making machines, and mild cooler cabinets, each having, or being primarily designated for use with a mechanical refrigerating unit operated by electricity, gas kerosene, or other means; cdt 7. "Toys and playthings of all sorts" under Section 165 (1) (h) was amended to read: "Electricity and/or battery operated toys", thereby reclassifying "playthings" and toys NOT operated by electricity or battery as ordinary articles subject to 20%. d. Certain articles were reclassified as essential articles, subject to 10%. 1. The classification of processed meat, fruits, vegetables, fish and other seafoods was expanded to include "other processed food products for human consumption". 2. Creamers.

3. The word "ordinary", modifying bakery products was deleted. 4. "Lard" and "shortening" was added to cooking oil. 5. Clothes and textiles intended for clothing, except textiles wholly or in chief value of silk, wool or linen, which are taxed at 30%. 6. Articles primarily intended for administration of medicine, such as but not limited to needles, injectable and scalp vein sets, disposable syringes, IV administration sets. 7. All kinds of soaps, whether for laundry or otherwise. 8. Toothbrushes and toothpaste. 9. Disposable ballpens. 10. Woven bamboo splits (sawali), nipa shingles, bamboo and basic sanitary and plumbing fixtures and fittings. 11. Pesticides and technical materials for use in the formulation of pesticides. e. The term "processed" as applied to food products has been defined to mean such products that have undergone the process of curing, canning, bottling or other manufacturing process. It does not include those (food products) which have merely undergone the simple process of preservation such as freezing, refrigeration, drying, salting or smoking. f. The taxation of raw material inputs at the same rate as that of the finished articles has been provided in Section 163 of the Tax Code. g.. The "deemed paid" tax provision in Section 166(b) of the Tax Code on taxexempt products of pioneer enterprises registered with the Board of Investments was deleted in Section 166 of the Tax Code as amended. cd h. Automobiles are subject to ad valorem tax under a new provision of the Tax Code (Section 135-A), as amended. cd All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-31-86 Revenue Memorandum Circular No. 26-86 July 31, 1986 REVENUE MEMORANDUM CIRCULAR NO. 26-86 Subject : Publishing the features of Executive Order No. 37 Amending certain provisions of the National Internal Revenue Code, as amended re: income tax To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, Executive Order No. 37 amended the pertinent income tax provisions of the National Internal Revenue Code to reflect both the format and structural changes required under the 1986 Tax Reform Program in order to improve equity and efficiency in administrative implementation. A. Format Amendments Format changes are incorporated by grouping homogenous provisions together as follows: cdasia

1. The tax rate imposition provisions - Sections 21, 22, 24 and 25 - prescribe exclusively the pertinent rates of income tax and the taxable base on which such rates are applied. Accordingly, the provisions imposing capital gains taxes on sales of real property and shares of stocks are transferred from Section 34 (which is a definition section) to the abovementioned sections. 2. References to the manner of collection of the tax are deleted from the rate imposition sections which are appropriately provided in Sections 50 and 51 on the payment of tax and withholding of tax at source, respectively. cdasia 3. The provision on tax liability of members of general professional partnership was transferred from Section 26 (under the Chapter on the Tax on Corporations) to Section 23 (under the Chapter on Tax on Individuals). 4. The format of the computational provisions are likewise amended. Section 28 is amended so as to define in broad terms the taxable base on which the appropriate income tax rates will be applied. Section 29 groups together all items of gross income. Section 30 is amended to include all deductions in arriving at taxable income, thus, the provisions of Section 21(f) allowing deductions in computing foreign sourced taxable income of nonresident citizens and Section 23 which allows for personal exemptions is transferred to Section 30. B. Structural Amendments 1. The switch from schedular to global system of taxing all categories of income, except certain passive incomes and capital gains, is provided basically in Section 21, which prescribes a unitary but progressive rate for the taxable aggregate income and flat rates for certain passive incomes derived by individuals. Tax on corporations with global features are provided in Sections 24 and 25. 2. Gross income concept is redefined in Section 29 to accommodate the global concept. The term "net income" or "taxable net income" appearing elsewhere in the income tax law is changed to "taxable income", which is now defined in Section 28 in order to clarify the legal concept that the amount on which the rates of tax prescribed in the rate imposition provisions connotes taxable income, whether gross, or net, as the taxable base. To maintain the taxability of gross compensation income without deductions (except personal exemptions) even if aggregated (globalized) with taxable income from other sources, Section 30 was amended to provide nondeductibility of itemized deductions from compensation income. 3. Provisions which are no longer relevant, such as those imposing tax on improper accumulation of surplus (Section 25) and on personal holding companies (Sections 63 to 69) which are intended to compel corporations to distribute their corporate earnings so as to be taxed to shareholders, are repealed. C. Specific Amendments, by section of the Code Sec. 20: Paragraph (z), a new paragraph was added to clarify the distinction of ordinary income from capital gains the computation of taxable income. This is necessary in order to emphasize the special tax treatment of capital gains. aisa dc Sec. 21: Paragraph (a) was restructured to effect the change in the system of taxing compensation, business and other income (except certain passive income) from schedular to global income tax system. Under the global system, gross compensation income will be

aggregated (globalized) with the net income from business, trade, or profession to arrive at the global taxable income (after allowable exemptions) which taxable will be subjected to a unitary but progressive, graduated rate ranging from 0% to 35%. casia This provision also allows and prescribes the separate computation of the respective income taxes of husband and wife. Married individuals have the option either to consolidate their respective aggregate taxable income and deduct to personal and additional exemptions. Only one graduated rate structure will be applied on the consolidated aggregate taxable income. If they elect to compute their respective incomes separately, each spouse shall claim the personal exemption of P6,000 and either, but not both, may choose to claim the additional exemptions. The respective aggregate taxable income of each will be taxed at the graduated rates of 0%-35% and their total income tax payable is the sum of their individual income tax determined separately. Both, however, should file only one consolidated return. Paragraph (b) is the tax rate proviso applicable to foreign sourced incomes of nonresident Filipino citizens. The portion allowing deductions to arrive at taxable income subject to tax under this paragraph was transferred to the provision, Section 30 as paragraph (m) thereof which allows deductions. Paragraph (c) restructures the tax on certain passive incomes, viz; 1. increasing the tax on interests and royalties from 17 1/2% to 20%. 2. providing for the gradual phase out of the tax on dividends received by an individual from domestic corporations, as well as on the share of an individual in a partnership income subject to corporate income tax: 15% in 1986; 10% in 1987; 5% in 1988; 0% in 1989 and thereafter. Paragraphs (d) and (e) imposing capital gains tax on gains derived from shares of stocks and real property are transferred from Section 34 (f) for clarity. Sec. 22: Paragraph (a) (2): The phrase referring to the manner of collecting the withholding tax is deleted because it is already provided in Section 51. Paragraphs (a) (3) and (b) specifically states that capital gains realized from sale of real property and shares of stock in domestic corporations by nonresident aliens whether or not engaged in trade or business in the Philippines are subject to the same tax on capital gains applicable to residents. Paragraph (e): Last paragraph clarifies that income derived by aliens referred to in paragraphs (c), (d) and (e) from sources, other than services performed for regional or area headquarters, offshore banking units and petroleum service contractors and subcontractors, are subject to the normal income tax rates. Sec. 23: The provisions of this Section allowing personal and additional exemptions to individuals are transferred to Section 30 under paragraph (1) thereof. Being the nature of deductions, exemptions should be grouped together with the itemized and optional standard deductions allowed in Section 30. cdt The relocation includes the amendments for upward adjustment of personal and additional exemptions as follows: Personal Exemptions Allowable to Individuals EO 999 EO 97

I. 1.

Basic Exemption Single individuals or married individuals judicially decreed as legally separated P4,000 P6,000 2. Married Individuals 8,500 12,000 3. Head of a Family (now includes married individuals judicially decreed as legally separated with qualified dependents) 5,500 7,500 II. Additional Exemption 1. For each qualified dependent not to exceed four 3,000 3,000 2. For each qualified dependent Prior to Jan. 1, 1980 1,000 1,000 The additional exemptions for qualified dependents may be availed of by only one of the spouses in cases of married individuals electing to compute their income tax separately. cd The proviso for special additional exemptions of P4,000 shall be allowed if the gross income of a single, married or legally separated individual, or head of family does not exceed the aggregate amount of P20,000. In case of married individuals electing to compute their income tax separately, the claimant shall be the spouse who claims the additional exemptions for dependents. Sec. 24: Paragraph (a): Reflects the single (one-tier) rate of 35% tax to supersede the two-tier rate (25%-35%) on taxable income derived by domestic corporations. Paragraph (b): Retains the separate taxation of taxable income of private educational institutions at 10%. The amendment also introduces the predominance test for determining whether the income realized by the institution consists mainly of income from the operation of the educational institutions as such; otherwise the institution will be taxed at 35% on its entire taxable educational and non-educational income. Paragraph (c): Clarifies tax treatment of government educational institutions by specifying exemption of said institution under Section 27. This is formerly paragraph (h). Paragraph (d): Reflects different taxation of certain passive incomes of domestic mutual life insurance companies. This is formerly paragraph (f). Paragraph (e) (1): Reflects the increase in the tax of interest from bank deposits, deposit substitutes and royalties from 17 1/2% to 20%. This is formerly paragraph (d). Paragraph (e) (2): Incorporates the provisions of paragraph 34(g) which provides the tax treatment of capital gains from sale of shares of stock as part of the enumeration of all categories of income subject to tax payable by domestic corporations under Section 24. Paragraph (e) (3): This is formerly paragraph (g) (2) which prescribes the tax on incomes under the expanded foreign currency deposit system maintained by domestic corporations. Paragraph (3) (4): Imposes a 0% income tax on intercorporate dividends. This replaces paragraph 24(c) which is repealed.

Sec. 25: The tax on improper accumulation of surplus is essentially a penalty tax designed to compel corporations to distribute corporate earnings so that the said earnings will be taxed to the shareholders. The exemption of dividends from income tax renders the improperly accumulated surplus tax meaningless. Accordingly, the provisions of the tax on improper accumulation of surplus are repealed and replaced with provisions to govern the taxation of foreign corporations which are lifted from Section 24 (b) (2). Paragraph (a) (1) Provides the imposition of a single rate of tax at 35% on taxable income derived by resident foreign corporations from Philippine sources. Paragraph (a) (2): This is formerly a proviso of Section 24 (b) (2) (i) which provides for the taxation of international carriers. The amendment clarifies the definition of gross Philippine billings. Paragraph (a) (3): This is formerly a part of Section 24(f) which reflects the tax on resident foreign mutual life insurance companies. It is amended to reflect different taxation of certain passive incomes of these companies. Paragraph (a) (4): This portion of the present Section 24 (g) (1), providing taxation of offshore banking units was transferred to this paragraph of new Section 25 to reflect its taxation as foreign corporation. Paragraph (a) (6) (A): Reflects the increase in taxation of interest on bank deposits and royalties derived by resident foreign corporations from 15% to 20%. cdtai Paragraph (a) (6) (B): Reflects the tax treatment of income under the expanded foreign currency deposit units which is maintained and operated by foreign banks. Paragraph (a) (6) (C): Provides for the taxation of capital gains realized from sales of shares of stocks by resident foreign corporations. This is transferred from Section 34(h). Paragraph (a) (6) (D): Provides for a 0% income tax on dividends received by a resident foreign corporation from a domestic corporation. Paragraph (b): This is formerly Section 24(b) (1) which provides for the tax treatment of incomes of nonresident foreign corporations. Paragraph (b) (2), (3), (4): Provides for the separate tax treatment of certain nonresident foreign corporations. Formerly Section 24(b) (1) (iv), (v), and (vii). Section 24 (b) (1) (vi) referring to tax treatment of non-income earning regional or manila headquarters of multinational in the Philippines is deleted. Paragraph (b) (5) (A): This is formerly Section 24(b) (1) (ii). The amendment provides for the increase in rate of tax on interest on foreign loans received by nonresident foreign corporations from 15% to 20%. Paragraph (b) (5) (B): This is formerly Section 24(b) (1) (iii) which provides for the tax treatment of dividends received by nonresident foreign corporations. Paragraph (b) (5) (C): Provides for the taxation of capital gains realized by a nonresident foreign corporation from the sale or disposition of shares of stocks. This was transferred from Section 34, for clarity. Sec. 27: Paragraph (1): New paragraph lifted and deleted from the former Section 24(h) to include government educational institutions among tax-exempt entities. Sec. 28: Defines "taxable income" to clarify the taxable base on which the appropriate income tax rates will be applied.

Sec. 29: Defines gross income under the global concept as a starting point in the computation of taxable income; deletes the item of actual, moral, exemplary and nominal damages received by the employee or heirs pursuant to an agreement arising out of an employeeemployer relationship from the enumeration of exclusions from gross compensation income from the exclusion provisions. Sec. 30: Integrates the provisions of Section 23 as a deduction from gross income under Section 30 (1); reflects upward revision of basic personal exemptions; revises the definition of "head of family" to include legally separated individual with qualified dependents; specifies a proviso for a written agreement between the taxpayer and the Bureau of Internal Revenue as to useful life of property subject to depreciation under Section 30(f); deletes the proviso on non-deductibility of loss from a particular line of business from income derived by an individual from other line or lines of business; deletes the proviso on net-operating loss carryover for individuals. cdasia Sec. 35: Clarifies computation of basis for gain or loss which is not adequately and clearly provided under present provision. Sec. 37: Incorporates, with amendments, the provision in Section 30(b) regarding the nondeductibility of interest paid or incurred abroad from Philippine source gross income, unless the indebtedness was incurred to provide funds for use in trade or business in the Philippines by a foreign corporation. Sec. 43: Specifies the manner of payment of capital gains tax on real property on installment basis. Sec. 45: Amends the manner of filing income tax returns for husband and wife who may compute their income tax separately and takes into account the upward adjustment of personal and additional exemptions for those not required to file an income tax return. Sec. 46: Specifies the manner of filing income tax returns covering capital gains tax on sales from real property in the case of corporate taxpayers. acd Sec. 50: Amends the manner of payment of income taxes as affected by the tax reform package. Sec. 51: Provides for the creditability of taxes withheld under the global system and the noncreditability of taxes withheld on certain passive incomes. Sec. 56: Adjusts the exemptions applicable to taxable estate and trusts which are taxable in the same matter as individuals. Sec. 61 to 69: Tax provisions on personal holding companies are deleted. Sec. 82: Amendment takes into account the non-finality of taxes withheld from wages. The proviso relating to finality was deleted.

Sec. 103: Provides for the non-applicability of donors tax on transfer for insufficient consideration of real properties referred to in Section 21(e). C. Authority to codify. The Commissioner of Internal Revenue is authorized to renumber, codify, consolidate the provisions of the National Internal Revenue Code as amended by prior legislations and Executive Order No. 37, and publish official copies thereof. cd D. Effectivity The Executive Order shall take effect as follows: On August 1, 1986 - with respect to the provisions of Sections 21(c), 24(e) (1), 24(e) (4), 25(a) (6) A, 25(a) (6)D, 25(b) (5) A and Section 103 of the National Internal Revenue Code, as amended by Executive Order No. 37; On January 1, 1986 - with respect to all other provisions amended by Executive Order No. 37: On or after July 1, 1986 - in case of corporation filing their income tax return on a fiscal year basis beginning after July 1, 1986. All Internal Revenue Officials, employees, and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-29-86 Revenue Memorandum Circular No. 27-86 July 29, 1986 July 29, 1986 REVENUE MEMORANDUM CIRCULAR NO. 27-86 Subject : Guidelines on the Implementation of Executive Order No. 1077 To : All Revenue Officials and Employees For the guidance of all revenue officials and employees, quoted hereunder Civil Service Memorandum Circular Nos. 4 and 5, s. 1986, on the implementation of Executive Order No. 1077 on leave credits. "MEMORANDUM CIRCULAR NO. 4, s. 1986 "TO: ALL HEADS OF MINISTRIES, BUREAUS AND AGENCIES OF THE NATIONAL AND LOCAL GOVERNMENT, INCLUDING GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATION AND STATE COLLEGES AND UNIVERSITIES "SUBJECT: Guidelines on the Implementation of Executive Order No. 1077 The abolition of some government offices under Proclamation No. 3, and the on-going reorganization in others have brought about questions on the accumulation and commutation on leave in excess of 300 days as provided for under Executive Order No. 1077, dated January 9, 1986. cdasia

"The following guidelines are hereby prescribed to provide uniform interpretation of the provisions of Executive Order No. 1077 dated January 9, 1986 providing for the accumulation and commutation of leave in excess of 300 days; "1. The reckoning date for crediting accumulated leave in excess of 300 days shall start on October 12, 1981, the date CSC Resolution No. 81-1158 was promulgated. Leave credits in excess of 300 days before this date shall be deemed forfeited; "2. Any officer or employee of the government who retired or voluntarily resigns or is separated from the service through no fault of his own on or after January 9, 1986 shall be allowed commutation of accumulated leave in excess of 300 days provided his leave benefits are not covered by any special law. All pertinent records relative thereto should be sent to the Civil Service Commission before payment of terminal leave for confirmation; "3. A staggered schedule of vacation leave of officials and employees for a minimum of five (5) working days annually shall be prepared. Those with accumulated vacation leave of less than ten (10) days shall have the option to on scheduled vacation leave or not; and cdt "4. An annual report of the accumulated leave of all officers and employees of the government should be submitted to the Commission on the form prescribed for the purpose signed by the Heads of Office or the duly authorized official. "Strict observance of the prescribed office hours should be properly recorded on the proper form and, wherever possible, registered on the bundy clock. Falsification or irregularities in the keeping of time records will render the guilty officer or employee liable to appropriate disciplinary action. "Please be guided accordingly. (SGD). CELERINA G. GOTLADERA Officer-in-Charge" "MEMORANDUM CIRCULAR NO. 5, s. 1986 "TO: ALL HEADS OF MINISTRIES, BUREAUS AND AGENCIES OF THE NATIONAL AND LOCAL GOVERNMENTS, INCLUDING GOVERNMENTOWNED AND CONTROLLED CORPORATIONS AND STATE COLLEGES AND UNIVERSITIES "SUBJECT: Delegation of Authority to Civil Service Regional Offices on the Confirmation of Terminal Leave and Evaluation of Annual Reports on Leave Credits "Pursuant to Executive Order No. 1077, dated January 9, 1986 pertaining to the accumulation and commutation of leave in excess of 300 days, the Civil Service Commission prescribed guidelines to provide uniform interpretation of its provisions in CSC Memorandum Circular No. 4, s. 1986. acd "To insure effective and facilitative action on terminal leave, confirmation thereof for local and national government offices in the different regions shall be evaluated and approved by the Civil Service Regional Offices. Likewise, annual reports of the accumulated leave of all officers and employees in the region shall be submitted for

review to the Civil Service Regional Offices which has jurisdiction over such units or offices. "This Memorandum Circular shall take effect immediately. (SGD.) CELERINA G. GOTLADERA Officer-in-Charge" Strict compliance with the foregoing is hereby enjoined. (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-11-86 Revenue Memorandum Circular No. 28-86 August 11, 1986 REVENUE MEMORANDUM CIRCULAR NO. 28-86 Subject : Clarifying the Provisions of Revenue Regulations No. 10-86, Amending Revenue Regulations No. 17-84 on Income Taxation of Interest Income from Deposits and Yield from Deposit substitutes. To : All Internal Revenue Officers and Others Concerned. For the guidance of all concerned, the following guidelines are hereby promulgated: 1. Revenue Regulations No. 10-86, amended Section 3 of Revenue Regulations No. 17-84. The coverage includes a final withholding tax on interest from Philippine Currency bank deposits and yield or any other monetary benefits from deposit substitutes and from trust fund and similar arrangements received by citizens, resident alien individuals, and domestic and foreign resident corporations at the rate of 20%, effective August 1, 1986. acd 2. The exemptions from the imposition of the 20% final withholding tax are the following. a) Yield on debt instruments with maturity of not more than five (5) days, issued specifically on interbank call or loans to cover deficiency in reserves against deposit liabilities as evidenced by interbank loan advice or repayment transfer tickets. b) Income received from their investments in the Philippines in loans, stocks, bonds or other domestic securities, or from interest on their deposits in banks in the Philippines (1) foreign governments, (2) financing institutions owned, controlled, or enjoying refinancing from them, and (3) international or regional financing institutions established by foreign governments. 3. In conformity with the procedures established in Revenue Regulations No. 17-84 and Revenue Memorandum Circular No. 39-85, the following rules of implementation shall be adopted: a) Interest on savings and time deposit. - In general, the rate of final withholding tax to be imposed shall be 20%, based on gross interest earned or accrued beginning August 1, 1986. b) Yield on deposit substitutes. - In general, the final withholding tax shall be 20% of the interest and/or yield on deposit substitute instruments issued, beginning August 1, 1986. acd

c) Transitory Rules - Notwithstanding the general rules above, the specific rules set forth below, shall be applied: (1) For deposits, deposit substitutes, and from trust funds and similar arrangements, the yield from which were paid in advance and where the prevailing rate of withholding tax at the time of placement have already been discounted or deducted, no additional withholding tax shall be imposed. (2) For deposits, deposit substitutes, and from trust funds and similar arrangements, the maturities of which fall after August 1, 1986, on which no withholding tax has been discounted or deducted, the tax shall be applied as follows: a) Interest/yield earned or accrued from October 15, 1984 up to December 31, 1985 - subject to 15% withholding tax; b) Interest/yield earned or accrued from January 1, 1986 to July 31, 1986 - subject to 17.5% final withholding tax; and c) Interest/yield earned or accrued from August 1, 1986 - subject to 20% withholding tax. cd All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-18-86 Revenue Memorandum Circular No. 29-86 August 18, 1986 REVENUE MEMORANDUM CIRCULAR NO. 29-86 Subject : Publishing Revenue Regulations 12-86, Amending Pertinent Provisions of Revenue Regulations 6-82, as amended, otherwise known as the Withholding Tax Regulations on Compensation. To : All Revenue Officers and Others Concerned. For the information and guidance of all concerned, published as Annex "A" hereof is Revenue Regulations No. 12-86, amending pertinent provisions of Revenue Regulations No. 6-82, as amended, otherwise known as the Withholding Tax Regulations on Compensation, prescribing the collection at source of income tax on compensation income paid on or after January 1, 1986 under Withholding Tax Tables effective January 1, 1986 which take into account the increases in personal exemption and the option of married individuals to compute separately their individual income tax based on their respective taxable income pursuant to Executive Order No. 37. cdt It is further informed that the Interim Report required under Section 9(2) of aforesaid regulations shall be submitted not later than September 10, 1986, together with the monthly Remittance Return of Taxes Withheld on Compensation (BIR Form 1743 W) for the month of August 1986 as instructed at the back of the Interim Report form. cd (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

09-01-86 Revenue Memorandum Circular No. 30-86 September 1, 1986 September 1, 1986 REVENUE MEMORANDUM CIRCULAR NO. 30-86 Subject : Extension of deadline of submission of the Interim Report on Excess Taxes Withheld required under Revenue Regulations 12-86. To : All Internal Revenue Officers, Employees and Others Concerned. For the information and guidance of all concerned the deadline for the submission of the Interim Report on excess taxes withheld from January to July 1986 due to the application of the New Withholding Tax Tables prescribed under Revenue Regulations No. 12-86 implementing Executive Order No. 37 relative to the increase of personal exemptions of individuals, is hereby extended from, on or before September 10, 1986 to, on or before November 10, 1986. acd This circular shall take effect immediately. cd (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-12-86 Revenue Memorandum Circular No. 31-86 September 12, 1986 REVENUE MEMORANDUM CIRCULAR NO. 31-86 Subject : Clarification as to the scope of availment of the tax amnesty under Executive Order No. 41 and compromise payments on delinquent accounts and disputed assessments under Executive Order No. 44. To : All Internal Revenue Officers and Others Concerned. The tax amnesty under Executive Order No. 41 may be availed of by any natural or juridical person who has heretofore failed to declare the correct amount of taxable income from January 1, 1981 to December 31, 1985. On the other hand, under Executive Order No. 44, the Commissioner of Internal Revenue or his duly authorized representatives shall accept compromise payments by taxpayers with outstanding delinquent accounts and disputed assessments (except withholding taxes whether final or creditable) pending as of December 31, 1985. cdtai Executive Order No. 41 and Executive Order No. 44 were respectively promulgated on August 22, 1986 and September 4, 1986. Accordingly, taxpayers against whom assessments had been issued from January 1 to August 21, 1986 may settle their tax liabilities by way of compromise under Section 246 of the Tax Code as amended by paying 30% of the basic assessment excluding surcharge, interest, penalties and other increments thereto. aisa dc It is desired that this Circular be given as wide a publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-86 Revenue Memorandum Circular No. 32-86

October 15, 1986 REVENUE MEMORANDUM CIRCULAR NO. 32-86 Subject : Publishing Questions Raised and Answers Given on The Interpretation of Certain Provisions of the Tax Code and Revenue Regulations Regarding the Final Withholding Tax on Interest Income from Deposits and Deposit Substitutes. To : All Internal Revenue Officers and Others Concerned. The following are questions and answers which were discussed in a series of conferences between the BIR Committee on Banks and representatives of the Banker's Association of the Philippines (BAP), the Philippine Association of Finance Companies, Inc. (PAFCI), the Investment Houses Association of the Philippines (IHAP), and the Central Bank of the Philippines. Question 1. What is the rate of the withholding tax on interest earnings from deposits and yield from deposit liabilities? cd i Ans. In general, interest earnings from savings and time deposits and yield from deposit substitutes are subject to 20% final withholding tax. However, reference is made to Revenue Memorandum Circular No. 28-86, which provides for a transitory provision as follows: "c) Transitory Rules. - Notwithstanding the general rules above, the specific rules set forth below, shall be applied: acd (1) For deposits, deposit substitutes, and from trust funds and similar arrangements, the yield from which were paid in advance and where the prevailing rate of withholding tax at the time of placement have already been discounted or deducted, no additional withholding tax shall be imposed. (2) For deposits, deposit substitutes, and from trust funds and similar arrangements, the maturities of which fall after August 1, 1986, on which no withstanding tax has been discounted or deducted, the tax shall be applied as follows: a) Interest/yield earned or accrued from October 15, 1984 up to December 31, 1985 - subject to 15% withholding tax; cd b) Interest/yield earned or accrued from January 1, 1986 to July 31, 1986 - subject to 17.5% final withholding tax; and c) Interest/yield earned or accrued from August 1, 1986 - subject to 20% withholding tax." Question 2. Are Rural Banks subject to the final withholding tax on interest earnings from deposits and deposit substitutes? Ans. Notwithstanding the provisions of P.D. No. 2026, which restored the rural banks' exempt status (previously withdrawn by P.D. 1955), the said

restoration cannot be considered as to have amended P.D. 1959 which amended the Tax Code by removing all exemptions and preferential tax treatments in the case of the final withholding tax on interest earnings from bank deposits and yield from deposit substitutes. For this reason, rural banks remain subject to the final withholding tax effective October 15, 1984. (See BIR Ruling No. 51 (a) - 159-86). Question 3. Can a tax exempt client who purchased government securities where the appropriate final withholding tax has been withheld claim for a refund? If so, what is the procedure? Under Revenue Memorandum Order No. 29-85, only NSTA - accredited foundations and the Philippine National Red Cross are allowed refund of taxes withheld, under certain conditions, by virtue of FIRB Resolution Nos. 16-85 and 17-85, respectively. These entities are considered taxable, but may claim for refund of the taxes paid. cdt

Ans.

The claim for refund shall be filed with the Government & Tax Exempt Corporations Division, BIR, for processing and evaluation. All Internal Revenue Officials and Others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. cdasia BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-86 Revenue Memorandum Circular No. 33-86 October 15, 1986 REVENUE MEMORANDUM CIRCULAR NO. 33-86 Subject : Publishing Questions Raised and Answers Given on The Interpretation of Certain Provisions of the Tax Code and Revenue Regulations Regarding Documentary Stamp Tax. To : All Internal Revenue Officers and Others Concerned. The following are questions and answers which were discussed in a series of conferences between the BIR Committee on Banks and representatives of the Banker's Association of the Philippines (BAP), the Philippine Association of Finance Companies, Inc. (PAFCI), the Investment Houses Association of the Philippines (IHAP), and the Central Bank of the Philippines. cda Question 1. Are Treasury Bills subject to DST? If so, at what

rate and who is liable? Ans. Effective January 1, 1986, all bonds, debentures and certificate of indebtedness issued by the Government of the Philippines or the government of any province, city or municipality are subject to DST at the rate of P0.20/200.00 or fractional part thereof, pursuant to Section 229 (now Section 193) of the Tax Code. cdt Are promissory notes, whether negotiable or non-negotiable subject to DST? If so, at what rate? All promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation, and on each renewal of any such note is now subject to DST at P0.20/200.00, or fractional part thereof, of the face value of such note. However, non-negotiable promissory notes became subject to DST only beginning October 15, 1984, the effectivity date of P.D. 1959. Prior to such date, non-negotiable promissory notes, as such both in form and substance are not subject to DST. Question 3. Ans. rate? Are deposit substitutes subject to DST? If so at what

Question 2. Ans. -

Deposit substitutes are subject to DST at P0.20/200, or fractional part thereof, of the face value of such note pursuant to Sec. 229 of the Tax Code, as amended by P.D. 1959, now re-numbered as Sec. 193, per P.D. 1994 Is the Central Bank, as issuer of CBCI and CB Bills liable for DST?

Question 4. Ans. -

The Fiscal Incentives Review Board (FIRB) in its Resolution No. 33-85, restored the tax exemption privilege of the Central Bank, effective June 11, 1984. However, Sec. 130 of R.A. No. 265 (Central Bank Charter) States that ". . . Provided, However, that said exemptions shall apply only to such taxes and assessments for which the Central Bank itself would otherwise be liable, and shall not apply to taxes assessments payable by persons or entities

doing business with the Central Bank." Corollary to this, Section 186 of the Tax Code provides that "whenever one of the party to the taxable document enjoys exemptions from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable to the tax." In view of the above, the Central Bank is exempt from DST, however, the purchaser or the other party to the CBCI or CB Bills, who is not exempt, is the one liable for DST. All Internal Revenue Officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-01-86 Revenue Memorandum Circular No. 34-86 October 1, 1986 REVENUE MEMORANDUM CIRCULAR NO. 34-86 Subject : Loss of one (1) set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: acd ---------------------------SERIAL NUMBER : QUANTITY ---------------------------8836585 : one (1) set ---------------------------The above receipt was reported missing by Mr. Nicolas V. Cabazal, Collection Agent of Revenue District No. 24, Revenue Region No. 4-A, Manila, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd BIENVENIDO A. TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-22-86 Revenue Memorandum Circular No. 35-86

September 22, 1986 REVENUE MEMORANDUM CIRCULAR NO. 35-86 Subject : Loss of one (1) set of Confirmation Receipt (BIR Form CB 82-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------9634814 : One (1) Set ---------------------------The above receipt was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai BIENVENIDO A. TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-21-86 Revenue Memorandum Circular No. 36-86 October 21, 1986 REVENUE MEMORANDUM CIRCULAR NO. 36-86 Subject : Publishing the revised ad valorem taxes on certain petroleum products per BOE Resolution No. 86-06 dated October 14, 1986 reducing the prices on regulated petroleum products. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective October 15, 1986; OIL CO. AD VALOREM SPECIFIC AD VALOREM TOTAL PRODUCTS TAKE RATE TAX TAX TAX Premium P2.8898 Regular 2.5938 25% Avturbo 2.2418 25% Kerosene 2.1588 14% Diesel 2.0398 22% 0.523 Fuel Oil 1.4725 7% L P G 2.047 14% 0.697 25% 2.604 2.567 0.628 0.449 0.511 0.287 P2.489 P0.722 P3.211 0.648 3.252 0.56 3.127 0.302 0.93 0.972 0.103 0.614 0.984

or 1.247/kg 0.513/kg 1.76/kg Asphalts 1.9318 14% 0.581 0.27 0.851 Solvents 2.1208 25% 2.472 0.53 3.002 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd ROMULO M. VILLA Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-22-86 Revenue Memorandum Circular No. 37-86 October 22, 1986 REVENUE MEMORANDUM CIRCULAR NO. 37-86 Subject : Loss of one (1) set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------B8890074 : one (1) set ---------------------------The above receipt which was reported missing by Mr. Manuel N. Advincula, Collection Agent of Revenue District No. 23, Revenue Region No. 4-A, Manila, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd BIENVENIDO A. TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-30-86 Revenue Memorandum Circular No. 38-86 October 30, 1986 REVENUE MEMORANDUM CIRCULAR NO. 38-86 Subject : Audit of taxpayers maintaining computer-based accounting records. To : All Internal Revenue Officers and Others Concerned. 1. BACKGROUND In the past, up to the present, emphasis has always been on the audit approach applicable to manual accounting system. The increased use of computerized accounting system by taxpayers renders imperative the need for familiarity by Revenue Enforcement Officers

of Electronic Data Processing (EDP) System. The following discussion is an overview of the basic changes in audit approach as a result of the transition from manual to computerbased accounting system. cd 2. THE IMPACT OF ELECTRONIC DATA PROCESSING SYSTEMS (EDPS) ON AUDITING There is no distinction between the audit concepts applicable to EDP and those applicable to manual systems. When computers are introduced, generally accepted auditing standards and their interpretations, legal liability and the basic concepts or gathering evidence remain unchanged. However, the specific methods appropriate for implementing the basic audit concepts do change with the introduction of EDP systems. An understanding therefore, of the impact of EDP on auditing becomes increasingly important as the use of computers by profit-oriented companies increases. 3. CHANGE IN ORGANIZATIONAL SET-UP The most important effect of EDP on audit results from changes in the company's organization and the information available for auditors to examine. The establishment of an EDP unit brings the data-gathering activities of different segments of the organization into one department. Such change has the advantage of centralizing data. On the other hand, centralization eliminates the control provided by division of duties of independent persons performing related functions. For instance, in many manual systems, different individuals prepare the sales journal and subsidiary records. The accuracy of the results is tested by comparing the subsidiary ledger with the total balance in the general ledger. However, with the establishment of an EDP unit, both these records will be prepared simultaneously by EDP unit. Auditors must, therefore, use great care in evaluating inadequate segregation of duties for the possibility of both fraudulent and unintentional errors. 4. CHANGES IN THE TRADITIONAL AUDIT TRAIL The audit trail pertains to the accumulation of source documents and records maintained by the company which are the support for the transactions that occurred during the period. It includes such things as duplicate sales invoices, supplier's sales invoices, cancelled checks, general and subsidiary ledgers and all types of journal. Since the audit trail is a primary source of evidence, it is necessary that an adequate trail be available for verification purposes. cdasia The effect of EDP on the audit trail depends on the level of sophistication of the system. When the computer is used only as a high-speed calculator, the audit trail may not be affected, especially if management desires to maintain the traditional source documents and records. In highly integrated on line-systems, the traditional audit trail can be nearly eliminated unless specific provision is made for some detailed records. A common change that occurs in the audit trail is the elimination or reduction of some source documents. Even if they are not eliminated, they are frequently filed in a manner that makes them difficult to retrieve for audit purposes. A second change in the system is the transfer of data and activities into a form that is not visually observable by the auditors. For instance, the ledger summaries are included in master files in machine-language, the journals and records are not printed out but are retained on magnetic tapes or disks and the methods of processing records are not observable because they are done by the computer. 5. CHANGES IN THE METHOD OF PROCESSING TRANSACTIONS

The most important effect of EDP on the processing of transactions is that it provides uniformity. Once information is fed into the system, the auditor can be confident it will be processed consistently with previous or subsequent information unless some changes are introduced in some aspect of the system. From an audit point of view, this means the system will process a particular type of transaction consistently correctly or consistently incorrectly. As a result, the emphasis in auditing EDP systems for processing is likely to be on testing for unusual transactions and on testing for changes in the system over time rather than on testing a large sample of similar transactions. 6. CHANGES IN THE APPROACH TO AUDITING Due to the loss of audit trails, auditors have to devise new methods for testing complex EDP system. For a while after the disappearance of audit trails, auditors insisted upon extensive special printouts, but the high cost to companies forced auditors to think about alternative approaches. It is necessary to distinguish between different levels of complexity in determining the impact of EDP systems in auditing methods. In some instances, the systems are so complex that the entire audit approach must be changed, whereas in others there is no significant change in audit approach. Consider the audit implications of the following type of systems: aisa dc 6.1. Simple Systems. Transactions are easily traced in a small computer system where the primary function performed is the sorting and manipulation of input data and the printing of output reports. There is no loss of audit trail. Audit of this type of system requires little training and background in EDP. Example of this type of system, shipping data are key-punched and processed throughout the system along with accounts receivable ledgers. The output is a multicopy sales invoice for each sale, updated subsidiary ledger and a sales journal. This type of system represents the bulk of systems in use today in the Philippines. 6.2. Complex Systems. This is characterized by the batch processing mode, the existence of one CPU (Central Processing Unit) and the extensive use of master files on magnetic tape in processing. In this type of system, processing is usually confined to calculations, extensions, summarizations and the like. There is some loss of audit trail but not significantly. The audit of such system can be done by auditors with limited specialized training in EDP auditing. Because of the extent of a printed audit trail, the auditors has the option of performing audit tests with or without the use of the computer based on his experience. An active involvement in evaluating the EDP system is necessary even though an audit trail exists since there are many opportunities for incompatible functions or other inadequate controls. 6.3. Sophisticated Systems. In this type of system, transactions are initiated within the computer, there is extensive data processing and consequently, a substantial loss of audit trail. Most of the output is in machine-readable form. Typical example is the input of shipping documents on remote or on-line teletype. Heavy reliance must be placed on internal control in the audit of said system. Since many of these tests require EDP skills beyond the knowledge of most auditors, EDP specialists are usually called upon by the auditors. Careful advance planning is necessary because records needed in audit and the approach to be used in testing must be made before data are processed. cd i 7. AREAS OF CONCERN

When a computer is used in the processing of financial data, two areas of concern must be carefully considered as part of the planning process before the bulk of the audit field work is begun, namely: evaluating internal accounting control and determining the desirability of using computer-assisted techniques. 7.1. Evaluating Internal Control in an EDP System The objective is the same as for a manual system, that is to determine on the basis of the adequacy of existing controls, the audit evidence that should be accumulated. Similarly, the technique of internal control evaluation for both EDP and non-EDP systems is to obtain information about the client's system, to evaluate its strengths and weaknesses and to ascertain that the system is actually operating in accordance with the plan. Evaluation of an EDP system is usually done by obtaining preliminary information from three major sources: Flowcharts, EDP questionnaires, and a study of the error listings generated by the system. The flowcharts and questionnaires have counterparts in nonEDP systems, but an error listing is unique to EDP systems. The flowcharts emphasize the organization of the company and the flow of information through the system, the questionnaires emphasize specific controls and the error listing supports both these approaches by showing the actual error reported by the EDP system. After obtaining a preliminary understanding of the EDP system, the auditor is in a position to decide on the extent to which he decides to rely on its controls. As in manual systems, the auditor may decide not to rely upon the EDP controls even if they are adequate. This approach is followed if the cost of an extensive or exhaustive study and test of the controls will exceed the reduction in the cost of the other procedures. 7.2. Auditing Around the Computer Then the auditor relies completely on the non-EDP aspect of a system, it is referred to as auditing around the computer. In this approach, the auditor reviews internal control and performs tests of transactions and account balances verification procedures in the same manner as in non-EDP systems, there is no attempt to test the client's EDP controls or to use the computer to perform audit procedures. cd To audit around the computer, the auditor must have access to source documents and a detailed output report in a readable form. This is possible only if all the foregoing conditions are satisfied: a. source documents are available in a non-machine language; b. documents are filed in such a way that it is convenient to locate them for auditing purposes; c. output is listed in detail to be able to trace individual transactions from the source documents to the output and vice-versa. If any of the above condition does not exist, the auditor will have to rely on computeroriented controls and possibly the use of computer for carrying out his audit procedures. 7.3. Auditing with the Use of the Computer There are two ways wherein the auditor uses the computer to perform audit procedures: a. processing the auditor's test data on the client's computer system as a part of the review of internal control; b. testing the records maintained by the computer as a means of verifying the client's financial statements. casia 7.3.1. Test Data Approach

The objective of the use of the test data approach is to determine whether the computer programs can correctly handle valid and invalid transactions as they arise. To achieve this objective, the auditor develops different types of transactions that are processed under this control using the client's computer programs on the client's EDP equipment. The test data used must include both valid and invalid transactions in order to check whether the client's system has properly processed the input. The auditor examines the error listing and the details of the output resulting from the test data. 7.3.2. Auditor's Computer Program Approach This approach is for the auditor to run his own program on a controlled basis to verify the client's data recorded in a machine language. When the auditor uses test data he is evaluating the ability of the client's system to handle different types of transactions, whereas in the auditor's computer program approach, the output of the program is being tested for correctness. Different kinds of tests and other functions can be performed with a computer program if the client's data are in a machine language, these include: a. Verifying Extensions and Footings. A computer program can be used to verify the accuracy of the client's computations by calculating the information independently. cd b. Selecting Audit Samples. The computer can be programmed to select samples from any machine-readable data in several ways including at random. It is also possible to use more than one criterion for sample selection. c. Comparing Data on Separate Files. When records on separate files should contain compatible information, a program can be used to determine if the information agrees. For example, change in accounts receivable balances between two dates can be compared with details of sales and cash receipts on transactions files and payroll details can be compared with personnel records. d. Using the Client's Program. This is acceptable and economical alternative when the client already has a program that the auditor can use, such as for footing or crossfooting. When using client's program, it is important to test the program for reliability before use. e. Using a Generalized Program. A generalized program consists of a series of computer programs which together perform various data processing functions. These functions for the most part can be described as data manipulations. Generalized programs have two important advantages, first, they are developed in such a manner that most of the audit staff can be quickly trained to use the program even though they have little formal EDP education. Second, they have a wide range of application, which can be made with a single program without having to incur the cost of developing an individualized program. But the high initial cost of their development and their relatively inefficient processing speed could be a setback. All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. acd BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-28-86 Revenue Memorandum Circular No. 39-86

October 28, 1986 REVENUE MEMORANDUM CIRCULAR NO. 39-86 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------0466437 : one (1) set ---------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc BIENVENIDO A, TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-09-86 Revenue Memorandum Circular No. 40-86 October 9, 1986 REVENUE MEMORANDUM CIRCULAR NO. 40-86 Subject : Final List of Promotable Personnel & Prohibition Against Solicitation of Outside Influence in Promotions To : All Revenue Service Chiefs, Regional Directors, Division Chiefs, Chiefs of Branches, Revenue District Officers and all Revenue Officials & Employees It has been observed that officials and heads of offices concerned do not strictly follow Revenue Memorandum Order No. 26-83 in the submission of Lists of Promotable Personnel. It has also become increasingly evident that employees are soliciting recommendations from outside sources in matters of promotion. Screening of candidates has consequently become more difficult causing undue delay in promotions. Attention is therefore drawn once more to the following provisions of Revenue Memorandum Order No. 26-83 in the submission of Final Lists of promotable personnel, and the provisions of Section 8 of Civil Service Rule XVIII on Discipline: 1. RMO No. 26-83: "A minimum of two (2) personnel, unless there is only one (1) next-in-rank, or a maximum of 20% of the total number of candidates per position title shall be included in the List." (Pls. note underscoring) cdt 2. Section 8, Civil Service Rule XVIII:

No recommendation of any person for promotion in the competitive service, whether oral or written, shall be received or considered unless it be made by the officer or officers under whose supervision he is or has been employed, and the presentation of any other recommendation shall be considered an unwarrantable interference with the public service. cdtai Such a recommendation made at the solicitation or with the knowledge or consent of the employee shall be sufficient cause for barring him from the promotion proposed and for proceeding against him administratively in accordance with these rules. (Pls. note underscoring also) Attention is, likewise drawn to the requirement, under the Bureau's Merit Promotion Plan in the case of field personnel, their accomplishments in terms of collections and assessments for the last 2 years should be included in the information on their performance. To give sufficient time for the Personnel Division to screen candidates and prepare the line-ups for submission to the Promotion Boards, Lists of Promotable personnel should be submitted not later than 30 days after each rating period. Please be guided accordingly. casia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-08-86 Revenue Memorandum Circular No. 41-86 November 8, 1986 November 8, 1986 REVENUE MEMORANDUM CIRCULAR NO. 41-86 Subject : Schedular capital gains tax in connection with sale, exchange or other disposition of real property; BIR clearance for transfer of title to the vendee transferee. To : All Internal Revenue Officers, Registers of Deeds and Others concerned. There are complaints that some corporations are being invariably required to secure BIR clearance authorizing transfer of title to real property sold, exchanged or otherwise disposed allegedly because the said clearance is required under the schedular capital gains tax law (Batas Pambansa Blg. 37, as amended). cdasia The said alleged requirement has no basis in law. Accordingly, this Circular is being issued for the proper guidance of all concerned. 1. Requisites. - The aforesaid law is applicable only (a) if the real property was a "capital asset" in the hands of the vendor/transferor; (b) if the said real property is located in the Philippines; (c) if the vendor/transferor is either an individual, estate or a trust; and (d) if the transaction is either a sale, exchange or disposition of the said kind of real property. 2. Meaning of terms. - (a) Capital asset. - For purposes of this law, this term applies only to real property which was not used in the trade or business of the vendor/transferor. This term does not apply to real property which, in the hands of the vendor/transferor, was used or offered for sale or for lease in the course of his trade or business.

(b) Exchange or other disposition. - These terms shall apply only to exchange or other disposition of the said real property for a consideration, in money or money's worth. Accordingly, these terms shall not apply to transmission of real property through donations or inheritance. 3. Tax base and tax rate. - The tax shall be based on the selling price or the prevailing fair market value of the said real property at the time of the transaction, whichever is higher. The capital gains tax shall be equal to the five percent (5%) thereof. The said fair market value shall be determined in accordance with BIR implementing rules and regulations. 4. Taxable event. - Pursuant to Presidential Decree No. 1994 which took effect on January 1, 1986, this tax shall be imposed if the transaction is a sale, exchange or other disposition of real property including pacto de retro sale and other forms of conditional sales. Accordingly, a conditional sale transaction like the mortgage foreclosure sale is embraced under this law. cdt 5. BIR Clearance. - Batas Pambansa Blg. 37 provides "no registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner of Internal Revenue or his duly authorized representatives has certified that such transaction has been reported and the tax herein imposed, if any, has been paid. (a) The said clearance is required only if the vendor/transferor is an individual, estate or a trust. Accordingly, such clearance is not required if the vendor/transferor is a corporation, regardless of whether or not the real property was a capital asset in the hands of the said corporation. If the vendor/transferor is a corporation, the Register of Deeds shall not require the said BIR clearance for purposes of recording the transaction and effecting transfer of title, provided, that the corresponding documentary stamp tax on the document of sale, exchange or disposition had been duly paid through the corresponding Revenue District Office and the official receipt number; amount of stamp tax paid and date of payment duly noted on all copies of the taxable instrument, pursuant to (then) Section 209 of the National Internal Revenue Code, as amended by Presidential Decree No. 1994. (b) The said BIR clearance is required only if the transaction is a sale, exchange or other disposition of real property for a consideration, in money or money's worth. Accordingly, the said BIR clearance shall not be competent if the transmission of the real property is occasioned by a donation or inheritance. For donation/inheritance of real property, the Register of Deeds may transfer title only after the Commissioner of Internal Revenue or his duly authorized representative has certified (i) that the corresponding donor's gift tax or estate tax had been duly paid; (ii) and that title thereto may accordingly be transferred in the name of the donee or the heir. (c) If the vendor/transferor is an individual, estate or trust, BIR clearance shall be required, regardless of whether or not the real property was a capital asset or an ordinary business asset in the hands of the said vendor/transferor. If the real property was a capital asset in the hands of the vendor/transferor, BIR clearance shall be issued after payment of the corresponding (i) capital gains tax; and (ii) documentary stamps tax. If the real property was an ordinary business asset in the hands of the said vendor/transferor, BIR clearance shall be issued after the vendor/transferor has filed a

sworn statement that the said real property was held as ordinary business asset in accordance with Section 7 of Revenue Regulations No. 8-79 which took effect on September 7, 1979, otherwise known as the implementing regulations of Batas Pambansa Blg. 37. This transaction shall, however, be reported by the said person in his annual tax return. (d) The sworn statement referred in the preceding sub-paragraph 5 (c) hereof, which is in lieu of the capital gains tax return shall be filed with the corresponding Revenue District Office also in case where the vendor/transferor, although an individual, estate or trust, is however, exempted from the 5% capital gains tax under the national internal revenue code or under existing special law (e. g., vendee/transferee is an entity of the Philippine Government, in which case, the vendor/transferor has the option either to report his said transaction under the 5% capital gains tax law or to report his transaction in his annual income tax return under normal income tax procedures; or where he avails of exemption from the capital gains tax, pursuant to existing special law; etc.) aisa dc After filing of the sworn statement, BIR clearance shall be issued to the vendor/transferor, subject to condition that the corresponding documentary stamp tax had been duly paid and noted in the taxable document. (e) The thirty (30) days filing period is applicable only for capital gains tax return. This filing period does not apply to the said sworn statement. Accordingly, no penalty shall apply to the vendor/transferor even if the said sworn statement is not filed within the said filing period. 6. Enforcement. - Strict enforcement of this Circular is enjoined. All concerned are also enjoined to give this Circular a wide publicity as possible. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-19-86 Revenue Memorandum Circular No. 42-86 November 19, 1986 REVENUE MEMORANDUM CIRCULAR NO. 42-86 Subject : Publishing the features of Executive Order No. 64, further amending Executive Order No. 41, as amended. To : All Internal Revenue Officers and others concerned. The Executive Order expanded the coverage of the tax amnesty by including estate and donor's taxes under Title III and the tax on businesses under Chapter II, Title V of the National Internal Revenue Code for the years 1981 to 1985. The business taxes covered are the privilege tax, sales tax, compensating tax and other percentage taxes. Taxpayers who have not yet availed of the tax amnesty under Executive Order No. 41 may avail of the benefits granted under the said Executive Order and Executive Order No. 64 by paying an amnesty tax of 15% of the increase in networth as defined in Executive Order No. 41. Those who have already availed of the tax amnesty under Executive Order No. 41 may avail of the benefits granted under Executive Order No. 64 covering estate, donor's and business taxes by paying an additional 5% on the same increase in networth. cdasia Method of availment.

(1) For taxpayers who have already availed of Executive Order No. 41 - Those who want to avail further of tax amnesty on business, estate and donor's tax liabilities shall file the tax amnesty return under BIR Form No. 187 on which they should (a) indicate the file numbers which were assigned to them at the time of availment of Executive Order No. 41 and (b) declare therein the same amount of increase in networth and (c) pay the additional amnesty tax due thereon at the rate of 5% based on the said increase in networth, or the minimum amount of P4,000 for individuals and P9,000 for corporations, whichever is higher. The return should be marked "Supplemental Tax Amnesty Return" to identify the same as having been filed under Executive Order No. 64. A taxpayer is not, however, precluded from amending his statement of assets and liabilities in order to reflect a higher increase in networth, in which case, the tax return shall be marked "Amended Tax Amnesty Return." In the latter case, the total amount of tax due on the increased networth shall be diminished by the amount of tax previously paid under Executive Orders 41 or 53. For this purpose, the amended sworn statement of assets, liabilities and networth and photocopies of the Confirmation Receipts/Payment Order or Revenue Official Receipt shall be attached to the amended return. (2) For those who have not yet availed of any tax amnesty. - Taxpayers who have not yet availed of the benefits granted under Executive Order No. 41 who now want to avail of both the benefits under Executive Order No. 41 and Executive Order No. 64 shall file a tax amnesty return under BIR Form No. 187, together with the required attachments, and compute the tax at the rate of 15% on the increase in networth to be declared therein. However, the amount of amnesty tax may not be lower than the amount of P9,000 in the case of individuals and 19,000 in the case of corporations. casia Taxpayers may still avail of the benefits of income tax amnesty under Executive Order No. 41 by paying 10% of the increase in networth. However, taxpayers desiring to avail of the benefits for business, estate and donor's taxes can only do so by paying 15% of the increase in networth or the minimum amount of P9,000 or P19,000, as the case may be. All Internal Revenue officials, employees, and other concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-11-86 Revenue Memorandum Circular No. 43-86 November 11, 1986 REVENUE MEMORANDUM CIRCULAR NO. 43-86 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ---------------------------SERIAL NUMBER : QUANTITY ----------------------------

B8990699 : One (1) Set ---------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent dispositions or use thereof. cd BIENVENIDO A, TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-04-86 Revenue Memorandum Circular No. 44-86 December 4, 1986 December 4, 1986 REVENUE MEMORANDUM CIRCULAR NO. 44-86 Subject : Documentary stamp tax on instrument of sale or conveyance of real property. To : All Internal Revenue Officers and others concerned. 1. Background. - Stamp taxes on taxable documents, including instrument of sale or conveyance of real property, shall be paid by any of the parties to the taxable document at the time the act is done or transaction had. Whenever one of the parties enjoys exemption from the tax, the other party who is not exempt shall be the one directly liable (Sec. 186, NIRC, as amended). Section 2 of Presidential Decree No. 1045, as implemented by Section 6 of Revenue Regulations No. 9-76, requires that if the amount of the stamp tax due is ten pesos (P10.00) or more, the stamp tax shall be paid to the Bureau of Internal Revenue or through its authorized agent bank, after which a corresponding official receipt evidencing payment shall be issued and a notation of such payment shall be made on the original and every copy of the document, as follows: (a) Amount of stamp tax paid; (b) Official receipt number; (c) Date of payment; and (d) Name and signature of the payor. If the amount of stamp tax due is below ten pesos (below P10.00), rather than the said official receipt, actual stamp shall be issued by the BIR - the stamp shall be affixed in the taxable document and after affixture shall be cancelled in order that payment of the tax may be effected. Section 214 of the Tax Code provides that a taxable document shall not be recorded nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court unless the corresponding stamp tax due thereon had been paid and that a notary public is prohibited from adding his jurat or acknowledgment to any taxable document unless the proper documentary stamp tax had been paid. aisa dc 2. Stamp tax on instrument of sale/conveyance of real property. - Section 209 of the Tax Code imposes a documentary stamp tax on all conveyances, deeds, instruments or writings bearing on the sale or other disposition of real property for a consideration. The

tax shall be based on the amount of consideration, or value received or contracted to be paid or the fair market value of the real property, whichever is higher. 3. Procedure for determination and collection of stamp tax on instrument of sale or conveyance of real property. 3.1 - The stamp tax on the said document shall be paid through the Revenue District Office having jurisdiction over the locality where the real property sold/disposed is located. 3.2 - The stamp tax referred hereunder applies only if the instrument is a sale or other conveyance of real property for a consideration in money or money's worth. 3.3 - Since the basis of the tax is either (a) the consideration as shown in the said document or (b) the fair market value of the real property, whichever is higher, the taxpayer shall present to the Revenue District Officer for verification (a) the original and every other copy/ies of the said document and (b) a true copy of the latest Tax Declaration of the said real property, duly certified by the corresponding City/Municipal Assessor. aisa dc From the said documents, the Revenue District Officer shall determine the actual amount of stamp tax due on the said taxable document. 3.4 - Payment Order shall be issued by the said Revenue District Officer to effect payment of the stamp tax due. 3.5 - After payment, the Revenue District Officer shall cause the notation on the taxable document of the following information: (a) Amount of stamp tax paid; (b) Official Receipt number; (c) Date of payment; and (d) Name and signature of the payor. At the bottom of the foregoing notations, the following shall also be shown: "AMOUNT OF STAMP TAX PAID ON THIS DOCUMENT CERTIFIED CORRECT: --------Revenue District Officer 3.6 - A notary public shall not add his jurat or acknowledgment on the taxable document unless evidence of payment of the tax as provided in paragraph 3.5 hereof is shown on the said document. 3.7 - The Register of Deeds shall not record the transaction and cause transfer of title to the real property unless the evidence of payment of the tax as provided in paragraph 3.5 hereof is shown on the said document. This requirement shall be in addition to the certification of the Revenue District Officer in case of a sale, exchange or other disposition of real property, classified as capital asset, made by an individual, estate or trust, pursuant to the provisions of Batas Pambansa Blg. 37, as amended. cdt 3.8 - The stamp tax referred herein shall be due and payable on every instrument of sale or conveyance of real property, regardless of the parties to the taxable document, whether an individual, estate, trust, a corporation or a partnership and regardless of the class of the real property, whether capital or ordinary business asset in the hands of the vendor/transferor. 4. This Revenue Memorandum Circular shall take effect immediately. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-05-86 Revenue Memorandum Circular No. 45-86 December 5, 1986 REVENUE MEMORANDUM CIRCULAR NO. 45-86 Subject : Tax exemption of the (i) Government Service Insurance System and (ii) Social Security System under Presidential Memorandum Order No. 42 dated September 25, 1986 To : All Internal Revenue Officers, all banks and other financial Institutions, and Others concerned. The tax exemption of the Government Service Insurance System (GSIS) and the Social Security System (SSS), pursuant to Presidential Memorandum Order No. 42 dated September 25, 1986 includes exemption from the final withholding tax on interest income derived from bank deposits and deposit substitutes. Accordingly, no withholding of the tax shall be made from interest income derived by the GSIS or by the SSS from their bank deposits or investment in deposit substitutes. cd i Quoted hereunder is the letter of the GSIS to the Honorable Presidential Executive Secretary dated November 13, 1986 and the ruling issued by the Office of the President of the Republic of the Philippines dated November 17, 1986. "November 13, 1986 Honorable Joker Arroyo Executive Secretary Office of the President Malacaang, Manila Re: Clarification of Sec. 1 of Memorandum Order No. 42 dated September 25, 1986.

Sir: This has reference to Memorandum Order No. 42 issued by Her Excellency, President Corazon C. Aquino on September 26, 1986, which further amended Section 24(c) of the Internal Revenue Code in order to exempt the Government Service Insurance System and the Social Security System from the payment of tax from their taxable incomes. In spite of the clear intention of the said Memorandum Order No. 42 to exempt both institutions from the payment of their taxes from their taxable incomes, the Government Securities Department of the Central Bank of the Philippines has been continuously deducting all creditable and withholding taxes from the Treasury Notes/Bills investment of the SSS upon the view that the exemption of the SSS under Section 1 of Memorandum Order No. 42 refers only to the payment of tax on its taxable incomes (as the term taxable income is defined in Sec. 28 of the Internal Revenue Code) which is imposed under Section 24(a) but does not extend to or include the exemption from the payment of the 20% final withholding tax on its interest income imposed under Section 24(e) of the National Internal Revenue Code, as amended by Executive Order No. 37. aisa dc We have discussed this problem with certain officials of the Bureau of Internal Revenue and as a matter of fact we wrote the Honorable Commissioner of the BIR a letter to this effect but it seems that even at the BIR, conflicting views are being expressed on the

matter. To avoid further confusion and to clarify the matter once and for all, may we, therefore, have the honor to request that the tax exemption of the SSS from the payment of any and all taxes imposed under the National Internal Revenue Code, as amended, be made by way of an amendment to Section 1 of Memorandum Order No. 42 to read as follows: cd "Sec. 1. The provisions of existing laws to the contrary notwithstanding. The Government Service Insurance System and the Social Security System are hereby exempted from the payment of tax on their taxable incomes, AS WELL AS THEIR INTEREST INCOME FROM DEPOSITS AND YIELD OR ANY OTHER MONETARY BENEFIT FROM DEPOSIT SUBSTITUTES AND FROM TRUST FUND AND SIMILAR ARRANGEMENTS, and for this purpose, Section 24(c) AND SECTION 24(e) of the National Internal Revenue Code, as amended by Executive Order No. 37, is further amended so as to exclude the aforesaid corporations from the provisions therefor EFFECTIVE AUGUST 1, 1986" (Capital letters indicate the desired amendment). Trusting your usual prompt and kind consideration. Very truly yours, (SGD.) JOSE L. CUISIA, JR. Acting Administrator November 17, 1986 Honorable Jose L. Cuisia, Jr. Administrator Social Security System Quezon City S i r: In reply to your letter of November 13, 1986, seeking "Clarification of Section 1 of Memorandum Order No. 42 dated September 25, 1986", please be informed that the President sustains your interpretation as embodied in your letter, thereby rendering unnecessary amendment to said provision. casia Very truly yours, (Sgd.) JOKER P. ARROYO Executive Secretary C.C. Hon. Feliciano Belmonte, Jr. President & General Manager Government Service Insurance System Manila

Hon. Bienvenido A. Tan, Jr. Commissioner Bureau of Internal Revenue Quezon City Hon. Jaime V. Ongpin Minister of Finance Manila" All concerned are enjoined to give this Revenue Memorandum Circular a wide publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-10-86 Revenue Memorandum Circular No. 46-86 December 10, 1986 December 10, 1986 REVENUE MEMORANDUM CIRCULAR NO. 46-86 Subject : Registration and stamping of receipts or sales or commercial invoices. To : All Revenue Regional Directors, Revenue District Officers and Taxpayers required to issue sales receipts/invoices. 1. Background. - Section 216 of the old National Internal Revenue Code provided as follows: ". . . All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered . . . issue duly registered receipts or sales or commercial invoices . . ." (EMPHASIS SUPPLIED) cdasia Presidential Decree No. 1994 which took effect on January 1, 1986 (i) renumbered Section 216 as Section 181 and (ii) amended its provisions as follows: ". . . All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered . . . issue receipts or sales or commercial invoices . . ." (EMPHASIS SUPPLIED) In short, the phrase "duly registered" had been repealed by P.D. 1994. 2. Meaning of the repeal. - The phrase "duly registered" had been deleted in order to do away with the requirement of registration of receipts/invoices. The requirement under Revenue Regulations No. 2-78 dated February 20, 1978 that receipts/invoices shall be registered with and stamped by the corresponding Revenue District Office before the same may be used and issued to customers or clients had been repealed by P.D. 1944. 3. This Revenue Memorandum Circular supplements RMO NO. 22-86, dated July 22, 1986 and RMO NO. 25-86, dated July 25, 1986, for the proper guidance and compliance of all concerned. cd i 4. This Circular shall take effect immediately. (Sgd). BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

12-03-86 Revenue Memorandum Circular No. 47-86 December 3, 1986 REVENUE MEMORANDUM CIRCULAR NO. 47-86 Subject : Loss of Six (6) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of six (6) sets of Confirmation Receipts, to wit: cd ---------------------------SERIAL NUMBER : QUANTITY ---------------------------B10251370 - B10351375 : Six (6) Sets ---------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia BIENVENIDO A, TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-04-86 Revenue Memorandum Circular No. 48-86 December 4, 1986 REVENUE MEMORANDUM CIRCULAR NO. 48-86 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cda ---------------------------SERIAL NUMBER : QUANTITY ---------------------------9200432 : One (1) Set ---------------------------The above receipt which was reported missing by Ms. Grace F. Villanueva, Collection Agent of North Quezon City, Revenue District No. 30, had been cancelled and any official transactions involving the use of said form is therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda BIENVENIDO A, TAN, JR. Commissioner By: ROMULO M. VILLA Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-01-86 Revenue Memorandum Circular No. 49-86 December 1, 1986 REVENUE MEMORANDUM CIRCULAR NO. 49-86 Subject : Publishing Executive Order No. 72 dated November 25, 1986. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 72: "MALACAANG Manila EXECUTIVE ORDER NO. 72. FURTHER AMENDING SECTION 227 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES. WHEREAS, there is a need to rationalize the taxes and exemptions on franchises by prescribing a new rate structure on franchise operators and withdrawing income tax exemptions; cda NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: Sec. 1. Section 227 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: cd "Sec. 227. Tax on franchises. - Any provision of general or special law to the contrary notwithstanding, there shall be levied, assessed and collected in respect to all franchises, upon the gross receipts from the business covered by the law granting the franchise, a tax in accordance with the schedule prescribed hereunder: (a) On electric utilities, city gas and water supplies - Two (2%) per cent (b) On telephone and/or telegraph systems, and radio broadcasting stations - Three (3%) per cent (c) On other franchises - Five (5%) per cent The grantee shall file the return with, and pay the tax due thereon to, the Commissioner of Internal Revenue or his duly authorized representative in accordance with the provisions of Section 162 of this Code, and the return shall be subject to audit by the

Bureau of Internal Revenue, any provision of any existing law to the contrary notwithstanding." Sec. 2. Any provision of general or special law to the contrary notwithstanding, all grantees of franchises shall be subject to income tax levied under Title II of the National Internal Revenue Code, as amended. Sec. 3. Section 1 of Republic Act No. 2889, Section 1 of Presidential Decree No. 551, as amended, Section 15(1) of Presidential Decree No. 1445, the pertinent provisions of the charters of franchise grantees, and all other laws, orders, issuances, rules and regulations or parts thereof, inconsistent with this Executive Order are hereby repealed or modified accordingly. aisa dc Sec. 4. This Executive Order shall take effect immediately. Done in the City of Manila, this 25th day of November in the year of Our Lord, nineteen hundred and eighty-six. (SGD.) CORAZON C. AQUINO President of the Philippines By the President: (SGD.) JOKER P. ARROYO Executive Secretary" SALIENT FEATURES 1. All franchise holders, upon the gross receipts from the business covered by the law granting the franchise, shall be subject to franchise tax as follows: (a) On electric utilities, city gas and water supplies - Two (2%) per cent (b) On telephone and/or telegraph systems, and radio broadcasting stations - Three (3%) per cent (c) On other franchises - five (5%) per cent The foregoing schedular rates revoke the uniform rate of franchise tax of 5% prescribed by Section 227 of the Tax Code as well as the rates of franchise tax prescribed in the individual franchises but maintains the 2% franchise tax payable by electric utilities and city gas. 2. As provided in Section 227 of the Tax Code, as amended by Executive Order No. 72, the Commissioner of Internal Revenue shall continue receiving the quarterly franchise tax returns to be filed by the franchise grantees as well as the franchise tax due thereon within twenty (20) days after the end of each taxable quarter, as provided in Section 162. Moreover, the Commissioner of Internal Revenue shall continue the audit and examination of said returns, any provision of the individual franchises to the contrary notwithstanding. 3. Upon the effectivity of Executive Order No. 72, all franchise holders are subject to income tax levied under Title II of the Tax Code, notwithstanding the particular provisions in the franchise granting exemption from income tax. 4. Executive Order No. 72, also revokes (1) Republic Act No. 2889 which heretofore exempts radio broadcasting and television stations from the payment of franchise and privilege taxes; (2) Section 1 of P.D. No. 551, as amended by P.D. No. 648, which is Section 227(b) of the Tax Code, prescribing the franchise tax on electric franchise holders before its amendment by Executive Order No. 72; (3) Section 15(1) of

P.D. No. 1445 authorizing the Commission on Audit to conduct the audit of financial operations of public utilities and franchises. Considering the above provisions of Section 227 of the Tax Code, as amended by Executive Order No. 72, prescribing that the franchise tax returns of franchise holders shall be subject to audit by the Bureau of Internal Revenue, the authority of the Commission on Audit under Section 38 of P.D. No. 1445 to "examine and audit the books, records and accounts of public utilities in connection with the fixing of rates of every nature, or in relation to the proceedings of the proper regulatory agencies, for purposes determining franchise taxes," is repealed. Such repeal was already effective on January 1, 1986 when Section 227 of the Tax Code was amended by P.D. 1994 providing that the audit shall be conducted by the BIR. cdasia 5. Under paragraph (b) of the above-quoted provisions of Section 227 of the Tax Code, as amended by Executive Order No. 72, radio broadcasting stations are subject to the franchise tax at the rate of 3%. Television stations not being included in paragraph (b) are, therefore, subject to the franchise tax at the rate of 5% under paragraph (c). 6. Aside from income and franchise taxes, all franchise grantees are already subject to the annual fixed tax of P2,000.00 in accordance with Section 161 (3) (gg) of the Tax Code, as amended. Effectivity. - Executive Order No. 72 which was promulgated on November 25, 1986, provides in Section 4 thereof that "this Executive Order shall take effect immediately." Hence, the effective date of Executive Order No. 72 is November 25, 1986. However, this Office is mindful of the fact that the provisions of the said Executive Order were not known to the taxpayers concerned until its publication in full in newspapers of general circulation. Said publication took place on December 1, 1986. Accordingly, and in fairness to all concerned, this Office is not enforcing strictly the provisions of the Executive Order based on its effectivity date. In other words, the provisions of the Executive Order shall be enforced strictly beginning December 1, 1986. All concerned are hereby enjoined to give this Circular as wide a publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-22-86 Revenue Memorandum Circular No. 50-86 December 22, 1986 January 1, 1987 REVENUE MEMORANDUM CIRCULAR NO. 50-86 Subject : Sworn declaration, in lieu of capital gains tax return, in connection with sale, exchange or other disposition of real property made by an individual, estate or trust. To : All Revenue Regional Directors, Revenue District Officers, and Others concerned. 1. Background. - Batas Pambansa Blg. 37, as amended, as implemented by Revenue Regulations No. 8-79, as amended by Revenue Regulations No. 13-85, requires that if the sale, exchange or disposition of real property is made by an individual, estate or trust but the said person, as vendor/transferor, is under the law not required to pay the capital gains tax either because "(i) The real property sold is used in the seller's trade or business, (ii)

The real property was held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business (e.g., the seller is engaged in the business of buying and selling real property), (iii) The real property was offered for rent" (Sec. 7(a)(4), REV. REGS. NO. 13-85), in lieu of the capital gains tax return, such vendor/transferor shall file with the Revenue District Office concerned a Sworn Declaration of the reason for exemption from payment of the capital gains tax which shall constitute as a valid application for the issuance by the Revenue District Officer of the required certification authorizing transfer of title to the real property sold, exchanged or otherwise disposed. cd i 2. Mode of procedure. - The vendor/transferor of the real property shall attest in his sworn declaration either of the following: 2.1 - If the real property sold was used in his trade or business (a) the fact that said property had been used in his trade or business; (b) the nature of its use, e.g., as his place of establishment; (c) the nature of the vendor's business; and (d) his current privilege tax receipt (PTR) showing the official receipt number, date and amount paid. 2.2 - If the real property sold was held primarily for sale in the course of his trade or business (a) the fact that is a real estate dealer; and (b) his current privilege tax receipt (PTR) showing the official receipt number, date and amount paid. 2.3 - If the real property sold was held primarily for rent (a) the fact that he is a real estate dealer; and (b) his current privilege tax receipt (PTR) showing the official receipt number, date and amount paid. 3. Evaluation of the sworn declaration. - The Revenue District Officer concerned shall evaluate the affiant's sworn declaration and shall require the said affiant to present the following for evaluation as a pre-requisite for issuance of the BIR clearance for transfer of title to the real property sold/disposed: acd 3.1 - The official receipt evidencing payment of the said affiant's privilege tax (PTR) referred to under paragraph 2 hereof; and 3.2 - The official receipt or commercial invoice issued by the affiant to the vendee in connection with payment received. 4. Effectivity. - The foregoing requirements shall take effect beginning January 1, 1987. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-12-87 Revenue Memorandum Circular No. 1-87 January 12, 1987 REVENUE MEMORANDUM CIRCULAR NO. 1-87 Subject : Clarification as to the deadline for availment of the expanded tax amnesty under Executive Order No. 41 as amended. To : All Internal Revenue Officers and Others Concerned. Pursuant to Section 1 of Executive Order No. 95 the "period within which taxpayers may avail themselves of the expanded tax amnesty under Executive Order No. 41, as amended, is hereby extended up to January 31, 1987." cdasia

Since January 31, 1987 falls on a Saturday, the next working day would have been Monday, February 2, 1987 but which, however, has been declared as a special public holiday, it being a Plebiscite day. Such being the case, the deadline for availment of the expanded tax amnesty under Executive Order No. 41 as amended, is on February 3, 1987. It is desired that this Circular be given as wide a publicity as possible. cdtai (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue TAN-T5152-J0923-A-4 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-14-87 Revenue Memorandum Circular No. 2-87 January 14, 1987 REVENUE MEMORANDUM CIRCULAR NO. 2-87 Subject : Correction of Section 3-C of Revenue Regulations No. 20-86 or the Revised Regulations amending Republic Act No. 1051. To : All Internal Revenue Officers and Others Concerned. Under Section 223 of the NIRC, as amended by PD 1994, there shall be collected from every person, company or corporation (except purely cooperative companies or associations) doing insurance business of any sort in the Philippines a tax of five (5%) per centum of the gross premium collection. cdasia However, the rate of six (6%) per centum was inadvertently stated in Section 3 C of Revenue Regulations No. 20-86 reading as follows: "Section 3. - Internal revenue taxes required to be withheld. - The following taxes, the amount of which can be fixed, determined, computed or ascertained are subject to withholding: xxx xxx xxx C. Premium Tax. - Six per centum (6%) of premiums paid to any person doing insurance business of any sort . . ." Accordingly, the above quoted provision of Revenue Regulations No. 20-86 should be corrected and the rate imposed by Section 223 of the NIRC, as amended by PD 1994 be made to prevail. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-21-87 Revenue Memorandum Circular No. 3-87 January 21, 1987 REVENUE MEMORANDUM CIRCULAR NO. 3-87 Subject : BIR Clearance authorizing the transfer of title to the vendee/transferee of real property in cases of payment of capital gains tax and documentary stamp tax liabilities under Executive Order No. 44. To : All Internal Revenue Officers, Registers of Deeds and Others concerned. Information has it that taxpayers, whether individuals, estates or trusts who settle thru a compromise under Executive Order No. 44 his/its capital gains tax and documentary

stamp tax liabilities which have been due/delinquent as of December 31, 1985 are required by the Registers of Deeds to submit the usual BIR Clearance authorizing the transfer of title to real property sold, exchanged or otherwise disposed of as required under B.P. Blg. 37 as amended. cda In this connection, pertinent portion of Revenue Memorandum Order No. 39-86 dated November 18, 1986 provides: "8. Clearance 8.1. - 30% compromise settlement rate. - If the compromise settlement rate is equivalent to 30% of the basic tax assessed, immediate action shall be taken on the taxpayerapplicant's application. After payment of the compromise amount, the revenue office which passed upon the application as referred to in paragraph 5.2 hereof, shall issue to the taxpayer a letter, signed by the chief of the said revenue office, confirming the payment and advising that the case is already closed. 8.2.- Below 30% compromise settlement rate. - If the recommended compromise settlement rate is below 30%, the Evaluation Committee shall forward to the Office of the Commissioner the complete docket of the case, together with (a) its report and recommendation; and (b) a letter to the taxpayer-applicant, for the signature of the Commissioner, advising of action taken on the case." cd i Accordingly, the Registers of Deeds should accept the aforesaid letters of the Commissioner of Internal Revenue or the Chief of the Revenue office which has passed upon the taxpayer's availment of compromise under Executive Order No. 44 as BIR clearance authorizing the transfer of title to real property in the name of the vendee/transferee. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue TAN-T5152-J0923-A-0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-87 Revenue Memorandum Circular No. 4-87 February 18, 1987 REVENUE MEMORANDUM CIRCULAR NO. 4-87 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the increase in company netback per Board of Energy Resolution No. 87-02 dated February 7, 1987. To : All Internal Revenue Officers and others concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products retroactive to January 1, 1987: acd Previous Tax Present Tax PRODUCTS Specific Differ Tax Tax Tax Premium Ad Valorem Tax Tax Total Specific Tax ence Ad Valorem Total

P2.489 P0.722 P3.211 P2.489 P0.931 P3.42 .209

Regular 2.604 0.648 3.252 2.604 0.844 3.448 .196 Avturbo 2.567 0.56 3.127 2.567 0.871 3.438 .311 Kerosene 0.628 0.302 0.93 0.628 0.482 1.11 .180 Diesel 0.523 0.449 0.972 0.523 0.632 1.155 1.83 Fuel Oil 0.511 0.103 0.614 0.511 0.154 0.665 .051 LPG 0.697 0.287 0.984 0.697 0.32 1.017 .033 or 1.247/kg. 0.513/kg. 1.76/kg. 1.247/kg. 0.572/kg. 1.819/kg. .059 Asphalts 0.581 0.27 0.851 0.581 0.373 0.954 .103 Solvents 2.472 0.53 3.002 2.472 0.851 3.323 .321 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) BIENVENIDO A. TAN, Jr. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-17-87 Revenue Memorandum Circular No. 5-87 February 17, 1987 REVENUE MEMORANDUM CIRCULAR NO. 5-87 Subject : Loss of six (6) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of six (6) sets of Confirmation Receipts, to wit: cda ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B2165109 - B2165111 : three (3) sets 7735974 - 7735975 : two (2) sets 9732484 : one (1) set ---------------------------The above receipts which were reported missing by the Accredited Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-87 Revenue Memorandum Circular No. 6-87 February 18, 1987 REVENUE MEMORANDUM CIRCULAR NO. 6-87 Subject : Loss of one (1) set of Payment Order (BIR Form RC-82-02-02)

To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cdt ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B-8468164 : one (1) set ---------------------------The above receipt which was reported missing by Mr. Agil A. Alih, Collection Agent of Isabela, Basilan, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-03-87 Revenue Memorandum Circular No. 7-87 March 3, 1987 REVENUE MEMORANDUM CIRCULAR NO. 7-87 Subject : Supplemental Issue of the Official Gazette Publishing Revenue Issuances To : All Concerned. This supplemental issue of the Official Gazette incorporates all Revenue Regulations and Revenue Memorandum Circulars issued by the Bureau of Internal Revenue from March to December, 1986 to implement all Executive Orders, amend revenue rules and regulations and clarify the circularize existing revenue laws. This is in compliance with the Resolution of the Supreme Court in the case of Taada et. al., vs. Tuvera et. al., G.R. No. 63915, December 29, 1986 wherein it was held that as a condition for effectivity, all statutes as well as presidential decrees and executive orders promulgated pursuant to validly delegated legislative powers, including administrative rules and regulations implementing existing laws, shall be published. cd All these revenue issuances are presented in this supplemental issue to conveniently provide taxpayers, tax practitioners, students of taxation and the public in general with information on these past implementing rules and regulations. cda (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-19-87 Revenue Memorandum Circular No. 8-87 February 19, 1987 REVENUE MEMORANDUM CIRCULAR NO. 8-87 Subject : Loss of Five (5) unused pads of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Numbers 0550751-H-0551000-H.

To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of five (5) unused pads of Revenue Official Receipts (BIR Form No. 25.24) to wit: cd i --------------------------Serial Number : Quantity --------------------------0550751-H-0551000-H : Five (5) pads --------------------------The above revenue official receipts which were reported lost by Maria Fe Rana, Collection Agent of Lumban, Laguna, have been cancelled and all official transactions involving the use of said forms are therefore invalidated. cdt Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-18-87 Revenue Memorandum Circular No. 9-87 March 18, 1987 REVENUE MEMORANDUM CIRCULAR NO. 9-87 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the increase in company netback per Board of Energy Resolution No. 87-03 dated March 16, 1987. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products retroactive to March 1, 1987: acd Previous Tax Present Tax PRODUCTS Specific Difference Tax Tax Tax Ad Valorem Tax Tax Total Specific Tax Ad Valorem Total

Premium P2.489 P0.931 P3.42 Regular 2.604 0.844 3.448 Avturbo 2.567 0.871 3.438 Kerosene 0.628 0.482 1.11 Diesel 0.523 0.632 1.155 0.523 Fuel Oil 0.511 0.154 0.665 LPG 0.697 0.32 1.017 0.697 or 1.247/kg. 0.572/kg. 1.878/kg. .059 Asphalts 0.581 0.373 0.954 Solvents 2.472 0.851 3.323

P2.489 P0.967 P3.456 .036 2.604 0.873 3.477 .029 2.567 0.974 3.541 .103 0.628 0.539 1.167 .057 0.787 1.31 .155 0.511 0.202 0.713 .048 0.353 1.05 .033 1.819/kg. 1.247/kg. 0.581 0.469 1.05 .096 2.472 0.953 3.425 .102

0.631/kg.

All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (SGD.) BIENVENIDO A. TAN, JR Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-20-87 Revenue Memorandum Circular No. 10-87 March 20, 1987 March 20, 1987 REVENUE MEMORANDUM CIRCULAR NO. 10-87 Subject : Publishing Department Order No. 29-87 dated March 6, 1987 To : All Internal Revenue Officers and Employees. For the information and guidance of all concerned there is published hereunder the full text of Department Order No. 29-87 implementing EO 45, which prescribes the guidelines and procedures on funding of financial incentives for BIR employees granted under EO 1042: cda "March 6, 1987 Department Order No. 29-87 Subject : Guideline and Procedures for the Implementation of Executive Order No. 45 Relative to the Creation of the BIR Special Fund under EO 1042. :

To

The Commissioner of Internal Revenue and All Others Concerned. Pursuant to the provisions of Executive Order No. 45 amending Executive Order No. 1042, revenue personnel were granted financial incentives based on performance and collection efficiency which shall be funded from the BIR Special Fund in case of deficiency on the appropriation for the Bureau of Internal Revenue for Personal Services. This Order is issued to set forth the rules, regulations and procedures in the computation of annual additions to the BIR Special Fund. Sec. 1. Basis for the Special Fund The BIR Special Fund shall be created out of the real increase in revenue collections in a given year over that of the immediately preceding year but not to exceed 10% of actual collections over tax effort. Real increase in revenue considers adjustments for inflation, revenue effects of new tax measures, and other factors such as administrative reforms. The amount to accrue to the Special Fund must not exceed the ceiling which is equal to 10% of levels of tax effort provided in EO 45 as follows: casia 1986 8% of GNP 1987 8.5% of GNP 1988 9% of GNP 1989 9.5% of GNP

1990 10% of GNP 1991 10.5% of GNP 1992 11% of GNP 1993 11.5% of GNP 1994 and thereafter - 12% of GNP Sec. 2. Procedure for the Computation of the Special Fund. A. Determine the Amount of Real Increase (RI) The following formula shall be used for the computation: RI = R - I CPI Where: R = increase in revenue collections computed of current year over that of the immediately preceding year. I = revenue effect of changes in tax measures, administrative reforms and other factors for the current year (from 1986 onward). CPI = Consumer Price Index for the current year. Sources of Figures: Collections - Gross Amounts before Refunds as recorded in the BIR books. aisa dc GNP - Actual GNP for the Year from NEDA Report. CPI - NEDA Report. B. Determine the amount of the ceiling for the Addition to the Special Fund (SFC) for the current year. cd i The following formula shall be used for the computation: SFC = 10% x (C - T.E.) Where: C = Actual collections for the current year. T.E. tax effort expressed as a given percentage of GNP under Section 1 hereof. cdt C. The actual amount for the Special Fund To determine the actual amount which shall accrue to the Special Fund, compare RI with GFC. The actual amount to be allocated to the Special Fund annually shall be equal to RI but not to exceed GFC. Sec. 3. Repealing Clause. - All regulations, orders or rulings previously issued which are inconsistent with this Order are deemed repealed or superseded. Sec. 4. Effectivity. - This Order shall take effect immediately. (SGD.) JAIME V. ONGPIN Secretary of Finance" Under EO 45 as implemented by Department Order No. 29-87 financial incentives for BIR personnel shall be based on performance and collection efficiency. Benefits granted under EO 1042 shall be funded from the real increase in tax collections of the current year over that of the previous year but should not exceed 10% of the excess of actual collections over a prescribed percentage of GNP. In 1987 we should collect more than =

P57.375 B which is 8-1/2% of P675 B the projected GNP for 1987 to entitle BIR personnel to avail of the financial benefits granted in EO 1042. cdasia It is therefore, incumbent upon each and every BIR employee to exert his utmost effort to realize our collection target of P58.057 B for 1987. All concerned are hereby enjoined to ensure that this Circular reaches each and every employee of this Bureau. (SGD.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-18-87 Revenue Memorandum Circular No. 11-87 March 18, 1987 REVENUE MEMORANDUM CIRCULAR NO. 11-87 Subject : Loss and cancellation of four (4) sets of Certificate Authorizing Registration of Untaxed Capital Gains on Real Estate Transactions (BIR Form No. 1954A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of four (4) sets of Certificate Authorizing Registration of Untaxed Capital Gains on Real Estate Transactions, to wit: cd ---------------------------Serial Number : Quantity ---------------------------147993-147996 : four (4) sets ---------------------------The above certificates which were reported missing by Ms. Loida C. Enriquez, Revenue Clerk, Revenue District No. 35-A, Marikina, Revenue Region No. 4-B, Quezon City, are hereby cancelled and all official transactions involving the use of the abovementioned certificates are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-18-87 Revenue Memorandum Circular No. 12-87 March 18, 1987 REVENUE MEMORANDUM CIRCULAR NO. 12-87 Subject : Loss and cancellation of seven (7) sets of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions (BIR Form No. 1954). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of seven (7) sets of Certificate Authorizing Registration of Taxable Capital Gains on Real Estate Transactions, to wit: aisa dc ----------------------------

Serial Number : Quantity ---------------------------333622-333628 : seven (7) sets ---------------------------The above certificates which were reported missing by Ms. Loida C. Enriquez, Revenue Clerk, Revenue District No. 35-A, Marikina, Revenue Region No. 4-B, Quezon City, are hereby cancelled and all official transactions involving the use of the abovementioned certificates are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-06-87 Revenue Memorandum Circular No. 13-87 April 6, 1987 REVENUE MEMORANDUM CIRCULAR NO. 13-87 Subject : Supplementary Revenue Memorandum Circular to Revenue Memorandum Circular No. 33-86, Publishing Questions and Answers to Documentary Stamp Tax. To : All Internal Revenue Officers and Others Concerned. The following are questions and answers which were discussed in a series of conferences between the BIR Committee on Banks and representatives of the Banker's Association of the Philippines (BAP), the Philippine Association of Finance Companies, Inc. (PAFCI), the Investment Houses Association of the Philippines (IHAP), and the Central Bank of the Philippines. Question 1. - Are documents of conveyance where the primary underlying instrument are those defined under Section 229 subject to DST? If so, at what rate? And who is liable? cdasia Ans. - A) Per NIRC Section 225 (now renumbered 189), DST shall be affixed "on all sales or agreement to sell or transfer of bonds, due bills, certificates of obligations or shares of stock in any association, company, or corporation." Based on this, all documents of conveyances covering instruments stipulated in NIRC Section 223 (now renumbered 187) and Section 224 (now renumbered 188) shall be subject to DST. Since NIRC Section 225 (now renumbered 189) applies only to documents of conveyances covering instruments stated in NIRC Sections 223 and 224, it follows that documents of conveyance covering instruments stated in NIRC Section 229 are not subject to DST. B) Said documents of conveyances shall be subject to P0.50 per P200.00 or fractional part thereof of the par/face value. C) Per NIRC Section 222 (now renumbered 186), the person making, signing, issuing, accepting or transferring the documents or instruments stated in NIRC Section

223 and 224 shall be responsible for the DST. Provided, That whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party who is not exempt shall be the one directly liable for the tax. Question 2: Are deposit substitutes, as defined by Central Bank Circulars/ MAABs and existing Presidential Decrees, subject to DST under NIRC Section 223 (now renumbered 187)? acd Ans. - No. Section 223 (now renumbered 187) covers only capital or quasi-capital instruments such as "bonds, debentures, and certificates of indebtedness issued by any association, company or corporation." However, deposit substitutes, as defined by Central Bank Circular/ MAABs and existing Presidential Decrees, are covered under NIRC Section 229 (now renumbered 193) and as such is subject to a DST of P0.20 per every P200.00 or fractional part thereof, of the face value. All Internal Revenue Officials and Others Concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-06-87 Revenue Memorandum Circular No. 14-87 April 6, 1987 REVENUE MEMORANDUM CIRCULAR NO. 14-87 Subject : Loss of two (2) pads of Revenue Official Receipts (BIR Form No. 25.24) bearing inclusive serial numbers 0197501 H - 0197550 and 0198001 H - 0198050 H. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) pads of Revenue Official Receipts (BIR Form No. 25.24) to wit: casia ---------------------------Serial Number : Quantity ---------------------------0197501 H - 0197550 H : One (1) pad 0198001 H - 0198050 H : One (1) pad ---------------------------The above revenue official receipts which were reported lost by Mr. Hadji San M. Amilhasan, Revenue Attache, Philippine Embassy, Riyadh, Kingdom of Saudi Arabia, have been cancelled and all official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-01-87 Revenue Memorandum Circular No. 15-87 April 1, 1987 REVENUE MEMORANDUM CIRCULAR NO. 15-87 Subject : Tax treatment of subsistence, clothing and quarters allowances paid to the personnel of the Armed Forces of the Philippines (AFP). To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the letterruling dated April 19, 1982 of the Commissioner of Internal Revenue to the Chief of Staff, Armed Forces of the Philippines, Camp General Emilio Aguinaldo, Quezon City holding that AFP quarters, clothing and subsistence allowances are exempt from income tax and should, therefore, be excluded in the determination of their gross income defined under Section 29 of the Tax Code as amended by Executive Order No. 37: "19 April 1982 "The Chief of Staff Armed Forces of the Phil. Camp General Emilio Aguinaldo Quezon City Sir: "This refers to your letter dated 5 April 1982, requesting information whether the subsistence, clothing, quarters and other allowances paid to the personnel of the Armed Forces of the Philippines (AFP) may be excluded in the computation of gross income subject to withholding tax, pursuant to Batas Pambansa Blg. 135, otherwise known as the Modified Gross Taxation system. cda "It is represented that "The special provision in the yearly appropriation of the AFP fix and authorize the payment of subsistence, clothing quarters and other allowances to AFP personnel, the value of which varies of each grade or rank. These allowances are intended to be given or furnished in kind for obvious reason, but in view of the lack of messing, quartering and other facilities obtaining throughout the headquarters, bases, camps or stations where military personnel are assigned, the money value of these allowances are given them in cash." "In reply, please be informed that since the said allowances for subsistence, clothing and quarters are being incurred for the convenience of the Armed Forces of the Philippines, the same are, therefore, exempted from income tax, hence, also exempted from withholding tax, pursuant Section 2(A) (2) (a) of Revenue Regulations No. 20-81, dated December 16, 1981: ". . . If, however, living quarters or meals are furnished to an employee for the convenience of the employer, the value thereof need not be included as wages subject to withholding. . . ." EMPHASIS SUPPLIED "The above rule applies notwithstanding that the said allowances are paid in cash or commuted since under the circumstances of AFP personnel, the same do not constitute income, hence, may not be subjected to income tax. Thus, in the case of JONES vs. UNITED STATES, 1925, 60 Ct. Cl. 552, cited in Cases on the Law of Taxation by John MacArthur Maguire and Roswell Magill, 4th ed., par. 6, Sec. 3, pp. 872-878), the court

ruled that the $500 paid to the plaintiff (a major in the U.S. Army) as commutation of quarters (there being no government quarters available at his new station in Washington, D.C.) was not income. Consequently, said allowance cannot be subjected to income tax: cd ". . . We have said that we do not believe the allowance of quarters or commutation thereof to an officer of the Army is income. . . . We are quite firmly convinced that, not only are they not allowance of a compensatory character, but they are not income as well. . . . Therefore, it seems to us that military quarters for both the enlisted men and officers of the Army are no more than an integral part of the organization itself. Quarters are expected to be furnished by the government to its officers; when it cannot thus furnish, it allows them to be obtained otherwise and pays a monetary compensation therefore called commutation. . . ." "However, please be informed that this opinion is restricted only to AFP quarters, clothing and subsistence allowances. Since the Office did not qualify the nature and kind of the other allowances referred to in the query, this Office is not, therefore, in a position to render an opinion in connection therewith." Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner" A-Aio It is desired that this Circular be given as wide a publicity as possible. (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-27-87 Revenue Memorandum Circular No. 16-87 March 27, 1987 REVENUE MEMORANDUM CIRCULAR NO. 16-87 Subject : Loss of fourteen (14) sets of Payment Orders (BIR Form RC-8202-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of fourteen (14) sets of Revenue Payment Order, to wit: aisa dc ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------8317487 - 8317500 : Fourteen (14) Sets ---------------------------The above receipts which were reported missing by Mr. Hector San Juan, Revenue Collection Agent of Marikina, Rizal, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary

steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-24-87 Revenue Memorandum Circular No. 17-87 April 24, 1987 REVENUE MEMORANDUM CIRCULAR NO. 17-87 Subject : Loss of Eighty One (81) Booklets of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of eighty one (81) booklets of Revenue Payment Orders, to wit: acd ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------3858676 - 3858750 : Three (3) Booklets 5122501 - 5123075 : Twenty Three (23) Booklets 5123201 - 5123325 : Five (5) Booklets 5531251 - 5532500 : Fifty (50) Booklets ---------------------------The above receipts which were reported missing by Ms. Teresita G. Clamor, Revenue Coordinator, RDO No. 32-A West Makati, Metro Manila, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-14-87 Revenue Memorandum Circular No. 18-87 April 14, 1987 REVENUE MEMORANDUM CIRCULAR NO. 18-87 Subject : Liability to the Excise taxes of Articles given as complimentary or give-away items To : All Internal Revenue Officers and Others Concerned. Section 110(a) of the National Internal Revenue Code, provides: "Sec. 110. Payment of excise taxes on domestic products. - (a) Persons liable; time for payment. - Unless otherwise especially allowed, excise taxes on domestic products shall be paid by the manufacturer or producer before removal from the place of production: Provided, however, That excise tax on locally manufactured petroleum

products levied under Section 128 of this Title shall be paid within fifteen (15) days from the date of removal thereof from the place of production. Should domestic products be removed from the place of production without the payment of the tax, the owner or person having possession thereof shall be liable for the tax due thereon." cd i Under the above-quoted provision, excise taxes on domestic products except petroleum products, are due and payable before removal from the place of production. In other words, such removal is necessary in order that the tax may accrue. And it is not necessary for the tax to accrue that said products be sold upon removal. It is for this reason that cigars and cigarettes actually consumed within the premises of the factory by its workers and employees are not subject to excise taxes because they are not yet removed from the place of production at the time they were consumed. (See Revenue Regulations No. 1586) Accordingly, articles taxable under Title IV of the Tax Code which are removed from the place of production and given as complimentary or give-away items are subject to excise tax. All rulings already issued which are inconsistent herewith are hereby revoked. Henceforth, the same may not be cited as a precedent in securing exemption from the payment of the excise taxes or in securing claim for refund or tax credit in case said taxes have been paid. cda All concerned are enjoined to give this Circular as wide a publicity as possible. BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue By: (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-15-87 Revenue Memorandum Circular No. 19-87 May 15, 1987 May 15, 1987 REVENUE MEMORANDUM CIRCULAR NO. 19-87 Subject : Issuance of New Serially-Numbered Documentary Strip Stamps of various denominations designed and printed by the Central Bank Security Printing Plant. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, announcement is hereby made that starting June 1, 1987, the Accountable Forms Division of this Bureau will issue the new serially-numbered documentary strip stamps of various denominations designed and printed by the Central Bank Security Printing Plant to replace the existing unnumbered documentary strip stamps which may still be used until June 30, 1987 after which they shall be rendered obsolete. aisa dc Hereunder is the general description of the serially-numbered documentary strip stamps: Size: 23 mm x 43 mm (cutting guide)

Design: Border inscribed with letters "RENTAS INTERNAS", vanishing spherical lines as background and the seal of the Republic of the Philippines at the center with price inscriptions on both sides cdtai Color Scheme by Denomination: Denomination Color Scheme P0.20 Orange 0.30 Purple 0.50 Rubine red 1.00 Brown 2.00 Process blue 3.00 Dark blue 5.00 Green This Circular shall take effect immediately and shall be given the widest publicity possible. (Sgd.) EUFRACIO D. SANTOS Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-13-87 Revenue Memorandum Circular No. 20-87 May 13, 1987 REVENUE MEMORANDUM CIRCULAR NO. 20-87 Subject : Effect of availment of compromise under Executive Order No. 44 by paying 30% of basic self-assessed tax per return. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder an excerpt of the memorandum of the Chief, Law Division dated April 7, 1987 duly approved by the Commissioner of Internal Revenue to the effect that proper availment of Executive Order No. 44 by the estates will entitle them to certain benefits such as, immunity from further investigations/examinations and relief from further estate tax liability for the period covered by the availment. acd "April 7, 1987 "MEMORANDUM FOR: The Commissioner xxx xxx xxx "Briefly, the above mentioned tax cases involve the transmissions of property occasioned by death for which estate tax returns were filed only after the promulgation of Executive Order No. 44 or beyond the period prescribed by law; and that said estates availed of the benefits of Executive Order No. 44 by paying 30% of their basic self-assessed tax per return. "The rationale behind the promulgation of Executive Order No. 44 is indicated in the "whereas clause" thereof stating: "Whereas, there is a need to clear this backlog of pending cases of disputed assessments and delinquent accounts.

"Whereas, there is a further need to raise revenues." "Pursuant to Executive Order No. 44, the Commissioner of Internal Revenue or his duly authorized representatives shall accept compromise payments by the taxpayers with outstanding delinquent accounts and disputed assessments pending as of December 31, 1985. (Underscoring supplied) cdt "It is significant to note that the phrase "delinquent accounts" has been given a specific meaning under Revenue Regulations No. 17-86 as embracing taxpayers who failed to pay their taxes on or before December 31, 1985 arising from a self-assessed tax, whether or not a tax return was filed. It is our opinion that the adverted estate tax cases of the late Amador Casas, et al., fall within the purview of the said definition; therefore, their availment of the compromise under Executive Order No. 44 is legal and proper. Where the compromise conforms with the requirements of the law; it closes the case pursuant to RMO No. 39-86 and as a consequence thereof, the taxpayer is relieved from further investigation, examinations or assessments. Such relief is not only implicit, it is inherent from the nature of the compromise agreement which is an arrangement for settling a dispute upon what appears to be equitable terms. In the compromise settlement of taxes, the Government stoops down to the level of the individual and in return for the payment and/or administrative convenience gained, it waives further examination, investigation or assessment. It acquires the character of a contract between the Government and the taxpayer which is protected by the guarantee of the non-impairment clause of the constitution (Art. III, Sec. 10, 1987 Constitution of the Philippines)". Respectfully Submitted: (SGD.) ALICIA P. CLEMENO Chief, Law Division CONCUR. (SGD.) JAIME M. MAZA Revenue Service Chief (Legal Office) APPROVED: (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Encl.: a/s The foregoing benefits apply not only to estate taxes but also to other internal revenue taxes, which are the subject of availment of Executive Order No. 44 by paying 30% of the basic self-assessed tax per return filed with this Office. casia It is desired that this Circular be given as wide a publicity as possible. (Sgd.) Eufracio D. Santos Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

05-04-87 Revenue Memorandum Circular No. 21-87 May 4, 1987 REVENUE MEMORANDUM CIRCULAR NO. 21-87 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: acd -----------------------SERIAL NUMBER : QUANTITY -----------------------11408657 : one (1) set -----------------------The above receipt which was reported missing by the Accredited Bank to this office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR. Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-29-87 Revenue Memorandum Circular No. 22-87 April 29, 1987 REVENUE MEMORANDUM CIRCULAR NO. 22-87 Subject : Loss of Fifty Two (52) Sets of Confirmation Receipts (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of fifty two (52) sets of Confirmation Receipts, to wit: cd i --------------------------SERIAL NUMBERS : QUANTITY --------------------------11358789 - 11358800 : Twelve (12) Sets 11358901 - 11358925 : Twenty Five (25) Sets 11358961 - 11358975 : Fifteen (15) Sets --------------------------The above receipts which were reported missing by the Accredited Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR.

Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-04-87 Revenue Memorandum Circular No. 23-87 June 4, 1987 REVENUE MEMORANDUM CIRCULAR NO. 23-87 Subject : Loss of One (1) pad of Revenue Official Receipts (BIR Form No. 25.24) bearing inclusive Serial Numbers 1654401-H to 1654450-H. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24) to wit: cd -----------------------Serial Number : Quantity -----------------------1654401-H to 1654450-H : One (1) pad -----------------------The above revenue official receipts which were reported lost at the Government Printing Office, are hereby cancelled and all official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees, and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-08-87 Revenue Memorandum Circular No. 24-87 June 8, 1987 REVENUE MEMORANDUM CIRCULAR NO. 24-87 Subject : Loss of 3 pads of Revenue Official Receipts (BIR Form No. 25.24) bearing Serial Nos. 8003951 - 8004000 and 8089901 - 8090000 To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of revenue official receipts, to wit: aisa dc Inclusive Serial Number Quantity 8003951 - 8004000 1 booklet 8089901 - 8090000 2 booklets The above booklets of revenue official receipts which were reported as missing while in the possession of Mr. Modesto Icasiano retired, Revenue Attache of Seattle, Washington are hereby cancelled and all official transactions involving the use of the abovementioned revenue official receipts are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned copies of receipts are found, taking

the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-08-87 Revenue Memorandum Circular No. 25-87 May 8, 1987 REVENUE MEMORANDUM CIRCULAR NO. 25-87 Subject : Loss of Twelve (12) Sets of Confirmation Receipts (BIR Form CB 82-02-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of twelve (12) sets of Confirmation Receipts, to wit: cd i ---------------------------SERIAL NUMBER : QUANTITY ---------------------------8111936 : one (1) set 8111940 - 8111950 : eleven (11) sets ---------------------------The above receipts which were reported missing by the Accredited Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-16-87 Revenue Memorandum Circular No. 26-87 June 16, 1987 June 16, 1987 REVENUE MEMORANDUM CIRCULAR NO. 26-87 Subject : Extending the use of unnumbered documentary strip stamps up to September 30, 1987 after which they shall be rendered obsolete. To : All Internal Revenue Officers and Others Concerned. In view of the large stock of documentary strip stamps still in the hands of revenue accountable officers, the use of unnumbered documentary strips stamps is hereby extended up to September 30, 1987 after which they shall be rendered obsolete. The Chief, Accountable Forms Division, all Chiefs of Administrative Branches, Revenue Collection Supervisors, and Revenue Collection Agents are hereby directed to exhaust all efforts to issue the remaining stocks of the unnumbered documentary strip stamps in their possession before issuing the new serially numbered documentary strip stamps. cdt

This Circular amends Revenue Memorandum Circular No. 19-87 dated May 15, 1987 and shall take effect immediately. All concerned are enjoined to give this Circular the widest publicity as possible. casia (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-18-87 Revenue Memorandum Circular No. 27-87 June 18, 1987 REVENUE MEMORANDUM CIRCULAR NO. 27-87 Subject : Loss and cancellation of eight (8) sets of Certificates Authorizing Registration of Taxable Capital Gains on Real Estate Transactions (BIR Form No. 1954). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of eight (8) sets of Certificates Authorizing Registration of Taxable Capital Gains on Real Estate Transactions, to wit: acd -----------------------Serial Number : Quantity -----------------------354858-354865 : Eight (8) sets -----------------------The above certificates which were reported missing by Ms. Victoria P. Banawa, Revenue Clerk, Revenue District No. 38, Batangas City, Revenue Region No. 4-C, San Pablo City, have been cancelled and all official transactions involving the use of the abovementioned certificates are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the said certificates are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-23-87 Revenue Memorandum Circular No. 28-87 June 23, 1987 REVENUE MEMORANDUM CIRCULAR NO. 28-87 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: aisa dc ---------------------SERIAL NUMBER : QUANTITY ---------------------11191446 - 11191447 : two (2) sets

---------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the used of said forms are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-09-87 Revenue Memorandum Circular No. 29-87 July 9, 1987 REVENUE MEMORANDUM CIRCULAR NO. 29-87 Subject : Loss of thirty eight (38) unused sets of Auxiliary Invoices (BIR Form No. 14.04) bearing inclusive serial numbers 794003-794040. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Auxiliary Invoices (BIR Form No. 14.04), to wit: casia -----------------------------Inclusive Serial Number : Quantity -----------------------------794003-794040 : Thirty eight (38) unused sets -----------------------------The above invoices which were reported lost by Mr. Margarito Calendacion, Sr., authorized representative of the Natural Resources Development Corporation, are hereby cancelled and all official transactions involving the use of said forms are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the abovementioned invoices are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-10-87 Revenue Memorandum Circular No. 30-87 July 10, 1987 July 10, 1987 REVENUE MEMORANDUM CIRCULAR NO. 30-87 Subject : Publishing Executive Order No. 195 dated June 17, 1987. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Executive Order No. 195: cdt "MALACAANG

Manila EXECUTIVE ORDER NO. 195 AMENDING PARAGRAPH (b) OF SECTION 128 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, BY REVISING THE EXCISE TAX RATES OF CERTAIN PETROLEUM PRODUCTS. WHEREAS, the upward trend in the world prices of crude oil has made it necessary to adjust the prices of domestic petroleum products; WHEREAS, in the adjustment of oil prices, it is likewise necessary to restructure the excise tax components thereof in order to cushion the impact of increased prices of petroleum products on the economy; and WHEREAS, in restructuring the excise tax components of certain petroleum products, it becomes imperative to adopt the pure ad valorem tax scheme in order to provide for a built-in flexibility to price changes and obviate frequent revisions of tax rates as a result of fluctuations in crude oil prices. NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order that: Sec. 1. Paragraph (b) of Section 128 of the National Internal Revenue Code, as amended, is hereby amended to read as follows: cd "Par. (b) - For products subject to ad valorem tax only: PRODUCT AD VALOREM TAX RATE 1. Naphtha, gasoline and other similar products of distillation 48% 2. Aviation turbo jet fuel48% 3. Thinners and solvents 48% 4. Fuel oil, commercially known as bunker fuel and on similar fuel oils having more or less the same generating power 0% 5. Fuel oil, commercially known as diesel fuel oil, and on similar fuel oils having more or less the same generating power 24% 6. Kerosene 24% 7. Liquified petroleum gas 24% 8. Asphalts 24% "The ad valorem tax imposed in this paragraph shall be based on the company take or netback on the product as approved by the Energy Regulatory Board including the said ad valorem tax." cdtai Sec. 2. All orders, issuances, rules and regulations or any part thereof which are inconsistent with the provisions of this Executive Order are hereby repealed or modified accordingly. Sec. 3. This Executive Order shall take effect immediately.

Done in the City of Manila, this 17th day of June, in the year of Our Lord, nineteen hundred and eighty-seven. (Sgd.) CORAZON C. AQUINO President of the Philippines By the President: (Sgd.) JOKER P. ARROYO Executive Secretary" Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-01-87 Revenue Memorandum Circular No. 31-87 July 1, 1987 REVENUE MEMORANDUM CIRCULAR NO. 31-87 Subject : Loss of One Hundred Twenty Five (125) Sets of Confirmation Receipts (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one hundred twenty five (125) sets of Confirmation Receipts, to wit: cd i --------------------------SERIAL NUMBERS : QUANTITY --------------------------9116076 - 9116100 : 25 sets 9116226 - 9116250 : 25 sets 11076001 - 11076075 : 75 sets --------------------------The above receipts which were reported missing by the Accredited Banks to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-15-87 Revenue Memorandum Circular No. 32-87 July 15, 1987 July 15, 1987 REVENUE MEMORANDUM CIRCULAR NO. 32-87 Subject : Publishing the provisions of EXECUTIVE ORDER NO. 194 dated June 16, 1987 amending Section 203 and 229 of the National Internal Revenue Code as amended, with respect to the documentary stamp tax and the tax on winnings on Horse Races. To : All Internal Revenue Officers and Others Concerned.

For the information and guidance of all concerned, the pertinent provisions of Executive Order No. 194 are hereunder quoted: Sec. 2. Stamp tax on horse race tickets. - On each horse race ticket, there shall be collected a documentary stamp tax of ten (P0.10) centavos; Provided, That if the cost of the ticket exceeds one (P1.00) peso, an additional tax of ten (P0.10) centavos on every one (P1.00) peso or fractional part thereof shall be collected: Provided, further, That in the case of double, forecast/quinella and trifecta bets, the tax shall be five (P0.05) centavos on every one (P1.00) peso worth of ticket. Sec. 3. Tax on Winning. - Every person who wins in horse races shall pay a tax equivalent to ten (10%) per cent of his winnings or "dividends", the tax to be based on the actual amount paid to him for every winning ticket after deducting the cost of the ticket: Provided, That in the case of winnings from double, forecast/quinella and trifecta bets, the tax shall be four (4%) per cent. In the case of owners of winning race horses, the tax shall be ten (10%) per cent of the prizes. casia The tax herein prescribed shall be deducted from the "dividends" corresponding to each winning ticket or the "prize" of each winning ticket or the "prize" of each winning race horse owner and withheld by the operator, manager, or person in-charge of the horse races before paying the dividends or prizes to the persons entitled thereto. The operator, manager, or person in-charge of horse races shall, within twenty (20) days from the date the tax was deducted and withheld in accordance with the second paragraph hereof, file a true and correct return with the Commissioner of the Bureau of Internal Revenue in the manner or form to be prescribed by the Secretary of Finance, and pay within the same period the total amount of tax so deducted and withheld. Sec. 4. The taxes herein prescribed shall be subject to review by the Secretary of Finance after eighteen (18) months from the date of effectivity and implementation of this Executive Order. If, after review, the level of government revenue from horse racing is equal to or higher than that corresponding to the eighteen (18) months immediately preceding the effectivity of this Executive Order, the tax structure for horse racing herein prescribed shall become permanent; otherwise, the taxes imposed under the National Internal Revenue Code, as amended, and the distribution of gross receipts from the sale of betting tickets in horse races under Republic Act Nos. 6631 and 6632 shall be automatically restored. Sec. 5. The Secretary of Finance shall promulgate the necessary rules and regulations to implement this Executive Order. cdasia Sec. 6. Subject to the provisions of Section 4 hereof, Sections 203 and 229 of the National Internal Revenue Code, as amended; and all laws, orders, issuances, and rules and regulations or parts thereof inconsistent with this Executive Order are hereby repealed or modified accordingly. Sec. 7. This Executive Order shall take effect immediately. Done in the City of Manila, this 16th day of June, in the year of Our Lord, nineteen hundred and eighty-seven. (Sgd.) CORAZON C. AQUINO President of the Philippines By the President: (Sgd.) JOKER P. ARROYO

Executive Secretary SALIENT FEATURES: 1. In the imposition of the amount of documentary stamp tax on the horse race ticket, the Executive Order now classifies the class of the bets and prescribed two (2) rates. In the case of double, forecast/quinella and trifecta bets, the documentary stamp tax shall only be five (P0.05) centavos on every one (P1.00) peso worth of ticket. All other class of bets shall be subjected to ten (P0.10) centavos for each ticket and an additional (P0.10) centavos for every one (P1.00) peso or fractional part thereof if the ticket exceeds one peso. 2. In the imposition of the rate of tax on winnings, the Executive Order now classifies the class of the winning bets and prescribing two (2) rates of tax. In the case of winning from double, forecast/quinella and trifecta bets, the tax on the winnings shall only be four (4%) per centum. Winnings on all other bets including the prize on the winning horses is subject to ten (10%) per centum. cdtai It shall be noted also, that the winnings in horse races regardless of the class of the bet is also subject to the 20% final (income) withholding tax prescribed under Sec. 21 (c) (1) in relation to Section 51 of the Tax Code, as amended by Executive Order No. 37 dated November, 1985. Henceforth, the operator, manager or the person in-charge of the horse races shall also withhold the 20% final income tax on the winnings and remit to the BIR in accordance with Revenue Regulations No. 1-82 as amended. cdtai The foregoing amendments is made effective on June 16, 1987. All internal revenue officers and others concerned are hereby enjoined to give this Memorandum Circular a wide publicity as possible. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-87 Revenue Memorandum Circular No. 33-87 July 24, 1987 REVENUE MEMORANDUM CIRCULAR NO. 33-87 Subject : Publishing Questions and Answers in the Interpretation of Revenue Memorandum Order No. 14-87 To : All Internal Revenue Officers and Others Concerned. The following are the questions and answers in the interpretation of the provisions of Revenue Memorandum Order No. 14-87. Question 1 - Are the fish and prawns in the ponds considered stock in trade to be qualified to avail of RMO 14-87? Answer 1 - Yes, if it is an integral factor in the determination of income. Question 2 - Can a taxpayer avail of the privilege of last priority in audit under RMO 1487 if he has mixed income consisting of 70% service income and only 30% buy-and-sell income where inventory is involved? cdtai

Answer 2 - Yes, if inventory is a factor in the determination of income and the increase in value of the inventory is at least P100,000. However, the privilege of last priority in audit or investigation shall apply only to his trading activity. Question 3 - What is the basis of the increase in value of the inventory of the qualifying P100,000 - as of December 31, 1986 only or also as of June 30, 1987? Answer 3 - P100,000 increase in the value of inventory as of December 31, 1986. Question 4 - What is the treatment for corporations on the fiscal year basis with respect to period of availment? Answer 4 - Only corporations of fiscal year basis up to March 30, 1987 may avail of RMO 14-87. Question 5 - May a corporation which reported a loss in 1986 avail of RMO 14-87 by reporting an increase of inventory of P100,000 and pay 13.5% and the corresponding sales tax? Answer 5 - Yes, because the additional income tax to be paid at 13.5% and the corresponding sales tax are based on the increase in the value of the inventory. Question 6 - May cottage and handicraft producers who enjoy certain exemptions from sales taxes avail of RMO 14-87 by just submitting the sworn statement of their actual inventory and pay the corresponding 13.5% additional income tax without paying any sales taxes? Answer 6 - Cottage and handicraft producers are now subject to tax. Therefore, they have to pay the 13.5% income tax based on the increase of the value of their inventory and the appropriate sales tax. Question 7 - May sellers of agricultural products who enjoy sales tax exemption avail of RMO 14-87 by just submitting the sworn statement of their actual inventory and pay the corresponding 13.5% additional income tax without paying any sales taxes? Answer 7 - Dealers of agricultural products in their original state may avail of the last priority privilege by paying the 13.5% additional income tax and the graduated annual fixed tax based on their gross sales in 1986 plus the increase in the inventory. Question 8 - An individual has three (3) kinds of business - manufacturer, retailer and importer. Is the minimum of P100,000 increase attributed to three (3) kinds of inventory or to each kind of inventory per kind of business? Answer 8 - RMO 14-87 contemplates an increase of inventory of at least P100,000 for the year 1986 without regard to the kind of business. Question 9 - A general merchandise businessman is asking if he may submit a sworn statement of actual inventory as of December 31, 1986 with the option of not reporting the inventory as of June 30, 1987. Answer 9 - The submission of the sworn statement of inventories as of December 31, 1986 is mandatory. If the additional inventory remains unsold as of June 30, 1987, the filing of the inventory as of said date may be dispensed with. Question 10 - Could the adjusted inventory as of December 31, 1986 be in lump sum? Or at least itemized in categories or lots, but, not down to the last single item? Answer 10 - Yes, by lots if the articles are of small value and of the same general description and classification as to essential, ordinary, etc. Question 11 - Does sworn statement of actual inventory require classification as to locally purchased and imported and the corresponding sales tax? cdtai

Answer 11 - The sworn statement of actual inventory should contain a brief description of the articles and the classification whether locally purchased or imported. Question 12 - What is the basis of the additional sales tax for the amended sales tax returns? Answer 12 - The increase in the value of the ending inventory in the calendar year 1986 or fiscal year ending up to March 31, 1987 shall be the basis. Question 13 - Should retailers of PX goods pay 1.5% sales tax for their increase in inventories together with the 13.5% income tax? Answer 13 - Retailers of PX goods should pay the appropriate advance sales tax because these inventories are deemed imported. Question 14 - A retailer of watches and jewelries is asking whether he could pay 1.5% sales tax, because he is definitely not an importer of such luxurious items. Answer 14 - Retailers of articles of foreign origin are required to pay the appropriate advance sales tax, as the articles are deemed untaxed imported goods. Question 15 - Does the amended income tax return require amended financial statements (also audited) to be attached? Or the BIR will just require the taxpayers, as in previous "amnesties" to fill up a special BIR form? Answer 15 - The amended financial statement to be attached to the income tax returns need not be audited. Question 16 - Taxpayer will disclose his unreported inventory (increase) under RMO 1487 at the same time an unreported income not related to the inventory. At what rate should the undeclared income be taxed? Answer 16 - RMO 14-87 contemplates only of increase of inventory, which is either considered unexplained capital or undeclared income. If there is unreported income other than from an increase in inventory, such unreported income is subject to the regular rates of tax and the taxpayer cannot avail himself of the last priority in audit. Question 17 - A partnership firm of 3 partners which registered an increased inventory of 3 million pesos and paid the sales tax and 13.5% additional income tax, accordingly the three million pesos were divided to the three partners, each with P1M, if they were required to pay the 10% dividend tax, would this constitute double taxation? aisa dc Answer 17 - Should the general partnership avail of this last priority, the partners shall be subject to the 15% dividend tax to the extent of their share of the partnership profit whether distributed or not. Question 18 - Can the taxpayer file another adjusted inventory after he has availed of RMO 14-87? Answer 18 - A taxpayer may amend or modify his returns, statement or declaration at any time within the period up to August 14, 1987. Question 19 - A jewelry store who had already paid his compromise sales tax of P6,000 for 1986 wishes to avail of RMO 14-87 by increasing his inventory by P100,000 and pay the corresponding 13.5% additional income tax. The question is whether the compromise sales tax of P6,000 could be credited or deducted from the taxes under RMO 14-87? Answer 19 - No. Because the amended sales tax returns and the sales taxes to be paid accordingly are based on the increase in the value of the inventory and does not consider tax credit of tax previously paid.

Question 20 - A corporation availed of RMO 14-87 by increasing its inventory by P1M and paid the 13.5% additional income tax of P135,000. Is the increase of capital of P865,000, (P1M minus 135,000 = P865,000) considered tax paid. Answer 20. - Yes, provided he pays also the appropriate sales tax. Question 21 - Why should the sales tax be paid (increase in inventory) when the item is not yet sold? cd i Answer 21 - The increase in inventory for sales tax return purposes is considered as a voluntary declaration of untaxed goods. Question 22 - At what stage of the investigation or inventory taking will the filing of a letter manifesting willingness to avail of the last priority in audit suspend such investigation or inventory taking? Answer 22 - Up to the stage where there are no findings yet of a tax liability. Question 23 - How are you going to consider the case of a taxpayer who has a mixed income, for example, a producer and a contractor who files a consolidated income tax return, are you going to examine him for his contractor income and his producer income only the last priority? Answer 23 - The last priority in audit applies only to taxpayers where inventory is an integral factor in the determination of income. If the audit can be separated, then last priority in audit should be accorded only on the records of the particular taxpayer as it affects the operational income as a producer. Question 24 - Will the payment of 1.5% subsequent sales tax be credited against any sales tax liability that may arise from any subsequent amended sales tax returns? Answer 24 - No, because under existing laws the payment of the 1.5% subsequent sales tax cannot be the subject of a tax credit. Question 25 - Please explain why last priority audit does not apply to cases of refund or tax credit. Answer 25 - Last priority in audit and investigation cannot apply to taxpayers requesting for refund or credit because verification of records is a must in determining whether refund can be given or not. cda Question 26 - May payment under RMO 14-87 be effected through a tax credit certificate? Answer 26 - Payment under RMO 14-87 cannot be effected thru a tax credit certificate but only thru cash payment. Question 27 - A taxpayer who avails of RMO 14-87 (increase in inventory - classified as ordinary article of P100,000) will pay the following: Amended ITR - 13.5% x P100,000 P13,500 Amended STR - 20% x P100,000 20,000 P33,500 Is this correct? Answer 27 - The illustrative computation is correct. In addition, the additional inventory shall be subject to the regular income and sales tax rates in 1987. If unsold as of June 30, 1987, no income or sales tax shall accrue. cdtai Question 28 - How may a taxpayer avail of the last priority in audit and investigation under RMO 14-87? Answer 28 - A taxpayer may avail of the last priority in audit and investigation by attaching to the sworn statement of inventory and amended returns a covering letter.

All Internal Revenue Officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity as possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-20-87 Revenue Memorandum Circular No. 34-87 July 20, 1987 REVENUE MEMORANDUM CIRCULAR NO. 34-87 Subject : Loss of one (1) booklet of Revenue Official Receipts (BIR Form No. 25.24) bearing inclusive serial nos. 0606351 H - 0606400 H. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) unused booklet of Revenue Official Receipts (BIR Form No. 25.24), to wit: cdt Inclusive Serial Numbers Quantity 0606351 H - 0606400 H One (1) booklet The above revenue official receipts which were reported as missing while in the possession of Ms. ESTER L. VENTURA, Revenue Collection Agent of Talugtug, Nueva Ecija, are hereby cancelled and all official transactions involving the use of said receipts are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-22-87 Revenue Memorandum Circular No. 35-87 July 22, 1987 REVENUE MEMORANDUM CIRCULAR NO. 35-87 Subject : Loss of two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: cda ------------------------SERIAL NUMBERS : QUANTITY ------------------------12301058 - 12301059 : two (2) sets ------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdt

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-21-87 Revenue Memorandum Circular No. 36-87 July 21, 1987 REVENUE MEMORANDUM CIRCULAR NO. 36-87 Subject : Loss of two (2) sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: cdtai ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------11939421 : one (1) set 10012175 : one (1) set ---------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-21-87 Revenue Memorandum Circular No. 37-87 August 21, 1987 REVENUE MEMORANDUM CIRCULAR NO. 37-87 Subject : Missing Original Copy of Authority to Cancel Assessment (BIR Form No. 17.58) bearing serial number 532551. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing copy of Authority to Cancel Assessment, to wit: acd Serial Number Quantity 532551 One (1) Copy (Original) The above copy was found missing by the Auditor's Office, Revenue Region No. 4-C, San Pablo City, during the inspection conducted by that Office. The entire set bearing the above serial number has been cancelled and all official transactions involving the use of the said set is therefore invalidated. cd

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-27-87 Revenue Memorandum Circular No. 38-87 August 27, 1987 REVENUE MEMORANDUM CIRCULAR NO. 38-87 Subject : Registration of Value-Added Taxpayers To : All Internal Revenue Officers and others concerned. This Revenue Memorandum Circular is designed to provide information and guidelines on how to comply with the VAT registration requirements, as required under Executive Order No. 273. A. REGISTRATION COMPLIANCE REQUIREMENTS 1. WHO SHALL REGISTER a. Mandatory - Every person who, in the course of trade or business, sells goods or renders services subject to the value-added tax (VAT), is required to register as a VAT taxpayer if the amount of his aggregate gross annual sales and/or receipts exceeds P200,000. b. Optional 1) Any person whose transactions are exempt from the value-added tax under subparagraphs A-2, a), b), c), f) and w) below may, at their option, apply for registration. 2) A VAT-registered person may also register any or all of his exempt activities under subparagraphs A-2 a), b), c) and f) below. 2. WHO ARE NOT REQUIRED TO REGISTER The following persons whose transactions are either exempt from or are not covered by the value-added tax, are not required to register: cd a) Seller of non-food agricultural, marine and forest products in their original state, if he is the producer himself or the owner of land where such products are produced; b) Seller or importer of agricultural and marine food products in their original state; and livestock and poultry food products of the kind yielding or producing food for human consumption; c) Seller or importer or fertilizers, pesticides and herbicides; chemicals for the formulation of pesticides; seeds, seedlings and fingerlings; fish, animal and poultry feeds; and soya beans and fish meals; d) Seller or importer of petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to excise tax; e) Seller or importer of raw materials to be used by him in the manufacture of petroleum products (except lubricating oil and grease) subject to excise tax; f) Printer, publisher, importer or seller of books and newspaper, magazine, review or bulletin which appears at regular intervals at fixed prices and not principally devoted to advertisements;

g) Importer of passenger and/or cargo vessel of more than 10 thousand tons, whether coastwise or ocean-going, including engine and spare parts to be used by him as operator; h) Importer of personal and household effects as a returning resident or non-resident citizen coming to resettle in the Philippines; i) Importer of professional instruments and implements, wearing apparel, domestic animals and personal and household effects coming to settle in the Philippines for the first time for his own use and not for sale; j) Persons whose gross receipts are subject to percentage tax (operators or keepers of hotels, motels, etc.; caterers; common carriers; dealers in securities and lending inventors; banks and non-bank intermediaries; insurance companies; franchise holders; operators of amusement places; and persons liable for the tax on overseas dispatch, message or conversations); cdasia k) Agricultural contract growers and miller of palay into rice, corn into grit and sugarcane into raw sugar; l) Persons rendering medical, dental, hospital and veterinary services; m) Duly accredited educational institutions and government educational institutions rendering educational services; n) Artists in the sale of his works of art and similar creations or his services performed for the creation of such works; cdt o) Actors or actresses, talents, singers and emcees; radio and television broadcasters; choreographers; musical, radio, movie, television and stage directors in the performance of their services; p) Professional athletes in the performance of their services; q) Lessors of real property; r) Professionals in the performance of their profession or calling subject to occupation tax under the Local Tax Code (except customs brokers) and registered general professional partnerships; s) Employees under employer-employee relationships; t) Regional or area headquarters of multinational corporations for services rendered to affiliates, subsidiaries or branches in the Asia Pacific Region, which do not earn or derive income from the Philippines; u) Persons whose transactions are exempt under special laws or international agreements; v) Export sellers who are not VAT-registered; w) Persons whose annual sales or receipts derived from otherwise taxable transactions do not exceed P200,000. 3. WHEN TO REGISTER a. The following persons shall register on or before October 29, 1987: 1) Those whose gross sales and/or receipts for a 12-month period from September 1, 1986 to August 31, 1987 exceed P200,000. 2) Those who started business after September 1, 1986 who expect to realize gross sales and/or receipts in excess of P200,000 for any 12-month period up to December 31, 1987. aisa dc 3) Those starting business between September 1, 1987 and November 30, 1987 who expect to realize gross sales and/or receipts in excess of P200,000 for their first 12-month period.

b) Persons starting business on or after December 1, 1987, who expect their aggregate gross sales and/or receipts to exceed P200,000 for the next 12-month period shall register within thirty days before the start of their business. c) Persons who qualify for optional registration under paragraph A-1 b) hereof, may apply for registration not later than ten days before the beginning of a taxable quarter. 4. HOW/WHERE TO REGISTER The taxpayer shall accomplish in duplicate the application form for VAT Registration (BIR Form No. 2550-1) and affix his signature in the space provided therefor. The duly accomplished form shall then be filed with the proper Revenue District Officer of the city or municipality where his principal place of business is located, irrespective of whether or not there are branches in other places. 5. ASSIGNMENT OF TAXABLE PERIODS. All VAT-registered persons shall be divided into three groups to be known as groups A, B and C in accordance with the last digit of the VAT registration number. Those whose VAT registration number ends in 1, 2, 3 and 4 shall be in Group A; 5, 6 and 7, Group B; and 8, 9 and 0, Group C. The taxable quarters of the respective groups shall be as follows: cdt Group End Nos. 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. A 1, 2, 3 & 4 Jan 1-Mar 31 Apr 1-Jun 30 Jul 1-Sep 30 Oct 1-Dec 31 B 5, 6 & 7 Feb 1-Apr 30 May 1-Jul 31 Aug 1-Oct 31 Nov 1-Jan 31 C 8, 9 & 0 Mar 1-May 31 Jun 1-Aug 31 Sep 1-Nov 30 Dec 1-Feb 29/28 In the initial year (1988), however, taxpayers under category "A" will file their return and pay the tax payable on or before April 20. Those under category "B" will file their return on or before May 20 and those under category "C" will file their return on or before June 20, after which, the filing of the return will have to be made regularly within twenty days after each quarter. Illustration: "x" denotes filing date. Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Last Quarter A B X X X X X X Jan. 20, 1989 Feb. 20, 1989

C X X X March 20, 1989 B. PUBLICITY All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) BIENVENIDO A. TAN JR. Commissioner By: (Sgd.) VICTOR A. DEOFERIO JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

08-27-87 Revenue Memorandum Circular No. 39-87 August 27, 1987 REVENUE MEMORANDUM CIRCULAR NO. 39-87 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Order dated August 25, 1987. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M., August 26, 1987: cd Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas 3.5897 3.4636 (.1261) Regular Gasoline 3.2334 3.1226 (.1108) Avturbo 3.525 3.1222 (.4028) Kerosene 1.1747 1.1368 (.0379) Diesel Fuel 1.1551 1.0919 (.0632) Fuel Oil (Bunker) ------LPG* 0.8152 0.7773 (.0379) Asphalts 1.0354 0.9975 (.0379) Thinners/Solvents 3.4078 3.2970 (.1108) * P1.3906/kilograms All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdt (Sgd.) EUFRACIO D. SANTOS Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-27-87 Revenue Memorandum Circular No. 40-87 August 27, 1987 August 27, 1987 REVENUE MEMORANDUM CIRCULAR NO. 40-87 Subject : Optional Retirement With Reference to Memorandum Circular No. 33 of the Office of the President dated August 3, 1987 To : All Revenue Officials and Employees For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 33 of the Office of the President regarding the Supreme Court Decision on OP Memorandum Circular No. 133 dated October 16, 1967, an optional retirement: cd "MEMORANDUM CIRCULAR NO. 33 SUPREME COURT DECISION ON OP MEMORANDUM CIRCULAR NO. 133 DATED OCTOBER 16, 1967 "For the information of all heads of offices, both national and local, including government-owned or controlled corporations, attention is invited to the decision of the

Supreme Court in the case of Marasigan vs. Cruz, G.R. No. L40648 promulgated on May 20, 1987, affirming a decision of the Court of First Instance of Manila declaring "void and of no effect" OP Memorandum Circular No. 133 prescribing certain conditions for optional retirement under Commonwealth Act No. 186, as amended by Republic Acts No. 1616 and No. 4968, the dispositive portion of which reads as follows: "In its decision the trial court set out the perspective that is appropriate in respect of a retirement law like Commonwealth Act No. 186, as amended: 'A retirement law such as C.A. 186 and amendatory laws is in the nature of a contract between the government and its employees. When an employee joins the government service he has a right to expect that after rendering the required length of service and fulfilled the conditions stated in the laws on retirement, he would be dues prescribed therefor. It would be cruel to deny him the benefits he had been expecting at the ends of his service by imposing conditions for his retirement which are not found in the law. It is believed to be a legal duty as well as a moral obligation on the part of the government to honor its commitments to its employees when as in this case, they have met all the conditions prescribed by law and are therefore entitled to receive their retirement benefits.' "We agree with the trial court in this respect. cdtai "Accordingly, applications for optional retirement benefits under C.A. 186 as amended by R.A. 1616 and R.A. 4968 shall no longer be submitted to the Malacaang Clinic for determination of the physical incapacity of applicants. "Please be guided accordingly." By Authority of the President: (SGD.) CATALINO MACARAIG, JR. Deputy Executive Secretary Manila, August 3, 1987 EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-04-87 Revenue Memorandum Circular No. 41-87 September 4, 1987 REVENUE MEMORANDUM CIRCULAR NO. 41-87 Subject : Loss of five (5) sets of Revenue Official Receipts (BIR Form 25.24) bearing serial nos. 1061496-1061500. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of five (5) sets of Revenue Official Receipts (BIR Form 25.24) to wit: cdt Inclusive Serial Numbers Quantity 1061496-1061500 Five (5) sets

The above revenue official receipts which were reported lost by Mrs. Nelia G. Cortez, Revenue Collection Agent of Tiaong, Quezon, are hereby cancelled and all official transactions involving the use of said receipts are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Officer-In-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-10-87 Revenue Memorandum Circular No. 42-87 August 10, 1987 REVENUE MEMORANDUM CIRCULAR NO. 42-87 Subject : Loss of one (1) Set of Payment Order (BIR Form RC-82-02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cd i ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------0507730 : one (1) set ---------------------------The above receipt which was reported missing by Ms. Realina G. Ferrera, Acting Supervising Revenue Collection Officer, RDO No. 35, Marikina District, Pasig Metro Manila, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd BIENVENIDO A. TAN Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-11-87 Revenue Memorandum Circular No. 43-87 September 11, 1987 REVENUE MEMORANDUM CIRCULAR NO. 43-87 Subject : Final Extension of the use of unnumbered documentary strip stamps up to October 31, 1987 after which they shall be rendered obsolete. To : All Internal Revenue Officers and Others Concerned. In view of the reported large stock of documentary strip stamps still in the hands of the different revenue accountable forms officers, the use of unnumbered documentary strip

stamps is hereby extended up to October 31, 1987, after which they shall be rendered obsolete. This is definitely the last extension. cda The Chief, Accountable Forms Division, all Chiefs of Administrative Branches, Revenue Collection Supervisors, and Revenue Collection Agents are hereby directed to exhaust all efforts to issue the remaining stocks of the unnumbered documentary strip stamps in their possession before issuing the new serially numbered documentary strip stamps. cdt This Circular amends Revenue Memorandum Circular No. 26-87 dated June 16, 1987 and shall take effect immediately. All concerned are enjoined to give this Circular the widest publicity possible. EUFRACIO D. SANTOS Deputy Commissioner Officer-In-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-22-87 Revenue Memorandum Circular No. 44-87 September 22, 1987 REVENUE MEMORANDUM CIRCULAR NO. 44-87 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------11626285 : one (1) set ---------------------------The above receipt which was reported missing by the Accredited Bank to this office has been cancelled and any official transactions involving the use of said form is therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-07-87 Revenue Memorandum Circular No. 45-87 October 7, 1987 REVENUE MEMORANDUM CIRCULAR NO. 45-87 Subject : Limitations on the tax-free privileges of the New Armed Forces of the Philippines Commissary and the Exchange Services (NAPCES) now AFPCES and the Integrated National Police Service Stores System (INPSSS) To : All Internal Revenue Officers and Others Concerned

Executive Order Nos. 76 and 93 dated December 2 and 17, 1986, respectively, and Fiscal Incentives Review Board (FIRB) Resolution No. 5-87 dated April 13, 1987, as implemented by Revenue Regulations No. 3-87 dated February 9, 1987, allow and regulate the purchases and sales of tax-free articles by AFPCES and INPSSS, subject to certain conditions imposed therein. casia The articles listed in Annex "A" hereof, which are subject to sales tax, may be purchased and sold tax-free by the abovementioned entities, except vehicles, watercrafts, aircrafts, perfumes, jewelries and precious stones. The term "vehicles" does not include two-wheeler motorcycles with engine displacement of not exceeding two hundred (200) cubic centimeters. AFPCES and INPSSS may purchase and sell such two-wheeler units tax-free under the following conditions: 1. The unit shall be for the personal use of AFPCES and INPSSS members only; 2. The Land Transportation Commission, in the issuance of registration certificates, shall annotate thereon the fact that the unit shall not be for lease or resale to others; and 3. Only one (1) unit per authorized customer, every five (5) years, shall be allowed. The following articles subject to excise tax may be purchased and sold tax-free by AFPCES and INPSSS: a. Tobacco products which includes smoking and chewing tobacco, cigar and cigarettes; b. Alcohol beverages/distilled spirits which includes compounded liquors, wines and fermented liquor; c. Matches; and cd i d. Petroleum products which include diesel, gasoline and lube oil only. All internal revenue officers and others concerned are enjoined to give this Circular the widest publicity possible. BIENVENIDO A. TAN, JR. Commissioner 19 September 1987 ATTY. MELCHOR B. BANARES Assistant Revenue Service Chief (Specific Tax) Bureau of Internal Revenue Quezon City Dear Sir, Attached herewith is the classification scheme presently adopted by AFPCES for all consumer good items. Each category is known as a commodity group and within the group falls all generic items. cdasia As provided in the Revenue Regulation 3-87 dated February 9, 1987, Sec 16-C, Subject: Limitations, the commodity grouping exclude vehicles, watercraft, aircraft, perfumes, jewelries and precious stones. GEORGE P. AQUINO Col (GSC) PAF

Commander & General Manager ANNEX "A" COMMODITY COMMODITY GROUP 1 GROUP 2 BEVERAGE DAIRY PRODUCTS CHOCOLAIT DRINKS CREAMERS/CREAMS COFFEE/TEAEGGS/MILK JUICE DRINKS ICE CREAM COMMODITY COMMODITY GROUP 3 GROUP 4 PRESERVES POULTRY/FROZEN PRODUCTS SWEET PRESERVES BOTTLED PRESERVES CANNED PRESERVES EX: CHICKEN COLD CUTS HOTDOGS/LONGANIZA

MAYONNAISE/PICKLES JAMS/JELLIES SARDINES/SAUSAGES PEAS/GARBANZOS COMMODITY COMMODITY GROUP 5 GROUP 6 RICE/PASTA/SUGAR OIL PRODUCTS

NOODLES/INSTANT NOODLES COOKING/EDIBLE OIL CEREALS/FLOUR VEGETABLE/CORN OIL BAKING MIXES COMMODITY COMMODITY GROUP 7 GROUP 8 CONDIMENTS SNACKS SALT/PEPPER/GARLIC VINEGAR/SOY SAUCE MUSTARD/CATSUP COOKIES/BISCUITS CANDIES/CHOCOLATES CURLS/CHIPS

COMMODITY COMMODITY GROUP 9 GROUP 10 HOUSEHOLD SUNDRIES PAPER PRODUCTS PETCARE PRODUCTS TABLE NAPKINS

DEODORIZER/MOPS FACIAL TISSUE INSECT SPRAY/REPELLANT BATHROOM TISSUE CHRISTMAS DECOR/TREES WAX PAPER/TIN FOILS COMMODITY COMMODITY GROUP 11 GROUP 12 HEALTH/BEAUTY PRODUCTS CLEANING PRODUCTS GENTLEMEN'S TOILETRIES BABY/HAIR OILS FLOOR WAX HAND/BODY LOTION LAUNDRY SOAP/DETERGENT LIQUID/BATH SOAP MURIATIC ACID SANITARY NAPKINS SHOE CLEANING PRODUCTS COSMETICS COMMODITY COMMODITY GROUP 13 GROUP 14 SCHOOL & OFFICE SUPPLIES/ TOBACCO/WINE & SPIRITED EQUIPMENT DRINKS NOTEBOOKS/WRITING PADS TOBACCO/CIGARETTE PENS/PAPERS/BOOKS LIQUOR/WINES FOLDERS/ENVELOPES MIXED DRINKS CALCULATORS/STAPPLERS GREETING CARDS/TYPEWRITERS FILING CABINETS XEROXED MACHINES COMMODITY COMMODITY GROUP 15 GROUP 16 OVER THE COUNTER GOODS TOYS & GAMES RAZORS/BLADES TOYS CANDIES AT THE CASHIER'S COUNTER GAMES TOOTHBRUSHES EX: DOLLS, BOARD GAMES MEDICINE AT THE CASHIER'S COUNTER ROBOTS, TOY GUNS SCALE MODEL TOYS STUFF TOYS HOME GAMES COMMODITY COMMODITY GROUP 17(a) GROUP 17(b) (t.v. & video equipt.) (audio equipt.) TELEVISION SETS CASSETTE/CASSETTE DECKS/RADIOS VIDEO RECORDERS HI-FI STEREO SYSTEM/SPEAKERS VIDEO ACCESSORIES AMPLIFIERS & TUNERS/AUDIO RACKS

VIDEO CAMERAS WORLD RECEIVERS/CAR RADIOS COMPACT DISC PLAYERS COMMODITY COMMODITY GROUP 17(c) GROUP 18 HOME APPLIANCE TIRE/BATTERIES/ACCESSORIES AND SPARE PARTS REFS/FREEZERS/HUMIDIFIERS TIRES/BATTERIES WASHING/KITCHEN MACHINES BRAKE FLUID/OIL OVENS/BREAD TOASTERS VEHICLES/SPARE PARTS TRANSFORMERS/CONVERTERS AUTO ACCESSORIES PORTABLE GENERATORS/COOLERS AIRCONS/PERSONAL DISHWASHERS VOLTAGE REGULATORS/STABILIZERS COMMODITY COMMODITY GROUP 19 GROUP 20 KITCHENWARES MEDICINE AT THE DRUGSTORE POTS/PANS VITAMINS/MINERALS WOK/PLATES DECONGESTANTS/DEXTROSE PLASTIC PAILS/BASINS MEDICINES & DRUGS TABLEWARE/HOLLOW WARE ABBOCATH/SURGICAL INSTRUMENTS COMMODITY COMMODITY GROUP 21 GROUP 22 POL PRODUCTS HARDWARE & CONSTRUCTION SUPPLIES GASOLINE/DIESEL TOOLS & PAINTS LUBRICANTS LIGHTBULBS/CEMENT MOTOR OILS HARDWARE COMMODITY COMMODITY GROUP 23 GROUP 24 CLOTHING/TEXTILE/LINEN FURNITURES MEN/WOMEN/CHILDREN'S APPAREL TABLES/CHAIRS SHOES/SLIPPERS/SANDALS BEDS/CABINETS TEXTILE/YARNS/THREADS, ETC. FOOD SERVER/TRAYS/TROLLEYS TOWELS/DRAPES/LINEN COMMODITY COMMODITY GROUP 25 GROUP 26 PHOTOS & FILMS CAMERAS & ACCESSORIES

PHOTO DEVELOPING MATERIALS CAMERAS & LENSES FILMS/FILTERS FLASH BULBS/TRIPODS PHOTO LAB EQUIPMENT CAMERA FILTERS COMMODITY COMMODITY GROUP 27 GROUP 28 PORCELAIN & GLASSWARE SPORTS & LEISURE EQUIPT CHINA WARES SPORTING GOODS/WEAR GLASS WARES CAMPING EQUIPT/BICYCLES PADDLES/RACKETS BALLS/SHUTTLE COCKS GOLF CLUBS & EQUIPT AIR PISTOLS/RIFLES COMMODITY COMMODITY GROUP 29 GROUP 30 TRAVEL ARTICLES & LEATHER GOODS WATCHES/CLOCKS/BIJOUTERIES LUGGAGES/SUITCASES WATCHES ATTACHE CASES/WALLETS WALL CLOCKS HAND/SHOULDER BAGS COMMODITY COMMODITY GROUP 31 GROUP 32 HOUSE & GARDEN MEN'S/WOMEN'S UNDERGARMENTS GARDEN FURNITURES BRIEFS/UNDERSHORTS/LONG JOHNS GARDEN ARTICLES UNDERSHIRTS/CAMISOLES/SLIPS TOOLS/GRILLS BRASSIERES/PANTIES/GIRDLES BATHROOM EQUIPT SECURITY EQUIPT COMMODITY COMMODITY GROUP 33 GROUP 34 MUSIC EQUIPMENT BEER/SOFTDRINKS GUITARS/PIANOS/ORGANS SYNTHESIZERS/SPEAKERS SING - ALONG SYSTEM COMMODITY GROUP 35 COMPUTER/ACCESSORIES SOFT DRINKS BEER

MICROPROCESSORS/PRINTERS DISK DRIVES/HARD DISKS COMPUTER MONITOR/COMPUTERS COMPUTER PERIPHERALS CONTINUOUS FORM PAPER COMPUTER PRINTER RIBBON Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-05-87 Revenue Memorandum Circular No. 46-87 November 5, 1987 REVENUE MEMORANDUM CIRCULAR NO. 46-87 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------B-12481411 : one (1) set ---------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-27-87 Revenue Memorandum Circular No. 47-87 November 27, 1987 REVENUE MEMORANDUM CIRCULAR NO. 47-87 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 87-06 dated November 16, 1987. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, September 1, 1987. cd Peso/Liter Products Previous Tax Present Tax Difference

Premium/Avgas P3.4636 P3.5374 Regular Gasoline 3.1226 3.1964 0.0738 Avturbo 3.1222 3.5250 0.4028 Kerosene 1.1368 1.1620 0.0252 Diesel Fuel 1.0919 1.1171 0.0252 Fuel Oil (Bunker) ------LPG* 0.7773 0.8025 0.0252 Asphalts 0.9975 1.0227 0.0252 Thinners/Solvents 3.2970 3.3708 0.0738

P0.0738

* P1.4357/kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai (Sgd.) Eufracio D. Santos Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-23-87 Revenue Memorandum Circular No. 48-87 November 23, 1987 REVENUE MEMORANDUM CIRCULAR NO. 48-87 Subject : Loss of three (3) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officer, Employees and Others Concerned. Notice is hereby given of the loss of three (3) sets of Confirmation Receipts, to wit: casia ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------13294921 : one (1) set 11499747 : one (1) set 10219800 : one (1) set ---------------------------The above receipts which were reported missing by the Accredited Banks to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Officer-In-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

12-02-87 Revenue Memorandum Circular No. 49-87 December 2, 1987 REVENUE MEMORANDUM CIRCULAR NO. 49-87 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 87-06 dated November 16, 1987. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, November 1, 1987. cda Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas P3.5374 P3.4785 Regular Gasoline 3.1964 3.1375 (0.0589) Avturbo 3.5250 3.5250 --Kerosene 1.1620 1.1419 (0.0201) Diesel 1.1171 1.0970 (0.0201) Fuel Oil/Feedstock ------LPG* 0.8025 0.7824 (0.0201) Asphalts 1.0227 1.0026 (0.0201) Thinner/Solvent 3.3708 3.3119 (0.0589) (P0.0589)

* P1.3997/Kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. acd (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-02-87 Revenue Memorandum Circular No. 50-87 December 2, 1987 REVENUE MEMORANDUM CIRCULAR NO. 50-87 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 87-07 dated November 18, 1987. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, November 19, 1987. aisa dc Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas Regular Gasoline P3.4785 P3.3598 3.1375 3.0188 ( .1187) (P0.1187)

Avturbo 3.5250 3.5250 Kerosene 1.1419 1.1013 ( .0406) Diesel 1.0970 1.0564 ( .0406) Fuel oil/Feedstock LPG* .7824 .7418 ( .0406) Thinner/Solvent 3.3119 3.1932 ( .1187) Asphalts 1.0026 .9620 ( .0406) * P1.3997/Kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd i (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-07-87 Revenue Memorandum Circular No. 51-87 December 7, 1987 REVENUE MEMORANDUM CIRCULAR NO. 51-87 Subject : Guidelines on the compliance with certain administrative requirements of the value-added tax system. To : All Revenue Regional Directors, Revenue District Officers and others concerned. This Revenue Memorandum Circular is designed to provide information and guidelines on certain administrative requirements of the value-added tax (VAT) system. 1. Filing of inventory of unused invoices/receipts. - In accordance with Section 26 of Revenue Regulations No. 5-87, unused invoices/receipts of VAT-registered persons as of December 31, 1987, may be allowed to be used or issued for VAT transactions beginning January 1, 1988, until exhausted. It is mandatory, however, that the taxpayer shall first a) file an inventory in triplicate of such unused invoices/receipts, which must show the VAT registration number of the taxpayer, number of booklets and corresponding serial numbers; and b) stamp on the original and duplicate of such unused invoices/receipts his VAT registration number. cdasia The inventory shall be filed with the revenue district office of the city or municipality where the principal place of business or branch is located. Pending submission of the final inventory of unused invoices, a tentative list of invoices to be used starting January 1, 1988 shall be filed not later than December 31, 1987. The final inventory shall be filed not later than January 31, 1988. For those who will become liable for the tax after January 1, 1988, the inventory shall be filed before the date they shall become liable for the VAT. 2. Registration of subsidiary sales and purchases journals. - The subsidiary sales and purchases journals required to be kept and maintained by VAT-registered persons in addition to the regular books of accounts under Sec. 22 of RR 5-87 shall, before its use, be registered with the collection agent of the city or municipality where the principal

place of business or head office of the VAT taxpayer is located. In the initial year of implementation, it shall be registered not later than January 1, 1988 (RR 6-87). The regulations do not prescribe a definite form or contents of the subsidiary books, which will depend on the particular need of the business of the taxpayers. However, the subsidiary sales journal (SSJ) shall at least contain separate columns for: sales-export; sales-zero-rated; sales-exempt; sales-taxable; deemed sales; and output tax. Similarly, the subsidiary purchase journal (SPJ) shall at least provide for purchases of goods for sale; purchases of supplies; purchases of raw materials; purchases of services; purchases of capital goods; purchases from non-VAT persons; input taxes; and input tax deemed paid. On the certificate of registration required to be stamped on the first page of the journal, the VAT registration number of the taxpayer, in addition to other items of information, shall be indicated by the registering officer. 3. Filing of information by construction and service contractors. - In order that the tax on amounts due on contracts completed on or before December 31, 1987, payments of which are however, receivable on or after January 1, 1988, shall be considered as having accrued before the effectivity of the VAT and subject to the 4% percentage tax, Section 6(g) of RR 5-87 prescribes that a) an information return showing the name(s) of the contractee(s) and the corresponding amount(s) of the contract price outstanding as of December 31, 1987, and containing a declaration of the obligation to pay the percentage tax due; cd b) the contractor billed the unpaid amount not later than December 31, 1987, a copy of which shall be attached to the information; c) the receivable amount has been duly recorded in the 1987 books of account of the contractor; and d) the contractor files the percentage tax return and pays the 4% contractor's tax due on payments received not later than the 20th day after the end of each quarter beginning with the last calendar quarter of 1987. This privilege is given only to a VAT-registered taxpayer. Consequently, his failure to comply with any of the above-stated conditions shall automatically make him liable to the 10% VAT. The information return (BIR Form No. ) shall be filed in triplicate not later than January 20, 1988. 4. Application for the imposition of the zero-rate - Section 8(d) of RR 5-87, implementing Sections 100(2) and 102 of the Tax Code, prescribes prior application for, and approval of, the imposition of zero rate on certain transactions. The application shall be made in BIR Form No. ______, and filed with the Revenue District Officer of the city or municipality where the principal place of business or head office of the applicant is located in quadruplicate. The transactions for which application for zero-rate may be claimed are: (a) sales of goods to persons or entities whose exemption under special laws or international agreements effectively zero-rate such sales; and (b) services rendered to persons or entities whose exemption effectively zero-rates such supply of services. Once the application is approved for a certain transaction involving the same exempt persons or entities under the same law or international agreement, there is no need for renewal of the application for future transactions. cdasia

5. Transitional input tax credits. - The presumptive input tax equivalent to 8% of the value of goods on hand as of December 31, 1987, which were either purchased as finished products for resale without processing or to be used as supplies in the course of business shall be allowed to a VAT-registered person who had filed the required inventory of such goods not later than January 31, 1988. The inventory must show the VAT registration number of the claimant, quantity, description and corresponding value per item of goods, and filed in triplicate with the Revenue District Officer of the city or municipality where the principal place of business of the claimant is located. This inventory requirement is distinct and separate from the inventory of goods for income tax purposes which is required to be submitted on or before January 30. All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-04-87 Revenue Memorandum Circular No. 52-87 December 4, 1987 REVENUE MEMORANDUM CIRCULAR NO. 52-87 Subject : Loss of one (1) Set of Confirmation Receipt (BIR Form CB 82-0203). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ---------------------------SERIAL NUMBERS : QUANTITY ---------------------------12441411 : one (1) set ---------------------------The above receipt which was reported missing by the Accredited Bank to this office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-05-88 Revenue Memorandum Circular No. 1-88 January 5, 1988 REVENUE MEMORANDUM CIRCULAR NO. 1-88 Subject : Collection of Amusement Taxes on Certain Services To : All Internal Revenue Officers and Others Concerned

Beginning January 1, 1988, the law on Value-Added Tax (VAT) embodied under Executive Order No. 273 goes into effect. However, while sale of services are subject to VAT, there are certain services which are not subject thereto. Among those services are those rendered by proprietors, lessees or operators of amusement places which are subject to amusement taxes under Section 123 (formerly 228) of the Tax Code, as amended by Executive Order No. 273, as follows: 1. 18% in the case of cockpits; 2. 18% in the case of cabarets, night or day club; 3. 15% in the case of boxing exhibitions; 4. 15% in the case of professional basketball games as envisioned in Presidential Decree No. 871; cd 5. 30% in the case of Jai-Alai and race tracks; and 6. 15% in the case of bowling alleys. Considering that the collection of the percentage taxes on amusement places enumerated above has remained despite the imposition of the VAT, there is no longer any doubt that said percentage taxes are collectible by the Bureau of Internal Revenue. The percentage taxes are based on gross receipts irrespective of whether or not any amount is charged or paid for admission. For purposes of the amusement tax, the term "gross receipts" embraces all the receipts of the proprietors, lessors or operators of the amusement places. Hence, said receipts include those derived from admission tickets. (See Sy Chuico vs. Collector, 107 Phil., 428) Accordingly, BIR Ruling No. 231-86 dated November 5, 1986 which ruled that "only the gross receipts of amusement places derived from sources other than from admission ticket shall be subject to 20% (now 30%) amusement tax prescribed under Section 228 of the Tax Code, as amended", is hereby revoked. Likewise, that portion of said ruling which holds that the tax on gross receipts derived from admission tickets obviously issued by the above enumerated amusement places shall be levied and collected by the city government pursuant to Section 13 of Presidential Decree No. 231 is also revoked. It is noted that only the collection of the amusement tax on admission collected from theaters, cinematographs, concert halls, circuses and other places of amusement was transferred to the provinces and cities (Sec. 13, P.D. No. 231; Part V, Provincial Circular No. 22-73, Department of Finance) If the amusement places referred to in Section 123 of the Tax Code are considered included in the places of amusement referred to in Section 13 of P.D. No. 231, then that would render said Section 123 (formerly Section 228) nugatory thereby resulting in tremendous loss of revenue to the National Government. In other words, all the receipts of the proprietor, operator or lessor of the aboveenumerated amusement places, which receipts include those derived from amusement tickets are subject to amusement taxes prescribed by Section 123 of the Tax Code, as amended by Executive Order No. 273. These amusement taxes are payable to the Bureau of Internal Revenue. casia Aside from BIR Ruling No. 231-86, all other rulings and decisions inconsistent herewith are hereby revoked. casia All concerned are enjoined to give this as wide a publicity as possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-19-88 Revenue Memorandum Circular No. 2-88 January 19, 1988 REVENUE MEMORANDUM CIRCULAR NO. 2-88 Subject : Loss of Three (3) Booklets of Revenue Official Receipts (BIR Form 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of three (3) booklets Revenue Official Receipts (BIR Form No. 25.24), to wit: cd ------------------------Inclusive Serial Numbers : Quantity ------------------------9012301-G to 9012350-G : 1 booklet 9017751-G to 9017800-G : 1 booklet 9018351-G to 9018400-G : 1 booklet ------------------------The above revenue official receipts which were verified as missing during the field audit and investigation conducted by investigators of the Inspection Service, this Bureau, are hereby cancelled and all official transactions involving the use of said receipts are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-15-88 Revenue Memorandum Circular No. 3-88 January 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 3-88 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------13551951 : one (1) set ------------------------The above receipt which was reported missing by the Accredited Bank to this office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cd

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-29-88 Revenue Memorandum Circular No. 4-88 January 29, 1988 REVENUE MEMORANDUM CIRCULAR NO. 4-88 Subject : Annual Five-Day Vacation Leave Under EO No. 1077 To : All Revenue Officials and Employees For the information and guidance of all employees, quoted hereunder is Memorandum Circular No. 22, s. 1987 dated December 17, 1987 of the Civil Service Commission: cda MC No. 22, s. 1987 "MEMORANDUM CIRCULAR" "Subject : Annual Five-Day Vacation Leave Under EO No. 1077. "To : All Heads of Departments, Bureaus and Agencies of the National and Local Governments including Government-owned/or Controlled Corporations and State Universities and Colleges "The Annual 5-day vacation leave required under Executive Order No. 1077 is considered complied with when an officer or employee goes on approved vacation leave within a calendar year or a period aggregating not less than five (5) days which need not be successive. cd i "This Memorandum Circular amends the pertinent portion of MC No. 6, s. 1986. (Sgd.) Celerina G. Gotladera" Chairman December 17, 1987 Office of Executive Director (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-15-88 Revenue Memorandum Circular No. 5-88 February 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 5-88 Subject : Issuance of Warrant of Garnishment addressed to the Disbursing Officer of an agency of a foreign government. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder US embassy Note No. 798 dated December 11, 1987 to the effect that court and analogous

processes, such as a Warrant of Garnishment issued by the Bureau of Internal Revenue, involving foreign governments should first be forwarded to the Department of Foreign Affairs for the Department's consideration and then if deemed appropriate, delivered to the Embassy concerned by diplomatic note; that the Disbursing Officer of an agency of a foreign government like the United States Facility, Subic Naval Base to whom the said Warrant of Garnishment is issued, is without authority to comply with the same; and that the money intended for the salaries of the employees of the United States Government like those of the US Facility, Subic Naval Base but which are not yet actually paid to the said employees are still property of the US Government which cannot be the subject of a Warrant of Garnishment in satisfaction of the internal revenue tax liabilities of the employees.' cd "Embassy of the United States of America "No. 798 "The Embassy of the United States of America presents its compliments to the Department of Foreign Affairs and has the honor to refer to the attached Warrants of Garnishment issued by the Ministry of Finance, Bureau of Internal Revenue. The warrants were delivered by regular mail to the Disbursing Officer of the United States Facility, Subic Naval Base. "The Embassy believes the Department will agree that the attempted service of process at the premises of an Agency of the United States Government is not consonant with international practice and is inconsistent with Philippine Department of Justice Circular No. 47 of August 5, 1970 (as amended) which requires that court and analogous processes involving foreign governments be forwarded to the Department of Foreign Affairs for the Department's consideration and then if deemed appropriate, delivered to the Embassy by diplomatic note. It appears the Ministry of Finance did not send these documents through the Department of Foreign Affairs. "The Embassy also wishes to note that the United States Government is without authority to comply with the warrants. Until actually paid, the salaries of its employees are property of the United States Government and not subject to attachment under United States and international law. "Embassy of the United States of America "Manila, December 11, 1987 "The Embassy respectfully requests the Department to inform the Ministry of Finance, Bureau of Internal Revenue of the foregoing. The warrants are hereby returned for such disposition as the Department deems appropriate. cdasia "The Embassy of the United States of America avails itself of the opportunity to renew to the Department of Foreign Affairs of the Republic of the Philippines the assurance of its highest consideration." It is desired that this Circular be given as wide a publicity as possible. (Sgd.) Bienvenido A. Tan, Jr.

Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-08-88 Revenue Memorandum Circular No. 6-88 February 8, 1988 REVENUE MEMORANDUM CIRCULAR NO. 6-88 Subject : Publishing Section 115 of the Tax Code, as amended by Executive Order No. 273. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder is Section 115 (formerly Section 173), Title V, of the Tax Code: "Sec. 115. Percentage tax on carriers and keepers of garages. - Keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, persons who transport passenger or freight for hire, and common carriers by land, air, or water except owners of bancas and owners of animal-drawn two wheeled vehicles, shall pay a tax equivalent to three (3%) per centum of their quarterly gross receipts. "In computing the percentage tax provided in this Section, the following shall be considered the minimum quarterly gross receipts in each particular case: aisa dc Autocalesa: "1. "2. Manila and other cities Provincial 600.00 P1,200.00

Jeepney for hire "1. "2. Manila and other cities Provincial 1,200.00 P2,400.00

Public Utility bus - Not exceeding 30 passengers P3,600.00 Exceeding 30 but not exceeding 50 passengers 6,000.00 Exceeding 50 passengers 7,200.00 Taxis: "1. "2. Manila and other cities P3,600.00 Provincial 2,400.00 Car for hire (w/ chauffeur) P3,000.00 Car for hire (w/o chauffeur) 1,800.00 Pursuant to Section 103(j) of the Tax Code, common carriers, transportation contractors as well as other taxpayers subject to the 3% tax under the above-quoted provision, are exempt from the payment of the value-added tax. cdasia All concerned are hereby enjoined to give this circular as wide a publicity as possible.

(Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-15-88 Revenue Memorandum Circular No. 7-88 February 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 7-88 Subject : Taxability of travel agents and travel agent service exporters to the value-added tax. To : All Internal Revenue Officers and Others Concerned 1. A travel agent is required to pay a 10% VAT on its receipts which purposes of this tax will not include the price of airline or ship tickets or the reimbursement of expenses which shall be limited to passport and visa fees for all types of passengers and hotel room charges, bus and/or car tour charges, guide fees, resort fees and meal charges for tourists provided that all the said expenses are properly supported by receipts issued by the supplying company or establishment. All other income or receipt shall pay the VAT of 10%. cdtai 2. In determining the amount of gross receipts every travel agent is allowed and shall prove when required that the expenses or fees or fares mentioned under paragraph one hereof was in fact meant for a third party other than the travel agent and paid to such party. 3. In the case of tickets sold to travel agents on a net basis the tax shall be based on the margin between the selling price to the customer and the net purchase price provided that where such margin exceeds 9% of the gross selling price of the ticket to passenger then the whole transaction shall be considered a resale and the 10% VAT shall be imposed on the gross selling price. 4. Travel agent service exporters and these are defined as those travel agents who furnish tour package arrangements for foreign tourists paid for in acceptable foreign currency which has been surrendered to the Central Bank thru the banking system in the Philippines shall be considered as a 0 rated transaction under Subsection (2), Sec. 102 of E.O. 273. 5. The sale of tickets to any person which is paid for in an acceptable foreign currency and surrendered to the Central Bank thru the banking system in the Philippines shall be considered a 0 rated transaction under Subsection (2), Section 101 of E.O. 273. 6. Where tour services are packaged and sold to domestic tourist the VAT of 10% shall be collected on the total receipts of the tour operator not including the fees paid to bus operators, resort and guide fees and meal expenses that are properly receipted for. cd i 7. In case the passenger or customer of a VAT registered travel agent is also a VAT registered person and requires the issuance of a receipt to apply as an input tax payment of VAT for the services of the travel agent, the travel agent is required to issue a receipt segregating the amount paid as VAT otherwise such a receipt will not be valid for purposes of input tax credits. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) Bienvenido A. Tan, Jr.

Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-19-88 Revenue Memorandum Circular No. 8-88 February 19, 1988 REVENUE MEMORANDUM CIRCULAR NO. 8-88 Subject : Assessment and collection of amusement tax on admission to places of amusement. To : All Internal Revenue Officers and Others concerned Under the Local Tax Code (P.D. 231, as amended) the jurisdiction to levy amusement tax on gross receipts arising from admission to places of amusement has been transferred to the local governments to the exclusion of the national government. "Taxes transferred. - The imposition of the taxes provided in Sections 12, 13, 14, 15 and 16 of this Code heretofore exercised by the national government or the municipal government, shall henceforth be exercised by the provincial government, to the exclusion of the national or municipal government. To avoid any revenue loss, the province shall levy and collect such taxes as provided in Sections 12, 13 and 14." (SEC. 11, LOCAL TAX CODE. EMPHASIS SUPPLIED) cd "Amusement tax on admission. - The province shall impose a tax on admission to be collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement. (SEC. 13, LOCAL TAX CODE. EMPHASIS SUPPLIED) The term "other places of amusement" embraces not only those enumerated under the Local Tax Code but includes all other places of amusement. aisa dc ". . . while cockpit, stadia and racetracks are not expressly stated in the above section (Section 13), they are deemed included in the blanket clause 'other places of amusement' because that which belongs to the class and is not specifically mentioned must be deemed included in the blanket clause."(OPINION OF THE SECRETARY OF JUSTICE, 1975; See also FINANCE MINISTRY RULING, DATED JANUARY 6, 1981) Since the promulgation of the Local Tax Code which took effect on June 28, 1973 none of the amendatory laws which amended the National Internal Revenue Code, including the value added tax law under Executive Order No. 273, has amended the provisions of Section 11 of the Local Tax Code. Accordingly, the sole jurisdiction for collection of amusement tax on admission receipts in places of amusement rests exclusively on the local government, to the exclusion of the national government. Since the Bureau of Internal Revenue is an agency of the national government, then it follows that it has no legal mandate to levy amusement tax on admission receipts in the said places of amusement. Considering the foregoing legal background, the provisions under Section 123 of the National Internal Revenue Code as renumbered by Executive Order No. 273 (Sec. 228, old NIRC) pertaining to amusement taxes on places of amusement shall be implemented in accordance with BIR RULING, dated December 4, 1973 and BIR RULING NO. 23186 dated November 5, 1986 to wit: cd ". . . Accordingly, only the gross receipts of the amusement places derived from sources other than from admission tickets shall be subject to . . . amusement tax prescribed under

Section 228 of the Tax Code, as amended (now Section 123, NIRC, as amended by E.O. 273). The tax on gross receipts derived from admission tickets shall be levied and collected by the city government pursuant to Section 23 of Presidential Decree No. 231, as amended . . ." or by the provincial government, pursuant to Section 11 of P.D. 231, otherwise known as the Local Tax Code. Revenue Memorandum Circular No. 1-88 dated January 5, 1988 and any revenue issuance inconsistent herewith are hereby amended or revoked accordingly. All concerned are enjoined to give this Circular as wide a publicity as possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-11-88 Revenue Memorandum Circular No. 9-88 February 11, 1988 REVENUE MEMORANDUM CIRCULAR NO. 9-88 Subject : Loss of One Original Copy of Revenue Official Receipt (BIR Form 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one original copy of Revenue Official Receipt (BIR Form 25.24) to wit: SERIAL NUMBER QUANTITY 2445000-H One (1) Original Copy The above copy which was verified as missing during an inspection by the representative of the Commission on Audit, as well as the other copies of the said set of revenue official receipt have been cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the said original copy of Revenue Official Receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-15-88 Revenue Memorandum Circular No. 10-88 February 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 10-88 Subject : Loss of duplicate copies of Authority to Cancel Assessment (BIR Form No. 17.58). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of duplicate copies of Authority to Cancel Assessment (BIR Form No. 17.58) to wit: cd

SERIAL NUMBER QUANTITY 554272 One (1) Duplicate Copy 554273 One (1) Duplicate Copy The above copies of Authority to Cancel Assessment which were reported as missing by the representative of the Commission on Audit, Revenue Region No. 4-C, San Pablo City, together with the other copies of the particular sets, have been cancelled and all official transactions involving the use thereof are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned duplicate copies of Authority to Cancel Assessment is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-23-88 Revenue Memorandum Circular No. 11-88 February 23, 1988 REVENUE MEMORANDUM CIRCULAR NO. 11-88 Subject : Loss of a triplicate copy of Certificate Authorizing Registration of Untaxed Capital Gains on Real Estate Transactions (BIR Form No. 1954A) bearing serial no. 202408. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of a triplicate copy of Certificate Authorizing Registration of Untaxed Capital Gains on Real Estate Transactions to wit: cda Serial Number Quantity 202408 One (1) Triplicate Copy The above copy of Certificate Authorizing Registration which was found missing by the representative of the Commission on Audit, Revenue Region No. 4-C, San Pablo City, together with the other copies of the particular set, have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the triplicate copy of the said certificate is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-03-88 Revenue Memorandum Circular No. 12-88 March 3, 1988 REVENUE MEMORANDUM CIRCULAR NO. 12-88

Subject : Use of the VAT invoice by VAT-registered persons who are also engaged in exempt transactions. To : All Internal Revenue Officers and Others Concerned A VAT-registered person who is also engaged in non-taxable (exempt) transactions, is not allowed to issue VAT invoice on said non-taxable (exempt) transactions. He should use separate invoices or receipts for the taxable and exempt operations. A VAT INVOICE can be used only for sales of goods or services subject to VAT. The invoicing requirements are prescribed in Section 21 of Revenue Regulations No. 5-87 which is quoted hereunder for the guidance of all concerned: "Sec. 21. Invoicing requirements. - (a) Invoices and/or receipts. - All VATregistered persons who sell goods or services shall, for every sale, issue an invoice or receipt. The invoice should contain the information prescribed in Sections 108(a) and 238. Only VAT-registered persons can print the VAT registration number in their invoice or receipt. Any invoice bearing the VAT registration number of the seller shall be considered as a "VAT Invoice". Value-added tax, whether indicated as a separate item or not in the "VAT Invoice" shall be allowed as input tax credit to those liable to valueadded tax. All purchases covered by invoices other than "Vat Invoice" shall not be entitled to input taxes. cda "The output tax may or may not be billed separately in the invoice or receipt. If the tax was not billed separately in the invoice or receipt, the total amount shown in the invoice or receipt shall consist of the gross selling price or gross receipts, as the case may be, and the amount intended to cover the tax. The seller is obligated to bill separately the tax if required to do so by the buyer. "If the taxable person is also engaged in exempt operations, he should issue separate invoices or receipts for the taxable and exempt operations. A "VAT Invoice" shall be issued only for sales of goods or services subject to value-added tax imposed in Sections 100 and 102. However, a BOI-registered pioneer enterprise can consolidate its sales in the VAT invoice and compute the value-added tax in accordance with Section 6(b), these regulations. The invoice of a BOI-registered enterprise should also indicate the percentage of exemption. "The invoice or receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records." acd It is desired that this Circular be given as wide a publicity as possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-23-88 Revenue Memorandum Circular No. 13-88 February 23, 1988 REVENUE MEMORANDUM CIRCULAR NO. 13-88 Subject : Publishing Law Instruction No. 7 of the Commission on Immigration and Deportation To : All Internal Revenue Officers and other concerned.

For the information and guidance of all concerned, there is published hereunder the full text of Law Instruction No. 7 of the Commission on Immigration and Deportation. cdasia LAW INSTRUCTION NO. 7 "HOLD DEPARTURE GUIDELINES "The Constitution provides in Article III, Bill of Rights: "Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health, as may be provided by law. cd "Further, the 1985 Rules on Criminal Procedure, Rule 114, provides: "Sec. 15. . . . An accused released on bail may be re-arrested without the necessity of a warrant if he attempts to depart from the Philippines without prior permission of the court where the case is pending. "Under these provisions, we hereby set the following guidelines, effective today: "1. In case of doubt, the presumption shall be resolved in favor of the constitutional right to travel. "2. As a general rule, we shall issue Hold Departure (HD) order, only when the applicant files authenticated copies - i.e., stamped, signed and sealed - of: "a. Information in criminal case filed in court; "b. Order of the judge holding departure. "3. If a government agency requests for HD order; "a. It shall name the specific law (e.g., B.P. No. 10, Section 11) which authorizes the agency to make the request. But it shall be based only on any of the three grounds: national security, public safety, or public health; "b. The letter request shall be filed by a government official, at the level of a bureau director or higher. "4. Copies of the HD order shall be distributed not only to the proper government agencies, but also to the subject of the order, so that he may, if he desires, file a motion for reconsideration with CID. cdasia "5. Names already in the HD list, when they do not fall under the guidelines, shall be stricken off. "6. Notify not only CID divisions concerned, but also: Department of Foreign Affairs; PCGG; BIR; NBI; Supreme Court; Office of Court Administrator; and the Technical Assistant for Media Affairs. "28 January 1988. (Sgd.) Miriam Defensor Santiago Commissioner" The aforequoted issuance effectively bars the Bureau of Internal Revenue from applying for a Hold Departure Order because there is no specific law authorizing our agency to make such a request. Moreover, violations of the penal provisions of the Tax Code such tax evasion, nonpayment of tax, etc., do not reasonably fall within the purview of the three (3) excepted grounds, i.e., national security, public safety or public health. Since the only instance where the departure of erring or delinquent taxpayers can be held is when the corresponding criminal information has already been filed and the court

issues a hold order, it is hereby directed that where chances of collection by civil action or summary remedy is futile or where flight for abroad is probable or where the taxpayer performs such acts which will impede or obstruct collection of the tax, such tax cases shall be referred to the Legal Office or Legal Branch, as the case may be, for the expeditious institution of criminal action. cdtai All concerned are enjoined to give this Circular as wide a publicity as possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-14-88 Revenue Memorandum Circular No. 14-88 March 14, 1988 REVENUE MEMORANDUM CIRCULAR NO. 14-88 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 88-03 dated March 8, 1988. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, January 1, 1988. Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas P3.3598 P3.2083 (P0.1515) Regular Gasoline 3.0188 2.7710 (.2478) Avturbo 3.5250 3.5250 Kerosene 1.1013 1.1455 .0442 Diesel 1.0564 1.0701 .0137 Fuel oil/Feedstock LPG* .7418 .9827 .2409 Thinner 3.1932 1.0461 (2.1471) Asphalts .9620 .8508 (.1112) * 1.7581/kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-09-88 Revenue Memorandum Circular No. 15-88 March 9, 1988 REVENUE MEMORANDUM CIRCULAR NO. 15-88 Subject : Guidelines Governing Travel Abroad To : All Revenue Officials and Employees

For the guidance of all revenue officials and employees, quoted hereunder are pertinent provisions of Memorandum Circular Nos. 7-84 and 5-85 of the Department of Finance regarding travel abroad. "a) Application for travel abroad of officials and employees shall be carefully screened and only those that are urgent and absolutely necessary shall be recommended. The Certificate of Urgency (Standard Form attached) shall be signed by the Deputy Minister. (For Administration) for the personnel of the Ministry (Proper) and by the Heads of Bureaus and Offices for their respective personnel. Sound judgement and impartiality shall be exercised in the issuance of this Certification. cd "b) Clearance shall be duly signed by the responsible official concerned that the applicant for authority to travel has no pending administrative, criminal or civil case (Memorandum Circular No. 7-84 dated September 4, 1984). "c) The applicant shall submit a sworn statement attested by the recommending official, stating: i) the estimated cost of the trip; ii) how the trip will be financed; iii) if on his own account, the total income of the applicant for the preceding tax year and the amount of income tax paid; iv) if for the account of other person/s, the income earned by such person/s for the preceding tax year and the income tax paid, to include both Philippines and/or foreign income tax; "No application shall be favorably considered if the expenses for such travel shall be borne by a taxpayer whose business is directly or indirectly affected by the official duties and responsibilities of the applicant." (Memorandum Circular No. 5-85 dated April 22, 1985) cd All employees are enjoined to comply strictly with these requirements. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-15-88 Revenue Memorandum Circular No. 16-88 March 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 16-88 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82 02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cdasia ------------------------SERIAL NUMBER : QUANTITY ------------------------C-0930625 : one (1) set ------------------------The above receipt which was reported missing by Mr. Restituto Salitrero, Sr., Revenue Collection Agent of Calbayog City, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-15-88 Revenue Memorandum Circular No. 17-88 March 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 17-88 Subject : Loss of Thirteen (13) Sets of Confirmation Receipts (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of thirteen (13) sets of Confirmation Receipts, to wit: ------------------------SERIAL NUMBERS : QUANTITY ------------------------13926688 - 13926700 : thirteen (13) sets ------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-24-88 Revenue Memorandum Circular No. 18-88 March 24, 1988 REVENUE MEMORANDUM CIRCULAR NO. 18-88 Subject : Effect of the implementation of E.O. No. 273 otherwise known as the Value-Added Tax Law on the requirements of withholding and remitting of taxes by government offices and agencies pursuant to R.A. No. 1051. To : All Internal Revenue Officers and Others Concerned 1. Revised Revenue Regulations No. 20-86 amending Revenue Regulations No. 483 and implementing Republic Act No. 1051 govern the manner of withholding and remitting of business, franchise and premium taxes to the Bureau of Internal Revenue due on account of money payments to be made by government offices, instrumentalities and agencies. The value-added tax imposed under E.O. No. 273 has replaced the sales tax, contractor's tax, miller's tax and broker's tax effective January 1, 1988. However, the value-added tax, the amount of which cannot be fixed, determined, computed or

ascertained at the time of such payments by the government offices, instrumentalities and agencies is not subject to the withholding and remittance provisions of R.A. No. 1051 and its implementing regulations. On the other hand, payments subject to the caterer's, room occupancy, common carrier's, franchise and premium taxes remain subject to the said withholding and remittance provisions. cd 2. Payments/billings for services completely rendered but which remain unpaid as of December 31, 1987 are still subject to the 4% contractor's tax provided that the conditions prescribed under Section 6 (g) of Revenue Regulations No. 5-87, implementing Executive Order No. 273 are complied with, in which case, the withholding and remittance provisions provided in Revenue Regulations No. 20-86 shall still apply. 3. Sales, contractor's, miller's and broker's taxes erroneously withheld during the months of January, February and March 1988, shall nevertheless be remitted to the Bureau of Internal Revenue, and may be claimed as refund or tax credit by the taxpayer concerned. 4. Money payments to persons who are exempt from the value-added tax because their gross quarterly sales or receipts did not exceed P200,000 during a 12-month period and who are, therefore, subject to a tax equivalent to 2% of their gross quarterly sales or receipts under Section 112 of the Tax Code, as amended by Executive Order No. 273, shall be covered by the withholding and remittance provisions pursuant to Revenue Regulations No. 20-86 implementing Republic Act No. 1051. cd It is desired that this Circular be given as wide a publicity as possible. (Sgd.) Eufracio D. Santos Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-30-88 Revenue Memorandum Circular No. 19-88 March 30, 1988 REVENUE MEMORANDUM CIRCULAR NO. 19-88 Subject : Loss of Twenty-Nine (29) Sets of Revenue Official Receipts (BIR Form 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of twenty-nine (29) sets of Revenue Official Receipts (BIR Form 25.24), to wit: acd Inclusive Serial Nos. Quantity 1670028 H to 1670050 H 23 sets 9866895 G to 9866900 G 6 sets The above Revenue Official Receipts were reported by Mr. Nestor S. Maceda, concurrent revenue collector of the Municipalities of Bagud and Imelda, Camarines Norte, Revenue District Office No. 44, Daet, Camarines Norte, as having been taken forcibly from him by unknown elements believed to be members of the New People's Army (NPA). The abovementioned sets of receipts have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-17-88 Revenue Memorandum Circular No. 20-88 April 17, 1988 REVENUE MEMORANDUM CIRCULAR NO. 20-88 Subject : Publishing Questions and Answers on Taxation Relative to the operations of the Philippine Ports Authority. To : All Internal Revenue Officers and Others Concerned The following are the questions and answers relative to the queries on taxation of the Philippine Ports Authority. Question 1. - For internal revenue purposes describe the Philippine Ports Authority (PPA). Answer - PPA is a body corporate created under and by virtue of P.D. 857, as amended by Executive Order No. 546, LOI No. 1005-A, Executive Order No. 159, having corporate powers and duties provided for by law. It is attached to the Department of Public Works, Transportation and Communication for policy and program coordination. The nature of its operations may be gleaned from the following provisions of P.D. 857, as amended, viz: cdtai Sec. 2 (f), Article II To ensure that all income and revenues accruing out of dues, rates, and charges for the use of facilities and services provided by the Authority are properly collected and accounted for by the Authority, that all such income and revenues will be adequate to defray the cost of providing the facilities and services (inclusive of operating and maintenance cost, administration and overhead) of the Port Districts, and to ensure that a reasonable return on the assets employed shall be realized. Sec. 6 (v), Article IV To provide services (whether on its own, by contract, or otherwise) within the Port District and the approaches thereof, including but not limited to - berthing, towing, mooring, moving, slipping, or docking any vessel; - loading or discharging any vessel; - sorting, weighing, measuring, warehousing, or otherwise, handling goods. Being a government corporate entity, PPA exercises also a propriety function in the pursuit of its corporate thrusts and objectives. Thus, corollary to the foregoing, there are identified instances where PPA provides by itself the actual rendition of port services. These instances are as follows: a) in case of takeover of cargo handling operations from private operators for lawful causes. This is commonly known as the Special Take-Over Units (STU) operation. b) When the Authority (PPA) provides the cargo handling operations itself instead of awarding it to a cargo handling operator. c) When PPA, under the above circumstances, undertakes generation or port-related services in the pursuit of its generation of non-traditional sources of revenues.

Question 2. - What port charges and fees formerly collected by the Bureau of Customs under the Tariff and Customs Code are now collected by PPA pursuant to Executive Order No. 137. Answer - The following fees and charges are now collected by PPA: 1. Harbor/anchorage fee which is a one-time charge assessed against vessels engaged in international trade every time they call at any port, is the amount the owner, agent, operator or master of a vessel has to pay for each entrance into or departure from a port of entry in the Philippines. 2. Berthing charge is the amount assessed against a vessel engaged in international trade for berthing or making fast to a vessel so berthed. 3. Usage fee is the amount assessed against a vessel engaged in coastal (domestic) trade for berthing, for making fast to a vessel so berthed or for mooring at an anchorage area. 4. Wharfage fee is the amount assessed against the cargo loaded or discharged by the vessel based on revenue tonnage for non-containerized cargo or number of boxes for containerized cargo received or discharged by such vessel. 5. Storage fee is the amount assessed on cargoes for storage in either the cargo sheds, warehouse in open storage area. casia 6. Lay-up is the fee for raising up the vessel for repair. Question 3. - Are the foregoing fees and charges subject to value-added tax (VAT)? Answer - The aforesaid fees and charges are collected by PPA to defray the cost of providing the facilities and services of the Port Districts [(Sec. 2 (j) P.D. No. 857)]. Wharfage dues partake of the nature of a fee which was then collected by the government through the Bureau of Customs and now by the PPA to support its operation of the customs service. (Procter and Gamble PMC vs. Commissioner of Customs, (19 SCRA 883). Accordingly, said fees and charges are not subject to VAT which is imposed on the consideration for the sale of service. Question 4. - Is PPA exempt from VAT on all fees/revenues/charges received? Answer - No. It is exempt from VAT only if the fees and charges arise from the use of government facilities. However, it is subject to VAT on gross receipts derived from taxable activities other than the fee for the use of the government facilities. Question 5. - Who is subject to VAT on taxable gross receipts generated by PPA from port related activities? Answer - PPA Question 6. - Can PPA pass on the VAT to its client-users? Answer - Yes, because VAT is an indirect tax. Question 7. - In case PPA enters into a contract with third parties for the operation by the latter of port facilities or performance of port related activities, where it is stipulated that PPA shall receive a percentage of fees and charges collected, what are the respective liabilities of the parties to VAT? Answer - VAT liability will not arise from receipts for the use of government facilities such as receipts from harbor and anchorage fees, berthing charges, usage fee, wharfage dues, storage fee and lay-ups. However, with respect to gross receipts from other port related activities which are taxable, VAT shall be levied based on the respective shares of the parties. For example, if the sharing arrangement is 50-50 on gross receipts from taxable activities, PPA shall be subject to 10% VAT on 50% and the third party shall be

liable to 10% VAT on the other 50%; thus, no cascading of VAT will result. The invoice to be issued by the third party to the persons paying such charges shall reflect that portion of the cost of the service as well as the VAT earmarked for PPA. Question 8. - Suppose PPA, or any party rendering port related services for that matter have already paid the contractor's tax instead of VAT, what are the consequences? Answer - PPA, or any party for that matter, will nevertheless be subject to VAT but without prejudice to their filing a tax credit or refund for erroneous payment. If PPA has withheld such taxes without having remitted the same to BIR it may refund the same to the parties directly, or remit the amount to the BIR where, upon a claim by the taxpayer concerned, the same shall be refunded or tax credited. Question 9. - Who are the parties liable for VAT in case PPA allows a private contractor to operate pursuant to a contractual agreement? aisa dc Answer - Both parties to the contract on their respective shares from gross receipts derived from taxable activities. Question 10. - Are security service contractors and consultants subject to VAT? Answer - Yes, because they are performing taxable services and not exempted from VAT under Section 103 of the Tax Code, as amended. Question 11. - May such security service contractors or consultants pass on the VAT to PPA? Answer - Yes. Question 12. - Are PPA revenues arising from the lease of its facilities/subject to VAT? Answer - No, if the property leased are real properties because such lease is exempt from VAT, pursuant to Section 103 (q) of the Tax Code, as amended. However, if the property leased are personal properties, the revenue derived from the lease thereof is subject to VAT. Question 13. - Describe the nature of the lease contract between PPA and "7-R" whereby the latter has been granted the privilege to collect storage charges for PPA in consideration for a fixed amount paid yearly to PPA? Answer - Since storage fee is exempt from VAT, "7-R" shall not bill the VAT to the cargo owners. On the other hand, the consideration received by "7-R" from PPA is for rendition of collection service as a business agent; hence, subject to VAT. Question 14. - What could be done to cargo operators who charge 10% VAT from cargo owners? Is it valid? Answer - Provided that the consideration is for the service that are subject to VAT, shifting of the VAT is proper. However, the collection of full 10% VAT from the cargo owners is not justified if the 10% VAT is computed on the basis of the rates prevailing before the implementation of the VAT and when the same was still subject to contractor's tax because the contractor's tax which used to be built-in on the basis of the total cost has already been repealed. Question 15. - May the input taxes on certain administrative expenses, such as purchases of supplies and services, be claimed as tax credit or refund? Answer - Yes, if the input tax will exceed the output tax. Question 16. - Considering that PPA has branches all over the country it would be very difficult to consolidate all the quarterly reports of their branches before the 20th day of the month following the close of the quarter; therefore, may it resort to estimated figures to determine its liability subject to adjustment later on?

Answer - No. VAT computation should be based on actual data. PPA may however request for an extension of time to file its return. Question 17. - Should the input tax be recorded as receivable from BIR? Answer - No, because input tax serves only to reduce the taxpayer's output tax; therefore, treating it as a receivable will convert it to an ordinary financial obligation which the law did not intend. Question 18. - What taxes have been replaced by VAT? Answer - The following taxes have been replaced by VAT: 1. Sales tax 2. Compensating tax 3. Advance sales tax 4. Miller's tax 5. All the fixed taxes of various businesses (PTR) 6. Contractor's tax 7. Broker's tax 8. Tax on subsequent sales Question 19. - Since PPA has no sales journal, can it add more column in its Collection and Deposit Journal entitled "10% Output VAT"? On the other hand, can it use its Journal of checks issued for "Input VAT"? Answer - The choice is up to PPA provided it is able to keep a summary of the VAT for each tax period covered by VAT return and link up such summary with the particular books where the output and input VAT are indicated. Question 20. - The principal is a firm having a tie-up with a local firm. The contract specifies that PPA will provide for the taxes to be paid by the consultant which include the contractor's tax (now VAT), Questions: Is PPA bound to pay the VAT payable by the consultant? If so, will PPA's payment of the consultant's VAT liability entitle it to claim an input tax credit? aisa dc Answer to A) - PPA's obligation to pay for the consultant's tax liability is contractual and is binding only between the parties; Therefore, notwithstanding such agreement, the consultant remains principally liable for the payment of the VAT. If the consultant's gross receipts exceed P200,000.00 during a 12-month period. VAT registration is mandatory. Otherwise, VAT registration is optional. If PPA pays for the consultant's VAT liability, it is entitled to input tax credit. Question 21. - Since the consultant's billing includes personnel services as well as reimbursements for office supplies and equipment, how will it affect the computation of the VAT? Answer - The tax base for VAT in the case of sale of services is gross receipts which means the total amount of money or its equivalent representing the contract price, compensation or service fee, including the amount charged for materials supplied with the services and deposits or advance payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person, excluding value-added tax. (Sec. 2(m), RR 5-87) Accordingly reimbursement for supplies and equipment shall form part of the consultant's gross receipts for purposes of the VAT. Question 22. - If work were completed prior to December 31, 1987 but billing were made after such date, which tax should apply?

Answer - VAT. If the contractor's tax has already been withheld, it shall be regarded as an erroneous payment which shall be refundable to the payor. Nevertheless, if the contractor's tax has already been withheld, the same shall be remitted to the BIR which shall then refund or issue a tax credit certificate in favor of the contractor/claimant. Question 23. - Should the VAT be reflected as income to be included as part of gross receipts? Answer - No. VAT is not included as part of gross receipts pursuant to Sec. 2 (m) RR 587. Question 24. - If the cargo is already subject to VAT in the outports, is it still subject to VAT in the Port of Manila? Answer - If the consideration received for services rendered in the outports is different from the consideration received in the Port of Manila, VAT shall apply for both considerations. Otherwise, if the service in the outports is treated as continuation of the services which was started or concluded in Manila, and the consideration received is for services rendered in Manila and the outports, VAT shall accrue only once. Question 25. - Some port users claim that their cargoes are exempt from VAT. What specific articles are exempt from VAT? Answer - Among others, the articles exempt from VAT include non-food agricultural, marine, or forest products if sold by the primary producer in its original state, i.e., rattan, corrals, shells, etc., agricultural food products in all stages of distribution, i.e., meat, fish, vegetables, dried fish, salted fish if merely sealed in plastic bags, corn grits, rice, raw cane sugar; fertilizers, pesticides, etc. Question 26. - Does the VAT exemption of the above articles carry VAT exemption for the port related charges or fees for services involved in handling such articles in the ports? Answer - No. The exemption is limited to sale and/or sale or importation in certain cases of the exempt articles. Question 27. - Three entities at the pier are collecting wharfage, cargo handling fees, and storage fees, namely: PPA, cargo handlers and 7-R, respectively. How does VAT affect the collection of such fees? Answer - Handling charges are subject to VAT. However, the cargo shall be subjected to VAT only once for a particular service, i.e., VAT for handling charges. Wharfage and storage fees are however exempt from VAT. However, if the activity of collecting these charges has been granted to another party for a fee, such fee is subject to VAT. aisa dc Question 28. - Is harbor pilot's fee subject to VAT? Answer - No, because harbor pilots are classified as professionals; therefore, fees received by them are exempt from VAT pursuant to Section 103 (r) of the Tax Code, as amended. Question 29. - On July 8, 1987, PPA entered into a contract with a contractor for the construction of various ports. Construction period is to run from September 1, 1987 to December 31, 1989. The contractor is obliged to perform all works in accordance with the contract specifications and to submit monthly progress billings based on actual work accomplished. In the three-month period ending December 31, 1987, the contractor completed 10% of the total work equivalent to P40 million. The corresponding progress billing has been submitted to PPA on January 15, 1988 and payable on or before February 15, 1988. What is the effect of VAT on such billings?

Answer - Work completed but not yet billed as of December 31, 1987 is subject to VAT pursuant to Sec. 6 (g) (3) of RR 5-87. Therefore, if the billing was made after such date, the gross receipt is subject to VAT. On work completed as of December 31, 1987, the contractor's tax will apply if the following conditions are present: 1. An information return was filed. 2. Work was completed and billed as of December 31, 1987. 3. Contractor has recorded in his books such amount receivable for 1987. 4. Contractor files not later than January 20, 1988 and on or before the 20th day after each calendar quarter, the regular contractor's tax return for the payment of contractors tax on payment received in 1988. Failure to comply with these conditions shall automatically subject the gross receipts to VAT of 10%. Question 30. - If the contractor in the preceding problem will request for cost adjustment to cover VAT, is PPA justified in granting an adjustment of 6% only corresponding to the difference between 10% VAT and 4% contractor's tax? Answer - Yes. Question 31. - Is PPA required to withhold the VAT for contractor's tax applicable for 1987 transaction? Answer - Payments/billings for services rendered but which remain unpaid as of December 31, 1987 are still subject to the 4% contractor's tax provided that the conditions prescribed under Section 6 (g) of Revenue Regulations No. 5-87, implementing Executive Order No. 275 are complied with, in which case, the withholding and remittance provisions provided in Revenue Regulations No. 20-86 shall still apply. (RMC 18-88). acd It should be emphasized, however, that the withholding of creditable income tax on income payments to certain contractors in accordance with Revenue Regulations No. 1378, as amended by Revenue Regulations No. 6-85, 8-85, and 13-86, shall remain. However, beginning January 1, 1988, there shall be no withholding for VAT because at the time of payment, the same cannot be determined, computed, and ascertained (RMC 18-89). Question 32. - Are revenue or administrative fines imposed by PPA subject to VAT? Answer - No, because fines are not consideration for the performance of taxable services. All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) Bienvenido A. Tan, Jr. Commissioner By: (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-26-88 Revenue Memorandum Circular No. 21-88 April 26, 1988 REVENUE MEMORANDUM CIRCULAR NO. 21-88

Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 88 - 05 dated April 12, 1988. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M., March 1, 1988. Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas 3.2083 3.1599 (0.0484) Regular Gasoline 2.7710 2.7332 (0.0378) Avturbo 3.5250 3.5195 (0.0055) Kerosene 1.1455 1.1851 0.0396 Diesel 1.0701 1.0694 (0.0007) Fuel Oil/Feedstock LPG* 0.9827 0.9553 (0.0274) Thinner 1.0461 1.0264 (0.0197) Asphalts 0.8508 0.8619 0.0111 * 1.7090/kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-18-88 Revenue Memorandum Circular No. 22-88 April 18, 1988 REVENUE MEMORANDUM CIRCULAR NO. 22-88 Subject : Loss of four (4) sets of Revenue Official Receipts (BIR Form 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of four (4) sets of Revenue Official Receipts (BIR Form 25.24), to wit: cd i Serial Number Quantity 1065276 1 set 1065301 1 set 1065303 1 set 1065304 1 set The above Revenue Official Receipts which were reported missing by Mr. Andres C. Velecina, Revenue Collection Agent of Bay, Laguna, are hereby cancelled and all official transactions involving the use of said receipts are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts are found, taking the

necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-25-88 Revenue Memorandum Circular No. 23-88 April 25, 1988 REVENUE MEMORANDUM CIRCULAR NO. 23-88 Subject : Loss of Two Sets of Confirmation Receipts (BIR Form CB 82-0203) To : All Internal Revenue Officers, Employees and Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: ------------------------SERIAL NUMBERS : QUANTITY ------------------------13431169 : one (1) set 13431225 : one (1) set ------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-12-88 Revenue Memorandum Circular No. 24-88 May 12, 1988 REVENUE MEMORANDUM CIRCULAR NO. 24-88 Subject : Loss of Six (6) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of six (6) sets of Confirmation Receipts, to wit: cdtai ------------------------SERIAL NUMBERS : QUANTITY ------------------------10178580 : one (1) set 15005081 : one (1) set 15005131 : one (1) set

15005173 - 15005175 : three (3) sets ------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-12-88 Revenue Memorandum Circular No. 25-88 May 12, 1988 REVENUE MEMORANDUM CIRCULAR NO. 25-88 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82 02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------2844073 : one (1) set ------------------------The above receipt which was reported missing by Ms. Marina Sta. Maria, Revenue Enforcement Officer, Revenue District No. 32-A, West Makati, had been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-13-88 Revenue Memorandum Circular No. 26-88 May 13, 1988 REVENUE MEMORANDUM CIRCULAR NO. 26-88 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-8202-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: aisa dc ------------------------SERIAL NUMBER : QUANTITY

------------------------2389435 : one (1) set ------------------------The above receipt which was reported missing by Mr. Carlos G. Jarabelo, Revenue Tax Enforcement Officer, Revenue Region No. 4A-Manila, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-17-88 Revenue Memorandum Circular No. 27-88 May 17, 1988 REVENUE MEMORANDUM CIRCULAR NO. 27-88 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-8202-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cda ------------------------SERIAL NUMBER : QUANTITY ------------------------C-1463503 : one (1) set ------------------------The above receipt which was reported missing by Mrs. Angelita B. Ignacio, Revenue Collection Officer, Revenue District No. 40, Gumaca, Southern Quezon, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-09-88 Revenue Memorandum Circular No. 28-88 May 9, 1988 REVENUE MEMORANDUM CIRCULAR NO. 28-88 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: cd ------------------------SERIAL NUMBER : QUANTITY

------------------------8943327 - 8943328 : two (2) sets ------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-18-88 Revenue Memorandum Circular No. 29-88 May 18, 1988 REVENUE MEMORANDUM CIRCULAR NO. 29-88 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82 02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: casia ------------------------SERIAL NUMBER : QUANTITY ------------------------C3717574 : one (1) set ------------------------The above receipt which was reported missing by Mrs. Thelma C. Gatdula, Revenue Collection Officer, Revenue District No. 35, Pasig, had been cancelled and any official transactions involving the use of said form is therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-06-88 Revenue Memorandum Circular No. 30-88 May 6, 1988 REVENUE MEMORANDUM CIRCULAR NO. 30-88 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: -------------------------

SERIAL NUMBER : QUANTITY ------------------------12500192 : one (1) set ------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-02-88 Revenue Memorandum Circular No. 31-88 May 2, 1988 REVENUE MEMORANDUM CIRCULAR NO. 31-88 Subject : Loss of Three (3) Sets of Confirmation Receipts (BIR Form CB 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of three (3) sets of Confirmation Receipts, to wit: cd ------------------------SERIAL NUMBERS : QUANTITY ------------------------12335886 : one (1) set 12335934 : one (1) set 12335977 : one (1) set ------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-12-88 Revenue Memorandum Circular No. 32-88 May 12, 1988 REVENUE MEMORANDUM CIRCULAR NO. 32-88 Subject : Loss of Original Copies of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the loss of original copies of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Number Quantity 1500052-H Original Copy 1500067-H Original Copy 1500070-H Original Copy 1500075-H Original Copy 1500207-H Original Copy The above original copies of Revenue Official Receipts which were reported missing by Revenue Collection Officer Toribio M. Aligato and Revenue Collection Assistant Danilo A. Bitong, of Maria Aurora and San Luis, Aurora, respectively, together with the other copies of the particular sets, have been cancelled and all official transactions involving the use thereof are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EUFRACIO D. SANTOS Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-15-88 Revenue Memorandum Circular No. 33-88 April 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 33-88 Subject : Administration of Local and Foreign Assisted Scholarship Grants/Training To : All Bureau of Internal Revenue Personnel In view of the need for a more effective coordination and integrated management of all scholarship grants/training extended and made available to the Bureau of Internal Revenue personnel, be it local or foreign assisted, and in line with the appropriate implementation of Civil Service Commission Memorandum Circular No. 13 S 1987, to afford an equitable distribution of scholarships to deserving personnel at all levels, henceforth, all scholarship grants/training will be coursed and administered by the Administrative Service. acd This Memorandum Circular is issued for the guidance and compliance of all concerned and takes effect immediately. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-22-88 Revenue Memorandum Circular No. 34-88 June 22, 1988 July 1, 1988 REVENUE MEMORANDUM CIRCULAR NO. 34-88

Subject : Operation of the Common Fund under the New Disbursement System To : Assistant Commissioner (Financial Service), Assistant Commissioner (Administrative Service), Regional Directors and Others Concerned. For the information and guidance of all concerned, quoted hereunder is National Budget Circular No. 398 dated June 14, 1988 of the Department of Budget and Management, which is self-explanatory: National Budget Circular No. 398 June 14, 1988 Subject : Authority to Treat Cash Balances in Servicing Banks as Common Fund under the New Disbursement System To : All Heads of Departments, Constitutional Commissions, Bureau Offices and Agencies, including State Universities & Colleges, Schools and Hospitals, Chiefs of Financial and Management Service, Chief Accountants/Heads of Accounting Units, COA Unit Auditors and All Others Concerned 1.0 Purposes 1.1 To improve cash management by authorizing flexibility in the use of funding warrants released under the New Disbursement System (NDS). 1.2 To hasten the execution of programs/projects by facilitating the timely payment of obligations pertaining thereto. 1.3 To prescribe guidelines to be followed by agencies in the operation of the Common Fund. casia 2.0 Definition of Terms 2.1 Common Fund - the total cash in bank as appearing in the books of an agency which can be availed of for payment of expenditures during the current year including terminal leave, retirement gratuity, separation pay, accounts payable, unbooked prior years obligations, etc. 2.2 Operating units - refer to organizational units below the agency regional offices with complete set of books of accounts. 2.3 Critical level - the cash in bank per books of the agency which is equivalent to or less than one (1) month operating requirements as shown in the approved Financial & Work Plan. 3.0 General Guidelines 3.1 The Common Fund is hereby authorized to be adopted for each Fund, by agency/region/operating units with complete set of books of accounts. 3.2 Initially, the Common Fund shall cover two (2) months operational requirements of each fund of an agency/operating unit (as shown in approved Financial & Work Plan), computed on the basis of the bank balance reported in the Monthly Status of Funds as of May 31, 1988. Agencies whose cash in bank as of May 31, 1988 approximately equal or exceeds (2) two months operational requirements shall not be issued additional funding warrants, until such time that the Common Fund reaches the critical level. However, agencies whose cash in bank as of May 31, 1988 is less than their two (2) months operational requirements shall be issued additional funding warrants, to constitute their common fund. 3.3 Agencies shall submit to the Accounting and Finance Bureau (AFB) concerned on or before June 15, 1988 their Trial Balance as of May 31, 1988 to be supported by the

Status of Cash Advances to Regular and Special Disbursing Officers as of the same period, broken down by year when such cash advances were given. Henceforth, the monthly Trial Balance required to be submitted on or before the 20th day of the following month shall be supported by the Status of Cash Advances. casia 3.4 A Status of Common Fund, prescribed format attached as Annex "A", shall be submitted monthly and when the Common Fund is at its critical level. This report shall replace the Monthly Status of funds required under Joint Circular No. 4-86A dated January 2, 1988. To facilitate the preparation and submission of this report, agencies are advised to maintain a subsidiary ledger for each Advice of Allotment (AA) received wherein all Request for Obligation of Allotment (ROA) drawn for all allotment class chargeable thereto shall be entered/listed. 3.5 Agencies shall pay all their obligations including cash advances to disbursing officers from the Common Fund using allotment data in the AA as control ceiling. In no case shall the total funding warrants issued for current operation exceed the total allotment released for each allotment class for the current year. 3.6 The existing accounting and auditing policy to the effect that cash advances shall be given only for payment of salaries and petty expenses and that no subsequent cash advance shall be given unless the previous cash advance had been fully liquidated, is hereby reiterated. 3.7 Funding warrants to cover payment of prior years accounts payable shall, as usual, be separately requested from the DBM. Only those Accounts Payable listed in the submitted Statement of Accounts Payable (BF 304, revised) required under Circular Letter No. 88-4 shall be considered. 3.8 Terminal leave and retirement gratuity benefits of One Hundred Thousand Pesos and below per claimant shall be processed by the agency concerned and shall be paid out of the Common Fund after the covering AA shall have been issued and recorded in the books. 3.9 Terminal leave and retirement gratuity benefits of more than One Hundred Thousand Pesos, as well as separation pay benefits of employees regardless of amount, shall be processed/evaluated by the DBM. Funding warrant shall be issued for the purpose when the balance of the Common Fund as of the end of the month prior to the immediately preceding month is not sufficient to cover payment of said benefits after considering the operating requirements for the next two months. 3.10 Agency requests for allotments to cover payment of unbooked obligations shall be supported by original documents such as invoices, job orders, bills, contracts, agreements, statements of accounts, etc. and shall be processed and evaluated by the DBM. Funding warrant shall be issued depending on the status of the Common Fund as of the end of the month prior to the immediately preceding month. 3.11 Funding warrants issued to cover payment of the following shall be deposited to the same current account maintained for, and shall form part of the Common Fund: cd i 3.11.1 prior years accounts payable; 3.11.2 retirement gratuity and terminal lease of more than P100,000 3.11.3 separation pay; and 3.11.4 prior years unbooked obligations 3.12 Requests for replenishment of the Common Fund shall be made whenever the fund is at its critical level to be supported by the Status of Common Fund Report and the

Statement of Charges to Accounts Payable (BF 305). Accordingly BF 305 shall now be submitted every month instead of every quarter. 3.13 Unutilized allotments in any expenditure item under Maintenance and Other Operating Expenses may be used to augment other items under the same allotment class, provided that no item of expenditure shall be augmented by more than twenty-five percent (25%) of the augmented (recipient) expenditure item, without the approval of the Secretary of Budget and Management. 3.14 The Department of Health, the Department of Education, Culture and Sports and the Department of Public Works and Highways shall convert the operation of their Common Fund into the procedures prescribed in this Circular. 3.15 At the end of the Calendar year 1988 and every year thereafter, all unobligated balances of allotments shall be reverted to the Unappropriated Surplus except those released from continuing appropriations. The corresponding cash, however, shall not be remitted to the National Treasury but shall remain with the agencies servicing banks to backup the allotments to be released in the ensuing year. 3.16 The Common Fund shall not be applicable to Trust Liabilities which are authorized to be maintained under a separate bank account. cdasia 4.0 Saving Clause Cases not covered by this Circular shall be referred to the concerned Accounting and Finance Bureau, Department of Budget and Management. 5.0 Repealing Clause All provisions of existing circulars and other issuances inconsistent with this circular are hereby rescinded/repealed and/or modified accordingly. cdasia 6.0 Effectivity This circular shall take effect July 1, 1988. (Sgd.) Guillermo N. Carague Secretary Please be guided accordingly. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-22-88 Revenue Memorandum Circular No. 35-88 June 22, 1988 REVENUE MEMORANDUM CIRCULAR NO. 35-88 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 88-07 dated June 17, 1988. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M. May 1, 1988. cd Peso/Liter Products Previous Tax Present Tax Difference

Premium/Avgas P3.1599 P3.0421 Regular Gasoline 2.7332 2.6079 (0.1253) Avturbo 3.5195 3.5195 Kerosene 1.1851 1.1136 (0.0715) Diesel Fuel 1.0694 1.0510 (0.0184) Fuel Oil (Bunker) LPG* 0.9553 0.9436 (0.0117) Asphalts 0.8619 0.7468 (0.1150) Thinners 1.0264 0.9868 (0.0396)

(P0.1178)

* P1.6881/kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-04-88 Revenue Memorandum Circular No. 36-88 July 4, 1988 REVENUE MEMORANDUM CIRCULAR NO. 36-88 Subject : Publication of the missing original copy of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions) (BIR Form 1954) bearing serial number 415951. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions) (BIR Form 1954), to wit: casia Serial Number Quantity 415951 original copy The above copy of Certificate Authorizing Registration, which was reported missing by Mrs. Amelita A. Bejerano, Revenue Accountable Forms Officer of Revenue Region No. 9, Zamboanga City, as well as the other copies of the set are hereby cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the said original copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-08-88 Revenue Memorandum Circular No. 37-88 July 8, 1988 REVENUE MEMORANDUM CIRCULAR NO. 37-88 Subject : Loss of the Auditor's Copy of Revenue Official Receipt (BIR Form 25.24) bearing serial number 2999439-H.

To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the Auditor's Copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: casia Serial Number Quantity 2999439-H Auditor's Copy The above copy of revenue official receipt which was reported as missing by the Assistant Regional Director of Revenue Region No. 4-C, San Pablo City, as well as the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-18-88 Revenue Memorandum Circular No. 38-88 July 18, 1988 REVENUE MEMORANDUM CIRCULAR NO. 38-88 Subject : Loss of fifteen (15) original copies (BIR National Office Copy) of revenue official receipts bearing inclusive serial numbers 1885818 H - 1885832 H. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of fifteen (15) original copies of revenue official receipts (BIR Form 25.24), to wit: Inclusive Serial Numbers Quantity 1885818 H - 1885832 H Fifteen (15) Original Copies The above copies of revenue official receipts were reported missing by Ms. Concesa R. Valencia, Revenue Collection Assistant of Revenue District No. 71, Isabela, Basilan. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-14-88 Revenue Memorandum Circular No. 39-88 July 14, 1988 July 14, 1988 REVENUE MEMORANDUM CIRCULAR NO. 39-88 Subject : Provision of R.A. No. 465, as Amended by R.A. No. 6511 To : All Revenue Officials and Employees

For the information and guidance of all Officials and employees, quoted hereunder is the letter of the Commissioner, Professional Regulation Commission dated July 29, 1988: aisa dc June 29, 1988" "Hon. Vicente Jayme Secretary of Finance Manila "S i r : "This refers to the provision of R.A. No. 465, as amended by R.A. No. 6511, requiring that the current annual registration or professional ID card of a registered professional shall be presented to the collection agent of the Bureau of Internal Revenue (now, City or Municipal Treasurer) when paying his professional tax and the registration number, date of issuance and the year shown on the card shall be indicated on the official receipt as evidence that the payor is authorized by law to practice the profession. "The annual registration or professional ID card issued to a registered professional is now valid for three (3) years from the year of its issuance and until his birthmonth following its expiry date indicated in the card. The extended validity up to birthmonth is a grace period granted to a defaulting professional. cd "The Commission earnestly requests your cooperation in seeing to it that the above mandatory provision of R.A. No. 465, as amended is fully complied with, to serve public interest and welfare. "Thank you. Yours truly, (Sgd.) Julio B. Francia, Jr." Commissioner Please be guided accordingly. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-01-88 Revenue Memorandum Circular No. 40-88 August 1, 1988 August 1, 1988 REVENUE MEMORANDUM CIRCULAR NO. 40-88 Subject : Memorandum Circular No. 65, "Further Amending Circular No. 163, Dated March 5, 1968, as Amended, particularly as regards the Retention in the Service of Persons who have reached the Compulsory Retirement Age of 65 Years." To : All Revenue Officials and Employees For the guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 65, dated June 14, 1988 of the Office of the President: "MEMORANDUM CIRCULAR NO. 65 "Further Amending Circular No. 163, Dated March 5, 1968, as Amended, particularly as regards the Retention in the Service of Persons who have reached the Compulsory Retirement Age of 65 Years.

"WHEREAS, this Office has been receiving requests for reinstatement and/or retention in the service of employees who have reached the compulsory retirement age of 65 years, despite the strict conditions provided for in Memorandum Circular No. 163, dated March 5, 1968, as amended. cd i "WHEREAS, the President has recently adopted a policy to adhere more strictly to the law providing for compulsory retirement age of 65 years and, in extremely meritorious cases, to limit the service beyond the age of 65 years to six (6) months only. "WHEREFORE, the pertinent provision of Memorandum Circular No. 163 on the retention in the service of officials or employees who have reached the compulsory retirement age of 65 years, is hereby amended to read as follows: "Officials or employees who have reached the compulsory retirement age of 65 years shall not be retained in the service, except for extremely meritorious reasons in which case the retention shall not exceed six (6) months." "All heads of departments, bureaus, offices and instrumentalities of the government including government owned or controlled corporations, are hereby enjoined to require their respective offices to strictly comply with this circular." cd "This Circular shall take effect immediately. By authority of the President: (Sgd.) Catalino Macaraig, Jr. Executive Secretary "Manila, June 14, 1988" Strict compliance with the foregoing is hereby enjoined. (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-01-88 Revenue Memorandum Circular No. 41-88 August 1, 1988 August 1, 1988 REVENUE MEMORANDUM CIRCULAR NO. 41-88 Subject : Memorandum Circular No. 66, "Providing That All Heads of Commissions, Bureaus, Offices and Other Agencies under the Line Departments to Course their Communications to the President of the Philippines through the Department Head, Subject to Certain Exceptions." To : All Revenue Officials and Employees For the guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 66, dated June 14, 1988 of the Office of the President: "Memorandum Circular No. 66 "Providing that all Heads of Commissions, Bureaus, Offices and other Agencies under the Line Departments to course their Communications to the President of the Philippines through the Department Head, Subject to certain exceptions. "Unless there are urgent and compelling reasons that require that heads of commissions, bureaus, offices and other agencies under the line departments communicate directly with

the President, all communications, reports or correspondence from such officials shall be coursed through the respective department heads. cda "Strict compliance with this Circular is enjoined. By authority of the President: (Sgd.) Catalino Macaraig, Jr." Executive Secretary "Manila, June 14, 1988" Strict compliance with the foregoing is hereby enjoined. cda (Sgd.) Bienvenido A. Tan, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-02-88 Revenue Memorandum Circular No. 42-88 August 2, 1988 August 2, 1988 REVENUE MEMORANDUM CIRCULAR NO. 42-88 Subject : Denial of Claim for Employee Benefits To : All Regional Directors, Assistant Commissioners and other Internal Revenue Officers Concerned. For the information and guidance of all Regional Directors, Assistant Commissioners and other internal revenue officers concerned, quoted hereunder is the memorandum of the undersigned dated June 20, 1988: "June 20, 1988" "MEMORANDUM FOR: The Chief, Personnel Division "This refers to the claim for employee benefits of Mr. ZACARIAS NUEZ, former internal revenue employee who was considered resigned from the service effective November 7, 1979. acd "The records show that on July 23, 1979, Mr. Nuez was administratively charged for grave misconduct in Office; that on November 7, 1979, then Acting Commissioner Efren I. Plana terminated his services in this wise: "In line with the decision of the President yesterday, you are hereby considered resigned effective as of the date hereof." "that subsequent requests for reinstatement have been denied; that similarly, his claim for employee benefits have been repeatedly denied because the act of the Commissioner in terminating his service by considering him resigned is, in effect, a separation for cause thus resulting in the loss of employee benefits; that the 3rd Indorsement dated November 23, 1987 by the Revenue Service Chief, (Inspection) stated the case against Mr. Nuez as follows: ". . . Had the Administrative case against Mr. Nuez been pursued, the same would have resulted to his dismissal from the revenue service in view of the overwhelming evidences against him."

"It is observed that his wife had been tirelessly writing letters to then Commissioner Ruben B. Ancheta, and lately to President Corazon C. Aquino, professing innocence in behalf of her husband and claiming employee benefits. Each time such letter is received, time is wasted recovering the dockets elsewhere in our records file. Since denial of employee benefits in the case of Mr. Nuez is justified by the overwhelming weight of evidence and considering the length of time that has already elapsed since his separation from the service in 1979, the possibility of having his request for benefits being granted is almost nil. cd "In view, thereof, and in order to immediately deal with the claim of Mr. Nuez let this Memorandum be circularized for the information and easy reference by all persons concerned. "xxx xxx xxx" Please be guided accordingly. acd BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-15-88 Revenue Memorandum Circular No. 43-88 August 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 43-88 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-8202-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: cd i ------------------------SERIAL NUMBER : QUANTITY ------------------------C-2873345 : one (1) set ------------------------The above receipt which was reported missing by Ms. Gloria G. Agodon, Revenue Collection Officer of Laoag City, has been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-24-88 Revenue Memorandum Circular No. 44-88 August 24, 1988 REVENUE MEMORANDUM CIRCULAR NO. 44-88

Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Order dated August 16, 1988. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M., July 1, 1988. cd i Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas 3.0421 3.1006 .0585 Regular Gasoline 2.6079 2.7436 .1357 Avturbo 3.5195 3.0217 (.4978) Kerosene 1.1136 1.0506 (.0630) Diesel Fuel 1.0510 1.0401 (.0109) Fuel Oil/Feedstock LPG .9436 .9070 (.0366) Asphalts .7468 .7606 .0138 Thinners .9868 1.0091 .0223 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-88 Revenue Memorandum Circular No. 45-88 September 7, 1988 REVENUE MEMORANDUM CIRCULAR NO. 45-88 Subject : Accrual of documentary stamps tax liability on Deeds of Sale. To : All Internal Revenue officers and others Concerned. In view of the divergence of interpretations regarding the time of accrual of the documentary stamps tax liability on Deeds of Sale required under Sec. 196 of the Tax Code as amended, the following clarificatory guideline are hereby issued: The pertinent provisions of law involved are Sec. 173 and 201 of the Tax Code, as amended: aisa dc Sec. 173 provides that: I. In general documentary stamps are to be affixed a) Upon documents, instruments and papers; and b) Upon acceptances, assignments, sales and transfers of obligation, right of property incident thereto. II. The responsibility to pay the documentary stamps are lodged on The person making, signing, issuing, accepting and transferring the same. III. Time of Payment of the documentary stamps is: AT THE SAME TIME SUCH ACT IS DONE OR TRANSACTION HAD On the other hand, Sec. 201 1) Gives the effect of failure to stamp documents:

a) That the document shall not be recorded; and b) The record of transfer shall not be admitted or used in evidence in court. 2) Reminds the Notary Public or other officer authorized to administer oaths: a) Not to add his jurat or acknowledgment to documents subject to documentary stamps unless the same are affixed and cancelled. These two codal provisions are plain, clear and unambiguous and leaves no room for interpretation considering that while Sec. 173 fixed the time for payment and affixture of documentary stamps by the person making, signing, issuing, accepting or transferring the same and AT THE SAME TIME SUCH ACT IS DONE OR TRANSACTION HAD Sec. 201 on the other hand, merely provides the effect of failure to affix the stamps and prohibits the notary public from adding his jurat to a document where no documentary stamps are affixed. cdtai Documentary stamps should therefore be bought and/or affixed on the documents at the time such ACT IS DONE OR TRANSACTION HAD (meaning the date of execution or signing of the document). The time of execution is not extended to the time of the notarization of the Deed of Sale as this subsequent act of the Notary Public merely attests to the authenticity of the signatures of the parties to a Deed of Sale but does not confer validity or completion to the contract. The conclusion that the phrase "at the time such act is done or transaction had" should be construed to mean to be the same as the time when the Notary Public adds his jurat or acknowledgment to the document is therefore, not in place. aisa dc All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cda BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-02-88 Revenue Memorandum Circular No. 46-88 September 2, 1988 REVENUE MEMORANDUM CIRCULAR NO. 46-88 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------13952869 : one (1) set ------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia

VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-12-88 Revenue Memorandum Circular No. 47-88 September 12, 1988 REVENUE MEMORANDUM CIRCULAR NO. 47-88 Subject : Publishing Central Bank Letter dated July 7, 1988, endorsing the request of the Association of International Shipping Lines with the BIR for zero-rating of all services rendered to foreign shipping lines. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, hereunder is the full text of the Central Bank letter dated July 7, 1988 addressed to the Chairman of the VAT Review Committee: "July 7, 1988 Mr. Jaime M. Maza Chairman, VAT Review Committee Bureau of Internal Revenue Diliman, Quezon City Subject : ASSOCIATION OF INTERNATIONAL SHIPPING LINES, INC. Request with the BIR for zero-rating of all services rendered to foreign shipping lines.

Dear Mr. Maza: We refer to attached copy each of letters dated May 27, 1988 and June 9, 1988 from the Association of International Shipping Lines, Inc. seeking confirmation from this Office "that the portions of freight collections used to pay services rendered to the vessel can be deemed inwardly remitted funds" which is one of the requirements for the applicability of 0% value-added tax on services under Section 102(a)(2) of the NIRC as amended by E.O. 273. cdasia From our meeting held with you and the representations made by the Association of International Shipping Lines, Inc., we were made to understand that: 1. For VAT purposes, the rate of 10% applies to all business sales which are not specifically zero-rated or exempted; and 2. Services, the consideration for which are paid for in acceptable foreign currency remitted inwardly to the Philippines and accounted for in accordance with the rules and regulations of the Central Bank are zero-rated. Under existing Central Bank foreign exchange rules and regulations, specifically Central Bank Circular 1028 dated October 12, 1984, all foreign exchange earnings or acquisitions of residents from services rendered to non-residents are required to be inwardly remitted into the country within fifteen (15) calendar days from the date ownership accrues over the funds, and sold for pesos to authorized agent banks within three (3) days from their receipt in the Philippines.

On the other hand, under existing regulations, shipping companies authorized to do business in the Philippines, are, subject to prior Central Bank approval, allowed to remit abroad thru authorized agent banks their freight collections net of: a) commissions and fees due to resident agents and B) reimbursements of advances made by local shipping agents for vessel related expenses. aisa dc In view thereof, we interpose no objection to the request of the Association of International Shipping Lines, Inc., that "the portions of freight collections used to pay services rendered to the vessels be deemed inwardly remitted funds" provided that in all cases, prior Central Bank approval is secured to deduct said funds from the remittable freight collections. Very truly yours, (SGD.) GREGORIO R. SUAREZ Director cc: Association of International Shipping Lines, Inc. Features of the Central Bank Letter: Under this Central Bank letter, the proposal of the Association of International Shipping Lines, Inc., that the portions of freight collections used to pay services rendered to the vessels be deemed inwardly remitted funds, and hence, be subject to zero-rating, is endorsed by the Central Bank, provided that, in all cases, prior Central Bank approval is secured to deduct said funds from the remittable freight collections. Similarly situated taxpayers can avail of the same privileges extended to the associations as long as they comply with the requirements set by the Central Bank. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd i VICTOR A. DEOFERIO, JR. Acting Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-19-88 Revenue Memorandum Circular No. 48-88 September 19, 1988 REVENUE MEMORANDUM CIRCULAR NO. 48-88 Subject : Loss of two (2) booklets of Letters of Authority, (BIR Form No. 19.65-A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) booklets of Letters of Authority (BIR Form No. 19.65-A), to wit: cdt Inclusive Serial Numbers Quantity A-0107901 RR to A-0107950 RR one (1) booklet A-0107951 RR to A-0108000 RR one (1) booklet The above booklets of Letters of Authority which were reported as missing by Revenue District Officer Sam T. Dizon of Revenue District No. 89, Davao City, have been cancelled and all official transactions involving the use thereof are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned copies of Letters of Authority is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-15-88 Revenue Memorandum Circular No. 49-88 September 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 49-88 Subject : Loss of Three (3) Sets of Payment Orders (BIR Form RC-82-0202) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of three (3) sets of Revenue Payment Order, to wit: cdt ------------------------SERIAL NUMBERS : QUANTITY ------------------------C2890730 - C2890732 : Three (3) sets ------------------------The above receipts which were reported missing by Ms. Alma C. Surpia, Revenue Collection Officer of San Juan, Metro-Manila, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-23-88 Revenue Memorandum Circular No. 50-88 September 23, 1988 REVENUE MEMORANDUM CIRCULAR NO. 50-88 Subject : Missing Quadruplicate Copy of Letter of Authority, (BIR Form No. 19.65-A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing quadruplicate copy of Letter of Authority (BIR Form No. 19.65-A), to wit: cdasia Serial Number Quantity 0415672-RR one (1) copy (quadruplicate) The above copy of Letter of Authority which was reported as missing by Assistant Revenue Regional Director Arturo S.P. Guevara of Revenue Region No. 4-C, San Pablo City, together with the original and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy of Letter of Authority is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-23-88 Revenue Memorandum Circular No. 51-88 September 23, 1988 REVENUE MEMORANDUM CIRCULAR NO. 51-88 Subject : Loss of Four (4) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of four (4) sets of Confirmation Receipts, to wit: cd ------------------------SERIAL NUMBERS : QUANTITY ------------------------14159679-14159682 : Four (4) Sets ------------------------The above receipts which where reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-27-88 Revenue Memorandum Circular No. 52-88 October 27, 1988 REVENUE MEMORANDUM CIRCULAR NO. 52-88 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: casia ------------------------SERIAL NUMBERS : QUANTITY ------------------------15477017-15477018 : Two (2) Sets -------------------------

The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-04-88 Revenue Memorandum Circular No. 53-88 November 4, 1988 REVENUE MEMORANDUM CIRCULAR NO. 53-88 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 88-09 dated October 14, 1988. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, September 1, 1988. cdt Peso/Liter Products Previous Tax Present Tax Difference July 1 September 1 Premium/Avgas P 3.1006 P 2.8742 (.2264) Regular Gasoline 2.7436 2.4789 (.2647) Avturbo 3.0217 2.7785 (.2432) Kerosene 1.0506 0.9630 (.0876) Diesel Fuel 1.0401 0.9257 (.1144) Fuel Oil (Bunker) l p g .9070 0.9519 .0449 Asphalts .7606 0.7505 (0.101) Thinners 1.0091 0.9287 (.0804) All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-29-88 Revenue Memorandum Circular No. 54-88 November 29, 1988 REVENUE MEMORANDUM CIRCULAR NO. 54-88

Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 88-10 dated November 18, 1988. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, November 1, 1988. cdtai Peso/Liter Products Previous Tax Present Tax Difference Sept. 1 November 1 Premium /Avgas 2.8742 P2.5261 (.3481) Regular Gasoline 2.4789 2.1421 (.3368) Avturbo 2.7785 2.4323 (.3462) Kerosene 0.9630 0.8491 (.1139) Diesel Fuel 0.9257 0.7932 (.1325) Fuel Oil (Bunker) LPG 0.9519 0.8543 (.0976) Asphalts 0.7505 0.6376 (.1129) Thinners 0.9287 0.8133 (.1154) All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cda BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-15-88 Revenue Memorandum Circular No. 55-88 November 15, 1988 REVENUE MEMORANDUM CIRCULAR NO. 55-88 Subject : Loss of Original and Duplicate copies of Letters of Authority (BIR Form No. 19.65-A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the original and duplicate copies of Letters of Authority (BIR Form No. 19.65-A), to wit: cd Serial Number Quantity 0021064 NA 2 copies (original and duplicate) 0021065 NA 2 copies (original and duplicate) The above copies of Letters of Authority which were reported as lost by Revenue Enforcement Officers Angeles C. Bautista and Elenita B. Quimosing of the Industry Audit Division, together with the other copies of the sets, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies of Letters of Authority are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd BIENVENIDO A. TAN, JR.

Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-24-88 Revenue Memorandum Circular No. 56-88 November 24, 1988 REVENUE MEMORANDUM CIRCULAR NO. 56-88 Subject : Loss of one (1) stub of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) stub of Revenue Official Receipts (BIR Form No. 25.24), to wit: cd Serial Number Quantity 2162851 H 2 copies (duplicate and triplicate) 2162852 H - 2162900 H nine (9) sets The abovementioned revenue official receipts were reported as lost by Mr. Cesar S. Empeynado, Revenue Collection Assistant of Jose Dalman, Zamboanga del Norte. Revenue official receipts bearing inclusive serial numbers 2162852 H to 2162900 H are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets of revenue official receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-12-88 Revenue Memorandum Circular No. 57-88 December 12, 1988 REVENUE MEMORANDUM CIRCULAR NO. 57-88 Subject : Unauthorized disclosure of official or confidential information. To : All revenue officials and employees. This Office has observed lately that official and confidential information have been divulged to media and other fora, obviously in an unauthorized manner, in wanton violation of existing laws and regulations on the matter. To preclude the recurrence of such leakages which erode the confidence of the taxpaying public in the reliability and ability of this Bureau to safeguard the secrecy of their tax records, all concerned are hereby reminded to comply with the provisions of Subtitle I, Section A, Subsection 5, paragraphs (9) and (10) of the Code of Conduct for Bureau of Internal Revenue Employees promulgated in Revenue Memorandum Order No. 16-87, which state: cdtai "5. Official Relations with Public. xxx xxx xxx

"(9) Disclosure of official or confidential information. Any officer or employee of the Bureau of Internal Revenue may not divulge to any person or make known in any other manner than may be provided by law information regarding the business, income, or estate of any taxpayer, the secrets, operation, style of work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties except as provided in Section 74 now "Section 64" of the tax code, as amended and Section 26 of Republic Act No. 6388. xxx xxx xxx "(10) Service Operations not to be disclosed The contents of any internal management documents designated, 'official use only, are not to be disclosed without authority. Information concerning investigations by the Bureau must not be disclosed in an unauthorized manner. As a precaution against improper disclosure of information, employees should engage in loose talk concerning the business of the service. They should consult their supervisors whenever there is any question as to the propriety of releasing any specific information." xxx xxx xxx Revenue personnel found violating the aforequoted rules are not only liable administratively but also criminally, together with any person who may have procured the violation thereof, pursuant to the provisions of Sec. 269 and Sec. 277 of the Tax Code, which state: cdtai "Sec. 269. Unlawful divulgence of trade secrets. - Except as provided in Section 64 of this Code and Section 26 of Republic Act Numbered 6388, any officer or employee of the Bureau of Internal Revenue who divulged to any person or makes known in any other manner than may be provided by law information regarding the business, income, or estate of any taxpayer, the secrets, operation, style of work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, shall, upon conviction for each act or omission, be fined in a sum of not less than five thousand pesos but not more than ten thousand pesos, or imprisoned for a term of not less than six months but not more than five years, or both. (as inserted by PD 1994)" "Sec. 277. Procuring unlawful divulgence of trade secrets. - Any person who causes or procures an officer or employee of the Bureau of Internal Revenue to divulge any confidential information regarding the business, income, or inheritance of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, and which it is unlawful for him to reveal, and any person who publishes or prints in any manner whatever, not provided by law, any income, profits, losses, or expenditures appearing in any income tax return shall be fined in a sum of not more than two thousand pesos or imprisoned for a term of not less than six months nor more than five years, or both. (As Amended by PD 1994)" casia Strict compliance herewith is hereby enjoined. (Sgd.) BIENVENIDO A. TAN, JR. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

12-08-88 Revenue Memorandum Circular No. 58-88 December 8, 1988 REVENUE MEMORANDUM CIRCULAR NO. 58-88 Subject : Publishing the Memorandum Agreement between the Bureau of Internal Revenue and the Department of Science and Technology (DOST) on the Certification and Accreditation requirements for Private Science Foundations to avail of the tax exemption privileges under existing laws, rules and regulations. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, hereunder is the full text of the letter of the Commissioner of Internal Revenue to the Secretary of the Department of Science and Technology as well as the Memorandum dated August 30, 1988. "August 31, 1988 The Honorable Secretary Antonio V. Arizabal Department of Science and Technology (DOST) Gen. Santos Avenue, Bicutan, Taguig Metro Manila Dear Secretary Arizabal, With reference to your letter dated July 21, 1988, please find enclosed a copy of the memorandum dated August 30, 1988 which I have approved regarding the certification and accreditation requirements to be followed, in order that private science foundations may continue to avail of the tax exemption privileges under existing laws, rules and regulations. cdasia If you are agreeable to the stated arrangements, kindly indicate your conforme by signing your name on the space provided below and return a copy to this Office. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner Conforme: As an Interim Arrangement (SGD) ANTONIO V. ARIZABAL Secretary Department of Science and Technology" "August 30, 1988 MEMORANDUM FOR: The Commissioner Subject Certification and Accreditation of Private Science Foundations I respectfully recommend the following arrangements for the certification and accreditation of private science foundations in order for them to continue availing of the tax exemption privileges under existing laws, rules and regulations: cda :

1. DOST shall process all applications for certification and certify to the BIR that the applicant is a certified science/technology and/or research foundation. It shall also certify that donations made to certified foundations or received from another certified foundations are to be used actually, directly and exclusively for scientific and technological activities; 2. DOST shall in the course of its evaluation of application of existing foundations inspect the facilities and review the projects of said certified foundations and recommend the suspension and/or revocation of the certification for violation of the terms and conditions specified under NSTA Regulations; cd 3. BIR shall issue the accreditation to private science/technology and research foundations as a donee institution which comply with all the requirements therefor, pursuant to existing BIR-NEDA Regulations; it shall approve the tax exemption of all funds contributed to the support and maintenance of certified and accredited foundations which are to be actually, directly and exclusively used for scientific and technological pursuit; 4. BIR shall examine and audit the books of accounts of certified foundations pursuant to Section 236 of the Tax Code as amended, their investment portfolio, the utilization of donated funds/properties, and determine the amount of tax payable, if any is found due; and recommend suspension and/or cancellation of the accreditation for failure to comply with the laws and BIR-NEDA Regulations No. 1-81 as amended by Revenue Regulations Nos. 1-82 and 10-82. cdt Respectfully Submitted: (SGD) ALICIA L. TOMACRUZ Asst. Chief, Int'l. Tax Affairs Division APPROVED: (SGD) BIENVENIDO A. TAN, JR. Commissioner Conforme: As an Interim Arrangement (SGD) ANTONIO V. ARIZABAL Secretary Department of Science and Technology" All Internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide publicity as possible. cda BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-14-88 Revenue Memorandum Circular No. 59-88 December 14, 1988 REVENUE MEMORANDUM CIRCULAR NO. 59-88

Subject : Publishing Questions and Answers on Taxation Relative to the Establishment and Operation of the Security Printing Plant (SPP) and the Mint and Gold Refinery (MGR) of the Central Bank. To : All Revenue Officers and Others Concerned. The following are the questions and answers relative to the establishment of the operation of the CB Security Printing Plant and the Mint and Gold Refinery; Question 1: State the legal provisions that serve as bases in the establishment of the CB SPP-MGR. Answer: Under Section 1 of Presidential Decree 484, as amended by Presidential Decree 783, the Central Bank of the Philippines is authorized to operate a Security Printing Plant for the printing of banknotes, as well as to undertake such other security printing work as the facilities of the plant would permit, as well as to establish and operate a Gold Refinery and a Mint. aisa dc Question 2: What is the tax treatment of the operation of the two offices? Answer: Under Section I-A of PD 484 as amended by PD 783, the Central Bank shall be exempt from all forms of taxation and from duties and all other imposts on machineries, equipment, raw materials and supplies that it may import. Question 3: In the light of Executive Order No. 93, are the tax exemption privileges granted to CB under PD 484, as amended, still effective? Answer: Since E.O. No. 93 has withdrawn all tax and duty incentives granted to private and government entities, the tax exemption privileges granted to operations of the SPP and MGR are rendered ineffective. Question 4: Who are the present clients of the CB-SPP? Answers: The CB-SPP renders services to and charges printing fees from the banking community for the printing of MICR checks and from various government agencies for the printing of non-check security documents. Question 5: Are the printing charges subject to VAT? Answer: Pursuant to Section 99 of the Tax Code, as amended by EO 273, the printing activity can be classified as a service rendered by a person liable to VAT, thus, the printing charges are subject to the 10% VAT (VAT Ruling No. 379-88.) Question 6: How does the CB operate its MGR? Answer: In order to boost international reserves which consist of gold and other assets denominated in foreign currency, the Central Bank purchases gold and silver from local sources. The said materials are then refined for the Central Bank's account by MGR which decides on the refining schedule and purity and form of the refined products as dictated by its use which is primarily for international reserves. Unlike foreign refineries which are most privately owned, the MGR does not perform tolling services wherein raw gold bullion is refined for a fee and subsequently returned to the owner. acd Question 7: What is the nature and tax treatment of the refining fees? Answer: The pre-determined refining cost or fee is basically an accounting entry for internal control purposes i.e. the amount, instead of being directly paid by the seller of raw gold, is charged against the total value of the material as billed by CB which in turn charges the said amount against the annual budget. Since the refining fee is for the account of the Central Bank, the refining process does not partake the nature of a taxable service; hence it is not subject to VAT.

Question 8: What are the taxes applicable to the local suppliers of gold and silver to CB? Answer: 1. On the basis of the determined value of each of the metal contents of a. raw gold/silver bullion from primary producers with average assay of 53% gold and 30% silver; b. silver dore from the Philippine Associated and Refining Corporation (PASAR) with average assay of 25% gold and 75% silver; c. Gold and silver from traders and panners with gold assay ranging from 75% to 99% (in the case of panned gold) and silver assay ranging from 75% to 99% (in the case of silver) the purchase of gold is considered an export sale pursuant to E.O. 581 and Section 169 of CB Circular No. 960 is exempt from VAT. However, if such sale is made by a VAT registered firm, it is subject to zero-rate (Section 100 (a) (1) of the Tax Code as amended by EO 273). On the other hand, the purchase of silver is not considered an export sale and is therefore subject to 10% VAT which the Central Bank can claim as an input tax against its zero-rated VAT (in case silver is exported or sold to a BOI-registered entity exporting at least 70% of its output) or its 10% VAT (in case silver is sold domestically). For invoicing purposes, the seller shall segregate in its VAT invoice the sale of gold from the sale of silver. 2. On the basis of the actual market value of the annual gross output, the sale of gold/silver bullion and silver dore is subject to 5% excise tax (Section 151(a)(3) of the Tax Code, as amended by E.O. 273.) Question 9: What is the tax treatment of gold panners/traders who operate as small scale mining enterprises and are not VAT registered? cdasia Answer: The sale of gold by non-VAT registered gold panners/traders to Central Bank is considered an export sale and is exempt from VAT pursuant to EO 581. However, if the panner/trader is VAT registered the sale is zero-rated in addition to the 5% excise tax on the production of gold under Section 151 of the Tax Code, as amended. Question 10: What is the tax treatment of the sale of refined gold and silver by CB? Answer: The sale of gold grains to local jewellers and industrial users is subject to 10% VAT; however; if such output is sold as raw material to a BOI-registered exportproduct, the sale shall be subject to zero rate subject to the conditions under Section 2 of RR 2-88. Moreover, its export of refined silver (silver bars) is subject to 0%. (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-10-89 Revenue Memorandum Circular No. 1-89 January 10, 1989 REVENUE MEMORANDUM CIRCULAR NO. 1-89 Subject : Restoration of Tax Incentives by the Fiscal Incentives Review Board (FIRB). To : All Internal Revenue Officers and Others Concerned.

For the information and guidance of all concerned, there is published hereunder the letter of the Undersecretary of Finance dated January 3, 1989 to the Commissioner of Internal Revenue to the effect that the Department of Finance has maintained the position that resolutions of the Fiscal Incentives Review Board (FIRB) restoring tax exemptions or preferential treatment pursuant to Section 2 of Executive Order No. 93 are valid, binding and are still enforced to date, notwithstanding the Secretary of Justice Opinion No. 77, series of 1977 finding that provision to constitute an undue delegation of legislative power which is only advisory in nature; and that, therefore, Resolution No. 24-87 issued by the FIRB on July 14, 1987 restoring certain tax and duty privileges of electric cooperatives is considered in full force and effect; hence, BIR Ruling Nos. 369-88 and 469-88 should be cancelled insofar as the same are inconsistent with the said FIRB resolution. acd "03 January 1989 "The Honorable Commissioner Bureau of Internal Revenue Quezon City Restoration of Tax Incentives by the FIRB Sir: "Resolution No. 24-87 issued by the FIRB on 14 July 1987 (copy attached) restoring certain tax and duty privileges of electric cooperatives is considered in full force and effect. Accordingly, BIR Ruling No. 369-88, reiterated by BIR Ruling No. 469-88, should be cancelled in so far as the same is inconsistent with the aforestated FIRB resolution. aisa dc "In this connection, we are sending you copy of our letter dated 28 December 1988 addressed to the Manager, Agusan del Sur Electric Cooperative Inc. reiterating the applicability of FIRB Resolution No. 24-87. It will be appreciated if you would advise your Regional District Officer, Revenue District No. 81, Bayugan, Agusan del Sur of this action. The letter of RDO Eligio C. Rosales dated 21 November 1988 is attached for your reference. "The Department of Finance has maintained the position that resolutions of the Fiscal Incentives Review Board (FIRB) restoring tax exemptions or preferential treatment pursuant to Section 2 of Executive Order No. 93 are valid and binding. The Opinion of the Secretary of Justice issued 06 August 1987 (Opinion No. 77, Series of 1987) finding that provision to constitute an undue delegation of legislative power is advisory in nature; it made no categorical declaration that the action in fact taken theretofore by FIRB are null and void; the opinion of the Secretary of Justice should be taken in the light of the convening of Congress in 27 July 1987 as the lawmaking branch under the 1987 Constitution. In deference to Congress already being in place, the FIRB issued no further resolutions restoring tax exemptions. To complete the picture, there is pending with the Department of Justice a request for reconsideration of that opinion, submitted by the Office of the President last 09 June 1988 (copy attached). cda "It must be stressed that FIRB has issued a number of decisions restoring tax exemptions and incentives under E.O. No. 93. These decisions are held to be valid and are enforced

to date. To strike down all of these issuances would create a chaotic tax situation, even assuming that the Justice opinion would require that step to be taken. "It would be appreciated if rulings of the Bureau which revoke and reverse decisions of other agencies, particularly those within the Department of Finance would best be first cleared with the Office of the Secretary to avoid undesirable results." cd Very truly yours, (SGD.) MARCELO N. FERNANDO Undersecretary" It is desired that this Circular be given as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-02-89 Revenue Memorandum Circular No. 2-89 January 2, 1989 REVENUE MEMORANDUM CIRCULAR NO. 2-89 Subject : Loss of original copy of Authority to Cancel Assessment (BIR Form No. 17.58). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the original copy of Authority to Cancel Assessment (BIR Form No. 17.58), to wit: Serial Number Quantity 592379 1 copy (original) The above original copy of Authority to Cancel Assessment which was reported as missing by Assistant Regional Director Arturo S.P. Guevara of Revenue Region No. 4-C, San Pablo City, and the other copies of the set are hereby cancelled and all official transactions involving the use thereof are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. JOSE U. ONG Commissioner of Internal Revenue TAN 05220-C1831-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-10-89 Revenue Memorandum Circular No. 3-89 January 10, 1989 REVENUE MEMORANDUM CIRCULAR NO. 3-89 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: ------------------------

SERIAL NUMBER : QUANTITY -----------------------8993600 : One (1) Set -----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-24-89 Revenue Memorandum Circular No. 4-89 January 24, 1989 January 24, 1989 REVENUE MEMORANDUM CIRCULAR NO. 4-89 Subject : Preventive Measure to Preclude Unauthorized Use of the Tax Availment/Verification Certificates Issued by the Tax Amnesty Implementation Office of the Bureau. To : All Internal Revenue Officers, Employees and Others Concerned. Reliable information has been received by this Office to the effect that situations may arise leading to unauthorized use of the tax availment/verification certificates issued by the Tax Implementation Office of this Bureau to the prejudice of the revenue collection of the government. To preclude this possibility, it is hereby directed that only the original copy of the aforesaid certificates duly signed by the Tax Amnesty Implementation Officer of this Bureau be accepted to support any recommendation or application to close any delinquent internal revenue tax account or terminate any pending internal revenue tax case. The use or acceptance of photo copies of the aforesaid certificates for the aforestated purpose is hereby prohibited. cdasia In cases where, prior to the effectivity of this Order, photo copies of tax amnesty availment/verification certificates had been accepted, the same should be referred immediately to the Amnesty Implementation Office of this Bureau for confirmation of the correctness of the information or entries therein, as well as the genuineness of the signature of the issuing officer concerned. cdasia This Order takes effect immediately. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-06-89 Revenue Memorandum Circular No. 5-89 January 6, 1989 REVENUE MEMORANDUM CIRCULAR NO. 5-89 Subject : Loss of Apprehension Receipts (BIR Form No. 19.14). To : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the loss of Apprehension Receipts (BIR Form No. 19.14), to wit: Inclusive Serial Numbers Quantity 129651-129700 one (1) booklet The above apprehension receipts which were reported as lost by Revenue Enforcement Officer Jose Rimi Lebrilla of Revenue District Office No. 30, North Quezon City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda JOSE U. ONG Commissioner of Internal Revenue TAN 05220-C1831-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-20-89 Revenue Memorandum Circular No. 6-89 January 20, 1989 REVENUE MEMORANDUM CIRCULAR NO. 6-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------B 16357847 : One (1) Set -----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda JOSE U. ONG Commissioner of Internal Revenue By: VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-06-89 Revenue Memorandum Circular No. 7-89

February 6, 1989 February 6, 1989 REVENUE MEMORANDUM CIRCULAR NO. 7-89 Subject : Publishing the Memorandum of the Department of Transportation and Communication Postal Services Office To : All Bureau of Internal Revenue Personnel For the information and guidance of all concerned, there is published hereunder the full text of the memorandum of the Department of Transportation and Communication Postal Services Office: MEMORANDUM Subject : Public use of the new Postal Zip Code, Monitoring of To Chiefs of Centers Postmasters This Region Based on the results of survey conducted by the Management Information and Operations Control Division, PSO, regarding the above subject, it was reported that out of 3,068 sampled letters which originated from the various post offices in Luzon, including those in Metro Manila, barely 218 pieces were found to bear Zip Code Numbers. This result was considered unsatisfactory since the proportion between zip code users and non-zip code users registered a great imbalance of approximately 3 to 43 ratio. casia In the light of such findings, it is directed that the following measures be adopted in your respective offices, viz: 1. Postal employees, i.e. postal tellers, letters carriers, etc. with direct dealings with the mailing public should be tasked to assist in the campaign for the use of zip code. 2. Identified potential and regular individual mailers and business firms shall be furnished with copies of the Zip Code (Pamphlet form). 3. In the DSMDC, SSC and big post offices, a periodic sampling of mail zip code users shall be conducted with results thereof submitted to this office on the 5th day of every month. aisa dc The size of sample shall be not less than 500 pieces of both outgoing and incoming mails taken on two sampling days during the month. Chiefs of Center, Postmaster and other supervisory employees are enjoined to extend their fullest cooperation and support to this campaign so as to insure positive public reaction to our call for the use of the New Postal Zip Code. (SGD.) F.A. HIDALGO, JR. Regional Director The aforequoted issuance is now being enforced by the Postmaster BIR Post Office. All mail matter without the new zip code are no longer accepted by the said office. To avoid delay, offices are enjoined to indicate the new zip code in their letters. A copy of the New Zip Code directory is attached hereto as annex A. casia Please be guided accordingly. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. :

01-25-89 Revenue Memorandum Circular No. 8-89 January 25, 1989 REVENUE MEMORANDUM CIRCULAR NO. 8-89 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Confirmation Receipts, to wit: -----------------------SERIAL NUMBERS : QUANTITY -----------------------15757883-15757884 : Two (2) Sets -----------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-22-89 Revenue Memorandum Circular No. 9-89 February 22, 1989 REVENUE MEMORANDUM CIRCULAR NO. 9-89 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback, per Energy Regulatory Board Resolution No. 89-09 dated February 10, 1989. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, January 1, 1989. acd Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas P2.5261 P2.6058 0.0797 Regular Gasoline 2.1421 2.2436 0.1015 Avturbo 2.4323 2.8512 0.4189 Kerosene 0.8491 0.9945 0.1454 Diesel Fuel 0.7932 0.8504 0.0572 Fuel Oil (Bunker) L P G* 0.8543 0.8761 0.0218 Asphalts 0.6376 0.6463 0.0087

Thinners 0.8133 0.8404 0.0271 * P1.5673/kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdtai JOSE U. ONG Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-01-89 Revenue Memorandum Circular No. 10-89 March 1, 1989 March 1, 1989 REVENUE MEMORANDUM CIRCULAR NO. 10-89 Subject : Filing of Annual Income Tax Returns on or Before March 25, 1989 To : All Revenue Officials and Employees In compliance with Memorandum Circular No. 94 of the President of the Philippines dated February 13, 1989 entitled "URGING ALL GOVERNMENT OFFICIALS AND EMPLOYEES TO FILE THEIR ANNUAL INCOME TAX RETURNS ON OR BEFORE MARCH 15, 1989", all revenue officials and employees are hereby directed to file their annual income tax returns covering income for the preceding taxable year on or before March 15, 1989. cd i This Memorandum Circular shall take effect immediately. JOSE U. ONG Commissioner of Internal Revenue Manila, February 14, 1989 Sir: Enclosed, for your information and guidance, is a certified copy of Memorandum Circular No. 94 dated February 13, 1989 entitled "URGING ALL GOVERNMENT OFFICIALS AND EMPLOYEES TO FILE THEIR ANNUAL INCOME TAX RETURNS ON OR BEFORE MARCH 15, 1989". cdt Very truly yours, AURORA T. AQUINO Presidential Staff Director The Commissioner Bureau of Internal Revenue Quezon City MEMORANDUM CIRCULAR NO. 94 URGING ALL GOVERNMENT OFFICIALS AND EMPLOYEES TO FILE THEIR ANNUAL INCOME TAX RETURNS ON OR BEFORE MARCH 15, 1989 The national budget is a key government instrument for the attainment of national development objectives. In this connection, it is necessary to enhance voluntary tax compliance in order for the government to reach the revenue goal for the year 1989. In the attainment of the said objective, men and women who are now in the government service should set an example to the entire citizenry by the early filing of their annual income tax returns.

IN VIEW WHEREOF, all officials and employees of the National Government, local government units as well as government-owned and controlled corporations are hereby urged to file their income tax returns on or before March 15, 1989 covering income for the preceding taxable year. aisa dc This Memorandum Circular shall take effect immediately. Done in the City of Manila, this 13th day of February, in the year of Our Lord nineteen hundred and eighty-nine. By the President: CATALINO MACARAIG, JR. Executive Secretary Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-28-89 Revenue Memorandum Circular No. 11-89 February 28, 1989 REVENUE MEMORANDUM CIRCULAR NO. 11-89 Subject : Loss of one (1) set of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions) (BIR Form No. 1954). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions) (BIR Form No. 1954), to wit: Serial Number Quantity 394760 one (1) set The above set of certificate which was reported as missing by Ms. Lolita de Guzman, Chief, Administrative Unit of Revenue District No. 43, San Jose, Occidental Mindoro, is hereby cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned set is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-22-89 Revenue Memorandum Circular No. 12-89 February 22, 1989 REVENUE MEMORANDUM CIRCULAR NO. 12-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------B 16549752 : One (1) Set

-----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc JOSE U. ONG Commissioner of Internal Revenue By: VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-13-89 Revenue Memorandum Circular No. 13-89 March 13, 1989 March 13, 1989 REVENUE MEMORANDUM CIRCULAR NO. 13-89 Subject : Submission of Lists of Government Purchases/Contracts for Services for Tax Purposes To : All Revenue Officials and Employees Quoted hereunder, for the information and guidance of all concerned is Memorandum Order No. 219 issued on February 13, 1989 of the President of the Philippines. "To ensure efficiency in our tax collection system, it is necessary to monitor effectively, among others, the tax incidence in contracts with the government and thus obtain vital information for the discovery of potential taxpayers. casia "In order to attain these objectives, all offices of the national and local governments, agencies, and instrumentalities, including government-owned or controlled corporations, making purchases of articles and commodities and contracting for services to meet their operational requirements are hereby enjoined to submit a list of all the said purchases/contracts to the Bureau of Internal Revenue on a quarterly basis showing the following: 1. Names of suppliers of goods/services 2. Business/Trade Name 3. Principal place of business 4. Sales Invoice Number 5. VAT Number or NON-VAT Taxpayer Registration No. 6. Quantity/Description of articles/services purchased/contracted for cdt 7. Price or amount paid "The lists shall be submitted within fifteen (15) days after the end of each quarter. cdtai "Strict compliance with this Memorandum Order is hereby enjoined. "This Memorandum Order shall take effect immediately.

"Done in the City of Manila, this 13th day of February, in the year of Our Lord nineteen hundred and eighty-nine. cdtai (Sgd.) CORAZON C. AQUINO President of the Philippines This implementing guidelines for this memorandum shall follow. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-08-89 Revenue Memorandum Circular No. 14-89 March 8, 1989 REVENUE MEMORANDUM CIRCULAR NO. 14-89 Subject : Loss of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Numbers Quantity 3107644-3107650 seven (7) sets The above revenue official receipts which were reported as lost by Mr. Mario S. Hilario, Revenue Collection Officer of Calinan, Davao City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-20-89 Revenue Memorandum Circular No. 15-89 March 20, 1989 REVENUE MEMORANDUM CIRCULAR NO. 15-89 Subject : CSC Office Memorandum No. 16, s. 1989 To : All Revenue Officials and Employees For the information and guidance of all officials and employees, quoted hereunder is Office Memorandum No. 16, s. 1989 dated March 10, 1989 of the Chairman, Civil Service Commission: OM # 16, s. 1989" OFFICE MEMORANDUM Subject : Increase of Cash Awards Under the Incentive Award System

To

All Regional Directors and Heads of Field Offices "Your attention is invited to CSC Resolution No. 163 s. 1989, which increases from P5,000.00 to P10,000.00 the maximum amount of cash award which the head of a Department or agency may approve under the Rules, Regulations and Standards on Employee Suggestions and Incentive Award System. cdasia "To increase the interest of our clientele in our Outstanding Public Service and Honor Awards Program, you are enjoined to disseminate this information to the agencies under your jurisdiction. "It may be mentioned in this connection that under Section 4 of the rules above-cited, an employee may be considered by the Department or agency head for both the monetary and non-monetary awards upon recommendation of the agency Suggestions and Incentive Award Committee. cdasia "Please be guided accordingly. PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this Circular as wide publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-31-89 Revenue Memorandum Circular No. 16-89 March 31, 1989 REVENUE MEMORANDUM CIRCULAR NO. 16-89 Subject : 1989 Outstanding Public Service and Honor Awards Program To : All Assistant Commissioners, Regional Directors and Others Concerned Under Memorandum Circular No. 1, series 1989, the Civil Service Commission has launched the 1989 Outstanding Public Service and Honor Awards Program pursuant to the provisions of Section 33, Article VIII of PD 807 and EO 324. The Bureau is enjoined to participate in this program. The program guidelines are as follows: 1. Awards are granted for achievements made in 1988 for any of the following categories: cdtai 1. Consistent dedicated performance exemplifying the best in any profession or occupation in the public service. 2. Idea, suggestion or invention approved made/or adopted by the Employing Agency. 3. Performance of an extraordinary act or service in the public interest in connection with, or related to, one's employment or official function. 4. Outstanding community service or heroic act in the public interest (Not related to his official function as public servant). 2. Who are qualified - All offices and employees of the career-service who meet the following requirements: aisa dc 1. Hold first or second level positions;

2. Are permanent employees of the nominating agencies for at least one year; and 3. Have not been found guilty of any criminal or administrative offenses or does not have any pending case at the time of nomination. 3. Who shall nominate: 1. The immediate supervisor of the employee; 2. His co-workers, or 3. A private person or group. 4. Procedures/Requirements All nominations shall be submitted to and screened by the Suggestions and Incentive Award Committee (SIAC) of the BIR for submission to the Department of Finance/Civil Service Commission and shall be made on the prescribed form (Attached) together with the following supporting documents. cd i 1. Certification that the nominee has been screened by the agency SIAC and signed by its Chairman; 2. Personal Data Sheet (CS Form 212) of the nominee; 3. Certification that nominee has not been found guilty of any criminal and/or administrative offenses or any pending case at the time of nomination; 4. Supporting documents such as clippings, citations, publications, pictures and/or accomplished Performance Appraisal System (NPAS) forms; 5. Copies of 5 cm. x 5 cm. photo of nominee with his name written on the back. acd 5. Justification of Nomination 1. Describe the situation or task (responsibilities leading to employees actions.) Include information why particular action took place; 2. Describe the duties taken or not taken leading to completion of work assignment; 3. Describe results or effects caused by the action. These must indicate where the actions were effective in changing or improving the original situations. 6. Deadline for submission of nominations Nominations must be submitted to the CSC Central Office not later than May 15, 1989. cd i 7. Forms of Recognition 1. Lingkod Bayan and Silangan Awards(Presidential) 2. Pagasa Award (CSC) 3. Kapwa Award (Departmental) All officials concerned are directed to submit their nominations to the BIR Incentive Awards Committee not later than April 15, 1989, to provide ample time for members to screen your candidates. acd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-04-89 Revenue Memorandum Circular No. 17-89 April 4, 1989 REVENUE MEMORANDUM CIRCULAR NO. 17-89 Subject : Loss of Twenty Five (25) Sets of Payment Orders (BIR Form RS82-02-02)

To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of twenty five (25) sets of Revenue Payment Order, to wit: -----------------------SERIAL NUMBERS : QUANTITY -----------------------C-4354701 - C-4354725 : Twenty Five (25) Set -----------------------The above receipts which were reported missing by Ms. Grace Villanueva, Revenue Collection Agent, North Quezon City Hall, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-10-89 Revenue Memorandum Circular No. 18-89 April 10, 1989 REVENUE MEMORANDUM CIRCULAR NO. 18-89 Subject : Missing One (1) set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------16423780 : One (1) Set -----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-05-89 Revenue Memorandum Circular No. 19-89 April 5, 1989 April 5, 1989 REVENUE MEMORANDUM CIRCULAR NO. 19-89

Subject : Revised Guidelines in the Conduct of Government Training and Development Programs To : All Internal Revenue Officers and Others Concerned For your information and guidance, CSC Memorandum Circular No. 9 s. 1989 is hereunder quoted stressing the observance of the guidelines in the conduct of government training and development programs: "In line with the present thrust of government towards decentralization and deregulation, coupled with its drive towards cost effectiveness in government operations, the following guidelines in the administration of agency training and development programs shall be observed. cd i 1. Training and development programs shall refer to the following: 1.1 all training programs conducted by the agency which shall include orientation/reorientation, value development, employee development, supervisory development, retraining, pre-retirement seminars, and other courses on substantive or unique functions of the agency; 1.2 training programs conducted by other government offices/private institutions availed of by agency personnel; cdasia 1.3 conventions or conferences conducted by professional organizations attended by government personnel; 1.4 local scholarship grants sponsored by the agency itself and availed of by agency personnel/other government personnel; 1.5 local scholarship grants sponsored by other government offices/private institutions availed of by agency personnel; and 1.6 foreign-assisted scholarship programs availed of by agency personnel. 2. Residential or live-in programs, except conventions and conferences, whether conducted by the agency or other institutions, shall have a maximum of 50 participants. Maximum expenses for programs that are highly specialized or technical in nature unique to the functions of the agency shall be P19,200.00 per participant or P800.00 per day per participant. Expenses for other training programs shall not exceed the maximum amount of P14,400.00 per participant or P600.00 per day per participant. Such expenses shall cover board and lodging, supplies and materials, transportation, gasoline and oil expenses, communications expenses, rental of training rooms and honoraria of resource speakers. cdt 3. Non-residential programs, except conventions and conferences, whether conducted by the agency or other institutions shall have a maximum of 50 participants. Maximum expenses for programs that are highly specialized or technical in nature unique to the functions of the agency shall be P9,600.00 per participant or P400.00 per day per participant. Expenses for other training programs shall not exceed the maximum amount of P6,000.00 per participant or P250.00 per day per participant. Such expenses shall cover meals and snacks, supplies and materials, transportation, gasoline and all expenses, communications expenses, rental of training rooms and honoraria of resource speakers. 4. Attendance of government personnel in conventions and conferences shall be allowed for those with a maximum of 5 days duration and shall be limited to five participants per agency to be selected from among those who have not attended a similar activity for the last two years. Fees for conventions or conferences, whether conducted on a residential or non-residential basis, shall not exceed P500.00 per day per participant.

Otherwise, the attendance shall be on official time only and at no expense on the part of the government except the salaries and allowances of the participants. cd i 5. Training programs shall be conducted in places where majority of the participants are stationed in order to minimize cost of travel. The use of government training facilities and other less expensive venues shall be observed. 6. Government participants residing outside the venue of the training program, (i.e., venue: Metro Manila, participants coming from the regional offices; venue: Iloilo City, participants coming from Bacolod City) may be allowed travelling allowances and actual transportation expenses subject to COA rules and regulations, provided that if the training fee includes expenses for board and lodging, the same shall be deducted from the travelling allowances. Those coming from the place where the training program is held shall only be allowed actual transportation expenses. cdasia 7. Honoraria for resource speakers shall conform with the rates of honoraria set by the Civil Service Commission. 8. The head of agency shall be responsible for approving the training and development programs of their respective agencies. Likewise, accreditation of such programs for purposes of personnel actions shall be the responsibility of the head of agency. 9. The usual constraint on the availability of funds and existing accounting and auditing requirements shall apply. 10. Each regional office of a department or agency shall submit to the Civil Service Regional Office (CSRO) concerned, a semestral report of individual programs or courses conducted or attended, using the attached form. (Annex "A"). Such reports should be forwarded to the CSRO's not later than June 15 for the first semester report, and December 15, for the second semester report. aisa dc 11. Departments/agencies which fail to comply with any one of the conditions set herein shall be required to secure prior approval of the Civil Service Commission for the conduct of succeeding training and development activities. This memorandum Circular supersedes MC No. 5, s. 1976 and Joint CSC - DBM No. 871 (which was revoked on January 3, 1989) and other issuances inconsistent with the provisions of this Circular." Please be guided accordingly. cda JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-06-89 Revenue Memorandum Circular No. 20-89 April 6, 1989 REVENUE MEMORANDUM CIRCULAR NO. 20-89 Subject : Missing One (1) set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY

-----------------------6597157 : One (1) set -----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of paid form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd JOSE U. ONG Commissioner of Internal Revenue By: VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-06-89 Revenue Memorandum Circular No. 21-89 April 6, 1989 REVENUE MEMORANDUM CIRCULAR NO. 21-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------B 16950942 : One (1) set -----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd JOSE U. ONG Commissioner of Internal Revenue By: VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-21-89 Revenue Memorandum Circular No. 22-89

April 21, 1989 REVENUE MEMORANDUM CIRCULAR NO. 22-89 Subject : Official Position on the Issue of Compromise. To : The Deputy Commissioners, All Assistant Commissioners, Regional Directors, Revenue District Officers, Chiefs of Branches and All Others Concerned. Quoted hereunder for your guidance and compliance is the Memorandum dated April 17, 1989, embodying the official position of this Bureau in regard to compromise of tax cases: cd "This is the official position of the BIR on the issue regarding compromise deals in major tax evasion cases. "The law on the matter is Section 204 of the National Internal Revenue Code, as amended, which provides: "Sec. 204. Authority of the Commissioner to compromise, abate and refund/credit taxes. The Commissioner may "(1) Compromise the payment of any internal revenue tax when "(a) A reasonable doubt as to the validity of the claim against the taxpayer exists; or "(b) The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax. casia "(2) Abate or cancel a tax liability, when "(a) The tax or any portion thereof appears to be unjustly or excessively assessed; or "(b) The administration and collection costs involved do not justify the collection of the amount due. "All criminal violations may be compromised except: (a) those already filed in court, and (b) those involving fraud." xxx xxx xxx "(a) those already filed in court "Under this category are the information filed with the Municipal Metropolitan or Regional Trial Courts by the Fiscals/Prosecutors after conducting preliminary investigation. These court cases CAN NO LONGER be the subject of a compromise by the Bureau of Internal Revenue, even if these cases do NOT INVOLVE FRAUD, like non-payment of internal revenue taxes. "(b) those involving fraud "Those are violations where fraud was committed in the filing of returns and the preparation/filing of financial statements. The following violations of the NIRC constitute fraud. "Sec. 253. Attempt to evade or defeat tax. - Any person who willfully attempts in any manner to evade or defeat any tax imposed under this code or the payment thereof shall, in addition to other penalties provided by law, upon conviction thereof, be fined not more than ten thousand pesos or imprisoned for not more than two years, or both. "Sec. 254. Failure to file return, supply information, pay tax, withhold and remit tax. - cda xxx xxx xxx "Any person who attempts to make it appear for any reason that he or another has in fact filed a return or statement, or actually files a return or statement and subsequently withdraws, the same return or statement after securing the official receiving seal or stamp of receipt of an internal revenue office wherein the same was actually filed shall, upon

conviction therefor be fined not less than three thousand pesos or imprisoned for not more than one year, or both. "Sec. 256. Penal liability for making false entries, records or reports. (a) Any independent certified public accountant engaged to examine and audit books of accounts of taxpayers under sub-paragraph (a) of Section 232 and any person under his direction who: "(1) Willfully falsified any report or statement bearing on any examination or audit, or renders a report, including exhibits, statements, schedules or other forms of accountancy work which has not been verified by him personally or under his supervision or by a member of his firm or by a member of his staff in accordance with sound auditing practices, or "(2) Certifies financial statements of a business enterprise containing an essential misstatement of facts or omission in respect of the transactions, taxable income, deduction and exemption of his client, or cd "(b) any person who: xxx xxx xxx "(4) Knowingly makes any false entry or enters any false or fictitious name in the books of accounts or records mentioned in the preceding paragraphs, or "(5) Keeps two or more sets of such records or books of accounts, or xxx xxx xxx "Sec. 264. Offenses relating to stamps. - Any person who commits any of the acts enumerated hereunder shall, upon conviction thereof, be fined not more than ten thousand pesos or imprisoned for not more than five years, or both: xxx xxx xxx "(2) Erases the cancellation marks of any stamps previously used or alters the written figures or letters or cancellation marks on internal revenue stamps. "(3) Possesses false, counterfeit, restored or altered stamps, labels or tags or causes the commission of any such offense by another. "(4) Sells or offers for sale any box or package containing articles subject to excise tax with false, spurious or counterfeit stamps or labels or sells from any such fraudulent box, package or container or aforesaid. casia xxx xxx xxx "Sec. 265. Failure to obey summons. - Any person who, being duly summoned to appear to testify, or to appear and produce books of accounts, records, memoranda, or other papers, or to furnish information as required under the pertinent provisions of this Code, neglects to appear or to produce such books of accounts, records, memoranda, or other papers, or to furnish such information, shall, upon conviction, be fined not less than one thousand pesos or imprisoned for not more than one year, or both. "Sec. 267. Other crimes and offenses. (a) Misdeclaration or misrepresentation of manufacturers subject to excise tax. - Any manufacturer who, in violation of the provision of Title IV (now VI) of this Code misdeclares in the sworn statement required therein or in the sales invoice, any pertinent data or information shall be punished by a summary cancellation or withdrawal of the permit to engage in business as a manufacturer of articles subject to excise tax. xxx xxx xxx

"Sec. 269. Unlawful divulgence of trade secrets. - Except as provided in Section 74 (now 64) of this Code and Section 26 of Republic Act Numbered 6388, any officer or employee of the Bureau of Internal Revenue who divulges to any person or makes known in any other manner than may be provided by law information regarding the business, income, or estate of any taxpayer, the secrets, operation, style of work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, shall upon conviction for each act or omission, be fined in a sum of not less than five thousand pesos but not more than ten thousand pesos, or imprisoned for a term of not less than six months but not more than five years, or both. cdasia "Sec. 277. Procuring unlawful divulgence of trade secrets. - Any person who causes or procures an officer or employee of the Bureau of Internal Revenue to divulge any confidential information regarding the business, income or inheritance of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, and which it is unlawful for him to reveal, and any person who publishes or prints in any manner whatever, not provided by law; any income, profits, losses, or expenditures appearing in any income tax return, shall be fined in a sum of not more than two thousand pesos or imprisoned for a term of not less than six months nor more than five years, or both. "Revenue Memorandum Order No. 26-86 provides that these violations cannot be the subject of a compromise even if the same are still pending with the Fiscal's/Prosecutor's Offices. "Re: Tanduay case - The complaint is for swindling/estafa under Article 318 of the Penal Code. Crimes/offenses under the Penal Code cannot be the subject of a compromise as it is against public policy. [U.S. vs. Torres, 34 Phil. 995; 999] Thus, the Bureau has not agreed to the withdrawal of the complaint. "The compromise amount of P11 million in this case covers the payment of interest, surcharge and penalty for late payment of specific taxes which is allowed under the above-quoted Section 204 of the National Internal Revenue Code. acd "Generally, the position of this Bureau is that as a matter of policy once a criminal tax case is filed with the prosecution arm of the Government, the power to compromise when allowed by Section 204 of the Tax Code must not be exercised without seeking the prior comment or views of the prosecutor concerned. [Circular No. 11, Department of Justice, January 23, 1956, copy attached]" The salient features of the aforequoted position paper may be summarized as follows: (a) No compromise is allowed in cases involving fraud; (b) No compromise of cases pending in court; (c) No compromise of cases involving violations of Sections 253, 254, 256, 264, 265, 267, 269 and 277, all of the National Internal Revenue Code as amended: (d) Violations which may be the subject of a compromise under Section 204 of the Tax Code, but already pending investigation by the prosecution arm of the government, shall not be compromised without seeking the views and comment of the prosecutor concerned. All revenue officials concerned are hereby enjoined to give this circular as wide a publicity as possible in their respective areas of jurisdiction. cd (Sgd.) JOSE U. ONG

Commissioner of Internal Revenue TAN 05220-C1831-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-26-89 Revenue Memorandum Circular No. 23-89 April 26, 1989 REVENUE MEMORANDUM CIRCULAR NO. 23-89 Subject : Guidelines on the payment by taxpayers of 50% or more of the previous year's tax liability. To : All Assistant Commissioners, Revenue Directors, Revenue District Officers and Others Concerned. To insure uniformity on the treatment of the 1988 returns with payment of 50% or more over the previous year the following guidelines are issued in accordance with the twin Memoranda issued by the Commissioner of Internal Revenue to all Revenue Directors, Revenue District Officers and Chief, Assessment Branches, on April 11 and 18, 1989. cda A. COVERAGE AND LIMITATION. This covers the 1988 Income and Business tax returns. The availment is not an amnesty nor a last priority privilege. B. BASES OF THE PAYMENT OF THE 50% ADDITIONAL TAX OR MORE. 1. In cases where both income and business tax returns were already investigated and deficiency taxes were assessed, said deficiency taxes shall be added to the basic taxes to determine compliance with the payment of 50% or more; 2. If the 1987 income or business tax returns are in the process of investigation and no deficiency assessment has yet been issued against the taxpayer, the estimated assessment, such as mandatory assessments shall already be included in the computation; 3. In case the 1987 tax return indicates a net loss, then the taxpayer is required to file a correct 1988 return and pay the correct tax thereon. If the business is subject to percentage taxes then an increase of at least 50% of what has already been paid in business tax is required; 4. If the 1987 return is exempt, such as a BOI registered enterprise becoming taxable in 1988, the tax to be paid must be equivalent to 50% or more than the 1987 income tax presumptively computed including the business tax liability; 5. If the 1987 income tax return shows a combination of both compensation and business income, the total tax due per return will be the basis where no deficiency have been assessed; 6. If the taxpayer is new and filing only in 1988 he should file correct tax returns and pay the correct taxes. In other words he should start clean. cdt C. AMENDMENT OF THE RETURN AND PAYMENT OF THE TAX DUE. 1. If the taxpayer wishes to start clean with his 1988 tax return to avail of the sympathetic case-to-case treatment from the present tax administration but the returns already filed for taxable year 1988 for income and business tax purposes do not exceed that of 1987 by at least 50%, he can still amend his returns not later than May 2, 1989 and pay the difference of the basic tax without any increment;

2. In amending the returns the regular income tax and/or business tax return forms shall be used. No special return is required. 3. The taxpayer has two options in treating the 50% or more tax payment; a) Preferably by adjusting the Financial Statement to reflect the taxable income and compute the tax due thereon, or b) Make a simple payment without necessarily amending the financial statement as a manifestation of the taxpayers sincerity and willingness to support the government. 4. The taxpayer is required to indicate on the face of the return (1988 ITR), preferably at the bottom space of the return the tax or taxes paid in 1987; 5. For VAT and other business taxes paid in 1988, at least 50% additional payment based on the tax liability is required. D. TAXPAYER TO INFORM BIR. If a taxpayer has already complied with the payment of at least 50% over that of the 1987 tax liabilities and has not indicated the 1987 tax payment on the face of the 1988 tax return, the taxpayer should inform the Bureau that he has in fact complied with the requirement with the request that both the original and the duplicate copies of the taxpayer's 1988 tax return after having been duly processed for classification and numbering by the Assessment Branch of the respective Revenue Region be forwarded to the office of the Commissioner by writing to the Revenue Director, Attention: Chief, Assessment Branch where his legal residence or principal place of business is located, copy furnished: The Commissioner of Internal Revenue, Attention: The Chief, Tax Information and Assistance Division, National Office Building, Diliman, Quezon City, by attaching a photo copy of the face of the 1988 Tax Returns. aisa dc E. PROCESSING OF THE RETURNS FILED. All returns filed under this policy shall be processed in the Regional Offices by their respective Assessment Branches only for purposes of classification and indication of the corresponding assessment numbers. These returns (original and duplicate) shall then be transmitted by the Regional Directors to the Office of the Commissioner in batches of 100 returns per bundle with a transmittal list indicating the name, address and the assessment number of the particular return not later than May 12, 1989. All revenue officials and employees are enjoined to give this Circular the widest publicity possible. cd i (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-17-89 Revenue Memorandum Circular No. 24-89 April 17, 1989 REVENUE MEMORANDUM CIRCULAR NO. 24-89 Subject : Loss of original copy of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Number Quantity

3684982-H Original Copy The above copy which was reported as missing by Revenue Administrative Officer Lolita P. de Guzman of Revenue District No. 43, San Jose, Occidental Mindoro, as well as the other copies of the set are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned original copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition of use thereof. acd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-17-89 Revenue Memorandum Circular No. 25-89 April 17, 1989 REVENUE MEMORANDUM CIRCULAR NO. 25-89 Subject : Loss of Original and Duplicate Copies of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the original and duplicate copies of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Number Quantity 3263000-H Original and Duplicate Copies The above copies which were reported as missing by Revenue Collection Officer Benjamin T. Sadumiano of Paoay, Ilocos Norte, as well as the other copies of the set are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-11-89 Revenue Memorandum Circular No. 26-89 April 11, 1989 REVENUE MEMORANDUM CIRCULAR NO. 26-89 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 89-13 dated April 5, 1989. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, March 1, 1989. cdt

Peso/Liter Products Previous Tax Present Tax Premium/Avgas P2.6058 P2.8981 Regular Gasoline 2.2436 2.5521 0.3085 Avturbo 2.8512 3.5844 0.7332 Kerosene 0.9945 1.2475 0.2530 Diesel Fuel 0.8504 1.0591 0.2087 Fuel Oil (Bunker) L P G* 0.8761 0.8776 0.0015 Asphalts 0.6463 0.6831 0.0368 Thinners 0.8404 0.9406 0.1002

Difference 0.2923

* 1.5700/kilogram All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia JOSE U. ONG Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. no date Revenue Memorandum Circular No. 27-89 No date supplied REVENUE MEMORANDUM CIRCULAR NO. 27-89 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------3007895 : One (1) Set -----------------------The above receipt which was reported missing by Mr. Emilio P. Singian, Collection Agent, San Fernando, Pampanga, has been cancelled and any official transactions involving the use of said form is therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-27-89 Revenue Memorandum Circular No. 28-89 April 27, 1989 REVENUE MEMORANDUM CIRCULAR NO. 28-89 Subject : Adoption of Flexible Working Hours in the Government Service.

To : All Regional Directors, Service Chiefs, Revenue District Officers and Others Concerned. For the guidance of and implementation by all officials concerned, quoted below is Civil Service Memorandum Circular No. 14, s. 1989, dated April 21, 1989: "Pursuant to Resolution No. 89-256 dated April 21, 1989 the Civil Service Commission hereby prescribes the adoption of Flexible Working Hours for all officials and employees in the government service subject to the following conditions: acd 1) Heads of departments, offices and agencies shall have the authority to approve office working hours, provided that in such working hours officials and employees shall render not less than eight hours a day for five days a week for a total of forty hours. 2) The flexible working hours shall not start earlier than 7:00 o'clock in the morning and end not later than 7:00 o'clock in the evening, hence the public is still assured of the core working hours of eight o'clock in the morning to five o'clock in the afternoon. 3) The public must be assured of a continuous service during the period of 12:00 noon to 1:00 o'clock in the afternoon. cd i 4) The Flexible Working Hours adopted by the official or employees shall thereafter be his regular working hours which cannot be occasionally or periodically changed at his convenience. 5) In the exigency of the service, working days may also be altered to include Saturdays and Sundays provided that employees who work on such days may choose a compensatory days-off during the weekdays, provided that the Saturday and Sunday are regular workdays and not cases of overtime. Such working day may be applicable to offices with frontline services such as Consular Offices abroad, Bureau of Internal Revenue, Bureau of Customs, Social Security System, Government Service Insurance System, and other offices that issue licenses, permits, clearance, or which process documents needed to access to other services. cdtai 6) A report of flexible working hours adopted by the department, office or agency shall be submitted to the Civil Service Commission within thirty (30) days of its implementation. 7) Habitual absenteeism and tardiness shall hereafter be considered as grave offenses. casia All circulars, issuances inconsistent with this Memorandum Circular are deemed superseded. This Circular shall take effect immediately. (SGD) PATRICIA A. STO. TOMAS" Chairman Officials concerned may now submit to the undersigned for approval their recommendations for the proposed working hours of their personnel in accordance with the aforesaid guidelines. Special attention is drawn to item No. 7 of the guidelines. aisa dc JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-04-89 Revenue Memorandum Circular No. 29-89

May 4, 1989 REVENUE MEMORANDUM CIRCULAR NO. 29-89 Subject : Guidelines on the extension of payment of 50% or more of the previous year's tax liability and certain issues on the availment as provided for under RMC No. 23-89. To : All Assistant Commissioners, Revenue Directors, Revenue District Officers and Others Concerned. In response to the numerous and persistent requests from various sectors to extend the deadline for amending the 1988 Income and Business Tax returns to comply with the 50% minimum increase over that of 1987 ITR for income tax; and for VAT and other percentage taxes based on the total tax liability for 1988 (four quarters), these additional guidelines are hereby issued for the information of all concerned. cdt A. COVERAGE AND LIMITATION. If an amendment of the 1988 tax return and an additional payment were made without amending the VAT or other percentage tax return for 1988, then only the income tax liability of the taxpayer shall be accorded with whatever privilege will be extended for such availment or vice versa. B. BASES OF THE PAYMENT OF THE 50% OR MORE ADDITIONAL TAX. 1. For corporations on fiscal year basis, the privilege shall be extended to those entities whose taxable period end on July 31, August 31, September 30, October 31 and November 30, 1988; cda 2. For corporations on fiscal year basis, the availment shall be based on the income tax due per return as of July 31, 1987 and so on, and for VAT and other percentage taxes the basis shall be the total tax liability for 1988. (Business tax liability means the output tax for VAT and the total percentage tax due for other business taxes, without the benefit of credits.) C. EXTENDED DEADLINE. To accommodate all taxpayers willing to avail of this program, the undersigned hereby extends the deadline for the filing of the amended returns and the payment of additional taxes without any increment to May 15, 1989. This extension is final. D. TAXPAYER TO INFORM BIR. For those taxpayers who are no longer amending their 1988 returns but have already complied with the required minimum payment as of April 17, 1989, their letter to the Revenue Director, Attn.: Chief, Assessment Branch, must be accompanied by photo copies of the first pages of the 1987 and 1988 returns, a copy of which shall be furnished the Commissioner, Attn.: Chief, Tax Information and Assistance Division, NOB, Diliman, Quezon City, with the same attachments for monitoring purposes not later than May 20, 1988. casia E. PROCESSING OF THE RETURNS FILED. In view of the new deadline, the Revenue Directors are hereby instructed to transmit the returns (original and duplicate) in time to be received in the Office of the Commissioner not later than May 31, 1989. F. NO LETTER OF AUTHORITY (LAs) WILL BE ISSUED FOR 1988 RETURNS. No letter of authority shall be issued by any investigating unit in the Bureau covering taxable year 1988 and in the case of corporations on fiscal year basis, those ending July

31, 1988 up to November 30, 1988, until all returns shall have been classified in accordance with this program. Any violation of this ban shall be dealt with severely. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-21-89 Revenue Memorandum Circular No. 30-89 April 21, 1989 REVENUE MEMORANDUM CIRCULAR NO. 30-89 Subject : Loss of quadruplicate copy of Certificate Authorizing Registration (Taxable Real Property Transactions) (BIR Form No. 1954) and Letter of Authority-RR (BIR Form No. 19.65-A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of quadruplicate copy of Certificate Authorizing Registration (Taxable Real Property Transactions) (BIR Form No. 1954) and duplicate copy of Letter of Authority-RR (BIR Form No. 19.65-A), to wit: Serial Numbers Quantity 030647 Quadruplicate Copy 0433213-RR Duplicate Copy The above copies which were reported as missing by Mr. Arturo S.P. Guevarra, Assistant Regional Director of Revenue Region No. 4-C, San Pablo City are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-28-89 Revenue Memorandum Circular No. 31-89 April 28, 1989 REVENUE MEMORANDUM CIRCULAR NO. 31-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------16463780 : One (1) Set

-----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-17-89 Revenue Memorandum Circular No. 32-89 May 17, 1989 REVENUE MEMORANDUM CIRCULAR NO. 32-89 Subject : Representation Expenses of Personnel Authorized to Travel Abroad To : Revenue Officials and Employees Concerned Commission on Audit Circular No. 89-304 dated May 4, 1989 calls attention to Memorandum Circular No. 92 of the Office of the President issued January 19, 1989 enjoining strict observance of the provision of Sec. 17 of Executive Order No. 129 which provides that representation expenses may be allowed if absolutely necessary and only upon previous authority of the President. (Emphasis supplied) Quoted below is the statement of the Commission on Audit regarding compliance with the aforesaid provision: cdasia "Henceforth, claims for reimbursement of representation expenses in connection with foreign travels on official business shall be disallowed in audit if no prior presidential authority for the grant thereof has been secured." Please be guided accordingly. casia JOSE U. ONG Commissioner of Internal Revenue TAN 05220-C1831-A-9 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-03-89 Revenue Memorandum Circular No. 33-89 May 3, 1989 REVENUE MEMORANDUM CIRCULAR NO. 33-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------B-16271336 : One (1) Set

-----------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-19-89 Revenue Memorandum Circular No. 34-89 May 19, 1989 REVENUE MEMORANDUM CIRCULAR NO. 34-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: -----------------------SERIAL NUMBER : QUANTITY -----------------------16714076 : One (1) Set -----------------------The above receipt which was reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-09-89 Revenue Memorandum Circular No. 35-89 June 9, 1989 REVENUE MEMORANDUM CIRCULAR NO. 35-89 Subject : Publishing the revised ad valorem taxes on certain petroleum products as the result of the change in company netback per Energy Regulatory Board Resolution No. 89-15 dated June 6, 1989. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, May 1, 1989. cdt Peso/Liter

Products Previous Tax Present Tax Difference Premium/Avgas P2.8981 P3.5672 0.6691 Regular Gasoline 2.5521 3.1834 0.6313 Avturbo 3.5844 3.5239 (0.0605) Kerosene 1.2475 1.2223 (0.0252) Diesel Fuel 1.0591 1.1874 0.1283 Fuel Oil (Bunker) LPG 0.8776 0.9570 0.0794 or 1.5700/kg. or 1.7121/kg. 0.1421/kg. Asphalts 0.6831/kg. 0.8136/kg. 0.1305/kg. Thinners 0.9406 1.1649 0.2243 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdasia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-06-89 Revenue Memorandum Circular No. 36-89 June 6, 1989 June 6, 1989 REVENUE MEMORANDUM CIRCULAR NO. 36-89 Subject : Extension of deadline for voluntary additional payment of valueadded taxes and other percentage taxes. To : All internal revenue officers and others concerned. 1. PURPOSE To manifest a sincere desire to start clean in paying their tax liabilities and to support the government's campaign for more taxes, the privilege to pay additional value-added tax and other percentage taxes may be availed of up to June 30, 1989. 2. COVERAGE The privilege to pay additional VAT and other percentage taxes shall be limited to tax year 1988, more specifically: cda A. Value-added tax Group A, January 1 to December 31, 1988 Group B, January 1, 1988 to January 31, 1989 Group C, January 1, 1988 to February 28, 1989 B. Other percentage taxes calendar year basis, January 1 to December 31, 1988 fiscal year basis - 12 months period beginning with the months of February 1 until June 1, 1988. cd i 3. DEADLINE The voluntary payment privilege shall end on June 30, 1989. Taxpayers amending their earlier availment are covered by this deadline. 4. BASIS OF VOLUNTARY ADDITIONAL PAYMENT The minimum availment with respect to value-added tax shall be two per cent (2%) of gross sales or receipts for the period, without the benefit of deduction of VAT paid/input tax credits per return and per audit investigation, or P20,000, whichever is higher. Thus,

if the gross sale in 1988 was P300,000, the availment amount shall be P20,000 computed as follows: cdt Example: Gross sales/receipts P300,000 2% thereon 6,000 Amount of availment 20,000 For other percentage taxes, the basis shall be 50 per cent of tax due or paid per return in 1988, including tax paid per investigation without the benefit of credits, or P20,000, whichever is higher. Thus, if the gross receipts of a caterer in 1988 was P500,000, the availment shall not be less than P20,000. Example: Gross receipts P500,000 4% tax due thereon (per return) 20,000 50% thereof 10,000 Amount of availment (whichever is higher) 20,000 The amount of availment may be reduced by whatever amount the taxpayer has already paid in availing RMC Nos. 23-89 and 29-89 for VAT or other percentage tax purposes. However, any resulting computation shall not entitle the taxpayer to any refund. cdtai 5. NATURE AND TAX CONSEQUENCE OF PAYMENT The additional tax paid in accordance with this Circular and RMC Nos. 23-89 and 29-89 shall neither be creditable against VAT output tax or percentage tax liability nor deductible from the gross income for income tax purposes. 6. FORM AND MANNER OF PAYMENT In order to avail of the privilege, the taxpayer shall accomplish and present the prescribed form (Annex A) in triplicate to the Revenue District Officer or his authorized agent of the city or municipality where his principal place of business is located. The receiving officer after ascertaining the correctness of the amount to be paid in accordance with paragraph 4 hereof, shall issue the Payment Order (PO) for payment thru accredited agent bank. In places where there is no accredited bank, the payment may be received under revenue official receipt. In either case, the confirmation receipt number and official receipt number, date and amount shall be indicated on the prescribed form which shall be distributed as follows: acd Original Copy CIR Duplicate Copy Taxpayer Triplicate Copy RDO 7. EFFECT OF EARLIER AVAILMENT Taxpayers who have erroneously computed and paid the additional VAT different from that provided for in RMC 29-89 (basis of which is the output tax, without the benefit of credits), may amend their computation by complying with the procedures provided for in paragraph 6, and offset/credit their earlier payment against the computed amount to determine the final amount payable. If a taxpayer decides otherwise and prefers not to avail of the provisions of this circular, he forfeits the benefit of the "sympathetic and case-to-case treatment" of his tax case(s), and any amount paid previously may be credited against deficiency VAT that may be assessed in the future. 8. INVESTIGATION OF VAT AND OTHER PERCENTAGE TAX RETURNS

No letter of authority may be issued by any investigating unit in the National or the Regional Offices to any taxpayer who has availed of this privilege. It will only be the Commissioner of Internal Revenue who will issue such letter of authority on a case to case basis. cdasia 9. PROCESSING BY THE BIR Upon receipt of the documents prescribed in paragraph 6, the Revenue District Officer shall pre-audit the papers to verify if the conditions and requirements of this circular are complied with. If defects or omissions are ascertained, the same should immediately be communicated to the concerned taxpayer to effect the necessary corrective action not later than July 5, 1989. The Revenue District Officer shall then transmit all documents to their respective Chief, Assessment Branch, not later than July 10, 1989. The Chief of the Assessment Branch shall then locate all copies of the VAT/percentage tax returns for each taxpayer availing of this program. The Regional Director shall then transmit these returns and all other documents to the Commissioner of Internal Revenue, Attention: The Chief, Tax Information and Assistance Division, not later than July 31, 1989. cda The returns shall be bundled in batches of 100 together with the transmittal list with the following information: 1. Name of taxpayer 2. Address of taxpayer 3. Amount paid 10. EFFECTIVITY This Order shall take effect immediately and shall be given the widest publicity by all concerned. cdtai JOSE U. ONG Commissioner of Internal Revenue ANNEX A The Revenue District Officer Revenue District No. _____ ______________________ Sir: In accordance with Revenue Memorandum Circular No. _______ , please accept the voluntary payment of additional value-added tax or other percentage tax in the amount of P _______________________ for 1988, computed as follows: acd A. Value-Added Tax Gross sales/receipts from ________________, 1988 to ______________________ 1988/1989 P ___________ x 2% thereon or P20,000, whichever is higher P ____________ Less: Amount paid under RMC 23/29-89, if any P ____________ x

Amount required to be paid B. Other Percentage tax

P ____________ x

Total percentage tax due per return for the period from __________________, 1988 to ____________________ 1988/1989 (4 Qtrs.)

P ___________ x

50% thereof or P20,000, whichever is higherP ___________ x Very truly yours, ______________________________ Name of Taxpayer/President/Treasurer Attachments: [] photo copies of 4 VAT Quarterly returns and OR/CR of tax payments for the period availed of. [] photo copies of 4 percentage returns and OR/CR of tax payments for the period availed of. [] photo copies of additional tax payment under RMC Nos. 23/29-89. cdt ABSTRACT OF PAYMENT -----------------------------CR/ROR No. : Amount : Date -----------------------------: : : : : : -----------------------------Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-29-89 Revenue Memorandum Circular No. 37-89 May 29, 1989 REVENUE MEMORANDUM CIRCULAR NO. 37-89 Subject : Loss of one (1) booklet of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and others Concerned: Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.25) to wit; Inclusive Serial Numbers Quantity 4179551-4179600 One (1) booklet The above revenue official receipts which were reported as lost by Supv. Revenue Collection Officer Expedito C. Reyes are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. aisa dc

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case any of the above mentioned receipts are found, taking the necessary steps in the meantime to prevent improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. casia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-23-89 Revenue Memorandum Circular No. 38-89 May 23, 1989 REVENUE MEMORANDUM CIRCULAR NO. 38-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------14577349 : One (1) set ------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-19-89 Revenue Memorandum Circular No. 39-89 June 19, 1989 REVENUE MEMORANDUM CIRCULAR NO. 39-89 Subject : Loss of Revenue Official Receipt (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Numbers Quantity 1244604-M - 1244650-M 47 sets

The above revenue official receipts which were reported lost by Revenue Collection Officer ESTER L. VENTURA of Talugtug, Nueva Ecija, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdtai EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-05-89 Revenue Memorandum Circular No. 40-89 June 5, 1989 REVENUE MEMORANDUM CIRCULAR NO. 40-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------16562438 : One (1) Set ------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-20-89 Revenue Memorandum Circular No. 41-89 June 20, 1989 REVENUE MEMORANDUM CIRCULAR NO. 41-89 Subject : Publishing BIR Ruling No. 248(a) (3)-000-00-129-89 dated June 19, 1989 Re: Imposition of the civil penalty equivalent to twenty-five percent (25%) of the amount due in addition to the tax required to be paid in case of "failure to pay the tax within the time prescribed for its payment" under Section 248 (a) (3) of the Tax Code. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder BIR Ruling No. 248(a) (3)-000-00-129-89 dated June 19, 1989 to the effect that the civil

penalty under Section 248(a) (3) of the Tax Code, as amended, equivalent to 25% of the amount due in addition to the tax required to be paid shall be imposed not only to a deficiency tax where a formal assessment notice has been issued therefor but even to a deficiency tax ascertained after investigation. cd i "June 19, 1989 "Ms. Estrella V. Martinez Revenue District Office No. 31 Mandaluyong, Metro Manila "Madam: "This refers to your letter dated September 16, 1988 requesting a ruling as to whether the penalty equivalent to 25% of the amount due in addition to the tax required to be paid in case of failure to pay the tax within the time prescribed for its payment pursuant to Section 248 (a) (3) of the Tax Code, as amended shall apply to deficiency tax collected from field investigation. cdt "It appears that the Revenue District Officer of Revenue District Office No. 31, Mandaluyong, Metro Manila issued a Memorandum dated September 9, 1988 to the Asst. Revenue District Officer, Group Supervisors, Revenue Enforcement Officers and others concerned pertinent portion of which reads as follows: xxx xxx xxx "Pursuant to Section 248 thereof, in addition to the tax required to be paid, the penalty equivalent to 25% of the amount due shall be imposed in case of failure to pay the tax within the time prescribed for its payment. This also applies to deficiency tax assessed after investigation." "In reply thereto, I have the honor to inform you that pursuant to Section 248 (a) (3) of the Tax Code, as amended, a civil penalty equivalent to twenty-five percent (25%) of the amount due shall be imposed in addition to the tax required to be paid in case of "failure to pay the tax within the time prescribed for its payment". A deficiency tax assessed after investigation presupposes that the taxpayer failed to pay the correct amount of tax within the time prescribed for its payment, hence, the deficiency. Accordingly, the penalty equivalent to 25% of the amount due in addition to the tax required to be paid shall be imposed not only to a deficiency tax where a formal assessment notice has been issued therefor but even to a deficiency tax ascertained after investigation. aisa dc "This revokes BIR Ruling No. 248 (a)-000-00-483-88 dated October 6, 1988. Very truly yours, "(SGD.) EUFRACIO D. SANTOS Deputy Commissioner It is desired that this Circular be given as wide a publicity as possible. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-15-89 Revenue Memorandum Circular No. 42-89 June 15, 1989 REVENUE MEMORANDUM CIRCULAR NO. 42-89

Subject : Missing Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: -------------------------SERIAL NUMBER : QUANTITY -------------------------B-14898344 : One (1) Set B-16911820 : One (1) Set -------------------------The above receipts which were reported missing by the Accredited Banks to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-04-89 Revenue Memorandum Circular No. 43-89 July 4, 1989 July 4, 1989 REVENUE MEMORANDUM CIRCULAR NO. 43-89 Subject : Casual Employment To : All Revenue Officials and Employees Next year, our fund for the salaries of casual employees may entirely be scrapped, or at best greatly reduced. This will mean the termination or considerable reduction of casual employees. cdtai The policy of the Bureau is to extend permanent appointments to qualified casual employees. It is urged, therefore, that those who have not yet qualified in an appropriate civil service examination should now exert great effort to qualify in the forthcoming and succeeding civil service examinations. cdtai Please be guided accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-12-89 Revenue Memorandum Circular No. 44-89 July 12, 1989 REVENUE MEMORANDUM CIRCULAR NO. 44-89 Subject : Further Extending the deadline for voluntary additional payment of 50% of income and other percentage taxes and 2% value added tax for 1988. To : All internal revenue officers and others concerned. Under Revenue Memorandum Circular No. 29-89 dated May 4, 1989, the deadline for the amendment of the 1988 income tax return and the payment of additional taxes without

any increment was set on May 15, 1989. On the other hand, the privilege to pay additional value-added tax and other percentage taxes was set on June 30, 1989 under Revenue Memorandum Circular No. 36-89 dated June 6, 1989. Both programs are quite successful, based on reports received from regional offices. acd This Bureau has received many requests from taxpayers who wanted to avail of the privileges and start clean but failed to amend their returns and pay the required additional amount of taxes within the deadlines set. Recognizing the sincerity and the desire of taxpayers to come within the folds of the law and to support the present administration, the deadline for the filing of amended income and business tax returns and the payment of additional taxes is hereby extended to AUGUST 15, 1989, subject to the same coverage, conditions and guidelines as provided in Revenue Memorandum Circular Nos. 23-89, 29-89 and 36-89. cd i However, where a letter of authority covering 1988 income, VAT and/or other percentage taxes or notice of verification of transitional/presumptive input taxes for VAT purposes has already been issued at the time the taxpayer amends his tax return, any additional tax payment under these Circulars shall be credited against the deficiency assessment issued in connection with the above audit. With respect to the processing of tax returns filed under this Circular, the same procedure prescribed in RMC 36-89 shall be followed. The returns should reach the Office of the Commissioner not later than September 15, 1989. This Order shall take effect immediately and shall be given the widest publicity by all concerned. cdt (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-05-89 Revenue Memorandum Circular No. 45-89 July 5, 1989 REVENUE MEMORANDUM CIRCULAR NO. 45-89 Subject : Loss of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of revenue official receipts (BIR Form No. 25.24), to wit: Serial Numbers Quantity 3492065-H one set 3492085-H one set 3492094-H one set The above revenue official receipts which were reported as lost by Revenue Collection Assistant Wayne D. Acaylar of Balamban, Cebu, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc

This CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENT'S OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-13-89 Revenue Memorandum Circular No. 46-89 July 13, 1989 REVENUE MEMORANDUM CIRCULAR NO. 46-89 Subject : Loss of original copy of Certificate Authorizing Registration (Taxable Real Property Transactions) (BIR Form No. 1954). To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of the original copy of Certificate Authorizing Registration (Taxable Real Property Transactions) (BIR Form No. 1954), to wit: Serial Number Quantity 067019 one copy (original) The above copy which was reported as missing by Mr. Arturo S.P. Guevara, Asst. Regional Director of Revenue Region No. 4-C, San Pablo City and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above mentioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. This CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-18-89 Revenue Memorandum Circular No. 47-89 July 18, 1989 REVENUE MEMORANDUM CIRCULAR NO. 47-89 Subject : Lost copies of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing copies of revenue official receipts (BIR Form No. 25.24), to wit: Serial Number Missing Copy 4834624-H original copy 4838552-H collecting officer's copy The above copies of revenue official receipts which were reported as missing by Mr. Arturo S.P. Guevara, Asst. Regional Director of Revenue Region 4-C, San Pablo City, and the other copies of the particular sets have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned missing copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda This CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-27-89 Revenue Memorandum Circular No. 48-89 July 27, 1989 REVENUE MEMORANDUM CIRCULAR NO. 48-89 Subject : Observance of the 89th Anniversary of the Philippines Civil Service To : All Internal Revenue Officers and other concerned For your information and guidance, CSC Memorandum Circular No. 23, s., 1989 is hereunder quoted stressing the observance of the 89th Anniversary of the Philippine Civil Service; casia "The Philippine Civil Service will observe its 89th Anniversary from September 13 to 19, 1989. The focus of this year's celebration is on the theme: "KATAPATAN AT KAKAYAHAN, IHANDOG SA BAYAN." The Civil Service Commission has chosen this theme to remind all public officials and employees of their duty to serve the nation with integrity and competence. It will also make the general public aware of the bureaucracy's ever present desire to improve the quality of public service. In this regard, you are requested to hold a fitting celebration of Civil Service Week in your agency. It is suggested that there be a flag raising ceremony, a recitation of "Panunumpa ng Kawani ng Gobyerno", and a convocation when awards maybe given to outstanding officials and employees. cdtai The culminating activity of the week will be a commission-sponsored program on Tuesday, September 19. Details of this activity shall be provided later. Your cooperation is earnestly requested. (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. cdt (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-03-89 Revenue Memorandum Circular No. 49-89 August 3, 1989 August 3, 1989

REVENUE MEMORANDUM CIRCULAR NO. 49-89 Subject : Guidelines in the application of Penalties in Administrative Cases To : All Revenue Officials and Employees For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 30 s. 1989 of the Civil Service Commission: "Pursuant to Resolution No. 89-506 dated July 20, 1989, the Civil Service Commission hereby prescribes the following guidelines in the application of penalties in administrative cases. "Administrative offenses provided for under the Civil Service Law (Presidential Decree No. 807) and the Code of Conduct (Republic Act No. 6713), classified into grave, less grave, and light and their corresponding penalties are: casia ----------------------------------: : : : : 1st Offense : 2nd Offense : 3rd Offense : : : : : ----------------------------------A. GRAVE OFFENSES : 1. *Dishonesty : Dismissal : : : 2. *Gross Neglect of Duty : Dismissal : : : 3. *Grave Misconduct : Dismissal : : : 4. *Being notoriously : Dismissal : : : undesirable 5. *Conviction of a crime involving moral turpitude : Dismissal : : : 6. *Falsification of official document : Dismissal : : : 7. *Physically or mental : Dismissal : : : incapacity or disability due to vicious habits 8. *Engaging directly or : Dismissal : : : indirectly in partisan political activities by one holding non-political office 9. *Receiving for personal : Dismissal : : : use of a fee, gift or other valuable thing in the course of official duties or in connection therewith when such fee, gift or other valuable thing is given by any person in the hope of

10.

11.

12.

13. 14.

expectation of receiving a favor or better treatment than that accorded to other persons, or committing acts punishable under the anti-graft laws *Contracting loans of : Dismissal : : money or other property from persons with whom the office of the employee has business relations **Soliciting or : Dismissal : : accepting directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value which in the course of his official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of his office. The propriety or impropriety of the foregoing shall be determined by its value, kinship, or relationship between giver and receiver and the motivation. A thing of monetary value is one which is evidently or manifestly excessive by its very nature **Disloyalty to the : Dismissal : : Republic of the Philippines and to the Filipino people *Oppression : Suspension : Dismissal : 6 mos. 1 day to 1 year *Disgraceful and : Suspension : Dismissal : immoral conduct 6 mos. 1 day

: :

15.

16.

17.

18.

19.

20.

21.

to 1 year *Inefficiency and : Suspension : Dismissal : : incompetence in the 6 mos. 1 day performance of 1 year official duties *Frequent unauthorized : Suspension : Dismissal : absences or tardiness in 6 mos. 1 day reporting for duty 1 year loafing or frequent unauthorized absences from duty during regular office hours *Refusal to perform : Suspension : Dismissal : : official duty 6 mos. 1 day 1 year *Gross insubordination : Suspension : Dismissal : 6 mos. 1 day 1 year *Conduct grossly : Suspension : Dismissal : : prejudicial to the best 6 mos. 1 day interest of the service 1 year *Directly or indirectly: Suspension : Dismissal : : having financial and 6 mos. 1 day material interest in any 1 year transaction requiring the approval of his office. Financial and material interest is defined as pecuniary or proprietary interest by which a person will gain or lose something casia **Owning, controlling, : Suspension : Dismissal : managing or accepting 6 mos. 1 day employment as officer, 1 year employee, consultant, counsel, broker, agent, trustee, or nominee in any private enterprise

22.

23.

24.

B. 1.

regulated, supervised or licensed by his office, unless expressly allowed by law. **Engaging in the : Suspension : Dismissal : private practice of his 6 mos. 1 day profession unless authorized 1 year by the Constitution, law or regulation, provided that such practice will not conflict with his official functions. **Disclosing or : Suspension : Dismissal : misusing confidential or 6 mos. 1 day classified information 1 year officially known to him by reason of his office and not made available to the public, to further his private interests or give undue advantage to anyone, or to prejudice the public interest. acd **Obtaining or using : Suspension : Dismissal : any statement filed under 6 mos. 1 day the Code of Conduct and 1 year Ethical Standards for Public Officials and Employees for any purpose contrary to morals or public policy or any commercial purpose other than by news and communications media for dissemination to the general public. LESS GRAVE OFFENSES: *Simple neglect of : Suspension : Dismissal : duty 1 mo. 1 day 6 mos.

2.

3.

4.

5.

6.

7.

8.

9.

10.

*Simple misconduct : Suspension : Dismissal : : 1 mo. 1 day 6 mos. *Gross discourtesy in : Suspension : Dismissal : : the course of official 1 mo. 1 day duties 6 mos. *Gross violation of : Suspension : Dismissal : : existing Civil Service 1 mo. 1 day Law and rules of 6 mos. serious nature cd *Insubordination : Suspension : Dismissal : : 1 mo. 1 day 6 mos. *Habitual drunkenness : Suspension : Dismissal : 1 mo. 1 day 6 mos. *Nepotism as defined : Suspension : Dismissal : : in Sec. 49 of Presidential 1 mo. 1 day Decree No. 807 6 mos. **Recommending any : Suspension : Dismissal : person to any position in 1 mo. 1 day a private enterprise 6 mos. which has a regular or pending official transaction with his office, unless such recommendation or referral is mandated by (1) law, or (2) international agreements, commitment and obligation, or as part of the function of his office. aisa dc **Unfair discrimination : Suspension : Dismissal : in rendering public service 1 mo. 1 day due to party affiliation 6 mos. or preference **Failure to file : Suspension : Dismissal : :

11.

sworn statements of 1 mo. 1 day assets, 6 mos. liabilities and net worth, and disclosure of business interest and financial connections including those of their spouses and unmarried children under eighteen (18) years of age living in their households. **Failure to resign : Suspension : Dismissal : from his position in 1 mo. 1 day the private business 6 mos. enterprise within thirty (30) days from assumption of public office when conflict of interest arises, and/or failure to divest himself of his shareholdings or interest in private business enterprise within sixty (60) days from such assumption of public office when conflict of interest arises: Provided, however, that for those who are already in the service and a conflict of interest arises, the official or employee must either resign or divest himself of said interest within the periods, herein-above provided, reckoned from the date when the conflict of interest had arisen. cdtai LIGHT OFFENSES: *Neglect of duty Dismissal : : Reprimand : Suspension

C. 1.

2. 3.

4.

5. 6. 7.

8.

9. 10.

11.

*Discourtesy in the : Suspension : Dismissal : course of official duties 1-30 days *Improper or : Reprimand : Suspension : Dismissal : unauthorized solicitation 1-30 days of contributions from subordinate employees and by teachers or school officials from school children *Violation of : Reprimand : Suspension : Dismissal : reasonable office 1-30 days rules and regulations *Gambling prohibited : Reprimand : Suspension : Dismissal : by law. 1-30 days *Refusal to render : Reprimand : Suspension : Dismissal : overtime service 1-30 days *Disgraceful, immoral : Reprimand : Suspension : Dismissal : or dishonest conduct 1-30 days prior to entering the service cd *Borrowing money by : Reprimand : Suspension : Dismissal : superior officers from 1-30 days subordinates to superior officers *Lending money at : Reprimand : Suspension : Dismissal : usurious rates of interest 1-30 days *Willful failure to pay: Reprimand : Suspension : Dismissal : just debts or willful 1-30 days failure to pay taxes due to the government *Pursuit of private : Reprimand : Suspension : Dismissal : business, vocation or 1-30 days profession without permission required by Civil Service rules and

1-30 days : Reprimand

12.

13.

14.

regulations *Lobbying for personal : Reprimand Dismissal : interest or gain in 1-30 days legislative halls and offices without authority *Promoting the sale of : Reprimand Dismissal : tickets in behalf of 1-30 days private enterprise that are not intended for charitable or public welfare purposes and even in the latter cases if there is no prior authority. **Failure to act : Reprimand : Dismissal : promptly on letters 1-30 days and request within fifteen (15) days from receipt, except as otherwise provided in the rules implementing the Code of Conduct and Ethical Standards for Public Officials and Employees.

Suspension

Suspension

Suspension

15.

16.

**Failure to process : Reprimand : Suspension Dismissal : documents and complete 1-30 days action on documents and papers within a reasonable time from preparation thereof, except as otherwise provided in the rules implementing the Code of Conduct and Ethical Standards for Public Officials and Employees **Failure to attend to : Reprimand : Suspension Dismissal : anyone who wants to 1-30 days avail himself of the services of the office,

or act promptly and expeditiously on public transactions. cd i ----------------------------------* Offenses under Presidential Decree No. 807 The penalty of Forced Resignation may be imposed instead of dismissal. The penalty of Transfer, or demotion, or fine maybe imposed instead of Suspension from 1 month 1 day to 1 year The penalty of fine may be imposed instead of suspension from 1 day to 1 month. ** Offenses under Republic Act No. 6713 "Only one penalty shall be imposed for each case. "Each Case" means one administrative case which may involve one or more charges or counts. "In the determination of penalties to be imposed, mitigating and aggravating circumstances may be considered. cdasia "If the respondent is found guilty of two or more charges or counts, the penalty imposed should be that corresponding to the most serious charge or count and the rest may be considered as aggravating circumstances. "The second or the third offense committed need not be the same offense previously committed but any offense of the same classification. "The penalty of dismissal shall carry with it that of cancellation of eligibility, forfeiture of leave credits and retirement benefits, and disqualifications from reemployment in the government service. "The penalty of forced resignation shall carry with it that of forfeiture of leave credits and retirement benefits, and the disqualification for employment in the government service for a period of one year. However, where the resignation contains conditions or disqualification regarding reemployment in a class of position, the respondent shall be disqualified for reemployment in such positions. aisa dc "All Circulars, issuances inconsistent with this Memorandum Circular are deemed superseded. "THIS CIRCULAR SHALL TAKE EFFECT IMMEDIATELY." Quezon City, July 20, 1989 (SGD.) PATRICIA A. STO. TOMAS" Chairman Please be guided accordingly. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-18-89 Revenue Memorandum Circular No. 50-89 August 18, 1989 REVENUE MEMORANDUM CIRCULAR NO. 50-89 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 89-16 dated August 17, 1989. To : All Internal Revenue Officers and Others Concerned

For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, July 1, 1989. aisa dc PESO/LITER Products Previous Tax Present Tax Difference Premium/Avgas P3.5672 P3.7519 P0.1847 Regular Gasoline 3.1834 3.4013 0.2179 Avturbo 3.5239 3.1999 (0.3240) Kerosene 1.2223 1.1081 (0.1142) Diesel Fuel Oil 1.1874 1.0914 (0.0960) Fuel Oil (Bunker) L P G 0.9570 0.8883 (0.0687) or 1.7121/kg. or 1.5892/kg. (0.1229) Asphalts 0.8136/kg. 0.8728/kg. 0.0592 Thinners 1.1649 1.2330 0.0681 All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-18-89 Revenue Memorandum Circular No. 51-89 August 18, 1989 REVENUE MEMORANDUM CIRCULAR NO. 51-89 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Order dated August 15, 1989 and August 16, 1989. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, August 16, 1989. casia PESO/LITER Products Previous Tax Present Tax Difference Premium/Avgas P3.7519 P3.7796 P0.0277 Regular Gasoline 3.4013 3.4290 0.0277 Avturbo 3.1999 3.2276 0.0277 Kerosene 1.1081 1.1175 0.0094 Diesel Fuel Oil 1.0914 1.1009 0.0095 Fuel Oil (Bunker) L P G 0.8883 0.8977 0.0094 or 1.5892/kg. or 1.6060/kg. 0.0168 Asphalts 0.8728/kg. 0.8823/kg. 0.0095 Thinners 1.2330 1.2424 0.0094

All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. aisa dc JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-09-89 Revenue Memorandum Circular No. 52-89 August 9, 1989 REVENUE MEMORANDUM CIRCULAR NO. 52-89 Subject : Missing Seven (7) Sets of Confirmation Receipts (BIR Form CB82-02-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing seven (7) sets of Confirmation Receipts, to wit: ---------------------------SERIAL NUMBER : QUANTITY ---------------------------16737494 : One (1) Set 16755314 : One (1) Set 17325620 : One (1) Set 12190457 : One (1) Set 14150322 : One (1) Set 15024356 : One (1) Set 16785314 : One (1) Set ---------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-17-89 Revenue Memorandum Circular No. 53-89 August 17, 1989 REVENUE MEMORANDUM CIRCULAR NO. 53-89 Subject : Missing Two (2) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit:

--------------------------SERIAL NUMBERS : QUANTITY --------------------------15005122 - 15005123 : Two (2) Sets --------------------------The above receipt which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-22-89 Revenue Memorandum Circular No. 54-89 August 22, 1989 August 22, 1989 REVENUE MEMORANDUM CIRCULAR NO. 54-89 Subject : Revenue Memorandum Circular No. 48-89 dated July 27, 1989 relative to the Observance of the 89th Anniversary of the Philippine Civil Service. To : All Internal Revenue Officers Concerned On Monday, September 18, 1989, our regular flag-raising ceremony will be followed by the recitation of "Panunumpa ng Kawani ng Gobyerno" as a fitting celebration of Civil Service week from September 13-19, 1989. cda Please be guided accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-29-89 Revenue Memorandum Circular No. 55-89 August 29, 1989 September 1, 1989 REVENUE MEMORANDUM CIRCULAR NO. 55-89 Subject : Revocation of VAT Ruling No. 080-88 exempting refined sugar from VAT . To : All Internal Revenue Officers and Others Concerned Quoted hereunder is the full text of the Memorandum dated May 5, 1989 of this Office duly approved by the Secretary of Finance revoking the exemption of refined sugar from the VAT. "May 5, 1989 "MEMORANDUM FOR: The Secretary of Finance RE: REFINED SUGAR

"This refers to VAT Ruling No. 080-88 as enunciated in your duly approved Memorandum of former Commissioner of Internal Revenue, Bienvenido A. Tan, Jr. dated February 18, 1988 granting the request of the National Sugar Refineries Corporation for reconsideration of the administrative interpretation of the term "raw cane sugar" as contemplated under Section 103(b) of the Tax Code as amended by E.O. No. 273 to include all kinds of sugar including what is commonly known as "refined sugar". cda "Under Section 103(h) of the Tax Code, pertinent portion of which reads: "Sec. 103. Exempt Transactions, The following shall be exempt from the value-added tax: xxx xxx xxx (b) Sale or importation in their original state of agricultural and marine food products; livestock and poultry of a kind generally used as, or yielding or producing food for human consumption; and breeding stock and genetic materials therefor. Products classified under this paragraph and paragraph (a) shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, smoking or stripping. Polished and/or husked rice, corn grits and raw cane sugar shall be considered in their original state for purposes of this paragraph. cda only raw cane sugar is considered in its original state for purposes of the exemption from VAT. If the law intended to exempt the refined sugar from VAT, it would have so stated. The term "raw cane sugar" is defined in Section 9(b)(2) of Revenue Regulations No. 5-87 as follows: 'Raw cane sugar refers to the crystalized or solidified juice of sugar cane through a milling process, short of the process of being refined, without any addition of chemicals, resulting in muscovado or granulated sugar. It does not include refined sugar, molasses or bagasse.' "That raw cane sugar is indeed different from refined sugar for tax purposes is recognized even prior to the VAT law. Both commodities were separately subject to the miller's tax. Under then Section 168 of the Tax Code (before the VAT), refined sugar is subject to the miller's tax, but any miller's tax paid on the raw sugar shall be credited against the tax due on the refined sugar. This is probably the reason why only the raw cane sugar is exempt from VAT while refined sugar was being subjected to VAT. "In fact, the aforesaid approved Memorandum of former Commissioner Tan mentions the common perception that raw sugar and refined sugar are basically different from each other but states further that 'refined sugar is just a purer form of raw sugar without any chemical change, without the addition of any chemical substance and without any change in physical characteristics except color'; hence, refined sugar has since then been included within the term 'raw cane sugar', which the law considers in its original state for purposes of the exemption from VAT. "It is submitted that the above interpretation clearly violates the rule of statutory construction governing tax exemptions. aisa dc 'Exemptions from taxation are highly disfavored in law; and he who claims an exemption must be able to justify his claim by the clearest grant of organic or statute law. An exemption from the common burden cannot be permitted to exist upon vague implications.' (Asiatic Petroleum Co. vs. Llames, 49 Phil. 466)

"Exemptions are regarded as in derogation of sovereign authority and of common right and are construed strictissimi juris against the person or entity claiming exemption. "Accordingly, since under the law, only raw cane sugar is exempt from VAT and the fact that the raw cane sugar and refined sugar are basically different from each other, we cannot agree with the interpretation that raw cane sugar for VAT exemption purposes includes refined sugar. "Moreover, as regards the recommendation that Section 9(b) (2) of Revenue Regulations No. 5-87 be amended so as to include refined sugar within the term 'raw cane sugar', actually no regulation has as yet been promulgated to effect the amendment. Besides, the proposed amendatory regulations contravene the law (Section 103(b), Tax Code) which limits the exemption from VAT to raw cane sugar. Administrative regulations are valid only when they are not contrary to law. (Article 7, Civil Code) A rule or regulation to be valid, must be reasonable and consistent with law. (International R. Co. v. Davidson, 257 U.S. 506, 42 S. Ct. 179) Such being the case, this Office hereby withdraws said recommendation as it will result in tremendous loss of revenue to the Government. casia "In view of the foregoing considerations, it is respectfully recommended that VAT Ruling No. 08-88 exempting refined sugar from VAT be revoked. "Respectfully submitted: (SGD.) JOSE U. ONG Commissioner of Internal Revenue "APPROVED: (SGD.) VICENTE R. JAYME Secretary of Finance This Memorandum Circular is issued for the information and guidance of all concerned and shall take effect on September 1, 1989. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-26-89 Revenue Memorandum Circular No. 56-89 August 26, 1989 REVENUE MEMORANDUM CIRCULAR NO. 56-89 Subject : Lost of duplicate copy of Authority to Print Receipts/Invoices (BIR Form No. 2530) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one duplicate copy of Authority to Print Receipts/Invoices (BIR Form No. 2530), to wit: Serial Number Quantity 400050 duplicate copy The above copy was verified as missing during an inspection by the representative of the Commission on Audit. The set bearing the abovementioned serial number has been cancelled and all official transactions involving the use thereof are therefore invalidated. aisa dc

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-29-89 Revenue Memorandum Circular No. 57-89 August 29, 1989 REVENUE MEMORANDUM CIRCULAR NO. 57-89 Subject : Dissemination of the Rules of the Poster (Cartoon) Design Contest To : All Internal Revenue Officers and Others concerned For your information and guidance, Civil Service Commission Memorandum Circular No. 35, s. 1989 is hereunder quoted regarding the rules of the Poster (Cartoon) Design Contest as one of the activities for the Civil Service Week celebration. casia "One of the activities for the Civil Service Week celebration is the sponsorship by the Commission of the Poster (Cartoon) Design Contest. While the Civil Service Week has adopted the theme "Katapatan at Kakayahan, Ihandog sa Bayan," the contest itself will revolve around the subject "Red tape in government." We are furnishing you copies of the rules of the contest for immediate dissemination to the different agencies within your jurisdiction. Posters announcing the contest will also be made available. The Public Information Division of the CSC has been designated as the Poster Contest Secretariat (PCS) and all further inquiries should be addressed to them at telephone no. 99-19-94, 99-19-68; 96-65-54 or 99-19-67 loc. 226 99-18-48 loc. 226. cdtai Your cooperation is hereby enjoined. Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-23-89 Revenue Memorandum Circular No. 58-89 August 23, 1989 REVENUE MEMORANDUM CIRCULAR NO. 58-89 Subject : Loss of Seventy Five (75) Sets of Payment Orders (BIR Form RC82-02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of seventy five (75) sets of Revenue Payment Orders, to wit: --------------------------SERIAL NUMBERS : QUANTITY

--------------------------C-4495426 - C-4495450 : twenty five (25) sets C-4495451 - C-4495475 : twenty five (25) sets C-4495476 - C-4495500 : twenty five (25) sets --------------------------The above receipts which were reported missing by Mr. Jose D. Vera, Revenue Enforcement Officer, Revenue District No. 25, South Manila, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-13-89 Revenue Memorandum Circular No. 59-89 September 13, 1989 REVENUE MEMORANDUM CIRCULAR NO. 59-89 Subject : Publication of the WEEKLY MONITOR by the Public Information and Assistance Division. To : All heads of units, chairmen of existing committees and other internal revenue officers concerned. To give all revenue officials and employees an update of what is happening in the Bureau on a weekly basis, the Public Information and Assistance Division is publishing the Weekly Monitor starting October 2, 1989. All officials activities in the Bureau will be calendared including such other occasions of general interest to all Revenuers. aisa dc In order that there will be accuracy and reliability of information, all heads of units, committees and other concerned are requested to submit their schedule of activities to the Chief, Public Information and Assistance Division at least two weeks before the date of the activity to be assured of its inclusion in the Weekly Monitor. This Circular should be given the widest publicity by all concerned. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-07-89 Revenue Memorandum Circular No. 60-89 September 7, 1989 September 7, 1989 REVENUE MEMORANDUM CIRCULAR NO. 60-89 Subject : Suspension of the effectivity of Revenue Regulations No. 4-89 dated May 18, 1989, concerning the filing of information return for documentary stamp taxes paid.

In view of the protest of the Bankers Association of the Philippines who are most likely affected by the implementation of Revenue Regulations No. 4-89 due to unforeseen administrative problems in its compliance and implementation, its effectivity is hereby postponed until further notice but not later than three (3) months from the date of this Order. This suspension in prompted by the desire of this Office to afford the BAP-BIR Tax Committee opportunity to discuss more thoroughly the said Regulations. This Order is to take effect immediately. cd Recommending Approval: (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Approved: (Sgd.) VICTOR C. MACALINCAG Acting Secretary of Finance Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-08-89 Revenue Memorandum Circular No. 61-89 August 8, 1989 August 8, 1989 REVENUE MEMORANDUM CIRCULAR NO. 61-89 Subject : Reiteration of Certain Policies on Appointments to Positions in the Career Service To : All Concerned BIR Officials and Employee In relation with CSC MC No. 29, series 1989, it is informed that beginning January, 1990, the Civil Service Commission shall no longer entertain temporary appointments of non-eligibles as well as those who lack the appropriate eligibility to positions in the career service, except those covered by the provisions of CSC MC No. 10, s. 1977 and CSC Resolution No. 435, s. 1980. The said CSC Memorandum Circular reiterates certain policies on appointments to career positions in the government, the pertinent portion are as follows: 1. Qualification in appropriate examination shall be required for appointment to positions in the first and second levels in the career service in accordance with civil Service rules. (Sec. 19(7), P.D. 807). 2. A temporary appointment shall not exceed twelve (12) months, but the appointee may be replaced sooner if a qualified civil service eligible becomes available. (Sec. 25(b), P.D. 807) acd 3. The Commission and its Regional Officers shall certify qualified eligibles from its registers for purposes of appointment to career positions. 4. (a) A permanent appointment shall be issued to a person who meets all the requirements for the position to which he is being - appointed, including the appropriate eligibility prescribed, in accordance with the provisions of law, rules and standards promulgated in pursuance thereof. (Section 25(a), P.D. 807) (b) While the appointing authority is given a wide latitude of discretion in the selection of personnel for his department or agency, in the exercise of this discretion he shall be guided by and subject to the Civil Service Law and Rules.

Appointing authorities are likewise enjoined to extend appointments under PERMANENT status to all those considered and found qualified under 5(a), and in the light of the policy mentioned in 5(b), of the said CSC Memorandum Circular: otherwise, if only temporary appointments have been issued to fully qualified persons, the same shall be approved as PERMANENT by the Commission, such policy to be effective immediately. acd In view of the foregoing, it is hereby directed that all employees with TEMPORARY APPOINTMENTS be given other items where their qualifications are deemed appropriate, otherwise their services will be terminated. Please be guided accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-21-89 Revenue Memorandum Circular No. 62-89 September 21, 1989 REVENUE MEMORANDUM CIRCULAR NO. 62-89 Subject : Loss of Eight (8) Sets of Confirmation Receipts (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of eight (8) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------10048533 : One (1) Set 10048542 : One (1) Set 10048550 : One (1) Set 10048584 : One (1) Set 10048594 : One (1) Set 10048670 : One (1) Set 10048567 : One (1) Set 10048570 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

09-12-89 Revenue Memorandum Circular No. 63-89 September 12, 1989 REVENUE MEMORANDUM CIRCULAR NO. 63-89 Subject : Missing Two (2) Sets of Confirmation Receipts (BIR Form CB-8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------11825501 : one (1) set 11825516 : one (1) set ------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-22-89 Revenue Memorandum Circular No. 64-89 September 22, 1989 REVENUE MEMORANDUM CIRCULAR NO. 64-89 Subject : Missing Four (4) Sets of Confirmation Receipts (BIR Form CB 8202-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing four (4) sets of Confirmation Receipts, to wit: -------------------------SERIAL NUMBER : QUANTITY ------------------------16955361 : one (1) set 16980942 : one (1) set 16955111 : one (1) set 16955200 : one (1) set -------------------------The above receipts which were reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary

steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-29-89 Revenue Memorandum Circular No. 65-89 September 29, 1989 REVENUE MEMORANDUM CIRCULAR NO. 65-89 Subject : Loss of quadruplicate copy of Certificate Authorizing Registration of Taxable Real Property Transaction (BIR Form No. 1954). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one quadruplicate copy of Certificate Authorizing Registration of Taxable Real Property Transaction (BIR Form No. 1954), to wit: casia Serial Number Quantity 035259 quadruplicate copy The above copy which was reported as missing by Mr. Alberto B. Zamuco, Revenue District Officer of Revenue District No. 24, Sta. Mesa-Quiapo, Manila, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-28-89 Revenue Memorandum Circular No. 66-89 September 28, 1989 REVENUE MEMORANDUM CIRCULAR NO. 66-89 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: ------------------------SERIAL NUMBER : QUANTITY ------------------------16830238 : one (1) set ------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cdtai

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-29-89 Revenue Memorandum Circular No. 67-89 September 29, 1989 REVENUE MEMORANDUM CIRCULAR NO. 67-89 Subject : Missing Fourteen (14) Sets of Confirmation Receipts (BIR Form CB-82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing fourteen (14) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY -------------------------13983416 : one (1) set 14599634 : one (1) set 14599803 : one (1) set 14599865 : one (1) set 15257266-15257275 : ten (10) sets -------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are thereof invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-02-89 Revenue Memorandum Circular No. 68-89 October 2, 1989 REVENUE MEMORANDUM CIRCULAR NO. 68-89 Subject : Policy in case of the Office of the Regional Director To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder the letter dated September 21, 1989 of this Office, to the Assistant Regional Director, Revenue Region No. 3-B, Valenzuela, Metro Manila, to the effect that in the event that an incumbent Regional Director retires, the incumbent. Assistant Regional Director or any other revenue official will not be designated verbally or in writing as Acting Regional

Director for the reason that Regional Directors are presidential appointees; and that until the President has duly appointed a Regional Director, the Assistant Director by operation of law will perform the functions of the retired Regional Director in his capacity not as Acting Regional Director but as Assistant Regional Director. cdasia "September 21, 1989 Assistant Director Benito Q. Diaz Revenue Region No. 3-B Valenzuela, Metro Manila Dear Assistant Director Diaz: This has reference to your Revenue Regional Memorandum Circular No. 1-89 dated September 18, 1989, copy of which you furnished this Office and the senior officials of this Bureau. In the said Circular, you stated that 'upon the oral instructions of the Commissioner . . . assumed the functions and the position of Acting Regional Director. . . . (Emphasis supplied). In connection therewith, I regret to inform you that I do not recall having given you verbal instructions to assume the position of Acting Regional Director. It is the policy of this Office that in the event that an incumbent Regional Director retires, the incumbent Assistant Regional Director or any other Revenue official will not be designated verbally or in writing as Acting Regional Directors. The reason for this policy is that Regional Directors are presidential appointees and, until the President has duly appointed a Regional Director, the Assistant Director by operation of law will perform the functions of the retired Regional Director in his capacity not as Acting Regional Director but as Assistant Regional Director. cda This policy of not designating Acting Regional Directors is therefore intended to avoid preemption of the authority of the President to select other qualified officials for appointment as Regional Director. To dispel the impression that you were instructed to assume the position of Acting Regional Director, you are hereby requested to withdraw and cancel. Revenue Regional Memorandum Circular No. 1-89, as it is hereby considered revoked and cancelled. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue It is desired that this Circular be given as wide publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-09-89 Revenue Memorandum Circular No. 69-89 October 9, 1989 REVENUE MEMORANDUM CIRCULAR NO. 69-89 Subject : Parangal sa Dakilang Pilipino.

To : All Assistant Commissioners, Regional Directors and other concerned. For your information and guidance, the letter dated September 8, 1989 of Rep. Oscar F. Santos, Chairman, Nominations Committee, Parangal sa Dakilang Pilipino, is hereunder quoted regarding the Annual Awards Program of the PDP Laban and the Jaime N. Ferrer Foundation, Inc. 'Dear Sir/Madam: The PDP Laban in cooperation with the JAIME N. FERRER FOUNDATION, INC., has organized an awards program, PARANGAL SA DAKILANG PILIPINO, to give honor and recognition to Filipinos who exemplify unselfish and devoted service to the Filipino nation and people in some specific fields of endeavor. cdtai Awards shall be given in the following categories: * Parangal sa Dakilang Pilipino sa Pamahalaan (Government Service). Parangal sa dakilang Pilipino sa Paglilingkod Bayan (Community Science) * Parangal sa Dakilang Pilipino sa Pamamahayag at Komunikasyon (Journalism/Mass Media) * Parangal sa Dakilang Pilipino sa Paggawa (Labor) * Parangal sa Dakilang Kabataang Pilipino (Youth Achievement). In connection with the above, we have the honor to invite you to be a nominator for the award category relevant to your own field of endeavor or expertise. As a nominator, we request you to submit to us the name and accompanying data of a person and/or institution whom you deem qualified to receive an award in a specific category. Attached herewith is the official nomination form and the criteria for the awards. In the interest of our country and people, we trust that you will assist us in ensuring that awards are given to truly deserving Filipinos by sending us your nominations. cd i Very truly yours, (Sgd.) REP. OSCAR F. SANTOS Chairman Nominations Committee Parangal sa Dakilang Pilipino All revenue officials and employees are directed to submit their nominations direct to the Secretariat at the address indicated in the attached nomination form. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-27-89 Revenue Memorandum Circular No. 70-89 October 27, 1989 REVENUE MEMORANDUM CIRCULAR NO. 70-89 Subject : Loss of Official Delivery Invoices for Molasses. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of official delivery invoices for molasses (BIR Form No. 397), to wit: Serial Numbers Quantity

001779-002000 222 sets The above sets of official delivery invoices which were reported as lost by Mr. Jun T. Valliente of the National Sugar Refineries Corporation (NASUREFCO), are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned official delivery invoices are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-14-89 Revenue Memorandum Circular No. 71-89 November 14, 1989 REVENUE MEMORANDUM CIRCULAR NO. 71-89 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 89-17 dated October 18, 1989. To : All Internal Revenue and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, September 1, 1989. cd PESO/LITER Products Previous Tax Present Tax Difference Premium/Avgas P3.7796 P3.3997 (P0.3799) Regular Gasoline 3.4290 3.0626 (0.3664) Avturbo 3.2276 3.2707 0.0431 Kerosene 1.1175 1.1346 0.0171 Diesel Fuel Oil 1.1009 1.1150 0.0141 Fuel Oil (Bunker) LPG 0.8977 0.9240 0.0263 or 1.6060/kg. or 1.6530/kg. 0.0470 Asphalts 0.8823/kg. 0.8833/kg. 0.0010 Thinners 1.2424 1.1110 (0.1314) All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-04-89 Revenue Memorandum Circular No. 72-89 December 4, 1989 REVENUE MEMORANDUM CIRCULAR NO. 72-89

Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 89-19 dated November 28, 1989. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 AM, November 1, 1989. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cdt (SGD.) VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-in-charge PESO/LITER Products Previous Tax Present Tax Difference Premium/Avgas P3.3997 P3.4036 P0.0039 Regular Gasoline 3.0626 3.1201 0.0575 Avturbo 3.2707 3.7835 0.5128 Kerosene 1.1346 1.3114 0.1768 Diesel Fuel Oil 1.1150 1.1707 0.0557 Fuel Oil (Bunker) LPG 0.9240 0.8901 (0.0339) or 1.6530/kg or 1.5924/kg (0.0606) Asphalts 0.8833/kg 0.8824/kg (0.0009) Thinners 1.1110 1.1117 0.0007 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-04-89 Revenue Memorandum Circular No. 73-89 December 4, 1989 REVENUE MEMORANDUM CIRCULAR NO. 73-89 Subject : Loss of the original copy of Certificate Authorizing Registration (Untaxed Capital Gains on Real Estate Transactions) BIR Form No. 1954-A. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the original copy of Certificate Authorizing Registration (Untaxed Capital Gains on Real Estate Transactions) BIR Form No. 1954-A, to wit: Serial Number Quantity 139201 one copy (original) The above copy which was reported as missing by Mr. Severino D. Pascua, Revenue District Officer of Revenue District No. 1, Laoag City, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EUFRACIO D. SANTOS

Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-10-89 Revenue Memorandum Circular No. 74-89 November 10, 1989 REVENUE MEMORANDUM CIRCULAR NO. 74-89 Subject : Department Order No. 44-89 To : All Internal Revenue Officers and others concerned. For the information and guidance of all officials and employees, quoted hereunder is Department Order No. 44-89 dated October 18, 1989 of the Department of Finance. 'In compliance with the directive of the Department of Budget and Management under its National Budget Circular No. 411 dated September 18, 1989 entitled: 'Directing the Adoption of Economy Measures and the Imposition of Reserves for CY 1989', it is hereby ordered that the following measures be adopted to ensure economy in the Department operations: 1. Overtime work should be discouraged. Office work should be done during regular office hours. 2. Travel should be limited to those urgently necessary. Prudence should be exercised in request for reimbursement of travelling expenses. cd i 3. Wasteful use of office supplies should be avoided. The number of participants being sent to seminars/workshops/conventions should be limited to the minimum. 4. The sending of participants to seminars/workshops/conventions/conferences abroad shall be limited to those necessary as determined by the Scholarship Committee. 5. Water and toilet facilities should be inspected for leaks. Facilities in need of repair should be attended to immediately to avoid wastage of water. 6. After office hours all lights and airconditioners should be turned off; in the case of airconditioners these should be turned off 35 minutes before closing time. 7. The permits extended to personnel who stay in after office hours at the Finance Building should be reviewed to economize on water and electric consumption. cdt 8. Socio-cultural activities to be sponsored by the Department such as athletic competitions and cultural shows should be minimized. This Order supersedes Department Order No. 40-89 dated September 27, 1989 insofar as No. 7 is concerned. (Sgd.) VICENTE R. JAYME Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (SGD.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-11-89 Revenue Memorandum Circular No. 75-89 December 11, 1989 December 11, 1989

REVENUE MEMORANDUM CIRCULAR NO. 75-89 Subject : Extension of Deadline for remittance of taxes withheld in the Makati areas. To : All Internal Revenue Officers, Employees and Others Concerned. In view of the recent coup attempt, which practically paralyzed the business community of Makati from December 1 to December 8, the deadline for the remittance of taxes withheld for the month of November, 1989 on BIR Form Nos. 710.43 W and 7.50 A which fall due on even date, December 11, is hereby extended up to December 18, 1989. It is understood that as a consequence of this extension, taxpayers are relieved of all surcharges and penalties incident to late remittance, provided that remittance of withheld taxes are made within the period herein above stated. cdt This circular shall take effect immediately. (SGD.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-08-89 Revenue Memorandum Circular No. 76-89 December 8, 1989 REVENUE MEMORANDUM CIRCULAR NO. 76-89 Subject : Publishing the Resolution of the Supreme Court in the case of Commissioner of Internal Revenue vs. Oscar R. Victoriano and the Court of Tax Appeals re: taxability of terminal leave pay of retiring official/employee in the government service. To : All Internal Revenue Officers and Others Concerned. Quoted hereunder is the Resolution of the Supreme Court En Banc dated August 10, 1989; 'G.R. No. 83176 (Commissioner of Internal Revenue vs. Oscar R. Victoriano and the Court of Tax Appeals). - In view of the fact that the terminal leave pay of respondent former Presiding Justice of the Court of Appeals, Oscar R. Victoriano, is part of his salary, the Court Resolved to GRANT the petition and thus allow the imposition of the withholding tax thereon.' upholding, the effect, BIR Ruling No. 29-c-7-F-036-85 dated April 10, 1985 and BIR Ruling No. 29-C-7-F-053-85-158-85 dated September 13, 1985 that the terminal leave pay or the money value of the accumulate/unused vacation and sick leave credits received by the employee/official upon his retirement or separation from the government service is part of compensation for service performed subject to income tax and consequently to the withholding tax on wages prescribed under Section 72, Chapter X, Title II of the Tax Code as amended and as implemented by Revenue Regulations No. 6-82 as amended. cdtai It is desired that this Circular be given as wide as publicity as possible. (SGD.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

12-19-89 Revenue Memorandum Circular No. 77-89 December 19, 1989 REVENUE MEMORANDUM CIRCULAR NO. 77-89 Subject : Applicable Uniform Exchange Rate of U.S. Dollar To Philippine Peso for the Collection of Internal Revenue Memorandum Circular No. 26-85, dated July 15, 1985. To : All Internal Revenue Officers; All Revenue Attache, Revenue Attache and Officers Authorized to Collect Internal Revenue Taxes Abroad; Others Concerned. For internal revenue tax purposes, the following rules are hereby prescribed to govern the conversion of U.S. Dollar and other acceptable foreign currencies to Philippine Peso for the collection of taxes. 1. For payment made in the Philippines. Payment of internal revenue tax liabilities in the Philippines may be made either in cash or personal check (not accommodation checks). The tax liability in U.S. Dollars shall first be computed into Philippine peso equivalence. The conversion rate to be applied shall be the prevailing interbank reference rate at the time of payment and the liability shall be settled in Philippine currency. aisa dc If payment is made in foreign currency check, no BIR official receipt shall be issued; instead, a letter of acknowledgement shall be issued by the collecting officer to evidence receipt of the foreign currency check for clearance and conversion to Philippine pesos by the Central Bank of the Philippines/depository bank. When the check has been cleared and converted to Philippine peso by the Central Bank/depository bank, the corresponding BIR official receipt shall be issued in accordance with existing regulations. 2. For payment made abroad thru the Revenue Attache, Revenue Representative and/or Finance Officer of foreign posts who are authorized to collect internal revenue taxes. (a) Payment may be made in Philippine Peso, the U.S. Dollar or any other acceptable foreign currency. However, the U.S. Dollar shall be used as the base currency. Collection in any acceptable foreign currency other than the U.S. Dollar shall state in the Official Receipt the currency involved and its U.S. Dollar equivalent, indicating the conversion rate used at the time of payment. cda (b) The conversion rate to be applied shall be the local prevailing bank reference rate at the time of payment in the country where the payment is made. No other reference rate shall be used. All previous Circulars, Memoranda or Orders are hereby amended or modified accordingly. All internal revenue officers and other officials charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and are urged to give the same the widest publicity possible. cd i (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-05-89 Revenue Memorandum Circular No. 78-89 December 5, 1989

REVENUE MEMORANDUM CIRCULAR NO. 78-89 Subject : Reinstallation of Grievance Machinery in all Government Offices To : All Assistant Commissioners, Regional Directors and others concerned For your information and guidance, Memorandum Circular No. 45, s. of 1989 is quoted hereunder regarding the installation of Grievance Machinery in all Government Offices. "The Commission is mandated by law to provide leadership and assistance in developing employee relations programs in government offices. Every head of agency is likewise required by law to take proper steps towards the creation of an atmosphere conducive to harmonious relationship and improved employee morale. In consonance with this, the Commission has, as early as 1963, issued various memorandum circulars and guidelines stressing effective grievance machinery as a mechanism to carry out this mandate and requiring every agency to submit to the Commission its grievance procedures. Despite the lapse of time, only a negligible percentage of government agencies has made use of grievance machinery and fewer has still submitted their grievance procedure to the Commission and considering further that inter-office conflicts which can be averted through proper use of grievance machinery are allowed to grow into unmanageable proportion, it is felt that immediate reinstallation of grievance machinery is mandatory so as not to adversely affect efficient and effective delivery of public service. aisa dc Consequently, each head of office is therefore enjoined to develop a grievance procedure which suits the needs, culture and structure of their respective agency. Said procedures shall embody the principles emphasized in every grievance machinery and shall take into consideration the provisions articulated in Section 35 of PD 807 and in Section 1, Rule IX of the Implementing Rules of Executive Order No. 180. Each agency head shall submit the grievance procedure to the Commission not later than December 1, 1989 for approval. Attached are guidelines adopted by the Commission in the development of the grievance procedure. All issuances inconsistent with this Memorandum Circular are deemed superseded. Correspondence sent in compliance with this Memorandum Circular must be addressed to: cdt The Chairman Civil Service Commission National Government Center Constitution Hills, Diliman Quezon City Attention: Office for Personnel Relations (Sgd.) PATRICIA A. STO. TOMAS" Chairman All Revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

12-11-89 Revenue Memorandum Circular No. 79-89 December 11, 1989 REVENUE MEMORANDUM CIRCULAR NO. 79-89 Subject : Homestay Program and the LIBOT BAYAN Program To : All Assistant Commissioners, Regional Directors and others concerned In a memorandum dated November 20, 1989, Assistant Commissioner Angel Q. Yoingco of the Department of Finance has forwarded to us the Letter dated October 31, 1989 of the Director, Office of Product Research and Development, Department of Tourism, promoting the Homestay Program and the LIBOT BAYAN Program, a project which aims to encourage government employees to travel through a one-month salary loan from the GSIS. The Bureau is enjoined to participate in this Program. cdtai The program guidelines are as follows: 1. The program will make available to qualified government employees a one-month salary loan to be used for the purchase of a domestic tour package from the following licensed and accredited tour operations: 1) Adventure International Tours, Inc. The Dutch Inn, 1034 Roxas Blvd. Ermita, Metro Manila 2) Anggala Travel and Tour Corporation 555 Nueva St., Binondo, Manila 3) Anscor Travel Corporation Ground Floor Regina Bldg. Trasierra St., Legaspi Village Makati, Metro Manila 4) Blue Horizons Travel and Tours Don Mariano Marcos highway Quezon City 5) Broadway Travel Ground Floor Chateau Marie Bldg. 1322 Roxas Blvd. Ermita, Manila 6) Flight Shop, Inc. G/F Makati Stock Exchange Bldg. Makati, Metro Manila 7) Master Tour Travel Corp. 333 Dasmarias St. Sta. Cruz, Manila 8) Morning Star Travel 316 Dasmarias St. Binondo, Manila

9) Pacific Holiday Lobby Level, Westin Phil. Plaza Pasay City 10) Sarkies Tours Philippines, Inc. J.P. Laurel Memorial Foundation Bldg. M.H. del Pilar, Ermita, Manila 11) Sultan Express Tours and Travel Century Park Sheraton Hotel G/F Arcade, Vito Cruz, Manila 12) Southeast Travel Corporation 451 Pedro Gil Ermita, Manila 2. The loan is payable in 12 monthly installments. Permanent government employees of any agency with at least 80 months (6-1/2 years) of government service or at least 60 months (5 yrs.) with one co-maker who also have at least 60 months of service in the same agency are eligible to apply for the loan at the GSIS. cd i 3. A Libot Bayan Loan from the GSIS can only be used for the sole purpose of purchasing domestic tour packages from the tour operators which are licensed and accredited by the Department of Tourism. 4. The Libot Bayan packages may also be availed of by the government employees who do not wish to apply for the GSIS travel loan. Interested employees may inquire at the office of Product Research and Development, Rm 421, Department of Tourism, with telephone nos. 501760, 502324, 592629 and 592630. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-26-89 Revenue Memorandum Circular No. 80-89 December 26, 1989 REVENUE MEMORANDUM CIRCULAR NO. 80-89 Subject : Creditable Withholding Tax on Sales of Real Property Other Than Capital Assets. To : All Assistant Commissioners, Regional Directors, Revenue District Officers and Others Concerned. Under existing issuances, sellers of real properties are required to file their capital gains tax returns at the Office of the Revenue District Officer where the property is located. This procedure is followed for all types of taxpayers; corporation or otherwise, whether taxable or exempt from the capital gains tax. It has been observed lately that many sellers of real properties, who are exempt from the capital gains tax because they are either real estate dealers or the property owners are in corporate forms, do not include in their income tax returns the income from their sales of real properties. The Bureau of Internal Revenue is, therefore, having some difficulty

monitoring these transactions which are exempt from the capital gains tax but are subject to the regular income tax and should be declared as part of their gross income. In order to prevent further leakage of revenues from these transactions, Revenue Regulations No. 12-89 dated December 21, 1989, subjecting sales of real property other than capital assets to the creditable withholding tax was issued. This Circular is hereby issued to clarify and amplify some pertinent provisions of the aforesaid regulations. cdt 1. Only sales of real property classified as ordinary assets consummated on or after January 1, 1990, are subject to the creditable withholding tax. For purposes of this Circular, the date of notarization appearing on the Deed of Sale shall be considered prima facie the date of consummation of the contract of sale. However, sales evidenced by documents notarized in or before November, 1989 shall be deemed consummated on the date the same is filled with or submitted to the proper revenue office. If the seller is a corporation, the rate of withholding tax is 10% of the gross selling price or the total amount of money or its equivalent which the purchaser pays to the vendor. However, if the seller is an individual, estate, trust, trust fund or pension fund, the rate of withholding tax to be applied is 15%. 2. Considering that sales of real property classified as ordinary assets are merely added as one of the income payments subject to the expanded withholding tax provisions in Revenue Regulations No. 6-85, all other provisions of said regulations shall also apply to sales of real properties considered as ordinary assets. For example, the obligation of the payor to deduct and withhold arises at the time the consideration is paid or payable. The required withholding tax return shall be filed and the tax shall be remitted within ten (10) days after the end of each month. 3. Where the consideration or part thereof is payable on installments, no withholding of tax is required to be made on the installment payments where the buyer is an individual not engaged in any trade or business. In such a case, the withholding of tax shall be made on the last installment(s) paid to the seller and the basis of the withholding tax shall be the consideration appearing on the Deed of Sale or the zonal value prescribed at the time the Contract To Sale, duly notarized, was executed by the contracting parties. On the other hand, the applicable rate of withholding tax shall be deducted and withheld by the buyer of the real property, whether in corporate form or otherwise, who is constituted as a withholding agent, if he is engaged in any trade or business. He is presumed to have previously registered as such with the appropriate district office. cd i 4. No Certificate Authorizing Registration (CAR) shall be issued by the appropriate internal revenue official, unless the Confirmation Receipt or official receipt evidencing payment of the creditable withholding tax on the transaction is presented to him. For this purpose, it is required that the necessary information regarding such payment of withholding tax should be reflected on the face of the certificate to be issued by the internal revenue officer concerned. All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

01-03-90 Revenue Memorandum Circular No. 1-90 January 3, 1990 January 3, 1990 REVENUE MEMORANDUM CIRCULAR NO. 1-90 Subject : Effectivity of BIR Ruling Subjecting Household Insecticides to VAT. To : All Internal Revenue Officers and Others Concerned Under BIR Ruling No. 022-88 dated February 2, 1988, this Bureau had ruled that the importation of insecticide called Trebon 10 EC is exempt from value-added tax, because the same is one kind of pesticide that acts as contact and stomach poison to various insect pests of rice. VAT Ruling No. 16-88 dated February 5, 1988 placed household insecticide in the category of articles exempt from VAT. Both rulings provide the basis for not imposing the VAT on insecticides whether household or agricultural. On July 13, 1989, BIR Ruling No. 149-89 was issued stating: "In reply, please be informed that this Office, after a study has finally concluded that articles, namely fertilizers, pesticides, and herbicides, enumerated in Section 103(c) of the Tax Code, as amended by Executive Order No. 273, the sale or importation of which is exempt from VAT, are those which are used for agricultural purposes. The mosquito coils referred to by you although used to kill insects are not used for agricultural purposes; hence, they do not fall within the purview of Sec. 103(c) of the Tax Code, as amended." cdtai Said ruling was followed by BIR Ruling No. 178-89 dated August 18, 1989 reiterating that mosquito coils, not being used for agricultural purposes, is subject to VAT; thus, even raw materials used in the manufacture of mosquito coils are subject to VAT. Considering that no formal notice had been received by the industry regarding the issuance of BIR Ruling No. 149-89 dated July 13, 1989 and that BIR Ruling No. 178-89 was issued only to a particular mosquito coil manufacturer, questions have been raised on their effectivity. Pursuant to Section 246 of the Tax Code, as amended, any revocation or reversal of any rulings shall not be given retroactive application if the revocation will be prejudicial to the taxpayer except where the taxpayer deliberately misstated the material facts; where the facts subsequently gathered are materially different from the facts on which the ruling is based; and where the taxpayer acted in bad faith. Since none of these are present in the case of BIR Ruling Nos. 149-89 and 178-89 and considering that both rulings were not promptly communicated to the industry concerned, the effectivity of both rulings shall be September 1, 1989. cda This order shall take effect immediately and shall be given the widest publicity by all concerned. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-09-90 Revenue Memorandum Circular No. 2-90 January 9, 1990 REVENUE MEMORANDUM CIRCULAR NO. 2-90

Subject : Submission of summary list of sales and purchases and issuance of four-copy invoices for certain transactions prescribed under Revenue Regulations No. 689. To : All Internal Revenue Officers and Others Concerned. A. Summary list of sales and purchases (Sec. 23, RR 5-87, as amended by Sec. 3, RR 6-89) 1. Who are required? Every person liable for the VAT (whether registered or not) whose gross sales and/or receipts exceed P2,500,000.00 a quarter. cdtai In the initial implementation, the quarter from which the minimum sales or receipts shall be determined is the quarter of a VAT taxpayer ending as follows: Category Taxable Quarter A October 1 - December 31, 1989 B November 1 - January 31, 1990 C December 1 - February 28, 1990 and the first list to be submitted shall cover transactions from January 1, 1990, the date the Regulations took effect, to the last day of the quarter. Category Period Covered A January 1 - March 31, 1990 B January 1 - April 30, 1990 C January 1 - May 31, 1990 For the succeeding quarters, a taxpayer shall become subject to the requirement if the amount of his gross sales and/or receipts in the immediately preceding quarter exceeds the stated minimum amount. Once a taxpayer shall have become subject to the requirement, he shall continue to submit the list until the amount of his quarterly gross sales and/or receipts fall below the minimum amount for four (4) consecutive quarters, beginning after the last quarter in which his sales and/or receipts were in excess of the minimum qualifying amount. For example, if a taxpayer is a category "A" VAT taxpayer who became subject to the requirement for having exceeded the minimum amount of gross sales and/or receipts in his quarter ending December 31, 1989, he is obliged to submit the required list even if his gross sales and/or receipts do not exceed P2,500,000.00 in the succeeding four quarters: 2nd, 3rd, 4th quarters of 1990 and 1st quarter of 1991. He shall become exempt only if his gross sales and/or receipts for the 2nd quarter of 1991 do not exceed the minimum amount. 2. What is required? Submission of summary lists of sales and purchases which must show a) names, addresses and VAT numbers of suppliers and amount of purchases (exclusive of VAT) by totals per supplier b) names, addresses and VAT numbers of buyers and amount of sales (exclusive of VAT) by totals per buyer c) customs import entry number, amount of importation and VAT paid per entry. In lieu of the printed list, the requirement may be submitted on magnetic tapes or diskettes. 3. When is it required to be submitted?

The summary list is required to be attached to the quarterly VAT return, i.e., within 20 days of the month following each taxable quarter. B. Issuance of four-copy VAT invoices (Sec. 21, RR 5-87, as amended by Sec. 2, RR 6-89) 1. Who are required? a) Sellers of goods or services subject to VAT to offices of the national and local government, including government agencies and instrumentalities and governmentowned or controlled corporations; b) Sellers of goods or services otherwise subject to VAT to persons whose transactions are subject to zero rate; c) Sellers of goods or services otherwise subject to VAT to persons or entities whose exemptions granted under special law or international agreement effectively subjects such sales to zero rate, such as sales to the Asian Development Bank and US military facility; d) BOI-registered pioneer enterprises as of August 1, 1986, whether totally or partially exempt from VAT; e) Sellers of merchandise to enterprises of the Export Processing Zone Authority; f) Sellers of raw materials to BOI-registered enterprises whose export sales exceed 70% of total annual production; g) Sellers of raw materials to non-resident foreign buyers of the delivery to a resident local export-oriented BOI-registered enterprise; 2. Q. How do you determine the minimum qualifying gross sales or receipts of P2,500,000.00? Do you aggregate the exempt sales, if any, and the VAT taxable sales? Ans. No, the minimum amount refers only to VAT-taxable sales. 3. Q. Are government agencies exempt from VAT? Ans. No, what is taxable or exempt under VAT is the transaction. If the transaction is not one of the exemptions enumerated under Sec. 103 of the Tax Code, the sale of goods or services is subject to VAT, irrespective of whether the purchaser is government agency or a non-government agency. However, a government agency may claim exemption under a special law or international agreement. aisa dc 4. Q. Under the covering Regulations, supermarkets, department stores and other sellers of goods and services to last consumers may submit list of purchases of goods and services. If a taxpayer is a wholesaler and retailer at the same time, is he exempt from submitting the summary list of sale to last consumers? Ans. Yes, he is exempt from the requirement to submit the list of sales to "last consumers". He is, however, still required to submit the list of his purchases for his wholesale and retail business as well as the summary list of his sales in wholesale business. In this connection, "last consumers" shall refer to persons who purchase goods or services not for resale or for conversion into finished product or to be supplied with services or to be used in connection with VAT-taxable business, but for consumption not in connection with trade or business. 5. Q. In the instances where it is required that a four-copy invoice shall be issued, can photocopies be substituted for the two copies until four-copy invoice can be printed? Ans. In the initial implementation, the substitution with photocopies may be allowed. The four-copy invoice requirement, however, shall be strictly enforced beginning April 1, 1990. acd

6. Q. Will the required summary list of purchases include purchases of goods or services otherwise subject to VAT from non-VAT persons? Ans. Yes, because the Regulations does not exclude such purchases. All internal revenue officers and others concerned are hereby enjoined to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-04-90 Revenue Memorandum Circular No. 3-90 January 4, 1990 REVENUE MEMORANDUM CIRCULAR NO. 3-90 Subject : Tourism Administrative Circular No. 89-05 Implementing Republic Act No. 6768, Instituting A Balikbayan Program. To : All Internal Revenue Officers; The Revenue Attache, Kingdom of Saudi Arabia; All Finance Revenue Representatives; and Others Concerned. There is reproduced hereunder the entire text of Tourism Administrative Order No. 8905, issued on December 11, 1989, for your information and guidance. "TOURISM ADMINISTRATIVE ORDER NO. 89-05 RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 6768 INSTITUTING A BALIKBAYAN PROGRAM Pursuant to Section 5 of Republic Act No. 6768, the following rules and regulations on the new Balikbayan Program are hereby promulgated. Rule I. COVERAGE These rules and regulations shall govern the benefits enumerated under Republic Act No. 6768 as enacted. Rule II. DEFINITION OF TERMS - For purposes of the Act: The term "balikbayan" shall mean: a. a Filipino citizen who has been continuously out of the Philippines for a period of at least one (1) year from date of last departure; cdasia b. a Filipino overseas worker; or c. a former Filipino citizen and his family as this term is defined hereunder, who had been naturalized in a foreign country and comes or returns to the Philippines. The term "family" shall mean the spouse and the children of the balikbayan who are not balikbayan in their own right travelling with the latter to the Philippines. Rule III. DETERMINATION OF THE BALIKBAYAN STATUS The following are the BALIKBAYAN CATEGORIES: a. Filipino citizen who has been continuously out of the country for at least one (1) year from date of last departure; b. Filipino overseas worker; c. Former Filipino with foreign passport and members of his family, meaning the spouse and children of the balikbayan who are not balikbayan in their own right but who are travelling with the balikbayan.

In the availment of incentives from the agencies concerned, without prejudice to the requirements for travel tax exemption as provided under existing laws, the following documents are to be presented to evidence their balikbayan status: a. Filipino citizen who has been continuously out of the country. 1. Philippine passport showing date of last departure. b. Filipino overseas worker: 1. Passport and any of the following: POEA approved contract of employment Certificate of employment by the foreign employer. Certificate of employment by the Philippine Embassy/Consulate Prior year's income tax return to prove gainful employment abroad. Contract Worker stamp on passport Seaman's Service Record Book c. Foreign passport holder: 1. Passport and any of the following: Old Philippine passport Foreign naturalization papers to show former Philippine citizenship Certification from adopted country However, family members of the balikbayan who are travelling with the balikbayan should present: casia 1. Passport and any of the following: Birth Certificate in case of children Marriage Certificate in case of spouse Adoption papers in case of legally adopted children Rule IV. BENEFITS AND PRIVILEGES OF THE BALIKBAYAN Principally, the eligible participants in the program shall be entitled to the duty and taxfree maximum purchase of goods at Philippine duty-free shops operated by Duty Free Philippines under Executive Order No. 46 S. 86 in the amount of one thousand United States dollars ($1,000) or its equivalent in other acceptable foreign currencies subject to the following limitations: a. Purchases shall only be made in US dollars or other acceptable foreign currencies as listed by the Central Bank. b. Purchases shall be made within forty-eight (48) hours from date of arrival; c. The privilege is non-transferrable; purchases shall be made personally by the balikbayan for himself; d. The privilege can be availed of by a balikbayan only once a year and within the forty-eight (48) hour limit from the date of arrival; e. Only a balikbayan of majority age under Philippine laws can enjoy the privilege; Provided, however, that minors shall continue to be entitled to purchase privilege not exceeding two hundred fifty United States dollars ($250.00); and f. In addition to existing limitations on the number of consumables purchased such as, two (2) reams of cigarettes of any brand, two (2) bottles of wine and/or two (2) bottles

of liquor of any brand, a balikbayan shall be entitled to buy only one (1) item of every products category of non-consumables whose selling price exceeds two hundred United States dollars ($200.00). To implement the above limitations, the availment of duty and tax-free privilege shall be personal in nature, Purchases jointly made by the balikbayan family shall be considered on an individual basis for purposes of the limitation on value of purchase. Rule V. OTHER BENEFITS AND PRIVILEGES In addition to the duty and tax-free purchase of goods at Philippine duty free shops operated by Duty Free Philippines under Executive Order No. 46 S. 86, a balikbayan and his family shall be entitled to the following: a. The national flag air carrier shall establish a special promotional/incentive program for the balikbayan; b. For foreign passport holders with the exemption of restricted nationals who are not former Filipinos, visa-free entry to the Philippines for a maximum stay of one (1) year; extensions thereof shall be subject to such fees as may be required by the Commission on Immigration and Deportation. c. To those qualified, travel tax exemption as provided under P.D. No. 1183, Executive Order No. 283, and other allied laws; and d. Especially designated reception areas at authorized ports of entry for the expeditious processing of documents. Rule VI. MONITORING SYSTEM The Department of Tourism, in coordination with the Bureau of Customs, shall formulate and implement a control system to effectively monitor the forty-eight (48) hour limit and the maximum allowable purchase of one thousand United States dollars ($1,000) through the following scheme: aisa dc 1. A balikbayan shopping card shall be issued by the Duty Free Philippines' representative only after confirmation of the buyer's Balikbayan status, and subject to further check at random by the Bureau of Customs' representative as to its veracity. 2. The shopping card shall indicate the date of purchase, value of purchase for both consumables and non-consumables and quantity of non-consumables purchased. 3. The passport of the balikbayan shall be stamped by the Duty Free Philippines' representative after confirmation of his balikbayan status. 4. In case the balikbayan did not consume the allowable limit on purchases and the 48-hour period as granted by the law has not yet expired, he has still the option to avail of this privilege upon presentation of his passport with a "BALIKBAYAN" stamp on it and his shopping card. Rule VII. BIENNIAL REVIEW OF PROGRAM The Balikbayan Program as instituted in the Act shall be reviewed by Congress two years after the approval of the Act and every two years thereafter. Rule VIII. SEMI-ANNUAL REPORT OF SALES The Department of Tourism, through Duty Free Philippines, shall submit semi-annual reports to the President, through the Secretary of Finance, and to both Houses of Congress, which reports shall contain a statement of the quantities and the classification categories in the Tariff and Customs Code, sold by the Philippine duty-free shops operated by Duty Free Philippines under Executive Order No. 46 S. 86. Rule IX. REPEALING CLAUSE

All laws, rules and regulations inconsistent with the Act are repealed, amended or modified accordingly. Rule X. ISSUANCE OF ADDITIONAL RULES The Department of Tourism shall, in coordination with other government agencies, whenever necessary or as the need arises, issue from time to time additional rules and regulations for a more effective implementation of the Balikbayan Program as instituted by the Act. Rule XI. EFFECTIVITY This Administrative Order shall take effect immediately after its publication in at least two (2) newspapers of general circulation. acd Done at Manila, Philippines, this 11th day of December, 1989. (Sgd.) Peter D. Garrucho, Jr. Secretary of Tourism" In line with the declared policy of the Republic Act "to attract and encourage overseas Filipinos to come and visit their motherland", you are urged to give this Circular the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-23-89 Revenue Memorandum Circular No. 4-90 November 23, 1989 REVENUE MEMORANDUM CIRCULAR NO. 4-90 Subject : Digest of VAT Rulings for September 1989 To : All Revenue Officials and Others Concerned. Attach herewith as Annex "A" is the digest of VAT Rulings issued in the month of September, 1989. For the information and guidance of all concerned. JOSE U. ONG Commissioner of Internal Revenue ANNEX "A" Digest of VAT Rulings for September, 1989: 1. Only the sale of goods and services by primary contractors to U.S. Military Bases shall be subject to VAT at zero-rate pursuant to Sections 8(b)(2) and 8(c)(2) of Revenue Regulations No. 5-87, implementing Sections 100(a)(2) and 102(a)(3), respectively, of the Tax Code, as amended. Therefore, goods sold and services rendered to such primary contractors are subject to VAT which can be used as an input tax against the zero-rated output of the primary contractors. (VAT Ruling No. 216-89 dated Sept. 4, 1989 and VAT Ruling Nos. 222-89 and 234-89 dated Sept. 6, 1989). 2. The sales of used transportation equipment, machineries and scrap materials are subject to VAT pursuant to Sec. 100 of the Tax Code, as amended, and that such transactions require the issuance of "VAT invoice" in accordance with Revenue Regulations No. 5-87. (VAT Ruling No. 217-89 dated Sept. 4, 1989). cdt

3. A seller of industrial laundry services to zero-rated exporters of garments is still liable to pay the 10% VAT and cannot be granted zero-rating for lack of legal basis. However, the VAT, being an indirect tax, could be passed on to such zero-rated clients (VAT Ruling No. 218-89 dated September 4, 1989). 4. The importation of Calconpack red pepper packed in sealed drums is not exempt from the VAT because such article is no longer considered an agricultural food product in its original state since a sophisticated mode of packing has already been introduced (VAT Ruling No. 219-89 dated September 4, 1989). acd 5. Pursuant to Section 18(b) of Revenue Regulations No. 5-87 implementing Section 107 of the Tax Code, persons becoming liable to the VAT, whose gross sales reach P200,000 in any 12-month period, shall register within 30 days after the end of the 12month period and become liable to VAT on the first day of the month following the close of the 30-day period. Thus, a taxpayer who registered only on January 9, 1989 after realizing a gross sale of P200,000 for the 12-month period ended September, 1988 was duly fined for late filing pursuant to paragraph I(4) of RMO No. 13-88 and an unnumbered memorandum by the Commissioner of Internal Revenue dated January 12, 1988. (VAT Ruling No. 220-89 dated September 5, 1989). 6. Pursuant to Section 6(g) of Revenue Regulations No. 5-87, the 4% contractor's tax is applicable to outstanding liabilities on contracts completed as of December 31, 1987, payments for which are receivable on or after January 1, 1988 subject to the following conditions: a. An information return was filed by the contractor showing the name(s) of the contractee(s) and the amount(s) of the contract price outstanding as of December 31, 1987, and containing a declaration of the obligation to pay the contractor's tax due; b. The contractor billed the unpaid amount not later than December 31, 1987, and a copy of such billing is attached to the information return required in (a) hereof; cdasia c. The contractor has recorded in his books of accounts for the year 1987 the amount receivable; and d. The contractor files not later than January 20, 1988, and on or before the 20th day after each calendar quarter, the regular contractor's tax on payments received in 1988. Failure to comply with the abovestated conditions shall automatically subject the gross receipts to the 10% VAT. cdasia A corporation who exports in its own name rather than as an agent of another corporation is an exporter itself. It cannot be considered as an agent nor a broker even if the goods are manufactured upon advances made to a supplier corporation who ships the goods for and in behalf of the former. If an exporter is a VAT-registered taxpayer, its export sales are subject to VAT at 0%. If an exporter is not VAT-registered, its export sales are VAT-exempt pursuant to Section 103(v) of the Tax Code. In both cases, the exporter is subject to income tax on its export sales. aisa dc The peso commissions derived by a corporation from another corporation are subject to the 10% VAT pursuant to Section 102 of the Tax Code even if the original transactions from which they were derived are exportations which are zero-rated. (VAT Ruling No. 221-89 dated September 6, 1989). 7. The sale of services to North Davao Mining Corp., an entity classified as a copper mining company in distress is subject to VAT pursuant to Sec. 102(a) of the Tax Code, as

amended, since LOI No. 1416 which suspends all tax payments of such companies has been revoked by E.O. No. 340 effective Oct. 14, 1988. (VAT Ruling No. 223-89 dated Sept. 6, 1989). 8. Discounts granted to ice cream houses which are not granted at the time of sale of goods and are conditioned upon the meeting of a pre-set monthly quota shall not be allowed as deductions from the gross sales since pursuant to Sec. 6(c)(a) of Revenue Regulations No. 5-87, discounts conditioned upon the subsequent happening of an event or fulfillment of certain conditions shall not be allowed as deductions (VAT Ruling No. 224-89 dated September 6, 1989). 9. Section 3 of Revenue Regulations No. 2-88 provides for the exemption and not zero-rating of subcontracting services of BOI-registered entities performing services such as processing, converting or manufacturing of goods for a BOI-registered export producer who exports at least 70% of its total production. If any of the abovementioned conditions is not met, then such subcontracting service is subject to the 10% VAT. (VAT Ruling No. 225-89 dated September 6, 1989). cda 10. Commissions and agency fees received by shipping agents from foreign principals paid for in acceptable foreign currency inwardly remitted and duly accounted for in accordance with Central Bank regulations are considered zero-rated sales of services. However, if the payment for said services are in both foreign and local currency, only the services paid for in foreign currency shall enjoy zero-rating. The portion paid for in local currency shall be subject to VAT at 10%. (VAT Ruling No. 226-89 dated September 6, 1989). 11. The sale of goods to Southeast Asian Fisheries Development Center (SEAFDEC) is not qualified for zero-rating because pursuant to P.D. No. 292, the exemption of the center is not extended to its suppliers of goods and services. Furthermore, since VAT is an indirect tax, BOI-registered firms (e.g., Foresight Realty and Development Corporation) are not exempt from VAT since their exemption is only limited to direct taxes. (VAT Ruling No. 227-89 dated Sept. 8, 1989). 12. The Expanded Withholding Tax Law under Presidential Decree No. 1351 as implemented by Revenue Regulations No. 13-78 and as amended by Revenue Regulations Nos. 6-85 and 1-89 does not authorize the withholding of the VAT since such law covers only the withholding of income tax by certain persons upon certain classes of income payments. Neither is the VAT subject to the withholding and remittance provisions of Republic Act No. 1051, pursuant to Revenue Regulations No. 4-88 and Revenue Memorandum Circular No. 18-88. Therefore, any government entity who buys from VAT-registered persons cannot be legally constituted as a withholding agent under said R.A. in connection with the VAT due from its suppliers since the VAT cannot be fixed or determined at the point of payment (VAT Ruling No. 228-89 dated September 8, 1989). 13. A BOI-registered export producer, who is also VAT-registered, manufactures printed circuit boards (PCBs) and sells the same to another BOI-registered export producer as components of CB radio transceivers. The export sales of the BOI-registered export producer are automatically zero-rated pursuant to Section 100(a)(1) of the Tax Code. The sale of PCBs to the other BOI-registered export producer is effectively zerorated provided that the conditions under Section 2 of Revenue Regulations (RR) 2-88 are met. The input taxes passed on to the VAT-registered and BOI registered export producer

by its suppliers of goods and services before and after the issuance of said revenue regulations can be used as input tax credits against the zero-rated export sales provided that the purchases are attributable to the export activity. However, prior to the approval of such export producer's application for zero-rate, its sale of PCBs to the other BOIregistered export producer is subject to 10% VAT since such sale is still considered a domestic sale. cdt For purposes of claiming refund or tax credit, BIR Form 2552 is to be used. (VAT Ruling No. 229-89 dated September 8, 1989). 14. Importation of books for sale or publication in the Philippines is exempt from VAT in accordance with Section 103(f) of the Tax Code. Similarly, printing services are VAT exempt. However, proprietors of such services may opt to register for VAT purposes; in which case, they will be subject to the 10% VAT and may pass on this indirect tax to their clients as additional costs. (VAT Ruling No. 230-89 dated September 8, 1989). cdtai 15. Container freight service charges, container yard charges and other fees like overtime and penalties being billed by freight forwarding companies to customers are subject to the VAT. However, if the arrastre, wharfage and trucking fees are considered as reimbursements, they are not subject to the VAT provided the receipts are in the name of the clients/customers. (VAT Ruling No. 231-89 dated Sept. 11, 1989). 16. Pursuant to Section 102(a) of the Tax Code, as amended, the basis of the VAT on security services should be the total gross receipts which, in the case of the cost distribution scheme adopted by the Philippine Association of Detective and Protective Agency Operators, Inc. (PADPAO), correspond to the total amount of wages, allowances and incentives due to the guard and total amount of SSS and Medicare contributions due to the Government plus margin or agency fee (VAT Ruling No. 232-89 dated September 13, 1989). 17. Section 103 (c) of the Tax Code provides for the VAT exemption of the sale or importation of animal feeds but not the ingredients thereof. Therefore, the importation of Niacinamide Feed Grade, a chemical used primarily as a raw material for animal feeds, is subject to the 10% VAT. (VAT Ruling No. 233-89 dated September 13, 1989). aisa dc 18. The VAT, as an indirect tax, can be passed on to VAT exempt entities (e.g., shipping companies) by their contractors and suppliers because the former's exemption is limited only to direct taxes. (VAT Ruling No. 235-89 dated September 13, 1989). 19. The sale of goods to the Philippine International Trading Corporation by a VATregistered entity, which is classified as a foreign currency denominated sale or internal export under LOI 1355, is considered as an export sale and is automatically subject to zero-rate pursuant to Section 100(a)(1) of the Tax Code provided that the conditions under Section 8 (b)(1) of Revenue Regulations No. 5-87 are met. However, such entity will still have to file a quarterly VAT return on its zero-rated sales together with its sales subject to 10% VAT (VAT Ruling No. 236-89 dated September 14, 1989). 20. The following clarifications are made in connection with the VAT liabilities of a contractor of government contracts and projects; a) Only the 1% expanded withholding tax on gross collections net of VAT is automatically deducted in contracts awarded by any government entity;

b) Gross receipts of the main contractor is subject to VAT but he shall be allowed credits for payments to the sub-contractor and the gross receipts of the sub-contractor from the main contractor shall be subject to 10% output tax; c) The main contractor is not allowed to deduct 1/11 of the total gross collection and to remit the amount to the BIR in the name of the sub-contractor; cdasia d) The sub-contractor shall issue VAT receipts/invoices for the payments made by the main contractor after which he is required to file his own VAT return covering the gross receipts derived from the main contractor; and e) The main contractor can accept the subcontractor's VAT receipts regardless of the latter's place of registration (VAT Ruling No. 237-89 dated September 14, 1989). 21. Manning and crewing services rendered to a foreign principal are subject to VAT at zero-rate provided that the services are paid for in acceptable foreign currency inwardly remitted and duly accounted for in accordance with Central Bank rules and regulations. (VAT Ruling No. 238-89 dated September 15, 1989). casia 22. The ruling on producers of gold and silver sold to Central Bank are as follows: a. Sales of gold are exempt if the company failed to register for VAT purposes (Sec. 103 (v), NIRC), the input taxes attributed to such sales cannot be refunded since only those input taxes attributable to goods exported by a VAT-registered person can be refunded. b. On or after VAT registration, the sale of gold to Central Bank is zero-rated (Sec. 100(a)(1), NIRC); input taxes of such sale can be refunded. The sale of silver to Central Bank is not considered as export sale and is, thus, subject to the 10% VAT (Sec. 100, NIRC). Both gold and silver are subject to excise tax even if exported. c. The person liable for payment of VAT is the seller rather than the purchaser, regardless of their mutual agreement on such liability. Whether or not the VAT is billed separately in the invoice, the amount billed by the seller is deemed inclusive of the 10% VAT if the sale is taxable. (Sec. 108(a)(3) NIRC). d. The 10% VAT paid on importation of mining materials and equipment can be used as input tax (Sec. 101, NIRC). e. Fluctuations in values of foreign exchange may be recognized as income, provided such income has been realized from a closed and completed transaction. Conversely, loss from fluctuation in value of foreign exchange may be deductible, for income tax purposes, subject to compliance with requisites for deductibility prescribed in Sec. 29(d) of the NIRC. (VAT Ruling No. 239-89 dated September 20, 1989). cdasia 23. The income derived from the hauling and handling of merchandise by a customs broker with the use of trucks for hire is income from the rendering of a forwarding service and not from being a common carrier. Therefore, such income is subject to VAT to be reported together with the income as a customs broker. (VAT Ruling No. 240-89 dated September 20, 1989). 24. The sale or importation of tea seed cake, which is an organic, pesticide used for eliminating pond pests and predators usually applied in prawn growout ponds, is exempt from VAT pursuant to Sec. 103(c) of the Tax Code, as amended. (VAT Ruling No. 24189 dated September 21, 1989). cda 25. Export sales of an EPZA registered firm which failed to register for VAT purposes are exempt from VAT pursuant to Sec. 103(v) of the Tax Code. If said firm

becomes a VAT registrant, sales will automatically be zero-rated pursuant to Sec. 100(a) (1) of the same Code (VAT Ruling No. 242-89 dated September 20, 1989). 26. The business of hauling garbage is considered as a sale of service which is subject to the VAT under Sec. 102 of the Tax Code, provided that the gross income exceeds P200,000.00 for any 12-month period. Otherwise, said business is exempt from the VAT pursuant to Sec. 103(w) but is subject to the 2% percentage tax on gross receipts pursuant to Sec. 112 of the same Code (VAT Ruling No. 243-89 dated September 22, 1989). 27. The preparation of dried parings (a by-product of desiccated coconuts) is not deemed simple within the context of Section 103 (b) of the Tax Code. Apart from the preliminary processes of dehusking, machines, are used to mill/grind the parings and to dry the milled/ground parings. Thus, dried parings are not agricultural products in the original state and the sale thereof is subject to the 10% VAT. (VAT Ruling No. 244-89 dated September 22, 1989). cda 28. The sale of goods and services to a government agency (e.g., Department of Budget and Management) is not exempt from VAT. Hence, the VAT on the security services rendered to a government agency may be passed on to said agency since VAT is an indirect tax. (VAT Ruling No. 245-89 dated September 22, 1989). 29. Sales of VAT-registered exporters of garments are automatically subject to VAT at zero rate pursuant to Sec. 100 (a)(1) of the Tax Code. Such exporters are, however, still required to file a quarterly VAT return which will be used as basis for a refund of the input taxes paid to suppliers of goods and services in connection with their export activity (VAT Ruling No. 246-89 dated September 28, 1989). acd Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-17-90 Revenue Memorandum Circular No. 5-90 January 17, 1990 REVENUE MEMORANDUM CIRCULAR NO. 5-90 Subject : Loss of a triplicate copy of Authority to Cancel Assessment (BIR Form No. 17.58) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of a triplicate copy of Authority to Cancel Assessment (BIR Form No. 17.58), to wit: Serial Number Quantity 637219 one copy (triplicate) The above triplicate copy which was reported as missing by Assistant Regional Director Arturo S.P. Guevara of Revenue Region No. 4-C, San Pablo City, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

01-09-90 Revenue Memorandum Circular No. 6-90 January 9, 1990 REVENUE MEMORANDUM CIRCULAR NO. 6-90 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------16608956 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-16-90 Revenue Memorandum Circular No. 7-90 January 16, 1990 February 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 7-90 Subject : Creditable Withholding Tax on Sales, Exchanges or Transfers of Real Property. To : All Assistant Commissioners, Regional Directors, Revenue District Officers and Others Concerned Rationale Under existing issuances, sellers of real properties are required to file their capital gains tax returns within 30 days from date of sale/exchange at the Office of the Revenue District Officer where the property is located. This procedure is followed for all types of taxpayers, corporation or otherwise, whether taxable or exempt from the capital gains (final) tax. However, the gain from sale or exchange of real property by persons exempt from the capital gains (final) tax must be declared for income tax purposes in the seller's regular income tax returns required to be filed after the end of the taxable year (for individual taxpayers) or after the end of the quarter (for corporate taxpayers). It has been observed lately that many sellers of real properties, who are exempt from the capital gains tax, do not include in their income tax returns the gain from their sales of real properties. This non-reporting of gain has been made possible because of the defect in the system - the Certificates Authorizing Registration (CAR) are generally secured from the Revenue District Officer where the property is situated and the regular income tax returns are required to be filed in the place of residence or principal place of business of the taxpayer. Because of this, the Bureau of Internal Revenue is experiencing some difficulties in monitoring and matching these transactions during audit.

In order to prevent further leakage of revenues from these transactions, Revenue Regulations No. 12-89 dated December 21, 1989, subjecting sales of real property other than capital assets to the creditable withholding tax was issued. The rates prescribed in Revenue Regulations No. 12-89 were, however, deemed high by the various associations engaged in real estate industry, considering that the basis of the withholding tax is the gross selling price. The real estate industry officials expressed their fear that the industry might eventually collapse as a result of the spiralling costs of construction materials, labor, and interest rates, which is exacerbated by the imposition of the high withholding tax rates. It is also feared that there might be numerous claims for tax credits filed in the future; hence, Revenue Regulations No. 1-90 dated January 16, 1990 was issued to amend Revenue Regulations No. 12-89. aisa dc This Circular seeks to clarify and amplify some pertinent provisions of the aforesaid regulations. 1. Coverage. All sales, exchanges, or transfers of real properties (whether classified as ordinary or capital asset) by corporations, consummated on or after January 1, 1990, are subject to the creditable withholding tax. However, in the case of individuals, estates, trusts, trust funds or pension funds, only sales, exchanges or transfers of real properties classified as ordinary assets, consummated on or after January 1, 1990, are subject to the creditable withholding tax. Sales by individuals of real properties classified as capital assets remain subject to the 5% capital gains (final) tax. As provided for in RMC 80-89, the date of notarization appearing on the Deed of Sale shall be considered prima facie the date of consummation of the contract of sale. In the case of sales evidenced by public instruments notarized on or before November 30, 1989, the same shall be deemed consummated on the date the Deed of Sale/Transfer is filed with or submitted to the proper revenue office, except in exceptional circumstances where the taxpayer can prove by documentary evidence other than the Deed of Sale/Transfer that the public instrument was truly executed and notarized on the date shown therein. Illustrations. (a) If the Deed of Sale notarized on November 10, 1989 was presented to the proper revenue official within 30 days from date of sale, such transaction is not subject to the withholding tax provision of Revenue Regulations No. 12-89. (b) If such Deed of Sale was submitted to the proper revenue officer after 30 days from date of sale but before January 1, 1990; i.e., anytime between December 10 to December 31, 1989 in the example, the same is still not subject to the creditable withholding tax but subject to the penalties for late filing of the capital gains tax return and late payment of the tax. (c) The above transaction becomes subject to the creditable withholding tax if presented only on or after January 1, 1990. casia (d) If a Deed of Sale notarized on December 10, 1989 was presented to the BIR not later than January 9, 1990, such transaction is not subject to the creditable withholding tax. However, if the sales document was submitted to the BIR only on January 15, 1990, the sale is already subject to the creditable withholding tax because more than 30 days have elapsed from the date of sale. The reason for the cut-off date is to prevent ante-dating of public instruments transferring real properties. However, the Revenue District Officer may issue the CAR without the payment of the creditable withholding taxes where the taxpayer can clearly prove that

there was no ante-dating and the late submission of the Deed of Sale was due to a reasonable and justifiable cause, such as when due to a fire in the Quezon City Hall the title to the property was destroyed and had to be judicially reconstituted, or the Contract To Sell shows the last installment to have been paid on or before November, 1989, or the new Deed of Sale amends only some minor details in the old Deed of Sale notarized in 1989 like adding the Tax Account Numbers of the contracting parties. In such case, the revenue enforcement officer should state in his written report the relevant circumstances and attach to his report the other documents submitted by the taxpayer. When the seller of real property is an entity exempt from income tax (e.g., GSIS, SSS, qualified pension plan), no withholding of tax is required to be made thereon. In such a case, the seller must execute an affidavit establishing its exemption from income tax and submit the same together with the relevant law, decree or executive order. However, if the seller is an exempt entity under Article 26 of the Tax Code, the gain from sale of real property is still subject to income tax and consequently to the withholding tax, because the last paragraph of said section provides that "notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and character of the foregoing organizations from any of their properties, real or personal, . . . , regardless of the disposition made of such income, shall be subject to tax imposed under this Code." 2. When tax deducted and withheld creditable. In the case of a corporation, all sales or exchanges of real property, whether classified as ordinary or capital asset, shall be subject to the expanded withholding tax. The amount of withholding tax paid during the quarter to the BIR evidenced by Confirmation/Official Receipts (CR/ROR) and covered by BIR Form Nos. 1743W and 1743-B, is creditable against its income tax liability for the quarter in which payments or remittance of taxes were made. On the other hand, the sale or exchange of real property by an individual, estate, or trust becomes subject to the withholding tax only if the property is classified as an ordinary asset. The corresponding withholding taxes deducted and withheld, which are paid or remitted to the BIR (CR/ROR and BIR Form Nos. 1743W and 1743-B), may be credited against his income tax liability for the taxable year. cda No withholding of tax is required where the real property sold by an individual is a capital asset subject to the 5% capital gains (final) tax. 3. Rates of withholding taxes. The rates of withholding tax prescribed in RR 12-89 have been reduced from 10%, in the case of corporations, and 15%, in the case of individuals, estates and trusts to a uniform rate of: 0% - where the vendor is registered with and certified to as engaged in low-cost housing projects by the Housing and Urban Development Coordinating Council (HUDCC)/Housing and Land Use Regulatory Board (HLURB) and the consideration for the sale of the lot or house and lot per transaction does not exceed P500,000. The transaction, however, is still subject to the regular income tax and should be reported in the taxpayer's income tax return. 2.5% - where the vendor is habitually engaged in real estate business, certified as member by the Chamber of Real Estate and Builders Association, Inc. (CREBA), and is registered with HUDCC/HLURB; and 5% - where the vendor is not habitually engaged in real estate business;

under RR 1-90 and the same rates apply to corporations and individuals on their sales of real property beginning February 1, 1990. Where any of the conditions for the application of 0% or 2.5% is not met, the sale is subject to the 5% creditable withholding tax. For purposes of this Circular, a vendor shall be considered "habitually engaged in real estate business" if he has consummated during the preceding year at least six taxable real estate transactions, regardless of amount. A vendor who has previously been accredited by CREBA and registered with HUDCC/HLURB may still be considered habitually engaged in real estate business even if the number of sales made during the year falls below six. The duty of determining whether or not the vendor is habitually engaged in real estate business rests upon the BIR. The role of CREBA is to certify that the vendor is an accredited member of one of its affiliated associations and it may assist the BIR in determining whether or not a person is habitually engaged in real estate business. In order to simplify tax administration, the reduced rates in RR 1-90 may be withheld and paid by the withholding agent on real estate transactions consummated before February 1, 1990, if the sales document is presented to the BIR on or after February 1, 1990. In other words, beginning February 1, 1990, the test to be used for purposes of determining whether the transaction is subject to the old or new withholding tax rates is the date of receipt or presentation of the Deed of Sale to the BIR. Since the BIR does not want to refund taxes already paid by taxpayers on prior transactions at the higher rates, and in order to be fair to those who have paid at the old rates, the "date of presentation" test shall also be applied to applications for the issuance of CAR filed with the BIR in January, 1990. Thus, if the Deed of Sale notarized, for example, on January 5, 1990 is presented to the BIR on January 15, 1990, the rate of withholding tax prescribed in RR 12-89 shall still be applied thereto, even though the amount of tax is paid in February, 1990. 4. Application of other provisions in RR 6-85 real estate transactions. Considering that sales or exchanges of real properties covered, by the aforementioned regulations are merely added as one of the income payments subject to the expanded withholding tax provisions in Revenue Regulations No. 6-85, all other provisions of said regulations shall also apply to sales of real properties. For example, the obligation of the payor to deduct and withhold arises at the time the consideration is paid or payable. The required withholding tax return shall be filed and the tax shall be remitted within ten (10) days after the end of each month. cd 5. Withholding tax base. The regulations provide that the basis of the withholding tax shall be the gross selling price or the total amount of consideration or its equivalent paid to the seller/owner for the sale, exchange or transfer of the real property. For purposes of these regulations, the term "Gross selling price" means the consideration stated in the sales document or the fair market value/zonal value, whichever is higher. In exchange, the fair market value of the property shall be used. In case of installment sales, only such amounts paid beginning in 1990 shall be subject to the withholding tax. This is in consonance with the rule that regulations shall apply prospectively. Thus, past installment payments made before 1990 should not be subject to the expanded withholding tax provision because the requirement was imposed only in January, 1990.

6. Individuals as withholding agents and installment sales. Where the consideration or part thereof is payable on installments, no withholding of tax is required to be made on the installment payments where the buyer is an individual not engaged in any trade or business. In such a case, the withholding of tax shall be made on the last installment(s) paid beginning January, 1990 to the seller. On the other hand, the applicable rate of withholding tax shall be deducted and withheld by the buyer of the real property, whether in corporate form or otherwise, who is constituted as a withholding agent, if he is engaged in any trade or business. He is presumed to have previously registered as such with the appropriate district office. If the withholding taxes on the installment payments have been withheld and remitted to the BIR on the dates prescribed in RR 6-85, no further withholding tax shall be imposed when the final Deed of Sale is executed by the contracting parties. The duty to prove that such withholding of taxes on installments subject to the provisions of RR 12-89 and 1-90 have been made and paid to the BIR rests upon the buyer-withholding agent. 7. When to issue certificate. No Certificate Authorizing Registration (CAR) shall be issued by the appropriate internal revenue official, unless the Confirmation Receipt or official receipt evidencing payment of the creditable withholding tax on the particular transaction is presented to him. For this purpose, it is required that the necessary information regarding such payment of withholding tax should be typed and reflected on the face of the certificate to be issued by the internal revenue officer concerned. 8. Reporting requirement. In order to effectively implement the provisions of the regulations, all officials authorized to issue the certificates are instructed to add a new column "Expanded Withholding Tax Paid" in the monthly report of transactions not subjected to the capital gains (final) tax being submitted to the Chief, Assessment Performance Control Division, BIR National Office Building, Diliman, Quezon City. 9. Effective date. This Circular, which modifies Revenue Memorandum Circular No. 80-89, shall take effect on February 1, 1990. cd All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-24-90 Revenue Memorandum Circular No. 8-90 January 24, 1990 REVENUE MEMORANDUM CIRCULAR NO. 8-90 Subject : Digest of VAT Rulings for October, 1989. To : All Revenue Officials and Others Concerned. Attached herewith is the digest of VAT Rulings issued in the month of October, 1989. For the information and guidance of all concerned. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Digest of VAT Rulings for October, 1989

1. A foundation that is a duly registered non-stock, non-profit corporation which is exempted from the corporate income tax pursuant to Sec. 26(e) of the Tax Code, as amended, cannot be exempt from the VAT on its purchases of goods and services inasmuch as the foundation's exemption from corporate income tax is not a legal basis to make it exempt from VAT. Furthermore, since VAT is an indirect tax, the 10% VAT is passed on to the purchaser of goods and services whenever the seller is VAT-registered, except where the sale qualifies for zero-rated VAT or is exempted from said tax, whether or not the tax is separately billed in the seller's invoice. (VAT Ruling No. 247-89 dated October 4, 1989). 2. The sale of molasses is subject to VAT pursuant to Sec. 9(b)(2) of Revenue Regulations No. 5-87 notwithstanding the fact that said product is used as raw material in the manufacture of VAT exempt finished goods like animal and poultry feeds. (VAT Ruling No. 248-89 dated October 5, 1989). 3. Service fee billed in 1987 but collected in 1988 is subject to the 10% VAT if billing is made on projects not completed prior to 1988. However, under Sec. 6(g)(3) of Revenue Regulations No. 5-87, amounts due on contracts completed on or before December 31, 1987, and payments for which are receivable on or after January 1, 1988 shall be considered accrued as of December 31, 1987, and payments for which are receivable on or after January 1, 1988 shall be considered accrued as of December 31, 1987, such that the amount to be actually received in 1988 is subject to the 4% contractor's tax provided conditions under said section are met, to wit: cdasia (a) An information return shall be filed showing the name(s) of the contractee(s) and the amount(s) of the contract price outstanding as of December 31, 1987, and containing a declaration of the obligation to pay the contractor's tax due; (b) The contractor billed the unpaid amount not later than December 31, 1987, and copy of such billing is attached to the information return required in (a); (c) The contractor has recorded in his books of accounts for the year 1987, the amount receivable; and (d) The contractor files not later than January 20, 1988 and on or before the 20th day after each calendar quarter, the regular contractor's tax return for the payment of the contractor's tax on payments received in 1988. Failure to comply with the conditions shall automatically subject the gross receipts to the value-added tax of 10%. (VAT Ruling No. 249-89 dated October 5, 1989) 4. FIRB Resolution No. 17-87 restored the tax and duty exemption privileges of the National Power Corp. (NPC), including those pertaining to its domestic purchases of petroleum products granted under the terms and conditions of Commonwealth Act No. 120, as amended, effective March 10, 1987. However, the restoration of the tax and duty exemption privileges does not apply to importations of fuel oil (crude equivalent) and coal, commercially-funded importations (i.e., importations which include but are not limited to those foreign-based private financial institutions, etc.), and interest income derived from any source. Such exemption also does not include purchases of goods and services, hence, any contracting services with NPC is not qualified for zero-rating. (VAT Ruling No. 250-89 dated Oct. 5, 1989). 5. Effective zero-rating is applicable only to the primary contractor of U.S. Bases. Services rendered by a subcontractor to said primary contractor is subject to the 10% VAT under Section 102(a) of the Tax Code. The input VAT paid on services rendered by

a VAT-registered person to said subcontractor can be credited against the output tax payable. (VAT Ruling No. 251-89 dated October 5, 1989). 6. Area headquarters of multinational corporations are only exempt from taxes to which they are directly liable. Hence, they are liable to pay the VAT passed on to them by their suppliers since the VAT is an indirect tax which may be shifted by the seller to the buyer. Such being the case, they cannot apply for a tax credit or a tax refund of the input taxes on their purchases since such privilege is limited only to a VAT-registered person in respect to his (a) export sales, (b) zero-rated or effectively zero-rated sales, or (c) on capital goods purchased. None of the foregoing legal requisites may be availed of by an area headquarter of a multinational company. This finds support in VAT Ruling No. 256-88. (VAT Ruling No. 252-89 dated October 5, 1989). 7. The VAT exemption granted to certain entities is limited only to the taxes they are directly liable. This privilege does not exempt them from the taxes passed on to them by their suppliers of goods and services (VAT Ruling No. 253-89 dated October 5, 1989) aisa dc 8. The Philippine National Construction Corporation (PNCC) is exempt from VAT on its direct services for the construction and maintenance of the North and South Expressways by virtue of P.D. No. 1113 and Sec. 103 (u) of the Tax Code, as amended. Since the said exemption is limited only to taxes it is directly liable as a vendor/seller, PNCC is not exempt from VAT on its purchases of goods and services in connection with the construction and maintenance of said road. Furthermore, projects by the PNCC other than those covered by its franchise shall be subject to VAT pursuant to Sec. 102(a) of the same Code. Lastly, PNCC's construction work as a VAT-registered primary contractor in U.S. Military Bases are qualified for zero-rating in accordance with Sec. 8(c)(2) of Revenue Regulations No. 5-87 and the VAT passed on to PNCC on its purchase of goods and services used in its sales to U.S. Military Bases can be refunded to the extent that such input tax has not been applied against its output tax. (VAT Ruling No. 254-89 dated Oct. 9, 1989). 9. Temporary storing of goods by a corporation (SMC Carton Plant) in a storage/warehouse facility which is leased by another corporation (National Trucking and Forwarding Corp.) from still another company (Tabacalera) is not in itself a lease of real property since a lease involves the execution of an instrument by which the exclusive possession of property is given for a limited period (Article 1643 in relation to Article 1648 of the Civil Code). Furthermore, the consideration paid for such use of the leased property partakes the nature of a storage charge rather than rent. Hence, said transaction is subject to VAT in accordance with Sec. 102(a) of the Tax Code, as amended. (VAT Ruling No. 255-89 dated Oct. 13, 1989). aisa dc 10. In the business involving sale of service, it is the seller rather than the buyer who is subject to 10% Value Added Tax (Sec. 99 and 102, NIRC). However, by operation of law, the tax is passed on to the buyer, whether or not the tax is separately billed in the seller's invoice. Accordingly, billings for each sale should include the 10% VAT except if the sale is qualified for zero-rated VAT (Sec. 102, NIRC) or if the sane is VAT-exempt (Sec. 103, NIRC). Hence, in the sale of janitorial and other allied services to the Philippine Navy, such transaction being neither zero-rated nor VAT-exempt, the seller of services is the one liable for the payment of VAT but may pass on the tax to the Philippine Navy. (VAT Ruling No. 256-89 dated October 13, 1989).

11. Business involving cost centers which issue invoices/receipts for service rendered to affiliated companies on a cost basis partakes the nature of a service and is subject to VAT in accordance with Sec. 102(a) of the Tax Code. Furthermore, if the VAT is not billed separately in the invoice or receipt, the VAT is presumed to be included in the total cost. (VAT Ruling No. 257-89 dated Oct. 13, 1989). 12. The VAT on the income of job placement agencies is based on the placement fees but does not include the portion of the total amount received only held in trust and intended for payment to another person (e.g., expenses for documentation and processing) provided that such payment is made in behalf and for the account of the job applicants and are supported by receipts issued by the supplying company or a government agency, in the name of the applicant worker. (VAT Ruling No. 258-89 dated Oct. 13, 1989). 13. A VAT-registered taxpayer required to issue receipts under Section 238 of the Tax Code is subject to penalty under Section 263 of the same Code for failure to indicate the name of the purchaser in the VAT invoice for purchases amounting to P100.00 or over. Since the taxpayer may be punishable under Section 263 of the Tax Code, the suggested compromise penalty prescribed in Revenue Memorandum Order No. 26-86 in extra judicial settlement of the taxpayer's violation shall be applicable. (VAT Ruling No. 259-89 dated October 13, 1989). 14. Deposits for returnable containers shall be subject to the 10% VAT and should be declared in Schedule B-1 of BIR Form No. 2550 in accordance with Revenue Regulations No. 3-89. The sale of motor vehicles to employees is considered a sale of capital goods and is subject to the 10% VAT based on the actual selling price or fair market value, whichever is higher, pursuant to Section 3 of Revenue Regulations No. 5-87. Assets considered junk and/or retired, when sold later, are subject to the 10% VAT. This finds support in VAT Ruling No. 206-88. cdt (VAT Ruling No. 260-89 dated October 13, 1989) 15. Pursuant to Sec. 102(a) of the Tax Code, as amended, services are subject to VAT only if they are rendered for a fee, remuneration or consideration. Hence, businesses wherein services in behalf of foreign principals are rendered without any remuneration but which are based on remittances received to finance expenses incurred are exempt from VAT. However, if said services are paid abroad even if rendered here, they shall be subject to VAT since the situs of privilege taxes like VAT is determined by the place the privilege is exercised or enjoyed. (In this connection, the foreign personnel assigned to such entity by its head office is considered a non-resident alien engaged in trade or business in the Philippines and is subject to income tax on his net income received from all sources in the Philippines (Refer also to BIR Ruling No. 52-81) (VAT Ruling No. 261-89 dated Oct. 19, 1989). 16. Pursuant to BIR Ruling No. 493-88 (dated October 12, 1988), prawn feeds can be classified as fish feeds, the importation/sale of which is exempt from the value-added tax pursuant to Section 103(c) of the Tax Code (VAT Ruling No. 262-89 dated October 23, 1989). Such exemption is applicable to the importation and sale of said product in all stages of distribution. (VAT Ruling No. 267-89 dated October 26, 1989). 17. Although a real estate dealer/lessor, who is engaged in the development and sale of real properties (e.g., buildings), is exempt from VAT and is not required to register

pursuant to Section 9(b)(15) of Revenue Regulations No. 5-87 and Sec. 103(q) of the Tax Code, his importation of basic and essential parts (such as but not limited to elevators, conveyors, etc.) needed to finish a building project is subject to the 10% VAT under Section 101 of the same Code. (VAT Ruling No. 263-89 dated October 23, 1989). 18. Pursuant to Section 102(a)(2) of the Tax Code, income received by a company from its foreign principals for rendering the following services: a. shipping agency; b. shipping agency husbanding; c. shipping agency equipment rental; d. brokerage; e. seafreight cargo forwarding/handling; and f. air freight cargo forwarding/handling are considered as zero-rated sales of services provided that payment is made in acceptable foreign currency which is inwardly remitted to the Philippines and accounted for in accordance with the rules and regulations of the Central Bank of the Philippines. (VAT Ruling No. 264-89 dated October 26, 1989). cdasia 19. The sale of maintenance services by a domestic corporation (e.g., Fujitsu Philippines, Inc.) to a Japanese firm operating as a contractor in the Philippines (P & N Corporation of Japan) is not qualified for effective zero-rating since under the Exchange of Notes between the Philippines and the Japanese Government, the exemption granted to the main contractor is limited only to Japanese firms and nationals, hence, the tax exemption privilege cannot be extended to such domestic corporation. Accordingly, the seller of said services is directly liable for the payment of the VAT which, being an indirect tax, can be shifted to the party to whom services are rendered. This finds support in BIR Ruling No. 337-88. (VAT Ruling No. 265-89 dated October 26, 1989). 20. The Manila Bethel Temple, Inc., a religious organization, is exempt from all taxes to which it is directly liable, on activities conducted not for profit. Such activities include gross receipts from the following sources. a) Sale of Bibles and other religious articles (all reading materials) on a non-profit basis to church members. b) Receipts from the Music College and the Bible College in the form of offerings on a voluntary basis; and c) Receipts from the Bible College in the form of offerings on a voluntary basis. Such being the case, the VAT registration of said corporation is void ab initio and the corporation is advised to apply for the cancellation of its registration and to surrender its VAT Registration Certificate and unissued VAT invoices (for cancellation) (VAT Ruling No. 266-89 dated October 26, 1989). 21. Sale of goods to a government entity (e.g., National Irrigation Administration) is not qualified for effective zero-rating inasmuch as the tax exemption privileges granted to government agencies have already been withdrawn by E.O. No. 93. Such being the case, said sale of goods is subject to the 10% VAT pursuant to Sec. 100(a) of the Tax Code, as amended. (VAT Ruling No. 268-89 dated October 26, 1989). 22. Income received by a company from advertisers for 25 to 30 second spot commercials is exempt from VAT since it is derived from the sale of airtime which is neither a sale of good nor service but a sale of property right. Such being the case, the

VAT registration of such company can be cancelled since it is not registrable from the beginning. This finds support in VAT Ruling No. 182-89. Said company is, likewise, not subject to any business tax in lieu of VAT but only to corporate income tax. (VAT Ruling No. 269-89 dated October 26, 1989). 23. After an evaluation of the circumstances behind the late VAT payment of Ericsson Network Philippines, request for the abatement of surcharge and interest for late filing and payment of said company's VAT liability is approved, but limited only to the 25% surcharge. This is in line with the policy of liberality during the initial implementation of the VAT system, considering that said payment is for the initial quarter. This revokes VAT Ruling No. 149-89. (VAT Ruling No. 270-89 dated October 31, 1989). 24. Application for zero-rate of the contract of the Philippine National Construction Corporation with the National Irrigation Administration (NIA) for the construction of feeder canal funded from a loan extended by the Asian Development Bank is denied for lack of legal basis, inasmuch as exemptions granted to NIA were already withdrawn by Executive Order No. 93. (VAT Ruling No. 271-89 dated October 31, 1989). cdtai 25. The request to use one invoice for both VAT taxable and VAT exempt transactions is denied since according to Section 21 of Revenue Regulations No. 5-87, it is mandatory that where a VAT-registered person is also engaged in VAT exempt sales, it shall issue a separate VAT invoice for the VAT taxable transactions and a non-VAT invoice for the exempt transactions. (VAT Ruling No. 272-89 dated October 31, 1989). * Received a downpayment on a contract which provides that the contractee shall assume all taxes thereby presuming that it shall be the responsibility of the latter to pay the corresponding VAT on the downpayment received in 1988. Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-06-90 Revenue Memorandum Circular No. 9-90 February 6, 1990 REVENUE MEMORANDUM CIRCULAR NO. 9-90 Subject : Letter of Congratulations of the Secretary of Finance to BIR Personnel. To : All Revenue Officials and Personnel Hereunder is a reproduction in full of the Letter of Secretary Jesus P. Estanislao to the undersigned which I wish to share with everyone of you. cd i JOSE U. ONG Commissioner of Internal Revenue REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE MANILA 31 January 1990

The Honorable Commissioner Jose U. Ong Bureau of Internal Revenue Quezon City Dear Commissioner Ong: I am in receipt of your letter dated 29 January 1990. May I take this occasion to congratulate you and all the BIR officers and personnel for your record of collections in CY 1989. cdasia I take special pleasure in noting the high percentage increases that exceed normal expectations from an expanding economy. I also note your having exceeded the goal for CY 1989 of P79.7B. Please convey to all the BIR officers and employees my sincerest appreciation along with my earnest encouragement for all of you to do even better in 1990. cda Very truly yours, JESUS P. ESTANISLAO Secretary Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-17-90 Revenue Memorandum Circular No. 10-90 January 17, 1990 REVENUE MEMORANDUM CIRCULAR NO. 10-90 Subject : Department Order No. 51-89 To : All Internal Revenue Officers and others concerned. For the information and guidance of all officials and employees, quoted hereunder is Department Order No. 51-89 dated November 27, 1989 of the Department of Finance. "In the interest of the service, the complaints committee of this Department reconstituted under Department Order No. 16-89 is hereby further reconstituted as follows: 1. Undersecretary/Assistant Secretary Policy Development and Management Services Group - Chairman acd 2. Director, Legal Affairs Office - Member 3. Director, Central Administration Office - Member 4. Director/Representative, Bureau of Local Government Finance - Member 5. Chief, Personnel Services Division - Member-Secretary The Committee shall review, process and evaluate protests against appointments or promotions to open career positions in the Department of Finance and in its Bureaus and Attached Agencies including those pertaining to the Local Treasury and Assessment Services, BLGF, which are issued by the Secretary of Finance. Protests shall be resolved in accordance with the pertinent provisions of PD 807 dated October 6, 1975 and the rules and regulations issued thereunder as well as the policies of the office of the President and this Department. The findings and recommendations of the committee shall be submitted to the Secretary, specifying the employees who should properly be promoted to the vacancy, with an explanation of the reason or reasons for the choice, for appropriate action.

To facilitate early disposition of protests, the committee may require any personnel of the Department or Bureau of Local Government Finance to extend assistance. aisa dc This order shall take effect immediately and all orders, circulars and/or instructions contrary to or inconsistent herewith are hereby revoked. (Sgd.) VICENTE R. JAYME" Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-26-90 Revenue Memorandum Circular No. 11-90 January 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 11-90 Subject : CSC Memorandum Circular No. 56, Re-implementing Guidelines of the Incentives and Rewards System under RA 6713. To : All Revenue Officials and employees and others concerned For the information and guidance of all officials and employees, quoted hereunder is CSC Memorandum Circular No. 56, series, of 1989 dated December 28, 1989. "Section 6 of Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees, provides for the establishment of a system of annual incentives and rewards in order to motivate and inspire public servants to uphold the highest standards of ethics. To operationalize the Incentives and Rewards System, hereinafter referred to as the System, the following implementing guidelines are hereby adopted. 1. Scope The System shall apply to all officials and employees of the government, elective and appointive, permanent or temporary, whether in the career or non-career service, including military and police personnel, whether or not they receive compensation, regardless of amount. 2. Name of the Award The Award under the System shall be known as the Outstanding Public Officials and Employees Award. 3. Norms of Conduct as Bases for the Award The Award shall be granted to any public official or employee based on his consistent demonstration and observation of one or more of the following norms of conduct: casia 3.1 Commitment to Public Interest (Nananaig na Pagpapahalaga sa Kapakanang Pambayan) The official or employee always upholds the public interest over personal interest. All government resources and powers of his department, office or agency are employed and used efficiently, effectively, honestly and economically, particularly to avoid wastage in public funds and revenues. 3.2 Professionalism (Propesyonalismo)

The official or employee performs and discharge his duties with the highest degree of excellence, professionalism, intelligence and skill. He entered public service with utmost devotion and dedication to duty. He endeavors to discourage wrong perceptions of his role as dispenser or peddler of undue patronage. 3.3 Justness and Sincerity (Pagkamakatarungan at Katapatan) The official or employee remains true to the people at all times. He acts with justness and sincerity and does not discriminate against anyone, especially the poor and the underprivileged. He, at all times, respect the rights of others, and refrains from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest. He does not dispense or extend undue favors on account of his office to his relatives, whether by consanguinity or affinity, except with respect to appointments of such relatives to positions considered strictly confidential or as members of his personal staff whose terms are coterminous with his. 3.4 Political Neutrality (Pagkawalang-kinikilingan sa Pulitika) The official or employee provides service to everyone without unfair discrimination regardless of party affiliation or preference. 3.5 Responsiveness to the Public (Pagkamatugunin sa Madla) The official or employee extends prompt, courteous and adequate service to the public. Unless otherwise provided by law or when required by the public interest, the official or employee provides information on policies and procedures in clear and understandable language, ensures openness of information, public consultations and hearings whenever appropriate, encourages suggestions simplifies and systematizes policy, rules and procedures, avoids red tape and develops an understanding and appreciation of the socioeconomic conditions prevailing in the country, especially in the depressed rural and urban areas. 3.6 Nationalism and Patriotism (Pag-ibig sa Bayan at Patriotismo) The official or employee, at all times is loyal to the Republic and to the Filipino people, promotes the use of locally produced goods, resources and technology and encourages appreciation and pride of country and people. He endeavors to maintain and defend Philippine sovereignty against foreign intrusion. casia 3.7 Commitment of Democracy (Matibay na Pananalig sa Demokrasya) The official or employee commits himself to the democratic way of life and values, maintains the principle of public accountability and manifests by deeds the supremacy of civilian authority over the military. He at all times upholds the Constitution and puts loyalty to country above loyalty to persons or party. 3.8 Simple Living (Payak na Pamumuhay) The official or employee and his family lead modest lives appropriate to his position and income. They do not indulge in extravagant or ostentatious display of wealth in any form. 4. Nomination Criteria and Percentage Weight. Nominations shall be guided by the following criteria and percentage weight. Percentage Weight Criteria 4.1 Quality and Consistency of Performance The bahavioral performance, conduct or achievement in the observance of the norm(s) of conduct has been consistently 30%

outstanding or exemplary. 4.2 Unique and Exemplary Quality of Achievement 30% The Achievement is extraordinary and easily distinguishable for its uniqueness and originality 4.3 Risk or Temptation Inherent in the Work This refers to the dangerous element/ factor or temptation substantially present in the work. 4.4 Obscurity of the Position 10% This refers to the lowliness or insignificance of the position in relation to policy and decision making or to technical and supervisory positions. 4.5 Years of Service 5% This refers to the cumulative years of service that the nominee has rendered the Philippine Government. 4.6 Level of Salary 5% This shall be in accordance with the salary grades provided in Republic Act No. 6758, the Salary Standardization Law, or their equivalents in the local government, the military and the police. 4.7 Any similar circumstances or considerations in favor of the particular nominee 5% --------100% ====== 5. Forms of Incentives and Rewards Incentives and rewards may take the form of any of the following, as may be determined by the Committee on Awards. casia 5.1 Bonuses; or 5.2 Citations; or 5.3 Directorships in government-owned or controlled corporations; or 5.4 Local and foreign scholarship grants; or 5.5 Paid vacations; and 15%

5.6 Automatic promotion to the next higher position suitable to his qualification and with commensurate salary, provided, that if there is no next higher position or it is not vacant, said position shall be included in the next budget of the office; except when the creation of a new position will result in distortion in the organizational structure of the department, office or agency. Where there is no next higher position immediately available, a salary increase equivalent to the next higher position shall be given and incorporated in the base pay. When a new position is created, that which is vacated shall be deemed abolished. 6. Conferment of the Award The Award shall be conferred in a ceremony conducted for the purpose, to be determined by the Committee on Awards. The Award shall likewise be granted to an awardee who dies before the actual grant of the award. It shall be considered a posthumous award. 7. Committee on Awards 7.1 Composition The Committee on Awards, hereinafter referred to as the Committee, which shall administer the System, shall be composed of the following: 7.1.1 Ombudsman - Co-Chairman 7.1.2 Chairman, CSC - Co-Chairman 7.1.3 Chairman, COA - Member 7.1.4 Two (2) Government Employees Appointed by the President - Members 7.2 Functions and Responsibilities The Committee shall perform the following functions and responsibilities: 7.2.1 Conduct a periodic continuing review of performance of officials and employees in all departments, offices and agencies; 7.2.2 Establish a system of annual incentives and rewards to the end that due recognition is given of officials and employees of outstanding merit on the basis of standards set forth in Section 2, Rule V of the Rules Implementing the Code of Conduct and Ethical Standards; 7.2.3 Determine the form of incentives and rewards to be granted; 7.2.4 Formulate and adopt its own rules to govern the conduct of its activities, which shall include guidelines for evaluating nominees, the mechanism for recognizing the awardees in public ceremonies and the creation of sub-committees. 7.3 Assistance to the Committee In the evaluation of nominees, the Committee may be assisted by technical experts selected from the government and private sectors. 7.4 Finality of Decision Decisions of the Committee on Awards shall be deemed final and unappealable. aisa dc 8. Secretariat Services The Merit and Rewards System Division under the Office for Career Systems and Standards, Civil Service Commission, in addition to its regular functions, shall be tasked to provide secretariat services to the Committee on Awards. As such, it shall perform the following duties and responsibilities: 8.1 Coordinate all activities and undertakings of the Committee, including liaison work;

8.2 Be responsible for the promotion, public information and dissemination in print and broadcast media of the activities and programs of the Committee; 8.3 Provide the Committee investigative work; 8.4 Keep and maintain records of the Committee and provide the necessary documentation of all grants, procedures and other related activities; 8.5 Prepare budget proposals; and 8.6 Do other related work necessary for the proper and orderly conduct of business of the Committee in the implementation of the System. 9. Requirements for Nomination The following documents shall be submitted in six (6) copies: 9.1 Accomplished nomination form; 9.2 Personal Data Sheet of the nominee duly subscribed and sworn to before the highest ranking Human Resource Management Officer in the department, office or agency; 9.3 Certification by the Head of the department, office or agency on the nominee's; 9.3.1 Length of government service; 9.3.2 Latest salary received; and 9.3.3 Record of criminal and/or administrative offense or pending case against nominee, if any. If none, state so. 9.4 Clippings, citations, publications, pictures, if any, in support of the nomination. 10. Procedure in Nomination Any person may nominate a public official or employee for the Award. He shall submit the accomplished nomination form and other supporting documents to the Secretariat, Committee on Awards, Civil Service Commission, Batasan Complex, Diliman, Quezon City. cd In view thereof, all concerned are enjoined to submit their nominations for the outstanding public officials and employees award. For the guidance of all concerned. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-31-90 Revenue Memorandum Circular No. 12-90 January 31, 1990 REVENUE MEMORANDUM CIRCULAR NO. 12-90 Subject : Observance of Philippine Heart Month To : All Revenue Officials and employees and others concerned. For the information and guidance of all officials and employees, quoted hereunder is the letter dated January 25, 1990 of the Chairman, Heart Month Movement '90. "February 1, 1989 to February 28, 1990 has been proclaimed by President Corazon C. Aquino as the "Year of Cardiology" in the Philippines. cd

In observance of Philippine Heart Month (February), the Philippine Heart Association (PHA) intensifies the information campaign to make the public aware of the various heart diseases common to our people and of the importance of heart care. One of the main activities in the observance of the Heart Month is the Lakad-Puso Walkathon which emphasizes the importance of brisk walking as one of the best forms of exercise for the heart. In this connection, may we invite you and your group to join us in this healthful activity. This year's walkathon will be on Sunday, February 4, 1990 starting at 5:30 a.m. Assembly point will be at the Philippine Heart Center, East Avenue, Quezon City. The participants will proceed to the intersection of East Avenue and EDSA, turn right to EDSA, then turn right to Quezon Avenue, will go around the Quezon City Memorial Circle, and finally will converge at the Circle for a brief program by the organizers. cdt Thank you very much and hope you can join us on February 4. Sincerely yours, Adolfo B. Bellosillo, M.D." Chairman, Heart Month Movement "90 All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-17-90 Revenue Memorandum Circular No. 13-90 January 17, 1990 REVENUE MEMORANDUM CIRCULAR NO. 13-90 Subject : Setting-up of a Hotline Center in the Department of Finance To : All Internal Revenue Officials and others concerned For the information and guidance of all officials and employees, quoted hereunder is Memorandum dated December 27, 1989 of the Director, Central Administration Office, Department of Finance, Manila. In compliance with the memorandum dated December 18, 1989 of Assistant Secretary Angel Q. Yoingco regarding the Setting-up of a "Hotline Center" in the Department of Finance, please be advised of the following: acd 1. The office of Director Milida M. Guevarra of the Research and Information Office with telephone numbers 49-16-80 and 47-48-53, will handle all telephone calls and/or inquiries relevant to Emergency Coordinating Center (ECC) matters, from 8:00 A.M. to 6:00 P.M. - from Monday thru Friday. 2. The DOF Security Office, under OIC Gotardo Baylon with telephone number 4961-27, will take all telephone calls and/or inquiries relevant to ECC matters, from 6:00 P.M. to 8:00 A.M. - from Monday thru Friday and whole 24 hours during Saturdays and Sundays. Any urgent information, inquiry, instruction and all other matters which may require prompt action, should be relayed immediately to the following:

1) Asst. Secretary Angel Q. Yoingco, 171 Don Manuel Agregado Street, Sta. Mesa Heights, Quezon City, Tel. 712-39-93 2) Director Constante A. Espejo, 4 Lakandula, Parang, Marikina, Metro Manila, Tel. No. 947-31-02 3) Mr. Ronnie S. Buenviaje No. 40 St. Mary St., Cubao, Quezon City, Tel. No. 9616-25 cdt (Sgd.) CONSTANTE A. ESPEJO Director Central Administration Office All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-09-90 Revenue Memorandum Circular No. 14-90 February 9, 1990 REVENUE MEMORANDUM CIRCULAR NO. 14-90 Subject : Withdrawal of tax exemption privileges previously enjoyed by the Armed Forces of the Philippines Commissary (AFPCES) and the Philippine Constabulary/Integrated National Police Service Store System (PC/INPSSS) starting January 1, 1990. To : All Internal Revenue Officers and Others Concerned For your information and guidance, the entire text of the Fiscal Incentives Review Board Resolution No. 12-89 dated July 6, 1989 is reproduced hereunder: cd i "FISCAL INCENTIVES REVIEW BOARD RESOLUTION NO. 12-89 BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to endorse to the Department of Budget and Management the subsidy availment of the Armed Forces of the Philippine Commissary and Exchange Service and the Philippine Constabulary/Integrated National Police Service Stores System through the Department of National Defense, in the amount of P50 million only, representing taxes, duties and charges on items/commodities purchased and subsequently sold by these outlets to their intended beneficiaries, pursuant to the terms and conditions of Executive Order No. 76, as amended by FIRB Resolution No. 5-87. Provided, That the amount shall be chargeable against the Tax Expenditures Fund, pursuant to the terms and conditions of the Rules and Regulations to Implement the Subsidy Provision Under Executive Order No. 93. Provided, Further, That the exemption privileges enjoyed by subject outlets which were restored temporarily by FIRB Resolution No. 5-87 are hereby withdrawn effective January 1, 1990. aisa dc (Sgd.) VICTOR C. MACALINCAG Acting Secretary of Finance Chairman - FIRB" You are therefore urged to give this Circular the widest publicity possible so that the information on the withdrawal of exemption of AFPCES and PC/INPSSS as of January 1, 1990 and their grant of a P50M subsidy can be disseminated.

(Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-05-90 Revenue Memorandum Circular No. 15-90 February 5, 1990 REVENUE MEMORANDUM CIRCULAR NO. 15-90 Subject : Loss of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Numbers Quantity 6637564 G to 6637900 G 6 pads & 37 sets 6638001 G to 6638050 G 1 pad The above receipts which were reported as missing and unaccounted for, were among those issued sometime in 1976 to the late Epifanio Ona, former Revenue Representative of Agana, Guam. Said receipts are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdasia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-16-90 Revenue Memorandum Circular No. 16-90 February 16, 1990 REVENUE MEMORANDUM CIRCULAR NO. 16-90 Subject : Creditable withholding tax on sales, exchanges, or transfers of real property. To : All Assistant Commissioners, Regional Directors, Revenue District Officers and Others Concerned 1. As provided for in Revenue Regulations No. 1-90, and implemented by Revenue Memorandum Circular No. 7-90, the rates of creditable withholding tax on sales, exchanges, or transfers of real properties have been reduced to 0%, 2.5% or 5%, for real estate transactions the deeds of sale or transfer of which have been filed with the BIR on or after February 1, 1990. Under said issuances, the vendor of real property becomes entitled to zero (0%) percent only if the consideration for the sale of the lot or house and lot per transaction does not exceed P500,000 and he is registered with and certified to as engaged in low-cost housing projects under Batas Pambansa Blg. 220 (socialized housing law) by the Housing and Urban Development Coordinating Council (HUDCC) or the Housing and Land Use Regulatory Board (HLURB). And when the vendor's housing

project is registered with the above-mentioned government agency under Presidential Decree No. 957 (open market housing law), the transaction will be subject to either 2.5% or 5% withholding tax, notwithstanding the fact that the consideration is not more than P500.00. cdasia 2. In order to remove the bias against the low-cost housing projects registered under PD 957 and to simplify tax administration, all sales, exchanges or transfers of real property on or after March 1, 1990 shall be subject to zero (0%) percent, regardless of the law under which the project is registered, provided that the consideration does not exceed P500,000. In other words, it is the selling price or consideration (and not the law under which a project was approved) that determines whether or not a transaction is socialized/low-cost in nature. This is also in conformity with the prevailing ceiling for low-income housing as set by government housing facilities like the PAG-IBIG. 3. To be entitled to the lower withholding tax rates of 0% or 2.5% the presentation of the copies of the Certificate of Registration and License to Sell (Annexes "A" and "B") for a subdivision or condominium project issued by HLURB shall be sufficient proof for the purposes of the required HUDCC/HLURB certification in the regulations. 4. This Revenue Memorandum Circular, which modifies RMC 7-90 dated January 16, 1990, shall take effect on March 1, 1990. As in RMC 7-90, the date of presentation of the sales documents to the BIR shall be followed in determining the applicable withholding tax rate on the transaction. cd i 5. All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-01-90 Revenue Memorandum Circular No. 17-90 February 1, 1990 February 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 17-90 Subject : Pertinent Portions of Revenue Memorandum Order No. 1-90, Entitled "Amendments to the Provisions of a Revised Schedule of Compromise Penalties for Internal Revenue Violations, as Prescribed in RMO No. 26-86, Relevant to the Collection of Taxes Abroad." To : The Revenue Attache, Riyadh, Kingdom of Saudi Arabia; All Revenue Representatives and Officers of the Department of Foreign Affairs Authorized to Collect Internal Revenue Taxes Abroad; and Others Concerned. For Internal revenue tax purposes, the pertinent portions of Revenue Memorandum Order No. 1-90, relevant to the collection of taxes abroad are quoted below: "I. Objectives: This Order is issued: A. To update the Schedule of Compromise Penalties with a view to increase the compromise penalties and delete from the coverage thereof certain acts commonly resorted to by taxpayers as a means of tax evasion;

B. To reflect the changes in the Schedule which includes the Code Section, Nature of Violation, Criminal Penalty imposed and Amount of Compromise Penalty which are prescribed on Chapter II, Title X of the revised NIRC; C. To adopt and implement a uniform application of the various compromise penalties for criminal violations of the Tax Code; and cd i D. To provide supplemental guidelines on compromise penalties for resident taxfilers and non-residents as well." "II. Policies: Certain acts/violations which are commonly resorted to and applicable to non-resident taxpayers are imposed the same amount of compromise penalty as the resident taxpayers." "III. Guidelines and Instructions: 1. The internal revenue officers concerned shall apply the Revised Schedule of Compromise Penalties embodied in Annex "A" to ensure uniformity of action. 2. In no case shall the compromise penalty differ in amount from those specified in the aforementioned Schedule, except when duly approved by the Commissioner or, in a proper case, by the Regional Directors. 3. Although all amounts of compromise penalties incident to violations shall be itemized in the assessment notice and/or demand letter along with the other administrative penalties like surcharge and interest, the same should not form part of the total amount assessed/demanded but should appear separately as a suggestion to the taxpayer to pay lieu of criminal prosecution. If paid, the compromise penalties shall be collected and accounted for under the usual procedures, as internal revenue. 4. Since compromise penalties are only amounts suggested in settlement of criminal liability, and may not therefore be imposed or exacted on the taxpayer in the event that a taxpayer refuses to pay the suggested compromise penalty, the violation shall be referred for criminal action as heretofore mentioned. cd i 5. Non-resident filers who commit any of the violations stated in the schedule shall pay the equivalent amount of compromise penalty in pesos or its equivalent in U.S. dollars." (Note: In the implementation of No. 5, above, reference should be made to Revenue Memorandum Circular No. 77-89, dated December 19, 1989, prescribing a uniform exchange rate of U.S. Dollar for the collection of taxes abroad. The said Circular has earlier been circularized.) "IV. Repealing Clause: All other orders which are inconsistent herewith are hereby repealed or revoked accordingly." "V. Effectivity: This Order shall take effect immediately." All revenue officers and other officials charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and urged to give the same the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

02-27-90 Revenue Memorandum Circular No. 18-90 February 27, 1990 February 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 18-90 Subject : CSC Memorandum Circular No. 06, series of 1990 - Guidelines on the Implementation of CSC Resolution No. 90-073, dated January 22, 1990 To : All Revenue officials and employees and others concerned. For the information and guidance of all officials and employees, quoted hereunder is CSC Memorandum Circular No. 06, series of 1990 dated February 2, 1990. "The Civil Service Commission in its Resolution No. 90-073 dated January 22, 1990 adopted the policy that civil service eligibilities resulting from bar or board examinations, or assembled specialized written examinations conducted by the Civil Service Commission or department or agencies with the assistance of, or in coordination with, the Civil Service Commission, and eligibilities granted under PD 907 as amended, and PD 997 shall be allowed for permanent appointment to corresponding level of positions in the career service, provided that the appointee meets the education, training and experience, and other requirements for the position prescribed in the approved qualification standards. cdasia To provide uniform interpretation and application of the said eligibilities, the following guidelines are hereby prescribed: 1. Eligibilities resulting from specialized written examinations conducted by the Civil Service Commission or department or agencies with the assistance of, or in coordination with, the CSC or board or bar examinations which require at least four (4) years of college studies shall be appropriate for appointment to first and second level positions not covered by examinations as required by law, provided that the persons appointed to these positions possess the education, training and experience and other qualifications required for the positions. 2. Eligibilities resulting from specialized written examinations or board examinations which require less than four (4) years of college studies shall be appropriate for appointment to first level positions not covered by examinations as required by law, provided that the persons appointed to these positions possess the education, experience and training, and other qualifications required for the positions. 3. The corresponding RA 1080 (Board/Board) eligibilities shall be required for appointment to positions, the duties of which constitute practice of a profession regulated by the Philippine bar or board laws. cdtai 4. Eligibilities granted pursuant to Resolution No. 435 and MC No. 10 shall be appropriate only for which they were given, and for higher positions in the same level within the same or functionally-related group of positions. 5. Police eligibilities recognized by the Civil Service Commission shall only be applicable to specific positions enumerated in MC No. 7. s. 1986, and to functionallyrelated positions involved in the enforcement of laws and ordinances, prevention of crime, apprehension of criminals, and protection of life and property, and for such other positions that the Commission may determine. All circulars, guidelines, rules and regulations inconsistent with this Memorandum Circular are repealed, revoked, or amended accordingly. cdtai This Memorandum Circular shall take effect immediately.

PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-27-90 Revenue Memorandum Circular No. 19-90 February 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 19-90 Subject : Loss of the original copy of Certificate Authorizing Registration (Taxable Real Property Transactions) BIR Form No. 1954. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the original copy of Certificate Authorizing Registration (Taxable Real Property Transactions) BIR Form No. 1954, to wit: acd Serial Number Quantity 034076 one copy (original) The above copy which was reported as missing by Mrs. Leticia S. Vidal, Revenue Document Processor of Revenue District No. 25, South Manila, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-01-90 Revenue Memorandum Circular No. 20-90 March 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 20-90 Subject : Loss of duplicate copy of Authority to Print Receipts/Invoices (BIR Form No. 25.30). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Authority to Print Receipts/Invoices (BIR Form No. 25.30), to wit: Serial Number Quantity 414462 one (1) copy (duplicate) The above copy which was reported as missing, together with the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. acd

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-14-90 Revenue Memorandum Circular No. 21-90 February 14, 1990 REVENUE MEMORANDUM CIRCULAR NO. 21-90 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------B-17334950 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-08-90 Revenue Memorandum Circular No. 22-90 March 8, 1990 March 8, 1990 REVENUE MEMORANDUM CIRCULAR NO. 22-90 Subject : Rules Implementing Republic Act No. 6850 To : All Revenue Officials and Employees and others concerned For the information and guidance of all officials and employees, quoted hereunder are the Rules Implementing Republic Act No. 6850 dated March 5, 1990 issued by the Civil Service Commission. Pursuant to the provisions of Sections 1 and 2 of RA No. 6850, entitled "An Act to Grant Civil Service Eligibility Under Certain Conditions to Government Employees Under Provisional or Temporary Status Who Have Rendered a Total of Seven (7) Years of Efficient Service, and for Other Purposes", approved on February 8, 1990 and which took effect on February 27, 1990, the following implementing Rules are hereby promulgated: RULE I. SCOPE AND DEFINITION OF TERMS

Sec. 1. Except as otherwise provided herein, these Rules shall apply to all government employees in the national and local government units, including government-owned or controlled corporations with original charters, who as of the approval of the Act, are holding career service positions under provisional or temporary status and have rendered a total of at least seven (7) years of efficient service. casia Sec. 2. The terms below shall be construed as follows: (a) Provisional appointment - refers to an appointment of public school teachers who possess the minimum educational qualifications but lack the appropriate civil service eligibility provided in the Magna Carta for Public School Teachers. (b) Temporary appointment - refers to an appointment issued to a person who meets all the requirements for the positions to which he has been appointed, except the appropriate civil service eligibility. This does not refer to temporary appointment of teachers. (c) Seven (7) years of service - refers to the aggregate or total number of years of government service which need not be continuous, in the career or non-career service, whether appointive, elective, casual, emergency, seasonal, contractual or co-terminous, including military and police service, as evaluated and confirmed by the Civil Service Commission: Provided, that the last twelve (12) months must have been in the career service and covered by a valid and approved appointment by the Civil Service Commission. (d) Efficient service - refers to the employee's performance for the last two semestral rating periods which must be at least "Satisfactory". RULE II. GRANT AND APPLICABILITY OF ELIGIBILITY Sec. 1. The civil service eligibility that may be granted to an employee who meets the requirements under Rule I shall be as follows: cdtai (a) RA 6850 Career Service (Professional) eligibility for those holding second level positions which are professional, technical and scientific. For qualified teachers, the eligibility shall be RA 6850 Teacher, which would qualify them for registration as Professional Teacher under PD 1006. (b) RA 6850 Career Service (Subprofessional) eligibility for those holding first level positions which are in the clerical, trades, crafts, and custodial service. Sec. 2. The civil service eligibility granted shall be appropriate for permanent appointment to the position which the employee has been holding for at least three (3) months as of the approval of the Act, provided the appointee meets the other qualification requirements. Sec. 3. The civil service eligibility granted shall likewise be appropriate for permanent appointment to other positions in the same level provided the appointee meets the qualification requirements. RULE III. APPOINTMENTS EXCLUDED Sec. 1. Employees holding any of the following appointments are not entitled to the grant of civil service eligibility provided for in these Rules: (a) Temporary appointments in the closed career service and highly technical positions, such as those in the scientific career service and faculty and academic staff of state universities and colleges and foreign service officers;

(b) Temporary appointments to positions requiring eligibilities resulting from bar/board examinations; and (c) Appointments of military personnel and members of the Integrated National Police. RULE IV. REQUIREMENTS FOR GRANT Sec. 1. Qualified applicants may submit their applications with the nearest Civil Service Regional, Field or Provincial Office together with the following: 1) Latest approved provisional or temporary appointment; 2) Official service record certified true and correct by the head of agency; cdtai 3) A certification signed by the head of agency that the employee's performance rating is at least satisfactory during the last two semestral rating periods; and 4) Fee in the amount of One Hundred Pesos (P100.00). Sec. 2. The Civil Service Commission shall issue the corresponding certificate of Civil Service eligibility which shall be effective as of the approval of RA 6850. Sec. 3. On the basis of this eligibility, heads of agencies may propose the employee for permanent appointment to his present position. RULE V. EFFECTIVITY Sec. 1. These Rules shall take effect immediately. cda Quezon City, March 5, 1990. PATRICIA A. STO. TOMAS Chairman SAMILO N. BARLONGAY Commissioner MARIO D. YANGCO Commissioner Application forms may be secured from the Personnel Division. All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-12-90 Revenue Memorandum Circular No. 23-90 March 12, 1990 REVENUE MEMORANDUM CIRCULAR NO. 23-90 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 90-02 dated February 23, 1990. To : All Internal Revenue Officers and Others Concerned

For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M., January 1, 1990. acd Peso/Liter Products Previous Tax Present Tax Difference Premium/Avgas P3.4036 P3.4035 (P0.0001) Regular Gasoline 3.1201 3.0860 ( 0.0341) Avturbo 3.7835 4.0397 0.2562 Kerosene 1.3114 1.3984 0.0870 Diesel 1.1707 1.2599 0.0892 Fuel oil/Feedstock LPG 0.8901 0.9351 0.0450 or 1.5924/kg. or 1.6729/kg. 0.0805 Asphalts 0.8824/kg. 0.8951/kg. 0.0127 Thinners 1.1117 1.1131 0.0014 All internal revenue officers and other concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. aisa dc (Sgd.) EUFRACIO D. SANTOS Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-14-90 Revenue Memorandum Circular No. 24-90 March 14, 1990 REVENUE MEMORANDUM CIRCULAR NO. 24-90 Subject : Courtesy Campaign in the Civil Service To : All Revenue Officials and Employees and others concerned. For the information and guidance of all officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 15, series of 1990 dated March 5, 1990. Section 4 (a) and (e) of Republic Act No. 6713 otherwise known as the Code of Conduct and Ethical Standards for Public Officials and employees shall extend prompt, courteous and adequate service to the public. In view thereof, the Civil Service Commission hereby adopts the Courtesy Campaign to be known as "Ang Magalang, Bow" as a measure to promote courtesy in the civil service. To operationalize this Campaign, the following guidelines are hereby prescribed: I. OBJECTIVES A. General 1. To encourage civil servants to render prompt and courteous service to the public. cd 2. To create an atmosphere in government service where promptness and courtesy prevail at all times. B. Specific 1. To conduct a massive information campaign that will instill consciousness among public servants of the importance of prompt and courteous service to the public.

2. To establish a feedback mechanism through which clients can immediately report instances of courteous and prompt service, or its opposite, and 3. To establish a recognition and reward system for prompt and courteous public servants as well as a sanction mechanism for those who exhibit discourteous and uncivil behavior. II. MECHANISM A. Information and Education Campaign 1. The Civil Service Commission shall provide all agencies information materials like guidelines, posters, VTR modules, etc. 2. Print and broadcast media shall be extensively used for the campaign. cdasia B. Feedback Mechanism 1. The Public Assistance Counter shall be established in various agencies of the government located in the lobby or any place accessible to the public to serve as the information feedback center of the campaign. The Counter shall be manned by an Officer of the Day who shall have the following functions: a) Answer questions from walk-in public and provide information required by the visitor; b) Remind and/or encourage the public to give their feedback on the quality of service received by accomplishing the proper forms and using drop boxes for the purpose; c) Give directions as to location of offices, officials, employees, and facilities of the agency; d) Refer clients to appropriate office or official or employee; e) Submit weekly report on the names of employees reported for discourteous behavior, and other data as obtained from the drop box for Form B (Report of Discourtesy Form); f) Perform other tasks necessary and/or relevant to the operation of Public Assistance Counters. In cases where the complaint requires immediate attention, the Officer of the Day shall accompany the party to the Head of Office or responsible authority. aisa dc Heads of Agencies are enjoined to make themselves always available for consultation with the transacting public. Officers of the Day shall be required to attend a seminar on how to manage the Public Assistance Counter. 2. The Feedback Forms Instructional posters which contain feedback directions to the public shall be posted in conspicuous places in government offices. These will carry detachable feedback forms which shall be of two kinds: The Courteous Service Form (A) and Report of Discourtesy Form (B). Both forms shall contain spaces for the following information: a) Name of employee who has shown courtesy or discourtesy; b) Office/department/division of the employee; c) Nature of transaction; d) Date of transaction In addition, Form B shall contain space for a short explanation of the incident involving a discourteous employee.

Individual clients shall fill up Form A to congratulate a courteous employee for prompt and courteous service or Form B to report untoward incident involving a discourteous employee. For the convenience of the transacting public, all frontline service employees shall clearly show their full name and organizational unit. 3. Determining the Most Courteous Employee of the Month. On the basis of the entries in the forms, the Agency Head shall determine the Most Courteous Employee of the Month and the Employee Most Wanting of Courtesy. The forms shall be counted and the employee who garners the most number of congratulatory remarks shall be declared the Most Courteous Employee of the Month. All heads of agencies are required to submit to the Civil Service Commission the name/s of employee/s awarded a Most Courteous Employee of the Month. The names of the Most Courteous Employees from various agencies shall be included in a raffle where the CSC shall pick out the name of the employee who will be given the CSC monthly special award. cd i C. Recognition, Awards or Sanction 1. Recognition The Most Courteous Employee shall be recognized by posting his/her picture with her name, office, and other personality traits in the lobby or most conspicuous place in the building. If there is a consistent and continuous feedback of courteous service by an employee for a period of one year, he/she may be awarded a Most Courteous Employee of the Year. 2. Agency Awards The award for the Most Courteous Employee of the Month shall take the form of a luncheon treat with the Head of the Agency. However, additional rewards may be given in the form of recommendation, gift certificates or similar incentives. The award for the Most Courteous Employee of the Year may take the form of plaque containing the citation and signature of the Head of the Agency, gift certificates, round trip tickets to tourist spots in the country or abroad, or similar incentives. The Most Courteous Employee of the Year may also be nominated to the annual search for the Outstanding Public Officials and Employees under Republic Act No. 6713, an awards program being administered by the Civil Service Commission. 3. Sanction Discourteous employees or those named Employee Most Wanting of Courtesy because of consistent feedback of discourtesy shall be meted administrative and disciplinary sanctions to be determined by existing laws and other pertinent rules and regulations. Any employee reported for discourteous behavior shall be required to explain. cdtai The Commission enjoins all concerned to participate in this Campaign. Your active involvement will ensure the success of this Campaign in creating a positive public image of government. (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) EUFRACIO D. SANTOS

Deputy Commissioner (Officer-In-Charge) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-26-90 Revenue Memorandum Circular No. 25-90 February 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 25-90 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------C-6800380 : One (1) Set --------------------------The above receipt which was reported missing by Ms. Gloria G. Agodon, Revenue Collection Officer of Laoag City, has been cancelled and any official transactions involving the use of said form is therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-26-90 Revenue Memorandum Circular No. 26-90 February 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 26-90 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB 8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------14577349 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above mentioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia EUFRACIO D. SANTOS

Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-07-90 Revenue Memorandum Circular No. 27-90 March 7, 1990 REVENUE MEMORANDUM CIRCULAR NO. 27-90 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------C-3969207 : One (1) Set --------------------------The above receipt which was reported missing by Ms. Vilma A. Bamba, Revenue Collection Officer of Tacurong, Sultan Kudarat, has been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-16-90 Revenue Memorandum Circular No. 28-90 March 16, 1990 March 16, 1990 REVENUE MEMORANDUM CIRCULAR NO. 28-90 Subject : Sanction in Cases of Fake Civil Service Eligibility To : All Revenue Officials and Employees and all others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 8, series of 1990 dated February 14, 1990, issued by the Civil Service Commission. Pursuant to CSC Resolution No. 90-160 dated February 14, 1990, the Civil Service Commission hereby adopts the following policies and guidelines in the application of sanctions in cases of fake civil service eligibility: 1. Any act which includes the fraudulent procurement and/or use of fake/spurious civil service eligibility, the giving of assistance to ensure the commission or procurement of the same, or any other act which amounts to violation of the integrity of civil service examinations, possession of fake civil service eligibility and other similar act shall be categorized as a grave offense of Dishonesty, Grave Misconduct or Conduct Prejudicial to the Best Interest of the Service, as the case may be, and shall be penalized in accordance with the approved Schedule of Penalties. cd

2. A government employee who commits any of the acts described under Item I shall be held liable therefor in accordance with the provisions of Executive Order No. 292 (Administrative Code of 1987) and CSC MC No. 30, series of 1989, among others. 3. Any other person who commits any of the acts described under Item I shall be barred from taking any civil service examinations and/or disqualified from being employed in any capacity in the national and local government and in government-owned or controlled corporations with original charters, for a specific period unless such disqualification is lifted and condoned on meritorious grounds by this Commission. 4. The above sanctions shall be without prejudice to the filing of criminal charges, if the evidence so warrants. acd THIS MEMORANDUM CIRCULAR SHALL TAKE EFFECT IMMEDIATELY. (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-22-90 Revenue Memorandum Circular No. 29-90 March 22, 1990 March 22, 1990 REVENUE MEMORANDUM CIRCULAR NO. 29-90 Subject : Re-registration of Nullified Firearm License To : All Revenue Officials and Employees For the information and guidance of all concerned, quoted below is the relevant portion of a letter dated March 10, 1990, from the Northern Sector Command, Philippine Constabulary Capital Regional Command, Camp General Tomas Karingal, Sikatuna Village, Quezon City. "Please be informed that this Command is processing Re-Registration of Nullified Firearm License pursuant to PNEMO No. 6 dated 04 January 1990. In this regard, your employees who are licensed firearm holders may avail of our services. We are reserving Saturdays for your personnel so as not to affect their working hours." casia Please be guided accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-21-90 Revenue Memorandum Circular No. 30-90 March 21, 1990 REVENUE MEMORANDUM CIRCULAR NO. 30-90 Subject : Missing Four (4) Sets of Confirmation Receipts (BIR Form CB82-02-03).

To : All Internal Revenue Officers, Employment and Others Concerned. Notice is hereby given of the missing four (4) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------17079723 : One (1) Set 17079724 : One (1) Set 17079738 : One (1) Set 6360867 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-27-90 Revenue Memorandum Circular No. 31-90 March 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 31-90 Subject : Employees who availed of the BIR motorcycle loan To : All Internal-Revenue Officers and Employees Who Availed of the BIR Motorcycle Loan. 1. For the information and guidance of all the internal-revenue officers and employees who availed of the BIR Motorcycle Loan, the following letter dated March 8, 1990 of the Cubao Branch, Philippine National Bank is quoted hereunder: "Mr. Vicente Y. Puno Revenue Service Chief (Personnel & Administrative) Bureau of Internal Revenue Diliman, Quezon City Dear Mr. Puno: "This refers to the insurance coverage of the motorcycles of BIR employees who availed of the BIR-Motorcycle Loan. cda "Please inform the BIR borrowers that the amount of insurance coverage for theft, is only P5,000.00 and for own damage is P10,000.00 under the GSIS Policy No. NCN-89437 for the period covered November 16, 1989-90. "In this connection, kindly collect from each borrower the premium due on the insurance coverage attached Bill No. 74254 with list of assignee. Very truly yours,

(Sgd.) FULGENCIO I. AGAD Senior Assistant Manager" 2. In accordance with the request contained in the abovequoted letter, and considering that the officers and employees who availed of the BIR Motorcycle Loan have authorized the Disbursement Accounting Division the automatic deduction of the monthly installment payment of the loan, said division is hereby instructed to deduct corresponding premiums from the borrowers and remit the name to the Philippine National Bank. cd (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-02-90 Revenue Memorandum Circular No. 32-90 April 2, 1990 REVENUE MEMORANDUM CIRCULAR NO. 32-90 Subject : Resumption of the Publication of the Civil Service Reporter To : All Internal Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is the letter dated March 18, 1990 of the Chairman, Civil Service Commission. acd "The Civil Service Commission (CSC) is set to resume publication of the Civil Service Reporter. As the official external publication of CSC, the journal will cater to information requirements of personnel officers, training specialists and public personnel administrators. It aims to update its readers of new policies and directives as well as management trends affecting the public sector and to serve as a forum for information exchange between and among them. Thus, we would like to solicit articles from your office for inclusion in the CS Reporter. The articles may cover innovative programs, critical articles, news, and feature stories on public personnel administration concerns. cd i The deadline for submission of news and feature articles is on Friday, 30 March 1990. On the other hand, the more extended in-depth articles may be submitted on or before Friday, 20 April 1990. It would also be of much help to us if you could identify a person from your office who would serve as regular contributor or correspondent for this quarterly publication. We also plan to commission selected articles for which we will pay a modest honoraria. Your cooperation and assistance will greatly contribute to the success of this activity. We shall very much appreciate your favorable response to this request. cdtai Thank you very much. Very truly yours, (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. casia

EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-18-90 Revenue Memorandum Circular No. 33-90 April 18, 1990 April 18, 1990 REVENUE MEMORANDUM CIRCULAR NO. 33-90 Subject : Certificate of Neuro-Psychiatric Clearance for Recruitment Purposes to All Positions in the Bureau To : All Revenue Officials and Employees In order to determine whether or not applicants have the personality traits necessary for appointment to the revenue service, it is hereby required, as a matter of policy, that those being considered for appointment to positions in the Bureau, whether field or supportive, undergo neuro-psychiatric examinations, the results of which shall be evaluated before their appointments are given due course. cdt Those who are in the Metro Manila area shall undergo examinations at the AFP Medical Center, V. Luna St., Quezon City, while those who reside outside the Metro Manila area shall undergo the examinations at the nearest PC Regional Command. This Circular takes effect immediately and shall also apply to those whose appointment have not as yet been approved by all authorities concerned. Strict compliance herewith is enjoined. cd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-19-90 Revenue Memorandum Circular No. 34-90 April 19, 1990 REVENUE MEMORANDUM CIRCULAR NO. 34-90 Subject : Implementing Guidelines of the Four-Day Work Plan of the Government To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 21, series of 1990 dated April 18, 1990. "In line with the Presidential pronouncement on the observance of a 4-day work week which is in keeping with the energy conservation thrust of the government, the Civil Service Commission hereby issues the following guidelines: cdt 1. The five (5) non-working Mondays to be observed by government agencies in Metro Manila shall start on April 23, 1990 until May 28, 1990, except April 30, 1990. 2. The agency head has the option to declare these five Mondays as regular working days, provided however, that no MERALCO power is used. Services rendered on these days shall be considered as regular service and not overtime. 3. The agency head's option to observe the four-day work week for his agency shall be subject to the following conditions:

a. Non-working Mondays availed of shall be charged against employees' vacation leave credits or forced leave. In the case of employees with insufficient or no leave credits, their absences shall be charged against future leave credits. b. Employees who observe the non-working Mondays and who have insufficient or no leave credits shall not be considered absent on the Saturdays and Sundays preceding the non-working Mondays. c. These rules shall apply to casual employees with leave credits. In the case of those without leave credits including contractual employees, the agency head shall designate compensatory working days to offset these non-working days which shall be rendered when the electrical power supply has returned to normalcy. cd i d. During these non-working Mondays, all government offices shall maintain a skeletal force in order not to paralyze their operations. The Officer-of-the-Day who man the Public Assistance Center as provided for in MC No. 15, series of 1990, issued by this Commission, shall act as the head of the skeletal force and shall be responsible for the delivery of essential frontline services. e. Employees who chose to render service during the non-working Mondays shall constitute the skeletal force. The heads of office shall see to it that there is work to be done, and that work is done. cd i Cooperation of everyone is enjoined. (Sgd.) MARIO D. YANGO" Commissioner All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. casia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-19-90 Revenue Memorandum Circular No. 35-90 April 19, 1990 April 19, 1990 REVENUE MEMORANDUM CIRCULAR NO. 35-90 Subject : Directing Measures to Conserve Electric Power for Government Offices in Metropolitan Manila To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum Circular No. 114 dated April 18, 1990. cd "WHEREAS, due to power plant repairs and the extended drought, the Luzon grid is unable to produce enough electricity to meet industrial commercial and residential requirements in Metropolitan Manila and the rest of Luzon; WHEREAS, the business and industrial groups have reached a consensus on the need to conserve electric power in an equitable manner based on essentiality; cdasia WHEREAS, the business and industrial sectors have conceived a program which calls for government and private commercial firms to voluntarily halt their respective operations once a week in exchange for continuous power supply for four consecutive days;

IN VIEW THEREOF, the following measures for government offices in Metropolitan Manila are hereby directed: 1. The government offices identified by the Task Force on Power, Joint Government-Business Sector Initiatives Program, with 100 KW load capacity demand shall not use electric power derived from the Manila Electric Company on the following five (5) days: April 23; May 7; 14; 21 and 28 1990. 2. The heads of the offices affected during the aforesaid five (5) Mondays shall have the following options: (a) The offices may continue to perform their respective services and operations during the said five (5) Mondays: Provided, That no electric power derived from the Manila Electric Company shall be used; (b) The offices may partially or totally cancel their respective services and operations during the said five (5) Mondays: Provided, That the employees affected by the partial or total cancellation of the services and operations shall be considered on forced leave in accordance with the provisions of Executive Order No. 1077, S. of 1986; or (c) For every work day cancelled during the said five (5) Mondays, the offices may compensate such non-working day by holding work on any day when electric power service has normalized, the date to be determined by their respective heads. cdtai For purposes of this Memorandum Circular, the heads of offices shall refer to the Secretaries of the departments, heads of government-owned or controlled corporations, and heads of the local government units in Metropolitan Manila. cdt 3. The Presidential Management Staff shall monitor compliance with this Memorandum Circular. 4. This Memorandum Circular shall take effect immediately. By authority of the President: (Sgd.) CATALINO MACARAIG, JR." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-23-90 Revenue Memorandum Circular No. 36-90 April 23, 1990 REVENUE MEMORANDUM CIRCULAR NO. 36-90 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 90-03 dated April 16, 1990. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M., March 1, 1990. cdt PESO/LITER Products Previous Tax Present Tax Difference

Premium/Avgas P3.4035 P3.6583 P0.2548 Regular Gasoline 3.0860 3.3486 0.2626 Avturbo 4.0397 3.9947 (0.0450) Kerosene 1.3984 1.3857 (0.0127) Diesel Fuel Oil 1.2599 1.3371 0.0772 Fuel Oil (Bunker) LPG 0.9351 1.0817 0.1466 or 1.6729/kg. or 1.9352/kg. 0.2623 Asphalts 0.8951/kg. 0.9404/kg. 0.0453 Thinners 1.1131 1.2001 0.0870 All internal revenue officers and other concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-18-90 Revenue Memorandum Circular No. 37-90 April 18, 1990 REVENUE MEMORANDUM CIRCULAR NO. 37-90 Subject : Exclusion from gross income of dividends received from a domestic corporation and the share of an individual partner in a partnership subject to tax under Section 24 (a) of the Tax Code. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder BIR Ruling No. 21 (c) (2) - 283-88-063-90 dated April 18, 1990 to the effect that beginning January 1, 1990 dividends received from domestic corporation as well as the share of individual partners in the net profit of taxable partnership are no longer includible as part of taxable income computed in accordance with Section 28 in relation to Section 21 both of the Tax Code, as amended. (Sec. 61 Revenue Regulations No. 2). "P.R. Danac & Associates 777-B San Sebastian St. Quiapo, Manila Attn. Ms. Marietta C. Danac "Gentlemen: "This refers to your letter dated March 15, 1990 requesting clarification as to whether dividends received from a corporation as well as the share of individual partners in the net profit of taxable partnership which are virtually exempt from final tax, will still subject to the graduated income tax. cdtai "In reply thereto, please be informed that pursuant to Section 21 (c)(2) of the Tax Code, as amended, dividends received from a domestic corporation and the share of an individual partner in a partnership subject to tax at the rate under Section 24 (a) of the same Code shall be subject to tax at the rate of 15% in 1986; 10% effective January 1, 1987; 5% effective January 1, 1988; and 0% effective January 1, 1989.

"Such being the case, beginning January 1, 1989 dividends received from a domestic corporation as well as the share of individual partners in the net profit of taxable income computed in accordance with Section 28 in relation to Section 21 both of the Tax Code, as amended. (Sec. 61, Revenue Regulations No. 2)" cd i Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue It is desired that this Circular be given as wide a publicity as possible. (SGD.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-11-90 Revenue Memorandum Circular No. 38-90 April 11, 1990 REVENUE MEMORANDUM CIRCULAR NO. 38-90 Subject : Letter dated March 2, 1990 of CESO Executive Director regarding the submission of office plans for CY 1989 and 1990 and List of projects and activities planned to be accomplished in 1989. To : All Assistant Commissioners, Regional Directors and Assistant Regional Directors. For the information and guidance of all officials and employees and all others concerned, quoted hereunder is the letter dated March 2, 1990 of the Executive Director, Career Executive Service Board to Honorable Jesus Estanislao, Secretary, Department of Finance, Manila. "The CES Board will be conducting an evaluation of the performance of all Career Executive Service Officers (CESOs) CES eligibles and graduates of the Managing the Bureaucracy for Results (MBR) program in your department in order to establish performance data necessary to effectively promote their career development. These officials shall be assessed in terms of (1) accomplishment of office projects and activities that were planned for the year; (2) their managerial effectiveness; and (3) public accountability. cda To ensure the objective evaluation of accomplishments, we are requesting the officials concerned to submit their office plans for CY 1989 and 1990 and a list of their projects and activities that were planned to be accomplished in 1989. These are the office-based performance criteria that will be inputted in the rating form that we will develop and, later, we will ask you to accomplish being the superior of these officials. We hope you will find time to rate them. Performance ratings will also be gathered from the official's subordinates and office clientele. Moreover, we would like to inform you that in evaluating these officers, we will be administering forms to their subordinates in their respective offices. This will be done sometime in May of this year. The evaluation is expected to be completed within the first half of this year and the results will be available soon after. We will furnish you a copy of the evaluation results.

Thank you in anticipation of your support to the evaluation exercise and we hope to be of service to your Department. aisa dc Very truly yours, (Sgd) ELMOR D. JURIDICO" Executive Director All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-19-90 Revenue Memorandum Circular No. 39-90 April 19, 1990 April 19, 1990 REVENUE MEMORANDUM CIRCULAR NO. 39-90 Subject : NICA Clearance To : All Revenue Officials and Employees In view of the delicate nature of the duties and responsibilities of revenue personnel, it is hereby required as a matter of policy that those being considered for appointment to the Bureau, whether field or supportive should undergo a certificate of NICA Clearance. No action will be taken on the appointments without this required attachment. Those whose appointments are prepared in the Regional Offices should submit their duly accomplished Personal History Statement to the Personnel Division of this Bureau. cdt This circular takes effect immediately and shall also apply to all appointees whose appointment have not as yet been approved by all authorities concerned. Strict compliance herewith is enjoined. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-24-90 Revenue Memorandum Circular No. 40-90 April 24, 1990 REVENUE MEMORANDUM CIRCULAR NO. 40-90 Subject : Procedure in the Evaluation and Disposition of Contested Appointments To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Memorandum dated April 2, 1990. cd "The procedure implementing Department Order #51-89 dated November 27, 1989 as amended by Department Order #16-90 dated February 16, 1990 regarding the evaluation and disposition of contested appointments is hereby modified to include guidelines in the voting among members of the Complaints Committee as follows: acd All members of the Department of Finance Complaints Committee except the Head/Representative of the Bureau/Attached Agency concerned are entitled to a vote

during the deliberation of the contested appointment. In case of a tie, the protest with all the records thereof, shall be forwarded to the Secretary for decision. acd It is understood that before the Complaints Committee acts on any protest/complaint, the comment and recommendation of the Bureau Head concerned shall first be secured within fifteen (15) days from receipt of the protest/complaint. The aforementioned guidelines shall form part of the procedure in the evaluation and disposition of contested appointments as promulgated in a Memorandum dated November 27, 1989 of this Office. cdtai FOR: JESUS P. ESTANISLAO Secretary (Sgd) By: TOMAS V. APACIBLE" Acting Secretary of Finance All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-26-90 Revenue Memorandum Circular No. 41-90 April 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 41-90 Subject : Increased Regular Benefits under Medicare Program by Virtue of E.O. No. 365. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is the letter dated March 21, 1990 of the Acting Executive Director, Philippine Medical Care Commission to the Secretary of Finance, Manila. "Effective August 1, 1989, regular benefits under the Medicare Program have been increased by virtue of Executive Order No. 365. The increase resulted to some benefits exceeding those being provided for under the "Medicare-HMO Tie-Up Project." Considering the very nature of this Project, the participating HMO Companies were requested to increase the benefits they are offering to a level equal to or higher than those provided for under the Executive Order without any increase in the contribution of the member and his employer. The companies have agreed and effective August 1, 1989 for HealthKard International, Inc. and November 1, 1989 for Pamana, Inc., beneficiaries enrolled in this project are already entitled to the increased benefits. This is automatic to those who have enrolled and had been notified of the effectivity of membership by the HMO Company. aisa dc In case there are members of the tie-up project who at the moment would want to return to the regular program or transfer to another HMO Company, he must be guided by the provisions on withdrawal/transfer to another HMO Company/regular Program as contained in the enclosed brochure of the tie-up project.

For those who wish to remain under the tie-up project which we hope all enrollees would, kindly help us inform these employees of yours of the increases made on the benefits of the tie-up project. In case you or any Medicare member needs further clarification, please get in touch with Mrs. Delia G. Agpaoa at telephone numbers 981260 and 980421 local 2898. Thank you for your cooperation. aisa dc Very truly yours, (Sgd.) Atty. REYNALDO G. CABIGTING" Acting Executive Director All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. casia (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-09-90 Revenue Memorandum Circular No. 42-90 May 9, 1990 January 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 42-90 Subject : Rules and Regulations Governing the Grant of Step Increments to Deserving Officials and Employees of the Government To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is the Joint Civil Service Commission and Department of Budget and Management Circular No. 1, s. 1990 dated March 29, 1990. "Pursuant to Section 13(c) of Republic Act No. 6758 otherwise known as the "Compensation and Classification Act of 1989", the Civil Service Commission and the Department of Budget and Management jointly promulgate the following rules and regulations that shall govern the grant of step increments based on merit and/or length of service. RULE I. Coverage Sec. 1. These rules and regulations shall apply to all officials and employees in the national and local governments, including those in government-owned and controlled corporations, judiciary and legislature, who are appointed on a permanent status in the career service. aisa dc RULE II. Selection Criteria Sec. 1. Step increments shall be granted to all deserving officials and employees referred to in Section 1, Rule I hereof, based on the following criteria: (a) Merit - For those who have rendered very satisfactory or outstanding performance in assigned functions for two consecutive rating periods; and (b) Length of Service - For those who have rendered continuous satisfactory service in a particular position for at least three (3) years. RULE III. Step Increments Sec. 1. Merits Schedule. The grant of step increments to deserving officials and employees on the basis of merit shall be in accordance with the following:

a)

Criteria No. of Step Effectivity Increment Very satisfactory One (1) step The day following performance for two (2) the end of the consecutive rating second rating periods based on agency period approved performance appraisal system

b)

Outstanding performance Two (2) steps The day for two consecutive following the rating periods based on end of the agency approved second rating performance appraisal period system For positions allocated to salary grades 30 to 33, each succeeding step after the first step shall be computed at one per cent (1%) of the immediately preceding derived step of the salary grade allocation. In the initial implementation of step increments based on merit, performance for 1990 shall be made the basis of the grant. cdasia Sec. 2. Length of Service. A one (1) step increment shall be granted to officials and employees for every three (3) years of continuous satisfactory service in the position. Years of service in the position shall include the following: (a) those rendered before the position was classified to a position title with a lower or the same salary grade allocation; and (b) those rendered before the incumbent was transferred to another position within the same agency to another agency without a change in position title and salary grade allocation. In the initial implementation of step increments in 1990 an incumbent shall be granted step increments equivalent to one (1) step for every three (3) years of continuous satisfactory service in a given position occupied as of January 1, 1990. Sec. 3. Restrictions. The following restrictions shall be observed in the grant of step increments: (a) The adjusted salary of an official or employee after the grant of step increment shall not exceed the maximum step of the salary grade of his position, subject to the mathematical rules on rounding off. (b) No step increment received by an official or employee shall be carried to a higher position to which he is promoted or appointed as a result of reclassification. (c) The total number of recipients of step increments based on merit in any one (1) calendar year shall not be more than ten per cent (10%) of the total number of personnel actually employed in the department or agency, provided that the total number of recipients of two step increments shall not exceed three per cent (3%) thereof. (d) No step increment based on merit shall be given to an official or employee on the ground that he is retiring in the near future and for purposes of enabling him to collect a higher retirement gratuity, except as he may qualify in accordance with the criteria established under these Rules. cdt

Sec. 4. Qualification(s) for Other Incentives and Awards. Those granted step increments under these Rules may still qualify for other existing incentives and awards provided they meet the criteria of said awards. Sec. 5. Nullification. Any step increment granted in violation of these Rules shall be deemed null and void and the head of the department or agency shall require the refund to the government of whatever amount the awardee(s) has received. For any grant of step increments found to be based on spurious documents or representations, the head of the department or agency shall be personally liable for the refund to the government of the amount granted. Sec. 6. Responsibility. The head of the department or agency shall review annually the grant of step increments. Every department or agency shall develop its own systems and procedures in the recommendation, evaluation and approval of step increment grants. Sec. 7. Incorporation in Personal Services Itemization and Basic Salary. Step increments granted to officials and employees shall be treated as part of their basic salary and shall be incorporated in the Personal Services Itemization of the department or agency for the subsequent calendar year and thereafter. Sec. 8. Notification. The head of the department or agency shall: (a) notify in writing the official or employee concerned of the step increments granted under these Rules through a Notice of Step Increments, a copy of which shall be furnished the GSIS, and (b) submit to the Civil Service Commission and the Department of Budget and Management, not later than fifteen days after the end of each semester of a calendar year a list of officials and employees granted step increments under these Rules using the prescribed Form including a list of positions vacated by recipients of step increments. Sec. 9. Funding Source. Funding for the initial implementation of the step increments provided herein shall be charged against savings of the department or agency. Thereafter, step increments shall be charged against appropriations to be provided for the purpose and for other award and incentive schemes equivalent to two per cent (2%) of the total appropriations for personal services of the department or agency. In the case of government-owned or controlled corporations and local government units, an amount equivalent to two per cent (2%) of their total personal services cost shall likewise be provided in their respective budgets, chargeable against their own funds. cd i RULE IV. Complaints and Protests Sec. 1. Interpretation. Complaints and protests arising from the implementation of these Rules shall not be construed as disciplinary cases and shall not be governed by administrative and disciplinary procedures. Sec. 2. Complaints and Grievance Committee. All complaints and protests arising from the implementation of these Rules shall be brought to the agency Complaints and Grievance Committee created under CSC Memorandum Circular No. 45, s. 1989. The Committee shall adopt its own rules to govern the conduct of its activities in the evaluation of such complaint and protests. RULE V. Repeal Sec. 1. All rules, regulations, policies and standards inconsistent with these Rules and hereby repealed and/or amended accordingly. RULE VI. Effectivity

Sec. 1. These Rules shall take effect January 1, 1990. PATRICIA A. STO. TOMAS Chairman GUILLERMO N. CARAGUE" Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-17-90 Revenue Memorandum Circular No. 43-90 May 17, 1990 REVENUE MEMORANDUM CIRCULAR NO. 43-90 Subject : The Search for the 1990 Presidential and Civil Service Commission Awardees for Outstanding Public Service, Pursuant to Executive Order Numbers 334 and 292. To : All Revenue Officials and Employees: For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 17, series of 1990 dated March 30, 1990. cdasia "Rewarding government officials and employees for their meritorious performance and accomplishments, through the outstanding public service and honor awards program under Executive Order Numbers 334 and 292, has long been an integral part of the government machinery to spur public servants in enhancing their competence, efficiency and productivity potentials. From 1966 to 1989, a total of 391 men and women in the government have been conferred the Presidential and Civil Service Commission Awards for their outstanding performance on the job, and whose suggestions, inventions, superior accomplishments and other personal and collective efforts contributed to the efficiency, collective economy, or for their performance of other extraordinary acts or services in the public interest. The Presidential and CSC Awards for Outstanding Public Service are separate and distinct from the incentive and awards system under Section 6 of Republic Act No. 6713, the Code of Conduct and Ethical Standards of Public Officials and Employees, which grants an award to any official and employee for his consistent demonstration and observation of one or more of the eight norms of conduct provided in the Code." In view thereof, and pursuant to Executive Order No. 334, instituting the Presidential Awards for Outstanding Public Service and Section 35, Chapter 5, Outstanding Public Service and Section 35, Chapter 5, Subtitle A, Title I, Book of Executive Order No. 292, establishing a government-wide Employee Suggestions and Incentive Award System, the Civil Service Commission is formally launching the Search for the 1990 Presidential and Civil Service Commission Awardees for Outstanding Public Service. cdtai

The Commission enjoins all concerned to participate in the program and submit the nominations to the Suggestions and Incentive Award Committee in your agency. Your active participation will ensure the success of the Search for the 1990 Presidential and Civil Service Commission Awardees for Outstanding Public Service. Deadline for submission of nominations to the Civil Service Regional Offices is June 1, 1990 and to the CSC Central Office is July 2, 1990. (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-10-90 Revenue Memorandum Circular No. 44-90 April 10, 1990 REVENUE MEMORANDUM CIRCULAR NO. 44-90 Subject : Missing Two (2) Sets of Confirmation Receipts (BIR Form CB-8202-03). To : All Internal Revenue Officers, Employees and Other Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------16890808 : One (1) Set 18927586 : One (1) set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-04-90 Revenue Memorandum Circular No. 45-90 May 4, 1990 REVENUE MEMORANDUM CIRCULAR NO. 45-90 Subject : Missing Four (4) Sets of Confirmation Receipts (BIR Form CB82-02-03). To : All Internal Revenue Officers, Employees and Other Concerned.

Notice is hereby given of the missing four (4) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------19211319 : One (1) Set 18786285 : One (1) Set 18396175 : One (1) Set 18396221 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-01-90 Revenue Memorandum Circular No. 46-90 June 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 46-90 Subject : Accomplishment of "Panunumpa ng Kawani ng Gobyerno" by every employee and inclusion thereof in the Civil Service 201 File. To : All Internal Revenue Officers concerned: Further to RMC No. 54-89 dated 22 August 1989, all employees are directed to accomplish the "Panunumpa ng Kawani ng Gobyerno" and to submit the same with the Personnel Division to form part of his/her Civil Service 201 File, as fitting symbol of adherence to the "Code of Conduct and Ethical Standards for Government Officials and Employees" - (R.A. No. 6713). casia (Sgd.) JOSE U. ONG Commissioner of Internal Revenue REPUBLIKA NG PILIPINAS KAGAWARAN NG PANANALAPI KAWANIHAN NG RENTAS INTERNAS

ATTESTED BY: ______________________________ Director/Division Chief/District Officer

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-24-90 Revenue Memorandum Circular No. 47-90 May 24, 1990 REVENUE MEMORANDUM CIRCULAR NO. 47-90 Subject : Memorandum Circular No. 115 To : All Internal Revenue Officials and others concerned For the information and guidance of all internal revenue officials and others concerned, quoted hereunder is Memorandum Circular No. 115 dated April 24, 1990 of the President of the Republic of the Philippines, authorizing all Departments, Bureaus, offices and agencies, to increase by more than ten per cent (10%) their fees and charges, for services required by law to be rendered for a fee, subject to certain exceptions: cda "Whereas, Batas Pambansa Blg. 325 authorized all heads of departments, offices, agencies and commissions of the National Government to revise, comformably with rules and regulations of the Department of Finance, their fees and charges; Whereas, pursuant to Sec. 54, Chapter 12, Book IV of Executive Order No. 292 (Administrative Code of 1987), the heads of bureaus, offices, or agencies, may, upon approval of the department head, charge and collect the cost of the services rendered by the bureau, office or agency in excess of cost prescribed by law or approved by the same authority; cd i Whereas, it is only proper that the persons receiving the services for which the fees and charges are imposed should be made to share the burden of the expenses incurred by the government particularly of those agencies that last revised their fees and charges more than two (2) years ago; cdasia Whereas, the Secretary of Finance has recommended the revision of the rates of such fees and charges collected by the departments, bureaus, offices and agencies subject to certain exceptions; IN VIEW THEREOF, all departments, bureaus, offices and agencies are hereby authorized to increase the rates of their fees and charges for services required by law to be rendered for a fee, by not more than Ten Percent (10%); Provided, That this Memorandum Circular shall not apply to (a) those departments, bureaus, offices and agencies that have increased their fees and charges during the last two (2) preceding years; (b) government-owned or controlled corporations and local governments; (c) those fees and charges covered by international agreements; and (d) those imposed by state universities and colleges, government hospitals, medical centers and clinics. he rates of fees and charges revised under this Memorandum Circular shall be published once a week for two consecutive weeks in two newspapers of general circulation in the Philippines and shall become effective fifteen days after the last publication. The heads of the departments shall be responsible for the implementation of this Memorandum Circular in the bureaus, offices and agencies within their respective administrative jurisdiction taking into consideration the standards that (a) the fees and charges be revised at just and reasonable rates sufficient to cover administrative cost and (b) whenever practicable, be uniform for similar or comparable services and functions. The Department of Finance shall monitor compliance with this Memorandum Circular and submit a report thereon to the Office of the President.

This Memorandum Circular shall not apply to the fees and charges collected by the courts and constitutional bodies. Done in the City of Manila, this 24th day of April in the year of Our Lord, nineteen hundred and ninety. cdasia By the President: (Sgd.) Catalino Macaraig, Jr." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-23-90 Revenue Memorandum Circular No. 48-90 April 23, 1990 REVENUE MEMORANDUM CIRCULAR NO. 48-90 Subject : Counting of the Three-year Prescriptive To : All Internal Revenue Officials and Others Concerned. Period in the Issuance of Notice of Assessment, or Warrants of Distraint, Levy & Garnishment. Every now and then, an assessment is issued on what appears to be the "last day" of the prescriptive period prescribed by law, e.g., a 1989 Income Tax Return filed on April 15, 1986 was assessed for deficiency income tax on April 15, 1989. Pursuant to Sections 203 and 223 (c) of the Tax Code as amended by B.P. Blg. 700 which took effect on April 5, 1984, except in the case of a false or fraudulent return or failure to file a return, the period with which to make an assessment is three (3) years after the return is filed. Such tax may be collected by distraint or levy or garnishment or by a proceeding in court within (3) years after assessment of the tax. When a period covers a leap year, the question is raised as to when the last day of the prescriptive period shall have expired. Accordingly, in order to have a correct understanding of the procedure in determining the period of limitation upon assessment and collection when the period covers a leap year, it shall be understood that years are of 365 days each as provided in Article 13 of the New Civil Code. Consequently, a 3-year prescriptive period for assessment or collection purposes prescribed under Sections 203 and 223(c) of the Tax Code shall have an aggregate number of 1,095 days (365 days x 3 years = 1,095 days), reckoned from the date of filing of the return, or from the issuance of the assessment, as the case may be. In other words, the 3-year prescriptive period expires on the 1,095th day, notwithstanding the fact that within the period, there is a leap year which is of 366 days. The Supreme Court in the case of the National Marketing Corporation (NAMARCO) vs. Tecson, L-29131, August 27, 1969, 29 SCRA 70, explained the procedure in the computation of the prescriptive period as follows: casia "Civil law; Application of laws; Article 13 of the Civil Code explained; Term "year" as used in our laws is limited to 365 days. - Prior to the approval of the Civil Code of Spain, the Supreme Court thereof held, on March 30, 1887, that, when the law spoke of months,

it meant a "natural" month or "solar" month, in the absence of express provision to the contrary. Such provision was incorporated into the Civil Code of Spain, subsequently promulgated. Hence, the same Supreme Court declared that, pursuant to Article 7 of said Code, "Whenever months are referred to in the law, it shall be understood that the months are of 30 days", not the "natural", "solar" or "Calendar" months, unless they are "designated by name", in which case "they shall be computed by the actual number of days they have". This concept was, later, modified in the Philippines, by Section 13 of the Revised Administrative Code, pursuant to which, "month shall be understood to refer to a calendar month." With the approval of the Civil Code of the Philippines (R.A.386) we have reverted to the provisions of the Spanish Civil Code in accordance with which a month is to be considered as the regular 30-day month and not the solar or civil month with the particularity that whereas the Spanish Civil Code merely mentioned "months, days or nights", ours has added thereto the term "years" and explicitly ordains in Article 13 that it shall be understood that years are of three hundred sixty-five days." In the aforementioned decision the Supreme Court, in interpreting the term "year", referred to the explicit provision of Article 13 of the Civil Code of the Philippines which states that "it shall be understood that years are of three hundred sixty five days", and that when it is a leap year as in 1960 and 1964, there were twenty-nine (29) days in the month of February for those years, so that, there were actually 366 days in each of the said years. In the light of the decision of NAMARCO case supra, and also our law providing that in the computation of the period of time within which an act is to be done, the first day should be excluded and the last day included (Art. 13, New Civil Code; People vs. del Rosario, 97 Phil. 70-71), it is clear that in the above example, from April 16, 1986 (the return was filed on April 15, 1986) to April 15, 1989 when the deficiency income tax assessment was issued and mailed, a total of 1,096 days have already elapsed as there were 29 days in the month of February, 1988, 1988 being a leap year. Accordingly, since the Commissioner of Internal Revenue has only 1,095 days from the filing of the return within which to make an assessment, said period has elapsed by one (1) day; hence, the assessment was issued after the expiration of the period of limitation. In order, therefore, to prevent future assessments from being time-barred by reason of prescription, the assessment notice or warrants of distraint, levy, or garnishment as the case may be, should be issued on or before the 1,095th day. However, in order to make sure that prescription will not set in, all concerned are hereby instructed to issue assessment notices and warrants not later than ninety (90) days before the expiration of the 3-year prescriptive period. cda All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-21-90 Revenue Memorandum Circular No. 49-90 May 21, 1990 REVENUE MEMORANDUM CIRCULAR NO. 49-90

Subject : Career Executive Service Board's Management Aptitude Test (MAT) To : All Internal Revenue Officials and others concerned For the information and guidance of Internal Revenue officials and others concerned, quoted hereunder is the full text of the letter dated May 11, 1990 of the Executive Director, Career Service Executive Board. "The Career Executive Service Board wishes to announce the holding of the Management Aptitude Test (MAT) on August 5 and 12, 1990 in Manila, Cebu City and Davao City. First in the series of examinations for the granting of CES eligibility, the MAT is a mental ability test that will focus on Management and related areas." cd The examination is open to the following: 1. Incumbents of CES positions who are not more than sixty (60) years of age. 2. Division chiefs in any national government office including government-owned or controlled corporations with at least three (3) years managerial experience and who are not more than fifty five (55) years of age; 3. Those from the private sector holding executive positions with at least three (3) years managerial experience and who are not more than fifty five (55) years of age. May we therefore request your assistance in disseminating the CES eligibility examination procedures to qualified officials in your department/office particularly the incumbents of CES positions who are not yet CES Eligibles of CESOs, namely: Undersecretaries, Assistant Secretaries, Bureau and Assistant Bureau Directors, Regional and Assistant Regional Directors and Service Chiefs. cdasia Thank you for your continued support to the Career Executive Service. (Sgd.) ELMOR D. JURIDIGO Executive Director All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-31-90 Revenue Memorandum Circular No. 50-90 May 31, 1990 REVENUE MEMORANDUM CIRCULAR NO. 50-90 Subject : Extension of Deadline for the Submission of Nominations for the Outstanding Public Officials and Employees Awards under Republic Act No. 6713 To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 22, series of 1990 dated April 26, 1990. "The deadline for the submission of nominations for the outstanding Public Officials and Employees Awards under Section 6 of Republic Act No. 6713, the Code of Conduct and Ethical Standards for Public Officials and Employees, has been extended from April 9, 1990 to June 29, 1990. This will give sufficient time for more nominators from the public and private sectors of public officials and employees who consistently demonstrate and observe one or more of the following norms of conduct: commitment to public interest,

professionalism, justness and sincerity, political neutrality, responsiveness to the public, nationalism and patriotism, commitment to democracy and simple living. acd Nomination forms may be secured from the personal department of the agency or department, the CSC Regional, Field and Provincial Offices, or the Secretariat, Committee on Awards, 3rd Floor, CSC Building, Batasan Complex, Quezon City. (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. aisa dc (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-04-90 Revenue Memorandum Circular No. 51-90 June 4, 1990 REVENUE MEMORANDUM CIRCULAR NO. 51-90 Subject : Publishing Department Administrative Order No. 2, Series of 1990, Implementing the Guidelines, Rules and Regulations Governing countryside and Barangay Business Enterprises Pursuant To R.A. 6810, Otherwise Known as "Kalakalan 20". To : All Regional Directors, Revenue District Officers and Others Concerned. In accordance with the provisions of Section 10 of Republic Act No. 6810, otherwise known as "Kalakalan 20", there is quoted hereunder Department Administrative Order No. 2, Series of 1990, of the Department of Trade and Industry. "Republic of the Philippines Kagawaran ng Kalakalan at Industriya (Department of Trade and Industry) Trade and Industry Building 361 (Buendia) Sen. Gil J. Puyat Avenue Makati, Metro Manila, Philippines 3117 "Department Administrative No. 2 Series of 1990 "Guidelines Implementing R.A. 6810 Otherwise Known as "Kalakalan 20" "Pursuant to Sec. 10 of R.A. 6810, otherwise known as Kalakalan 20, and after consultation with the Departments of Finance, Labor and Employment, and Health and the local government units, the following Guidelines, Rules and Regulations governing countryside and barangay business enterprises are hereby promulgated for the compliance information and guidance of all concerned: "Preliminary Provisions "Sec. 1. Principles . - Registration procedures and granting of incentives shall be governed by the following principles: cdtai

"a) That the responsibility for the implementation of the law rests principally on the local government units; "b) That the burden of proof for non-compliance with the requirements shall rest within the government. "Sec. 2. Definition of Terms. - When used herein, the term: "a) CBBE - shall refer to countryside and barangay business enterprises; b) Productive business enterprises - shall mean entities engaged primarily in the production, processing or manufacturing of products or commodities, or other productive business enterprises recommended by the Department of Trade and Industry provincial office that will help develop the economy in its area. It excludes enterprises engaged principally in professional services, retailing, wholesaling or trading of commodities, products or merchandise. "c) Professional services - shall refer to services rendered in connection with the exercise of a profession, avocation or occupation duly licensed by the government. "d) Countryside - shall refer to all cities and municipalities, except the four (4) cities and thirteen (13) municipalities of Metro Manila, and other highly urbanized cities as determined by the Department of Trade and Industry, in consultation with the Department of Local Government. "e) CBBE Certificate of Authority - is the certificate issued to an applicant authorizing the same to operate as a CBBE and to be entitled to the benefits and privileges accorded to a registered CBBE. "f) Employees - shall mean all persons hired by the CBBE. "g) Assets - shall mean all kinds of properties, real or personal, owned by the CBBE and used for the conduct of its business. In the determination of total assets, the properties of all branches, agencies or divisions of the business entity shall be included. Net assets shall be equivalent to net worth, that is, assets less liabilities. "h) Registration - shall mean the inclusion of a CBBE in the CBBE Registry of an eligible city or municipality. cd "i) Financing - shall refer to all borrowings of the CBBE from all sources after registration. "j) Act - shall refer to R.A. 6810, otherwise known as Kalakalan 20. "Registration of CBBE "Sec. 3. Place of Registration. - The Office of the Treasurer of each city or municipality shall process the registration of CBBEs. "Sec. 4. Functions of the City or Municipal Treasurer in CBBE Registration: "a) To receive all applications and process the same as expeditiously as possible, consistent with the government policy embodied in R.A. 6713, otherwise known as the Code of Conduct and Ethical Standards for Government Officials and Employees; "b) To enter all relevant information regarding approved applications in the CBBE Registry. "c) To make available to the Provincial Office of the Department of Trade and Industry a copy of the Registry entries, as well as a list of denied applications. "Sec. 5. Who are eligible to register. - Any person, natural or juridical, cooperative or association, having the qualifications herein below enumerated, may apply for registration as CBBE, to wit:

"a) At the time of registration, the applicant should have no more than twenty (20) employees; Provided, That, in order to enjoy the benefits of CBBE registration, the registered entity shall continue to have no more than twenty (20) employees during the entire validity of its CBBE registration. "b) The applicant should engage solely in productive business enterprise activities, as understood in Sec. 2(b) hereof; "c) The assets, before financing, of the applicant should not exceed Five Hundred Thousand Pesos (P500,000.00); Provided, That, business entities whose assets exceed Five Hundred Thousand Pesos (P500,000.00) before the effectivity of these rules and regulations, which are restructured or reorganized into smaller units, shall not be qualified to register as CBBEs. "d) The applicant does not own an existing business that has been collapsed and/or transferred to the countryside for the purpose of setting up the same line of business. "e) The registered office and branches of the applicant's business should be located in the countryside. The applicant shall register only in the municipality or city where its principal operation is located. casia "Sec. 6. Requirements for Registration. - The applicant for CBBE registration shall submit the following: "a) Application form, in duplicate, signed by the owner or manager of the applying entity (CBBE Form 01); "b) One (1) picture of the owner in case of single proprietorship, and manager in case of other types of business entity; "Sec. 7. Fees and Charges. Applicants shall, upon approval of his application, pay the registration fee of Two Hundred Fifty pesos (P250.00) to the city or municipality. Starting on the second year and in the same month of its registration, CBBEs shall pay to the municipality or city where they registered, annual fees in accordance with the following schedule: "a) One Thousand Pesos (P1,000.00) - for CBBEs with networth amounting to not more than P100,000.00. cda "b) Two Thousand Five Hundred Pesos (P2,500.00) - for CBBEs with networth of more than P100,000 to P250,000; "c) Four Thousand Pesos (P4,000.00) - for CBBEs with networth of more than P250,000.00 to P400,000.00; and "d) Five Thousand Pesos (P5,000.00) - for CBBEs with networth of more than P400,000.00 to P500,000.00. "The annual fees may be paid in two (2) equal installments, with the first installment falling due within the same month the CBBE was earlier registered, and the second installment six (6) months thereafter. "Sec. 8. Period within which to apply for registration. - Application for CBBE registration shall be made on or before 13 December 1994. Applications made after that date will no longer be entertained. "Sec. 9. Approval of Application for Registration and Issuance of the CBBE Certificate of Authority. - The CBBE application for registration shall be acted upon the registration office within twenty-four (24) hours from receipt of complete registration requirements. The date and time when the application was received should be noted in the application itself (Form 01). The CBBE Certificate of Authority shall be issued

immediately upon approval of the application. All applications not acted upon within the required twenty-four (24) hours shall be deemed approved. "Sec. 10. Duration of CBBE Authority. - The CBBE Authority shall be valid for a period of five (5) years from date of registration, without any renewal. "Sec. 11. Grant of Juridical Personality to CBBEs. - The approval of the application for registration and the issuance of the CBBE Certificate of Authority shall vest the CBBE with juridical personality, separate and distinct from the owners/members thereof. As such registered CBBEs may own, dispose, and encumber its properties, and enter into contracts on its own account, with the capacity to sue and be sued, and transact business anywhere. "Sec. 12. Denial of Application for Registration. - The denial of any CBBE application shall be conveyed to the applicant within twenty-four (24) hours from receipt of the same, stating the grounds for denial. "Revocation or Cancellation of CBBE Certificate of Authority "Sec. 13. Revocation, Cancellation or Suspension of CBBE Certificate of Authority. - The CBBE Certificate of Authority may be duly revoked, cancelled or suspended by the city or municipal registration office, based on the following grounds: "a) by voluntary surrender of the CBBE Certificate of Authority by the registered CBBE; "b) by the death of the registered owner, in case of single proprietorship, unless there is a transfer of ownership in accordance with Section 15; "c) by failing to commence operations within forty-five (45) days from issuance of CBBE Certificate of Authority; "d) by violation of the provision of R.A. 6810, of these rules and regulations, and of the terms and conditions of the CBBE Certificate of Authority; "e) by merger or consolidation with an entity which is not eligible to be a CBBE; "f) by engaging in activities which are not considered as productive business enterprise activities as defined in Sec. 2 (b); "g) by failing to pay the annual fee within three (3) months from due date. cd i "Provided, That, where appropriate, the city or municipal Treasurer may impose the penalty of suspension for a period not exceeding six (6) months. "Sec. 14. Notification of Change of Address. - CBBEs transferring their location shall notify the city or municipality where they are registered of such change of address. In case they locate to another city or municipality, they shall likewise notify their new city or municipality of their presence therein and present their CBBE Certificate of Authority for entry in the Registry. "Sec. 15. Transfer of Ownership. - The CBBE shall report to the city or municipality any change in the status of its ownership structure, and shall surrender the original copy of the CBBE Certificate of Authority for notation of the transfer. "Sec. 16. Establishment of branches. - Registered CBBEs which have opened branch/es after the issuance of the CBBE Certificate of Authority shall notify the city or municipality where it is located, of such opening within thirty (30) days from the establishment of such branch/es. The assets of such branch/es shall be considered as part of the assets of the registered CBBE.

"Benefits and Privileges "Sec. 17. Exemption from taxes and fees. - Registered CBBEs shall be exempt from all taxes and fees, whether national or local, for a period of five (5) years from date of registration, including but not limited to: casia "a) building permit fees; "b) specific tax; "c) value-added tax; "d) income tax; "e) other taxes or fees that are, or may be, imposed by the national or local government units. "The foregoing exemption, however, shall not include exemption from real property and capital gains taxes, import duties, value-added tax on imported articles and other taxes on imported articles. As interpreted by the Department of Finance, the exemptions herein shall likewise not apply to taxes on income not arising from CBBE productive activity, such as interest, royalties, prizes and winnings and dividends. "In addition, any and all income, receipts and proceeds derived from the business operations of the CBBE shall be declared but shall be excluded from the computation of gross income for purposes of computing the individual income tax of the owners/members thereof. cdasia "Sec. 18. Exemption from government rules and regulations. - CBBEs shall be exempt from any and all government rules and regulations in respect of assets, income and other activities indispensably and directly utilized in, proceeding from, or connected with the business of the enterprise. CBBEs, however, shall not be exempt from the provisions of laws enacted to protect and safeguard public health and safety, workers' rights, treaty obligations, and other laws of similar nature: Provided, That, CBBEs may be exempt from procedural requirements of implementing rules and regulations which are tantamount to mere bureaucratic restrictions, as may be determined by the implementing agencies concerned taking into account the basic objective of this law to encourage the growth of countryside and barangay business enterprises to the fullest with the minimum of government intervention. "Utilization of CBBE Fees "Sec. 19. All fees and charges derived from the registration of CBBEs shall accrue exclusively to the city or municipality and shall be used for the administration of the Act and for development projects approved by the municipal or city council. "Effectivity of these Guidelines, Rules and Regulations "Sec. 20. These guidelines, rules and regulations shall take effect fifteen days after publication in a newspaper of general circulation. "APPROVED: February 12, 1990 "(Sgd.) Jose S. Concepcion, Jr. Secretary of Trade & Industry" All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-15-90 Revenue Memorandum Circular No. 52-90 June 15, 1990 June 15, 1990 REVENUE MEMORANDUM CIRCULAR NO. 52-90 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 90-06 dated May 28, 1990. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M. May 1, 1990. cda PESO/LITER Products Previous Tax Present Tax Difference Premium Avgas P3.6583 P3.7746 0.1163 Regular Gasoline 3.3486 3.5024 0.1538 Avturbo 3.9947 3.5739 (0.4208) Kerosene 1.3857 1.2367 (0.1490) Diesel Fuel Oil 1.3371 1.1982 (0.1389) Fuel Oil (Bunker) LPG 1.0817 1.0751 (0.0066) or 1.9352/kg. or 1.9234/kg. (0.0118) Asphalts 0.9404 0.8896 (0.0508) Thinners 1.2001 1.2411 0.0410 All internal revenue officers and other concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd i JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-28-90 Revenue Memorandum Circular No. 53-90 June 28, 1990 REVENUE MEMORANDUM CIRCULAR NO. 53-90 Subject : Publishing the Provisions of Republic Act No. 6956, dated June 18, 1990, an act, modifying the excise tax on distilled spirits, wines, fermented liquor and cigarettes amending Sections 138 (A) and (B), 139, 140 and 142 (C) and (D) of the National Internal Revenue Code, as amended To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, the pertinent provisions of Republic Act No. 6956 are hereunder quoted: cdt "Sec. 1. Sections 138 (a) and (b), 139, 140 and 142 (c) and (d) of the National Internal Revenue Code, as amended, are hereby further amended to read as follows: "Sec. 138. Distilled Spirits. On distilled spirits, there shall be collected, subject to the provisions of Section 130 of this Code, specific taxes as follows:

"(a) If produced from sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup or sugar of the cane, provided such materials are produced commercially in the country where they are processed into distilled spirits, per proof liter. Four pesos: Provided, That if produced in a pot still or other similar primary distilling apparatus, by a distiller producing not more than 100 liters a day, containing not more fifty percent (50%) of alcohol by volume, per proof liter, One peso and fifty-six centavos; cdasia "(b) If produced from raw materials other than those enumerated in the preceding paragraph, per proof liter, Thirty-five pesos; and" "Sec. 139. Wines. - On wines, there shall be collected per liter of volume capacity, the following taxes: "(a) Sparkling wines regardless of proof, Twenty-six pesos; "(b) Still wines containing fourteen percent (14%) of alcohol by volume or less, Three pesos; and "(c) Still wines containing more than fourteen percent (14%) of alcohol by volume, Eight pesos. "Fortified wines containing more than twenty-five percent (25%) of alcohol by volume shall be taxed as distilled spirits. Fortified wines shall mean natural wines to which distilled spirits are added to increase their alcoholic strength." cdtai "Sec. 140. Fermented liquor. - There shall be levied, assessed and collected an ad valorem tax equivalent to fifty percent (50%) upon the effectivity of this Act and sixty percent (60%) six (6) months thereafter of the brewer's wholesale price, excluding the ad valorem tax imposed under this section and the value added tax imposed under Title IV, on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar domestic fermented liquors, but in no case shall the sum total of the ad valorem tax and value-added tax be less than P1.00 per regular 320 ml. bottle." "Sec. 142. Cigar and Cigarettes. "(c) Cigarettes packed in twenties. - There shall be levied, assessed and collected on cigarettes packed in twenties an ad valorem tax at the rates prescribed below based on the manufacturer's registered wholesale price: cd "(1) On locally manufactured cigarettes bearing a foreign brand, fifty-five percent (55%): Provided, That this rate shall apply regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. Whenever it has to be determined whether or not a cigarette bears a foreign brand, the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern. "(2) On other locally manufactured cigarettes, forty-five percent (45%). "Duly registered or existing brands of cigarettes packed in twenties shall not be allowed to be packed in thirties. cd "When the existing registered wholesale price, including tax, of cigarettes packed in twenties does not exceed P4.00 per pack, the rate shall be twenty percent (20%). "(d) Imported cigarettes. - If the cigarettes are of foreign manufacture; regardless of the contents per pack, there shall be levied, assessed and collected an ad valorem tax of sixty-five (65%) of the importer's wholesale price and fifty-five percent (55%) beginning July 1, 1990.

For purposes of this section, 'manufacturer's or importer's registered wholesale price" shall include the ad valorem tax imposed in paragraphs (a), (b), (c) or (d) hereof and the amount intended to cover the value-added tax imposed under Title IV of this Code. "Sec. 2. The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, shall promulgate the necessary rules and regulations for the effective implementation of the provisions of this Act." "Sec. 3. Except as provided herein, this Act shall take effect fifteen (15) days following its publication in a newspaper of general circulation in the Philippines." aisa dc Salient Features of Republic Act 6956 A. Revision of specific tax rates on the following products: Old Rate New Rate 1. Distilled Spirits 1.1 If produced from sap of nipa, coconut, cassava, camote or buri palm or from the juice, syrup or sugar, etc. P3.20/proof liter P4.00/proof liter 1.2 If produced by a distiller producing not more than 100 liters a day, containing not more than 50% of alcohol by volume P1.00/p.l. P1.56/p.l. 1.3 If produced from raw materials other than those enumerated in the preceding paragraph P25.00/p.l. P35.00/p.l. 2. Wines 2.1 Sparkling wines regardless of proof P16.00/ P26.00/ gauge liter gauge liter 2.2 Still wines containing 14% alcohol or less by volume P1.00/g.l. P3.00/g.l. 2.3 Still wines containing more than 14% alcohol by Volume P4.00/g.l. P8.00/g.l. 2.4 Fortified wines containing more than 25% of alcohol by volume P3.20/p.l. P4.00/p.l. B. Revision in the ad valorem tax rate on Fermented liquor 1. Upon the effectivity of this Act, the ad valorem tax rateP37% 50% 2. Six months thereafter 50% 60% C. Revision in the ad valorem tax rates on certain cigarettes: Cigarettes packed in twenties (20's)

1. 1.1 1.2

Locally-produced Cigarettes bearing a Foreign brand 50% 55%

Cigarettes with a wholesale price that exceeds P4.00 per pack Cigarettes with wholesale price that does not exceed P4.00 per pack 15% 20%

40%

45%

1.3

2.

Imported cigarettes which take effect July 1, 1990 65% 55% The amendments covering all the above articles shall take effect on July 5, 1990 except in the case of imported cigarettes which shall take effect July 1, 1990. cdasia All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-26-90 Revenue Memorandum Circular No. 54-90 June 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 54-90 As a continuation of the observation of flag raising ceremonies every Monday, the following offices shall lead the ceremonies on the months indicated: 1990 August Planning & Research Service September Legal Service October Collection Service November Financial Service December Excise Tax Service Commissioner's and Deputy Commissioners' Offices February Assessment Service March Sector Operations Service April Inspection Service May Administrative Service After May, 1992, the same sequence as above shall be followed. cdasia In this connection, officials and employees are requested to observe a uniform salute whenever the Philippine Flag is raised by standing erect and placing their right hand over the left chest. cd i EUFRACIO D. SANTOS 1991 January

Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-31-90 Revenue Memorandum Circular No. 55-90 May 31, 1990 REVENUE MEMORANDUM CIRCULAR NO. 55-90 Subject : Missing One (1) Set of Confirmation Receipt (BIR Form CB-8202-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------17946472 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transaction involving the use of said form is therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc EUFRACIO D. SANTOS Depsuty Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-15-90 Revenue Memorandum Circular No. 56-90 June 15, 1990 REVENUE MEMORANDUM CIRCULAR NO. 56-90 Subject : Missing Twenty-Eight (28) Sets of Confirmation Receipts (BIR Form CB-82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing twenty-eight (28) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------B-19712600 : One (1) Set B-19159571 : One (1) Set B-19159576 : One (1) Set B-19440551 to : B-19440575 : Twenty-Five (25) Sets --------------------------The above receipts which were reported missing by the Accredited Banks to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd

Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-28-90 Revenue Memorandum Circular No. 57-90 May 28, 1990 May 28, 1990 REVENUE MEMORANDUM CIRCULAR NO. 57-90 Subject : Guidelines to Implement Cabinet Resolution No. 2 on the Filing of New Positions To : All Internal Revenue Officials and others concerned For the information and guidance of all internal revenue officials and others concerned, quoted hereunder is National Budget Circular No. 417 dated May 17, 1990. "1.0 PURPOSE This Circular is being issued to prescribe the guidelines on Section 1 (f) of Cabinet Resolution No. 2 issued 27 February, 1990 directing the freezing of the filing of new positions even if these are already approved in the General Appropriations Act. cdtai 2.0 GUIDELINES 2.1 On Regular Positions. No new positions, including those already approved for funding in the General Appropriations Act for CY 1990, shall be filled. Likewise, the additional positions funded for creation in CY 1990 shall not be reflected in the Personal Services Itemization (PSI) of the agency(s), although the corresponding amount shall still be included in the agency's ceiling in the succeeding years. 2.2 On Casuals and Contractual Positions. Casuals and contractual positions for which the term of office have already expired as of the effectivity of this Circular may be rehired, subject to the funding limitation provided under the approved lump sum for the purpose. No requests for additional releases shall be entertained to augment lump sums for casuals and contractuals in the 1990 budget. Likewise, no requests for the use of savings to augment lump sum provisions for casuals and contractuals shall be allowed. 2.3 Agencies may, however, request for modifications in their plantilla positions, subject to the following conditions: 2.3.1 The request will be within the personal services budget of the agency as reflected in the Personal Services Itemization (PSI) of the agency, less the lump sum amount for new positions; and 2.3.2 The modification is properly justified. 3.0 EFFECTIVITY This Circular shall take effect immediately. cda (Sgd.) Guillermo N. Carague" Secretary All internal revenue officials are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG

Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-29-90 Revenue Memorandum Circular No. 58-90 May 29, 1990 May 29, 1990 REVENUE MEMORANDUM CIRCULAR NO. 58-90 Subject : Additional Insurance for Officials and Employees Performing High Risk Functions To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 18, series of 1990 dated May 14, 1990. "The Civil Service Commission, pursuant to Section 35 of Executive Order No. 292, otherwise known as the Administrative Code of 1987, is mandated to promulgate rules, regulations and standards that may authorize the President or heads of departments and agencies to incur whatever necessary expenses in the recognition of subordinate officers or employees of the government who perform other extraordinary acts or service in the public interest, in connection with or in relation to their official employment. aisa dc In line with this mandate and consistent with the Commission's efforts to increase personnel benefits that will serve as incentive or reward to deserving officials and employees, the Commission issued Resolution No. 90-080, dated January 22, 1990 authorizing heads of agencies and departments to provide additional GSIS insurance to officials and employees who are engaged in high risk jobs, or who, in connection with, or in relation to the performance of their official duties perform high risk functions outside their official stations for a limited period of time. The Commission hereby adopts the following policies and guidelines: 1. High Risk Functions shall refer to duties or responsibilities that would put hazard or danger to life and limb of an official or employee. The danger or hazard may either be inherent to the regular functions of the official or employee or imminent for a limited period of time whether performed in or outside his official station. 2. The amount of additional insurance shall at least be equivalent to a one year salary of the official or employee. 3. Funds for this purpose may be sourced out from the savings of the department or agency. 4. The head of the department or agency shall enter into an agreement with the Government Service Insurance System on the insurance coverage of the officials and employees. aisa dc This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

05-29-90 Revenue Memorandum Circular No. 59-90 May 29, 1990 REVENUE MEMORANDUM CIRCULAR NO. 59-90 Subject : Request for Correction of Date of Birth To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Commission Memorandum Circular No. 19, series of 1990 dated May 14, 1990. "Pursuant to Section 12 (3), the Civil Service Commission is empowered to promulgate policies, standards and guidelines for the efficient and effective personnel administration in the government. It is also bound to keep and maintain personnel records of all officials and employees in the civil service. cdasia In the performance of these functions, the Commission attends to and acts on requests for correction of date of birth for purposes of appointment, promotion, transfer, retirement and other personnel actions. However, it has been observed that numerous requests for correction of date of birth have been submitted for the obvious purpose of delaying and/or postponing the actual date of their compulsory retirement. Thus, in order to forestall any attempt to unduly extend the services of officials and employees who have reached the compulsory retirement age of 65 years or to effect early compulsory retirement by the mere expedience of filing a request for correction of date of birth, the Commission resolved to adopt, as it hereby adopts as the policy on these cases as follows: 1. All requests for correction of date of birth for the purpose of retirement, shall be filed with this Commission or its proper Regional Office not later than five (5) years prior to the expected date of compulsory retirement; and 2. This period of five (5) years does not apply where the request is supported by primary evidence, that is, a certified true copy of the Certificate of Live Birth issued by the proper authorities, but all requests for correction of date of birth on the basis thereof should be filed not later than (1) year before the applicant's expected date of retirement. cdasia (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-14-90 Revenue Memorandum Circular No. 60-90 June 14, 1990 REVENUE MEMORANDUM CIRCULAR NO. 60-90 Subject : Circularizing Letter dated May 25, 1990 of the Head, Membership/Service Section, PAMANA, Inc. on the List of Applicants Verified by the GSIS for Inclusion in the Medicare-Pamana Tie-Up.

To : All Internal Revenue Officials and others concerned For the information and guidance of all concerned quoted hereunder is the full text of the letter dated May 25, 1990 of the Head, Membership/Service Section of Pamana, Inc. "We are pleased to submit to you Billing & consolidated List of Applicants verified by the Government Services Insurance System for inclusion in the Medicare Pamana TieUp. Please note that according to the System only those employees with at least 3 monthly contributions are approved. acd You may want to facilitate the availment of benefits of these members through an ID system, available at a minimal cost of P5.00 per member. In which case, kindly submit to us the requirements mentioned below to determine legalities with their dependents or a certification of dependents from the Employer/Personnel Department. 1. for dependent spouse - certified true copy of marriage contract 2. for dependent children - certified true copy of birth certificate 3. for dependent parent - affidavit of support Also, enclosed is a copy of procedure on availment of benefits. We hope that you will disseminate this to your employees in order that they could enjoy the benefits fully. Should you have any other matters to clarify, please do not hesitate to get in touch with us. We are always available to provide you our utmost service. cdasia Thank you very much. Very truly yours, (Sgd.) Ma. Rowena R. Nicolas" Membership/Services Section Head All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-15-90 Revenue Memorandum Circular No. 61-90 June 15, 1990 June 15, 1990 REVENUE MEMORANDUM CIRCULAR NO. 61-90 Subject : DENR Free Emission Testing of Diesel Motor Vehicles To : All Revenue Officials and Employees Concerned For the information of all revenue officials with government or personal diesel motor vehicles, quoted hereunder is the letter dated April 18, 1990 and DENR Secretary Fulgencio S. Factoran, Jr., inviting offices under the Department of Finance to avail of the free emission testing at the DENR Testing Center, East Avenue, Quezon City. cd "Dear Secretary Estanislao: "In keeping with the objective of the Environment Month this June, the Department of Environment and Natural Resources (DENR) through the Anti-Smoke Belching Project is providing free testing of diesel motor vehicles. Free testing will start on June 1 and will be held at the DENR Testing Center, East Avenue, Quezon City. "In this regard, may we request for your modest contribution in cleaning the air in Metro Manila by availing of the free emission testing or by undertaking proper engine

maintenance of all your corporate and personal vehicles. For additional details on scheduling, you can contact the Secretariat, GASMASC at telephone numbers 964708 and 976626 local 254. "Through your initiative and by taking preventive measures, your corporation/agency can avoid the inconveniences of being apprehended, stripped of registration plates, undergo testing prior to the release of confiscated plates including payment of necessary fines. "We therefore look forward to your cooperation in cleaning the air we breathe in the metropolis. casia Thank you." Very truly yours, (Sgd.) Fulgencio S. Factoran, Jr. Secretary For compliance. cd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-05-90 Revenue Memorandum Circular No. 62-90 June 5, 1990 REVENUE MEMORANDUM CIRCULAR NO. 62-90 Subject : Unauthorized Representations To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is the full text of Circular Letter No. 90-15 dated May 24, 1990 of the Secretary, Department of Budget and Management. "It has come to our attention that a certain Colonel Jose de Leon, a.k.a. Jose Reyes, a.k.a. Jose Alcantara has been representing himself either as an undersecretary, assistant secretary, or chief security aide in the Office of the Secretary, Department of Budget and Management (DBM). We have also been informed that the said Col. de Leon uses the aforementioned designations in order to secure special concessions from government agencies or private entities, or enter into transactions like selling liquor or similar bottled spirits to various government agencies, in return for favorable action on papers pending with the DBM. casia This Circular is being issued to forewarn and inform all concerned that there is no such official nor employee in the DBM. Further, no DBM personnel, in his official capacity, is authorized to engage in transactions, in exchange for favorable action on any matter pending with the Department. Kindly inform us and the proper authorities of misrepresentations and other similar irregularities of the above nature for proper action. Thank you. (Sgd.) Guillermo N. Carague" Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG

Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-04-90 Revenue Memorandum Circular No. 63-90 July 4, 1990 REVENUE MEMORANDUM CIRCULAR NO. 63-90 Subject : Essay writing contest in Pilipino in observance of the Philippine Civil Service Week As part of the observance of Philippine Civil Service Week on September 13-19, 1990, an essay writing contest in Pilipino will be conducted by the Civil Service Commission. Particulars of this contest are as follows: Each participating contestant will develop the theme - "Ito ang Gobyerno" in not less than 500 words and in not more than 2,000 words in Pilipino, typewritten double-spaced on 81/2" x 11" white bond paper. It may be a narrative description of that aspect of office operation/practice, activity/ies that may have produced the most positive/negative impact on the essayist. 1. Participants will come from the various Departments and agencies of the national and local governments. A government employee may submit only one entry. casia 2. Three copies of entries should be submitted/postmarked on or before Monday, August 6, 1990, and be sent to the following address: Essay Writing Contest in Pilipino Office for Legal Affairs Civil Service Commission Constitution Hills Diliman, Quezon City 3. All queries regarding the contest should be addressed to the above address or call up Telephone No. 991855 during office hours. 4. The Board of Judges will come from the academe. 5. The decisions of the Board of Judges will be final. 6. Announcement of winners will be on or before Friday, September 7, 1990. 7. Awarding of prizes will be on Friday, September 14, 1990 at the Civil Service Commission, Quezon City. cda PRIZES: First Prize: P3,000.00 plus Certificate of Appreciation Second Prize: P2,000.00 plus Certificate of Appreciation Third Prize: P1,000.00 plus Certificate of Appreciation BIR employees are enjoined to participate. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-27-90 Revenue Memorandum Circular No. 64-90 June 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 64-90

Subject : Loss of a collection officer's copy of Revenue Official Receipt (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of a collection officer's copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 6020594 H one (1) copy (collection officer's copy) The above copy which was reported as missing, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. aisa dc EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-28-90 Revenue Memorandum Circular No. 65-90 June 28, 1990 REVENUE MEMORANDUM CIRCULAR NO. 65-90 Subject : Loss of duplicate copies of Official Receipts (Gen. Form No. 13 A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of duplicate copies of Official Receipts (Gen. Form No. 13 A) to wit: Serial Numbers 3778888 P 3778893 P 3787582 P Quantity

one copy (duplicate) one copy (duplicate) one copy (duplicate)

The above copies which were reported as missing and the other copies of the particular sets bearing the abovementioned, serial numbers have been cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdasia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

06-28-90 Revenue Memorandum Circular No. 66-90 June 28, 1990 REVENUE MEMORANDUM CIRCULAR NO. 66-90 Subject : Loss of a quadruplicate copy of Authority to Cancel Assessment (BIR Form No. 17.58). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of a quadruplicate copy of Authority to Cancel Assessment (BIR Form No. 17.58) to wit: Serial Number Quantity 651801 One (1) copy (quadruplicate) The above copy which was reported as missing, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-25-90 Revenue Memorandum Circular No. 67-90 June 25, 1990 June 25, 1990 REVENUE MEMORANDUM CIRCULAR NO. 67-90 Subject : Setting of Objective Criteria to Determine the Most Fit and Meritorious Among Qualified Applicants To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 23, series of 1990 dated May 21, 1990. "Pursuant to CSC Resolution No. 90-417, s. 1990 dated May 2, 1990, qualification standards for all positions shall contain the following requirements: cd i That when two or more applicants meet the minimum requirements for the position, objective criteria must be set to determine who is the most fit and meritorious among all the applicants to ensure that the exercise of management discretion is not abused. This Memorandum Circular shall take effect immediately. (Sgd) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

06-26-90 Revenue Memorandum Circular No. 68-90 June 26, 1990 June 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 68-90 Subject : Extension of Services of Compulsory Retiree to Complete the Fifteen Years Service Requirement for Retirement Purposes To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 27, series of 1990 dated May 21, 1990. "Pursuant to CSC Resolution No. 90-454 dated May 21, 1990, the Civil Service Commission hereby adopts and promulgates the following policies and guidelines in the extension of services of compulsory retirees to complete the fifteen years service requirement for retirement purposes. 1. Any request for the extension of service of compulsory retirees to complete the fifteen (15) years service requirement for retirement shall be allowed only to permanent appointees in the career service who are regular members of the Government Service Insurance System (GSIS), and shall be granted for a period not exceeding one (1) year. cd 2. Any request for the extension of service of compulsory retiree to complete the fifteen (15) years service requirement for retirement who entered the government service at 57 years of age or over upon prior grant of authority to appoint him or her, shall no longer be granted. 3. Any request for the extension of service to complete the fifteen (15) years service requirement for retirement shall be filed not later than three (3) years prior to the date of compulsory retirement. 4. Any request for the extension of service of a compulsory retiree who meets the minimum number of years of service for retirement purposes may be granted for six (6) months only with no further extension. cdtai THIS MEMORANDUM CIRCULAR SHALL TAKE EFFECT IMMEDIATELY. (Sgd) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-26-90 Revenue Memorandum Circular No. 69-90 June 26, 1990 June 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 69-90 Subject : Prior Authority of this Commission is Dispensed With In the Hiring/Employment of Consultants on Contractual Basis To : All Revenue Officials and Employees and others concerned

For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 26, series of 1990 dated May 21, 1990. "Pursuant to Civil Service Resolution No. 90-452 dated May 21, 1990, the Civil Service Commission hereby adopts the following policy on the hiring of consultants on contractual basis in the Civil Service, as follows: 1. In the interest of the service and considering that consultancy services on contractual basis are among those included in the non-career service and do not involve filling up of career or non-career service positions or plantilla items, the prior authority of this Commission to hire or employ persons who are 57 years of age or over, or those who are previously retired from the government service, is no longer required. In other words, the heads of Department/Agency need not secure prior authority of this Commission as required under existing law, rules and regulations to effect employment of consultants falling under these categories, to wit: aisa dc a. Persons who are 57 years old or over; and b. Persons who were previously retired from the government service under existing retirement laws. 2. Notwithstanding Item No. 1, all contracts of consultancy services should be submitted to this Commission or its proper Regional Office for review and approval in accordance with the Civil Service Law, Rules and Regulations. cd This Circular shall take effect immediately. (Sgd) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-26-90 Revenue Memorandum Circular No. 70-90 June 26, 1990 June 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 70-90 Subject : Revision of the Rules Implementing RA 6850 To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 25, series of 1990 dated May 21, 1990. cdtai "The Commission has revised the Rules it has promulgated to implement RA 6850, entitled "An Act to Grant Civil Service Eligibility Under Certain Provisional or Temporary Status Who Have Rendered a Total of Seven (7) Years of Efficient Service and for Other Purposes", and implemented through CSC MC No. 14, s. 1990. Under the Revised Rules, the required twelve (12) months in the career service and three (3) months occupancy of the position held as of the approval of the Act, has been eliminated.

The attached copy of the Revised Rules with the revised application form (CS Form No. 0957-003, Revised May, 1990), should be widely disseminated by agencies concerned. casia THIS MEMORANDUM CIRCULAR SHALL TAKE EFFECT IMMEDIATELY. (Sgd) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-27-90 Revenue Memorandum Circular No. 71-90 June 27, 1990 June 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 71-90 Subject : Flexitime Schedules and DST To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 29, series of 1990 dated May 24, 1990. cdt "This is to clarify CSC MC No. 14, s. 1989 regarding flexitime working schedules in view of the adoption of Daylight Saving Time (DST). 1. The adoption of DST does not negate any of the provisions governing flexitime schedules as contained in CSC MC No. 14, s. 1989. DST simply means that clocks are advanced by one hour. cdt 2. While certain difficulties may arise regarding individual working schedules, this should be subject to negotiation between the employee concerned and the head of office. In such cases, the head of office should ensure that energy conservation measures are not negated. 3. The head of office should likewise see to it that services are being delivered during the core hours between 8 AM to 12 NN and 1 PM to 5 PM. For information and guidance. This circular should take effect immediately. cda (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-27-90 Revenue Memorandum Circular No. 72-90 June 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 72-90

Subject : Reiterating Certain Policies in the Conduct of Government Training and Development Programs and Amending the Provisions of CSC MC No. 9, s. 1989 To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 28, series of 1990 dated May 21, 1990. cd i "Pursuant to the decentralization thrust of the government, the Civil Service Commission issued Memorandum Circular No. 9, series of 1989, prescribing guidelines in the conduct of government training and development programs. The guidelines included delegating authority to heads of agencies to approve training and development programs of their respective agencies, as well as setting the ceiling for allowable expenditures for such programs. It has been reported and observed, however, that the present prescribed fees have become unrealistic and because of these limitations, many opportunities to participate in training programs conducted by various institutions possessing the expertise and capability could not be availed of by government employees. Moreover, the Commission's program for training and development activities is to establish its direct bearing on the level of productive output of workers and their effectiveness at rendering public services. In order to provide a more liberal policy in favor of personnel development efforts in government and to ensure that training and development programs will redound to the benefit of the individual, the organization and the public, certain Commission policies are hereby reiterated with some amendments to Memorandum Circular No. 9 as follows: 1. For purposes of classifying training and such other development programs, a distinction is hereby made between (a) employee development courses and (b) highly specialized, technical or scientific seminars or studies. The first classification shall refer to orientation/reorientation courses, retraining on basic skills inherent to the position held, value formation and development and pre-retirement seminars for rank-and-file and management level employees. The second category shall refer to programs aimed at capability building skills development/enhancement at any level or rank of employment requiring an understanding or use of special tools and techniques in order to cope with job/work changes or transfer of technology. aisa dc 2. Training fee for employee development courses for residential or live-in programs shall not exceed P800.00 per day participant and P1,000.00 per day per participant for highly technical, specialized or scientific courses. 3. Training fees for non-residential programs under employee development courses category shall not exceed P600 per day per participant and P800 per day per participant for highly technical, specialized or scientific courses. 4. In determining the honoraria for resource speakers, due consideration shall be given their qualification, competence/expertise and task performance without exceeding the maximum rate of P500.00 per hour. 5. The guidelines governing the attendance of government personnel in conventions and conferences shall still be observed, except that the maximum number of participants per agency shall no longer be limited to five (5) in the following instances: (a) where the required expenses for the additional participants will not be charged to agency funds; and (b) when the attendance/participation of the employees has the approval of the head of

Agency" shall refer to persons of authority in attached agencies or regional offices who exercise control and autonomy over financial matters of the Office. cdasia 6. Selection of participants to training and development programs shall be carefully made through the screening processes identified by the Personnel Development Committee established under CSC MC No. 10, s. 1989 and upon the approval of the head of agency. 7. As much as possible, all staff or employee development programs should be undertaken by the agency itself to conserve as well as maximize their resources since external courses usually involve large financial outlay. Technical assistance from the CSC as well as other government or private institutions may be sought or availed of provided the agency does not relegate/abdicate its responsibility to formulate, sponsor or conduct the training program. In this connection, the Commission encourages interagency coordination and networking to facilitate the pooling, utilization, and exchange of available government resources/facilities for training and development activities. 8. All heads of agencies, through their human resource development office/division or units, are enjoined to identify training and development programs for their respective personnel based on employee and organizational needs at the beginning of the calendar year. Programs formulated outside of the scheduled projects may still be conducted subject to the approval of the head of agency and consistent with the provisions of the herein guidelines. Similarly, all heads of agencies are enjoined to encourage the conduct of echo-seminars which are highly technical in nature to effect sharing of knowledge and skills and to maximize manpower utilization and cost effectiveness. cda 9. An amended form (see attached sheet) containing the semestral report of training, development and scholarship programs/activities is prescribed for use of all departments and agencies. 10. In all the above instances, heads of agencies are reminded to take into account the pertinent issuances of the Office of the President relative to austere practices in all government operations. All other policies, issuances and guidelines inconsistent with the provisions contained herein are deemed superseded. cdtai This Memorandum Circular will take effect immediately. (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-01-90 Revenue Memorandum Circular No. 73-90 August 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 73-90 Subject : "Taxes and Nation Building" Slogan/Poster Contest. To : All Internal Revenue officers and others concerned

The Bureau of Internal Revenue and Management Association of the Philippines have launched a nation-wide slogan/poster contest dwelling on the theme "Taxes and Nation Building." The contest mechanics are as follows: OBJECTIVES 1. To instill in the youth a deeper understanding of the importance of paying taxes and of contributing to the government's efforts to improve and uplift the people's standard of living. 2. To generate renewed commitment among the citizenry to pay taxes promptly and regularly. 3. To enhance awareness of the need to pay taxes and the benefits that the country and individual derive from taxes. 4. To help ensure a stronger sense of responsibility and duty to country among the future generations of taxpayers. aisa dc REQUIREMENTS 5. The poster/slogan contest is open to all elementary (15 years and below) and high school (19 years and below) students from both public and private schools nationwide. There shall be two levels in this competition: (i) high school and (ii) elementary. 6. * * * * The poster should: depict the theme "Taxes and Nation Building" and above mentioned objectives. carry a slogan/message in English, Pilipino or "Taglish." be brief, simple, specific, meaningful, creative, original and relevant. drawn on illustration board or cartolina measuring 15" x 20".

7. Each poster/slogan entry shall have the following information to be attached at the back of the entry: * * * * * * * * * name of contestant address and telephone number, if any age of contestant, grade level of contestant name and address of school name of faculty adviser name of Principal of the school date of submission signature of contestant signature of Principal

PRE-JUDGING 8. Pre-judging shall be done for each level: (i) elementary and (ii) high school. cdasia 9. The judges in this stage shall be composed of not more than five (5) members consisting of faculty members and/or officers of the school as designated by the school principal. 10. The criteria in judging are:

Relevance to the theme and clarity of message - 40% Originality and creativity - 30% Visual impact - 30% 11. Pre-judging shall be by Percentage System with the following percentage equivalence: Excellent - 90% and above Very Good - 85% - 89% Good - 80% - 84% Fair - 75% - 79% The percentage given by each judge shall be totalled and averaged and the resulting percentage shall be the final score. 12. In the case of a tie, there shall be another judging on the tied entries following the same criteria and rules. 13. A maximum of three (3) entries for each high school or grade school level shall be submitted to the nearest Revenue District Office of the Bureau of Internal Revenue. cdt 14. Schools shall submit their winning entries not later than October 1, 1990. FINAL JUDGING 15. Judges will be selected from the following sectors:

Bureau of Internal Revenue Department of Education, Culture and Sports Management Association of the Philippines Department of Finance Others, as may be determined by the Commissioner of Internal Revenue. 16. The judges shall use the same criteria and percentage system as in pre-judging. 17. The judges' decision shall be final. 18. The winning entries shall become the property of the Bureau of Internal Revenue and may be published and used in tax campaign. 19. Winner shall be announced and presented not later than October 31, 1990. cda 20. Prizes will be awarded to top three winners of each level as follows: First Prize - P15,000 Second Price - P10,000 Third Prize - P 5,000 Fourth Prizes (Four) - 2,500 each 21. The school of the First Prize winner shall receive a trophy. All concerned are enjoined to give this Circular the widest publicity. (Sgd.) JOSE U. ONG

Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-01-90 Revenue Memorandum Circular No. 74-90 August 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 74-90 Subject : Taxability of Prizes from small town lotteries (STL) To : All Regional Directors, Revenue District Officers, Internal Revenue Officers and Others Concerned. Pursuant to Section 10 of Republic Act No. 1169 as amended by B.P. Blg. 42 and P.D. No. 1157 or "An Act Providing for Charity Sweepstakes, Horse Races and Lotteries" the Philippine Charity Sweepstakes Office (PCSO) has promulgated "Rules and Regulations Governing Experimental Runs of Various Numbers Game for the Small Town Lottery." Accordingly, said rules and regulations have allowed the holding of small town lotteries. Under a Resolution passed by PCSO, small town lotteries must be endorsed by means of a resolution passed by the Sangguniang Panlalawigan or Sangguniang Panglunsod. cdt Under Section 4 of Republic Act No. 1169, only the holding of horse race sweepstakes by the PCSO and the sale of tickets in the said sweepstakes shall be exempted from all taxes. Under Section 21(c)(1) of the Tax Code, the Philippine Charity Sweepstakes winnings are not subject to the 20% withholding tax. It is clear, therefore, that the holding of small town lotteries is not embraced within the said tax exemption. Accordingly, prizes awarded in small town lotteries are subject to a final tax of 20% if the amount of prizes is more than P3,000.00, pursuant to Section 21(c)(1) of the Tax Code. If the prize is less than P3,000.00, the same is subject to income tax pursuant to Section 21(a) of the same Code. The individual, corporation, company or any juridical entity authorized by the PCSO to conduct the small town lottery, hence the party paying the prize shall undertake the withholding of the 20% final tax, before paying the prize to the winner, pursuant to Section 50(a) of the Tax Code. cdasia Moreover, the income derived by the party conducting the small town lottery is subject to income tax. cdt All concerned are enjoined to give this Circular as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-15-90 Revenue Memorandum Circular No. 75-90 August 15, 1990 REVENUE MEMORANDUM CIRCULAR NO. 75-90 Subject : Last priority in audit and investigation of 1988 and 1989 income tax VAT and 2% percentage tax liabilities. To : To all internal revenue officers and others concerned. Sec. 1. Statement of Policy. It is the policy of the Bureau of Internal Revenue to encourage voluntary disclosure of undeclared taxable base, such as sales, receipts and income. Towards this end, the Bureau of Internal Revenue, under certain conditions prescribed herein, extends the privileges of "relative last priority" or "absolute last priority" (hereinafter referred to as the "privilege") to taxpayers who shall come forward

and declare their correct liabilities for income tax under Title II, VAT under Title IV and the 2% percentage tax under Section 112 of the Tax Code by filing Annex "A". Sec. 2. Privilege of "relative last priority" and/or "absolute last priority". The income tax, VAT and 2% percentage tax returns for the taxable years 1988 and 1989 of any person who avails of the "relative last priority" shall be the last to be subjected to audit and investigation for the said taxable years, except when otherwise authorized by the Commissioner. The Commissioner, however, shall be very discreet and could refrain from authorizing audit and investigation of said returns, including verification of inventories, if the person qualifies for the privilege of "absolute last priority" for the said years. A certificate and/or a card of availment of either privilege shall be issued to any person upon entitlement thereof under the conditions prescribed in this Circular. cdt Sec. 3. Who may avail of the privilege may be availed of by any person liable to pay income tax, VAT and/or two percent (2%) percentage tax who, due to inadvertence or otherwise: (a) has underdeclared his liabilities for income tax, VAT and 2% percentage tax for the taxable years 1988 and 1989 or (b) has not filed any income tax return and value added tax and/or 2% percentage tax return for the taxable years 1988 and 1989 and, in either case, has not been issued a letter of authority for the taxable year(s) 1988 and/or August 1989 as of August 15, 1990. Any person who availed of the privilege for the "sympathetic" treatment under Revenue Memorandum Circular Nos. 23-89, 29-89, 36-89 and 44-89 may also avail of the privilege under this Circular provided that he satisfies the conditions prescribed in the preceding paragraphs and Sections 5 & 6 hereof. For purposes of income and the 2% percentage taxes, the terms "taxable year 1988" means the calendar year 1988 and any fiscal year ending on or before July 31, 1988 and June 30, 1989 and "taxable year 1989" means the calendar year 1989 and any fiscal year ending on or before July 31, 1989 and June 30, 1990. The availment of the privilege under this circular shall be strongly recommended as a condition to qualify for any legislative general tax amnesty which the government may grant in the future. Sec. 4. Cases not covered. Notwithstanding the availment of the privilege granted under this Circular, the following cases are not covered by the privilege: cdt For purposes of VAT, the term "taxable year" means: Taxable Year 1988 Group A - Jan. 1, 1988 to Dec. 31, 1988 Group B - Jan. 1, 1988 to Jan. 31, 1989 Group C - Jan. 1, 1988 to Feb. 28, 1989. Taxable Year 1989 Group A - Jan. 1, 1989 to Dec. 31, 1989

Group B - Feb. 1, 1989 to Jan. 31, 1990 Group C - Mar. 1, 1989 to Feb. 28, 1990. (a) Verification to obtain information relevant to the tax liability of another person pursuant to Section 7 of the Tax Code; (b) Verification to obtain information pursuant to a request of a Competent Authority under the Exchange of Information Article of tax entered into by the Philippines with other countries; (c) Request for refund of any taxes paid or application for issuance of tax credit memo or certificate; (d) Determination of correct withholding tax liability of withholding agents; (e) Non-contract surveillance for the purpose of determining tax compliance requirements; (f) Internal revenue taxes, other than income tax, VAT and 2% tax; (g) Persons who are being investigated by the Presidential Commission on Good Government pursuant to Executive Order Nos. 1, 2 and 14. (h) Persons under investigation as a result of verified information filed by informer under Section 281 of the Tax Code and duly recorded in the official registry book of the Bureau of Internal Revenue as of August 15, 1990. cd i Sec. 5. Conditions for the enjoyment of the privilege. In order to qualify for the privilege, the taxpayer shall (a) file a: (i) Voluntary Declaration form (Annex "A") which will serve as an amended return and pay the deficiency income tax, VAT, and, 2% percentage tax (hereinafter referred to as "deficiency taxes") for both taxable years 1988 and 1989 determined in accordance with Section 6 of this Circular. The amount of undeclared inventory as of the end of the taxable years 1988 (to be shown in Line 3) and 1989 (to be shown in Line 13) must not be less than P1,000,000 for each year; and, (ii) Sworn declaration of inventory (Annex "B") declaring his correct inventory of goods (whether subject to or exempt from VAT) as of the end of the taxable years 1988 and 1989. Such sworn declaration shall be attached to and filed with Annex "A" and should show, among others, the following information: quantity, brief description of the article, unit cost, and amount. Articles of the same general description and of small values may be reflected in the inventory as a lot, and (b) comply with the bookkeeping law and requirements by: (i) keeping accurate accounting records and (ii) issuing sales invoices and receipts in accordance with Section 283 of the Tax Code after the availment of the privilege under this Circular. Non-compliance with this condition shall result in the forfeiture of the privilege. Sec. 6. Determination of the deficiency taxes. (a) Amount to be paid for "relative last priority" - The amount of deficiency taxes to be paid for purposes of availing of the privilege of last priority in audit and investigation shall be the highest of the amounts determined (as illustrated in Annex "C") under the following factors:

(1) Inventory factor Deficiency taxes arising from undeclared sales, receipts or gross profit/income on the basis of undeclared inventories reported in Annex "A". (2) Taxes due per return factor Five hundred percent (500%) of the sum of the (A) total income tax for 1988 and 1989; and (B) total VAT (net of input taxes) and total 2 (%) percentage tax for 1988 and 1989 due per return before credits for withholding tax, quarterly corporate tax, tax credits memos and certificates. However, this factor shall not be applied if the deficiency tax per inventory factor amounts to P4 million or more or if the taxpayer avails of the absolute last priority. cd i (3) Minimum tax factor. The minimum amount of tax payable for both years shall not be less than P300,000. (b) Amount to be paid for "absolute last priority". If the total deficiency tax paid under paragraph (a) of this Section amounts to at least P4 million for the taxable years 1988 and 1989, the taxpayer shall be entitled to the privilege of "absolute last priority". However, if the amount computed under paragraph (a) is less than 4 million, the taxpayer may avail of the privilege of "absolute last priority" if he pays a deficiency tax amounting to at least P4 million for both taxable years 1988 and 1989. (c) Credit for amount previously paid for "sympathetic treatment". The additional amount paid for availment of "sympathetic treatment" under Revenue Memorandum Circular Nos. 23-89, 29-89, 36-89 and 44-89 granting the privilege of last priority in audit for 1988 shall be credited against the amount determined as payable under paragraphs (a) or (b) of this Section. Sec. 7. Effect of availment of the privilege on ongoing enforcement operations. Upon payment of the deficiency taxes determined in Section 6 of this Circular, (a) any inventory verification and contract surveillance operations on the taxpayer shall be suspended but may be resumed after October 31, 1990 only upon order of the Commissioner; and (b) subject to the provisions of Section 4 hereof, any audit and investigation pursuant to a letter of authority issued after August 15, shall be withdrawn. Sec. 8. Nondeductibility of deficiency VAT - The deficiency value-added tax determined and paid under Annex "A" shall not be deductible for income tax purposes and not creditable for VAT purposes by the person availing of this privilege. Sec. 9. When and where to file declaration and pay the deficiency taxes. The voluntary declaration form (Annex "A"), sworn declaration of inventory (Annex "B") and attachments thereto shall be filed with, and the corresponding deficiency taxes paid, not later than October 31, 1990 or the date prescribed in Section 10, for installment payments, to the appropriate revenue officer authorized to receive tax returns and internal revenue tax payments under Sections 44, 45 and 110 of the Tax Code, as amended. Sec. 10. Payment of deficiency tax in installments. - If the deficiency tax amounts to P10 million or less, the same shall be paid upon filing of the Voluntary Declaration Form (Annex "A"). If the amount of the deficiency tax exceeds P10 million but does not exceed P20 million, the same may be paid in two equal installments, the first installment upon filing of the Voluntary Declaration Form and the second, installment not later than November 30, 1990; and, the third installment not later than December 31, 1990. Sec. 11. Adjustment of books of accounts. The correct inventory declared as of the end of the taxable year 1989 (shown in Line 7, Annex "A") shall be reflected as the

inventory as of the beginning of taxable year 1990 and, correspondingly, the taxpayer shall record in his books of accounts and/or financial statements. cda Sec. 12. Date of effectivity. This Circular shall take effect on August 15, 1990 and shall expire on October 31, 1990 and the same shall be given the widest publicity possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-12-90 Revenue Memorandum Circular No. 76-90 July 12, 1990 REVENUE MEMORANDUM CIRCULAR NO. 76-90 Subject : Loss of Twenty-Eight (28) Sets of Payment Order (BIR Form RC82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of twenty-eight (28) sets of Revenue Payment Order, to wit: --------------------------SERIAL NUMBER --------------------------6836364 : 6993993 : 7556506 : 7556726-7556750 --------------------------: QUANTITY

One (1) Set One (1) Set One (1) Set : Twenty-Five (25) Sets

The above receipts which were reported missing by Revenue District Officer, Juan C. Villanueva of San Pablo City and Acting Revenue Officer, Milagros C. Natividad of Urdaneta, Pangasinan, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-90 Revenue Memorandum Circular No. 77-90 July 23, 1990 REVENUE MEMORANDUM CIRCULAR NO. 77-90 Subject : Loss of One (1) Set of Payment Order (BIR Form RC-82-02-02). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Payment Order, to wit:

--------------------------SERIAL NUMBER : QUANTITY --------------------------C-7108950 : One (1) Set --------------------------The above receipt which was reported missing by Ms. Ana C. Raguero, Revenue Accountable Forms Custodian, Revenue Region No. 5-Legaspi City, has been cancelled and any official transaction involving the use of said form is therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-08-90 Revenue Memorandum Circular No. 78-90 August 8, 1990 REVENUE MEMORANDUM CIRCULAR NO. 78-90 Subject : Missing Twenty-Five (25) Sets of Confirmation Receipt (BIR Form CB-82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing twenty-five (25) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------20376726 to : 20376750 : Twenty-Five (25) Sets --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-08-90 Revenue Memorandum Circular No. 79-90 August 8, 1990 REVENUE MEMORANDUM CIRCULAR NO. 79-90

Subject : Loss of Two (2) Sets of Payment Order (BIR Form RC-82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Payment Order, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------7722608 : One (1) Set 7721141 : One (1) Set --------------------------The above receipts which were reported missing by Ms. Norma U. Sanchez, PO Issuing Officer, RDO 24, Manila and Ms. Armi S. Linsangan, Revenue Officer II, RDO 24, Manila, have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-22-90 Revenue Memorandum Circular No. 80-90 August 22, 1990 REVENUE MEMORANDUM CIRCULAR NO. 80-90 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 90-11 dated August 14, 1990. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M. July 1, 1990. acd Peso/Liter Products Previous Tax Present Tax Difference (0.1782)

Premium/Avgas P3.7746 P3.5964 Regular Gasoline 3.5024 3.2622 (0.2402) Avturbo 3.5739 3.4037 (0.1702) Kerosene 1.2367 1.1704 (0.0663) Diesel Fuel Oil 1.1982 1.1532 (0.0450) Fuel Oil (Bunker) 0 0 0 LPG 1.0751 1.0590 (0.0161) or 1.9234/kg. 1.8946 (0.0288)

Asphalts Thinners

0.8896 0.7956 (0.0631) 1.2411 1.1780 (0.0631)

All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-18-90 Revenue Memorandum Circular No. 81-90 September 18, 1990 REVENUE MEMORANDUM CIRCULAR NO. 81-90 Subject : Status of Philippine Tax Treaties To : All Internal Revenue Officer and Others Concerned. Hereunder is the complete list of tax treaties which the Philippines has entered into with other countries and is in effect as of this date: For additional information on any of these tax treaties, direct all requests for said information to International Tax Affairs Division, telephone number 965729 or 980022. cd All concerned are hereby enjoined to give this Revenue Memorandum Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue EFFECTIVITY 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. RP-Denmark 1 January 1974 RP-Singapore 1 January 1977 RP-Canada 1 January 1977 RP-France 1 January 1978 RP-United Kingdom 29 January 1978 RP-Pakistan 1 January 1979 RP-Australia 1 January 1980 RP-Japan 1 January 1981 RP-Belgium 1 January 1981 RP-New Zealand 1 January 1982 RP-Finland 1 January 1982 RP-Indonesia 1 January 1983 RP-Austria 1 January 1983 RP-United States 1 January 1983 RP-Thailand 1 January 1983 RP-West Germany 1 January 1985 RP-Malaysia 1 January 1985 RP-Korea 1 January 1987 RP-Sweden 1 January 1990 RP-Italy 1 January 1990

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-11-90 Revenue Memorandum Circular No. 82-90 September 11, 1990 September 11, 1990 REVENUE MEMORANDUM CIRCULAR NO. 82-90 Subject : Use of Government Vehicles To : All Assistant Commissioners, Regional Directors and Other Officials Concerned. Quoted hereunder for the guidance of all BIR Officials concerned are pertinent provisions of Executive Order No. 418 of the President, issued in August 21, 1990, on the use of government vehicle. cdasia "Sec. 2. All departments, agencies, offices, government-owned and/or controlled corporations local government units and other government instrumentalities are prohibited from using government vehicles for purposes other than official business. Provided, That in every case, the trip ticket authorizing the use of the vehicle shall be displayed on the windshield or in another conspicuous place on the vehicle: Provided, further, That vehicles used by intelligence and investigative agencies of the government shall not be covered by the foregoing proviso. cda The use of government vehicles on Sundays, legal holidays, or out of the regular office hours or outside the route of the officials or employees authorized to use them, or by any person other than such officials or employees, shall, unless properly authorized, be prima facie evidence of violation of this Section in the administrative proceeding against the officials or employees responsible for such violation . . . . " Please be guided accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-10-90 Revenue Memorandum Circular No. 83-90 September 10, 1990 REVENUE MEMORANDUM CIRCULAR NO. 83-90 Subject : Missing of two (2) Confirmation Receipts (BIR Form CB-82-0203). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------19977698 : One (1) Set 19977728 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-14-90 Revenue Memorandum Circular No. 84-90 September 14, 1990 REVENUE MEMORANDUM CIRCULAR NO. 84-90 Subject : Missing of Fifty-Four (54) Sets of Confirmation Receipts (BIR Form CB-82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing fifty-four (54) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBERS : QUANTITY --------------------------20199226 - 20199227 : Two (2) Sets 20199235 : One (1) Set 20199238 : One (1) Set 20199240 : One (1) Set 20199246 : One (1) Set 20199249 - 20199250 : Two (2) Sets 20199255 : One (1) Set 20199257 - 20199263 : Seven (7) Sets 20199265 - 20199267 : Three (3) Sets 20199271 : One (1) Set 20199274 : One (1) Set 20199299 - 20199321 : Twenty-Three (23) Sets 20199324 - 20199332 : Nine (9) Sets 20199351 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-05-90 Revenue Memorandum Circular No. 85-90

October 5, 1990 REVENUE MEMORANDUM CIRCULAR NO. 85-90 Subject : Publishing the Specific Tax Rates on certain petroleum products pursuant to Republic Act 6965 revising the form of excise tax therefor from ad valorem tax to Specific tax. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published here are the new specific tax rates on the following petroleum products pursuant to the provisions of Republic Act 6965, effective October 5, 1990. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular a wide publicity as possible. cd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue PESO/LITER Products Ad Valorem Tax Previous Specific PresentDifference

Premium Gasoline P3.5964 P2.52 (P1.0764) Regular Gasoline 3.2622 2.28 (.9822) Naphtha 3.2622 2.28 (.9822) Naphtha-For production of petrochemicals 0 0 0 Aviation Turbo 3.4037 2.38 (1.0237) Diesel Fuel Oil 1.1532 0.45 (.7032) Kerosene 1.1704 0.50 (.6704) L.P.G. 1.0590/lt. 0 ( 1.0590/lt) or 1.8946/kg. 0 (1.8946/kg) Asphalt .7956/kg. 0.56 (.2356/kg) Bunker Fuel 0 0 0 Lube Oils, Greases, base stocks for lube oils & greases, aromatic extracts & other similar preparations, and additives for lube oils & greases 4.50 4.50 0 Processed Gas 0.05 0.05 0 Waxes & Petroleum 3.50 3.50 0 Denatured AlcoholFor motive power 0.05 0.05 0 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

10-01-90 Revenue Memorandum Circular No. 86-90 October 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 86-90 Subject : Early Completion of the Audit of the Accounts of Retiring Accountable Officers To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Commission on Audit Circular No. 81-154 dated March 11, 1981. "1. Rationale: It has come to the attention of the Commission on Audit that numerous retired accountable officers of the government, after having spent the best years of their lives in the government service, could not enjoy their retirement benefits on account of their failure to secure clearance from money and property accountabilities. In many instances, the reason is failure of the Resident Auditor to complete the audit of the money and property accounts of the retired accountable officers. Most of these accountable officers are in the twilight of their years and the delay in the enjoyment of their retirement benefits is actually a deprivation of their right to the early enjoyment of their gratuities. Retirees are without job alternatives because of age. For the reason, they deserve the compassionate attention of the entire officialdom of the Government. 2. Early Completion of the Audit of Accounts of Retiring Accountable Officers. Officials and employees of the Commission on Audit are hereby directed to give priority to the audit of accounts of these accountable officers. They are directed to complete the audit of the money and property accountabilities of the retiring accountable officers within six (6) months from the date of the submission of their complete accounts to the auditor. The Resident Auditors shall concentrate on the completion of the audit of the accounts of said accountable officers. As the personnel situation in the auditing unit would allow, auditing personnel shall be assigned to this audit activity, exclusively, if possible, in order to complete said audit within the time prescribed above. 3. Notice of Intended Retirement Date: Retiring accountable officers shall notify the Resident Auditor of their intended date of retirement at least six (6) months in advance. Upon receipt of the notice, the Resident Auditor shall forthwith assign such personnel as may be necessary to attain the objectives of this issuance. The Resident Auditor shall give like attention to accountable officials who suddenly pass away. acd 4. Notice to COA Central Office of Auditor's Failure to Comply with this Issuance: Accountable officers involved are hereby requested to inform the Commission on Audit of the failure of any COA official to attend to the early audit and settlement of their accounts. Completion of audit as prescribed in Section 2 hereof means the issuance of the final certification of settlement to the retiring accountable officers. The issuance of the final certificate of settlement will enable him to wipe off all balances due from him and thus secure clearance from money and property accountability. 5. Partial Payments of Gratuities in Case of Physical Impossibility to Complete Audit:

In case of failure of the Auditor or physical impossibility to complete the audit within the prescribed period, the retiring official maybe allowed to collect 50% of the proceeds of his retirement gratuity and other benefits due upon posting of a bond equivalent thereto. Such bond shall be answerable for any disallowances in his accounts and shall be released only upon final liquidation of whatever balances maybe due from him. 6. Lifting of Technical Suspensions: In the audit of a retired or deceased accountable officer's accounts, technical suspensions shall be waived but only upon a clear showing that no loss had been suffered by the Government. Examples: a. Lack of signature of the approving official on the voucher when at the time of the audit the approving officer is already dead; cd i b. Requiring the signature of the payee on the receipt portion of the voucher where the payee could no longer be located and there is other evidence showing that payee actually received the money, say, official receipt of the payee; and c. Failure to take up in the property accounts some equipment if upon actual physical verification the equipment exists. 7. Meaning of "Complete Accounts": Complete accounts means submission of all vouchers, journals, ledgers, trial balances, property inventory - all cash and property accounts - to the Auditor for audit. 8. Penal Clause: Failure of any COA official or employee to comply with the provisions of this Circular shall constitute sufficient cause for appropriate disciplinary action. casia 9. Effectivity: This Circular shall be effective immediately. (Sgd.) Francisco S. Tantuico, Jr. Acting Chairman (Sgd.) Silvestre D. Sarmiento Commissioner All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-04-90 Revenue Memorandum Circular No. 87-90 October 4, 1990 October 4, 1990 REVENUE MEMORANDUM CIRCULAR NO. 87-90 Subject : Appointment Pending Resolution of a Protest Case To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 43, series of 1990 dated September 5, 1990. cdasia "It has come to the attention of the Commission that there have been occasions when new appointments to contested positions were issued despite the pendency of protest or appeal on the decision thereof, or the incumbent has not first been legally removed or his appointment not validly terminated.

This practice is contrary to the Rules on Protest, contained in CSC Memorandum Circular No. 46, s. 1989, which provides that "a protest shall not render an appointment ineffective, if the appointee assumes the duties of the position". Moreover, the Supreme Court has consistently held that no person, no matter how qualified and eligible for a certain position, may be appointed to an office which is not yet vacant. The incumbent must first be legally removed or his appointment validly terminated. Appointment to a position that is not vacant is premature. Henceforth, the Commissioner shall "return without action" subsequent appointments issued to other parties pending final resolution of appeals by this Commission. THIS MEMORANDUM SHALL TAKE EFFECT IMMEDIATELY. cd i PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-04-90 Revenue Memorandum Circular No. 88-90 October 4, 1990 October 4, 1990 REVENUE MEMORANDUM CIRCULAR NO. 88-90 Subject : Directing All National Government Agencies of the Government to Limit Expenditures and Cash Disbursements for Remainder of CY 1990. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Administrative Order No. 197 dated October 8, 1990 of Her Excellency, President Corazon C. Aquino. WHEREAS, government cash disbursements have substantially accelerated and exceeded the program contributing to the widening of the cash deficit; WHEREAS, revenue collections may fall short of targets due to recent revenue reform measures; WHEREAS, there is a pressing need to keep the cash deficit within programmed levels to support the economic reform program; acd NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: Sec. 1. All agencies of the national government shall limit expenditures and cash disbursements for the remainder of the year 1990 to those that are absolutely necessary to sustain operations and implement critical programs and projects. For this purpose: a. All allotment releases for capital projects, except for foreign-assisted projects, earthquake-related expenditures, and projects which have already been bidded out or announced for bidding as of October 5, 1990, which have not yet been obligated shall be deferred to 1991; and b. The Department of Budget and Management shall withdraw the equivalent of 20 percent of allotments already released for maintenance and other operating expenditures for the fourth quarter, except those pertaining to the maintenance of roads, bridges, flood control facilities, schools and hospitals.

All agencies shall identify the specific expenditure items which shall be withdrawn to satisfy items a and b above. Said expenditure items shall be submitted to the Department of Budget and Management not later than October 15, 1990. Sec. 2. All agencies shall likewise submit to the Department of Budget and Management on or before October 15, 1990, a report on actual savings as of August 31, 1990, out of the following: a. salary lapses due to unfilled positions except for those covered by court decisions; and b. savings generated as a result of Administrative Order No. 177, S. of 1990. Sec. 3. The Department of Budgets and Management shall report the status of the implementation of this Administrative Order to the Office of the President on October 30, 1990. aisa dc Sec. 4. This Administrative Order shall take effect immediately. DONE in the City of Manila, this 8th day of October, in the year of our Lord, nineteen hundred and ninety. (Sgd.) CORAZON C. AQUINO By the President: (Sgd.) Catalino Macaraig, Jr. Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. aisa dc (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-17-90 Revenue Memorandum Circular No. 89-90 October 17, 1990 October 17, 1990 REVENUE MEMORANDUM CIRCULAR NO. 89-90 Subject : Early Completion of the Audit of the Accounts of Retiring Accountable Officers. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Commission on Audit Circular No. 81-154-A dated April 20, 1981. "1. Rationale: It has come to the attention of the Commission on Audit that numerous retired accountable officers of the government, after having spent the best years of their lives in the government service, could not enjoy their retirement benefits on account of their failure to secure clearance from money and property accountabilities. In many instances, the reason is failure of the Resident Auditor to complete the audit of the money and property accounts of the retired accountable officers.

Most of these accountable officers are in the twilight of their years and the delay in the enjoyment of their retirement benefits is actually a deprivation of their right to the early enjoyment of their gratuities. Retirees are without job alternatives because of age. For that reason, they deserve the compassionate attention of the entire officialdom of the Government. 2. Early Completion of the Audit of Accounts of Retiring Accountable Officers: cda Officials and employees of the Commission on Audit are hereby directed to give priority to the audit of accounts of those accountable officers. They are directed to complete the audit of the money and property accountabilities of the retiring accountable officers, within six (6) months from the date of the submission of their complete accounts to the Auditor. The Resident Auditors shall concentrate on the completion of the audit of the accounts of said accountable officers. As the personnel situation in the auditing unit would allow, auditing personnel shall be assigned to this audit activity, exclusively, if possible, in order to complete said audit within the time prescribed above. 3. Notice of Intended Retirement Date: Retiring accountable officers shall notify the Resident Auditor of their intended date of retirement at least six (6) months in advance. Upon receipt of the notice, the Resident Auditor shall forthwith assign such personnel as maybe necessary to attain the objectives of this issuance. The Resident Auditor shall give like attention to accountable officials who suddenly pass away. 4. Notice to COA Central Office of Auditor's Failure to Comply with this Issuance: Accountable officers involved are hereby requested to inform the Commission on Audit of the failure of any COA official to attend to the early audit and settlement of their accounts. Completion of audit as prescribed in Section 2 hereof means the issuance of the final certification of settlement to the retiring accountable officers. The issuance of the final certificate of settlement will enable him to wipe off all balances due from him and thus secure clearance from money and property accountability. 5. Meaning of "Complete Accounts": casia Complete accounts means submission of all vouchers, journals, ledgers, trial balances, property inventory - all cash and property accounts - to the Auditor for audit. 6. Penal Clause: Failure of any COA official or employee to comply with the provisions of this Circular shall constitute sufficient cause for appropriate disciplinary action. 7. EFFECTIVITY : This Circular shall be effective immediately. (Sgd.) Francisco S. Tantuico, Jr. Acting Chairman (Sgd.) Silvestre D. Sarmiento Commissioner All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdtai

This amends Revenue Memorandum Circular No. 86-90 dated October 1, 1990. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-90 Revenue Memorandum Circular No. 90-90 October 15, 1990 REVENUE MEMORANDUM CIRCULAR NO. 90-90 Subject : Missing of one (1) set of Confirmation Receipts (BIR Form CB02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------B-19144064 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-25-90 Revenue Memorandum Circular No. 91-90 October 25, 1990 REVENUE MEMORANDUM CIRCULAR NO. 91-90 Subject : Missing of One (1) Set of Confirmation Receipts (BIR Form CB02-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------B-19720046 : One (1) Set ---------------------------

The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-05-90 Revenue Memorandum Circular No. 92-90 November 5, 1990 REVENUE MEMORANDUM CIRCULAR NO. 92-90 Subject : Publishing the revised ad valorem taxes on certain petroleum products as a result of the change in company netback per Energy Regulatory Board Resolution No. 90-13 dated October 9, 1990. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, published hereunder are the new ad valorem taxes on the following petroleum products effective 12:01 A.M. September 1, 1990. cd PESO/LITER Products Previous Tax Present Tax Difference P0.5460

Premium/Avgas P3.5964 P4.1424 Regular Gasoline 3.2622 3.9262 0.6640 Avturbo 3.4037 4.1168 0.7131 Kerosene 1.1704 1.4218 0.2514 Diesel Oil 1.1532 1.3351 0.1819 Fuel Oil/Feedstock 0 0 0 LPG 1.0590 1.0795 0.0205 or 1.8946/kg. or 1.9312/kg. 0.0366 Asphalts 0.7956 0.9297 0.1341 Thinners 1.1780 1.3677 0.1897

All internal revenue officers and other concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. cd i JOSE U. ONG Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-07-90 Revenue Memorandum Circular No. 93-90 November 7, 1990 November 7, 1990 REVENUE MEMORANDUM CIRCULAR NO. 93-90

Subject : Extending the deadline for the availment of the privilege of last priority in audit under Revenue Memorandum Circular No. 75-90 and amending and simplifying certain requirements thereof. To : All Internal revenue officers and others concerned There have been numerous requests and clamor received from various sectors to extend the deadline and to simplify the requirements and the procedure in the computation of the deficiency tax to be paid, for the availment of the last priority privilege in audit. There are also many taxpayers who are subject to the value added tax or the percentage taxes who would like to avail of the privilege but could not afford the minimum amount prescribed in said Circular. Furthermore, there are taxpayers who were excluded from the coverage of RMC 75-90 because they are selling services and maintain no inventory but would like to be covered by the last priority program of the Bureau. In view thereof, this Circular and amendments are hereby promulgated to attain the said objectives. cdtai Sec. 1. The privilege of absolute last priority is hereby offered under this amendatory Circular to those who would pay a non-deductible deficiency tax covering the years 1986 to 1989 on a yearly basis in an amount computed in accordance with the following schedule but in no case should such deficiency tax be lower than the minimum amount of One Hundred Thousand Pesos (P100,000) per year: Tax due per return Up to P50,000 Over P50,000 Over P500,000 Over P1,000,000 Over P2,000,000 Over P3,000,000 Tax Rate

500% P500,000 400% P1,000,000 350% P2,000,000 300% P3,000,000 250% 200%

With respect to taxable years 1986 and 1987, the taxpayer may avail of the privilege of absolute last priority under this Circular, provided that no proposed or preliminary notice of assessment has yet been issued as of November 9, 1990. aisa dc Sec. 2. The basis for computing the deficiency tax shall be the amount of income tax (Title II), VAT (Title IV), and/or other percentage taxes (Title V) due per return. In the case of income tax and other percentage taxes, the basis shall be the tax due per return before credits for withholding tax, quarterly corporate tax, tax credit memos and certificates and in the case of value added tax, it is the amount after deducting the input tax. Sec. 3. Taxpayers need not file an amended return nor submit any other document except for the form prescribed herein as Annex "A" and the payment of the deficiency tax due at the time of filing such form. Sec. 4. Taxpayers are allowed to select the taxable year they want to avail of the privilege. For example, if they want to avail only for the years 1986 and 1989, he may do so by paying the appropriate amount of tax prescribed in Section 1 above. cd Sec. 5. Taxpayers who have availed of the "sympathetic treatment" for taxable year 1988 under RMC 23-89 and relative last priority for the taxable years 1988 and 1989 under RMC 75-90 may still avail of the absolute last priority in audit under this Circular, and

any additional amount paid under RMC 23-89 and 75-90 shall be credited against the tax to be paid under this amendatory Circular. However, the minimum amount to be paid under this Circular after crediting the deficiency tax paid under RMC 23-89 (sympathy treatment) and RMC 75-90 (relative last priority) shall in no case be lower than One Hundred Thousand Pesos (P100,000) per year. Sec. 6. No tax credit certificates or memoranda shall be used in payment of the tax due under this privilege. Sec. 7. The privilege herein granted shall be available only up to November 30, 1990. Sec. 8. All provisions in RMC 75-90 are hereby adopted and shall form part of this amendatory Circular, except for such provisions which are inconsistent with the provisions of this Circular. cd Sec. 9. This Circular shall take effect immediately upon approval. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-29-90 Revenue Memorandum Circular No. 94-90 October 29, 1990 REVENUE MEMORANDUM CIRCULAR NO. 94-90 Subject : Missing of Two (2) Sets of Confirmation Receipts (BIR Form CB02-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------20035779 : One (1) Set 20149875 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said forms are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-14-90 Revenue Memorandum Circular No. 95-90 November 14, 1990 REVENUE MEMORANDUM CIRCULAR NO. 95-90

Subject : Presidential Regional Assistance and Monitoring Service (PRAMS) To : Deputy Commissioners, Assistant Commissioners, Division Chiefs and Regional Directors For the information and guidance of all concerned, quoted hereunder is the letter dated November 8, 1990 of Executive Secretary Catalino Macaraig, Jr,: cdasia "Hon. Jose U. Ong Commissioner of Internal Revenue Quezon City Sir: Referring to your letter dated October 31, 1990, please be informed that the so-called Presidential Regional Assistance and Monitoring Service (PRAMS) is a non-existing agency within the Office of the President. For your further information, enclosed is a copy of my letter dated September 26, 1989 transmitting, for immediate investigation by the NBI, the letter dated September 25, 1989 of then DECS Undersecretary Tomas V. Santos regarding illegal activities of PRAMS. cd i We are referring your letter to the NBI for information and appropriate action in relation to our previous letter adverted to above. We thank you for bringing this matter to the attention of this Office. Very truly yours, (Sgd.) Catalino Macaraig, Jr. Executive Secretary Encls.: a/s" It is desired that this Circular be given as wide a publicity as possible. aisa dc (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-03-90 Revenue Memorandum Circular No. 96-90 December 3, 1990 December 3, 1990 REVENUE MEMORANDUM CIRCULAR NO. 96-90 Subject : Physical and Mental Fitness for Continued Employment in the Public Service To : All Revenue Officials and Employees and others concerned For the information and guidance of all officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 17, s. 1989 dated May 2, 1989. cda

"The new Constitution provides that "The Civil Service Commission, as the central personnel agency of the Government, shall establish a career service and adopt measures to promote morale, efficiency, integrity, responsiveness, progressiveness and courtesy in the civil service." As the central personnel agency, the Commission shall maintain a healthy government workforce that can adequately meet the requirements of the service. A healthy employee works more efficiently, more productively and possesses a better and more responsive work attitude than a sickly employee. cd i Under Section 29 of the Civil Service Decree of the Philippines (PD 807), the Commission shall integrate into a national plan the career and personnel development plans of each department or agency which shall include provision for, among others, employees' health services. The Commission notes that there is need for a continuing evaluation of the state of health of government employees. They must be given a chance to undergo preventive or remedial health measures to ensure that they are in good health at all times. In view of the foregoing, a health evaluation system shall be established in each department and agency whereby all government employees shall be required to undergo annual medical and physical examinations. Where an employee or official is noted to be unable to perform his duties for health reasons, whether physical or mental, the supervisor is obliged to report incidence of such irregular or unexplained behavior for evaluation and corrective action. acd Where the evaluation indicate that the employee is unable to continue working because of his physical or mental condition, steps shall be taken to effect improvement of the person's physical or mental state. Where this is deemed not possible and the person's continuance in the service may further jeopardize his health, that of his co-employees' health and the service itself, he may be separated. This separation however, shall not be disciplinary in nature and shall entitle the person to separation and other benefits under existing laws. This Memorandum Circular shall take effect immediately. cd i (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner (Officer-in-Charge) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-10-90 Revenue Memorandum Circular No. 97-90 December 10, 1990 December 10, 1990 REVENUE MEMORANDUM CIRCULAR NO. 97-90 Subject : Further extending the deadline for the availment of the privilege of last priority in audit under Revenue Memorandum Circular No. 93-90 and Revenue Memorandum Circular No. 75-90, as amended. To : All internal revenue officers and others concerned.

To further give more opportunity to taxpayers who would like to avail of the privilege of last priority in audit, the provisions of RMC 93-90 are hereby extended until December 21, 1990. This will will give chance to the many taxpayers who have been requesting the Bureau of Internal Revenue to give them a little more time to improve their cash position to financially enable them to avail of such privilege. cd This Circular shall take effect immediately upon approval. cd i (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-27-90 Revenue Memorandum Circular No. 98-90 November 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 98-90 Subject : Loss of nine (9) sets of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of nine (9) sets of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Number F-2457242 to F-2457250 Quantity nine (9) sets

The abovementioned revenue official receipts which were reported as missing by former Revenue Representative Juan G. Ventigan, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdasia VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-27-90 Revenue Memorandum Circular No. 99-90 November 27, 1990 November 27, 1990 REVENUE MEMORANDUM CIRCULAR NO. 99-90 Subject : Extending the deadline for filing engagement letters as required in Revenue Regulations No. 6-90. To : All internal revenue officers and others concerned. Sec. 1. Pursuant to Revenue Regulations No. 6-90, the independent CPA of taxpayers, whose gross annual sales and/or receipts for the year exceeds P100,000 and whose books of accounts are required, to be audited for financial purposes pursuant to Section 232 (A)

of the Tax Code must submit copies of the engagement letters to the Bureau of Internal Revenue not later than two (2) months before the beginning of the client's taxable year covered by the engagement. In order to give the CPAs ample time to comply with the said provision of the regulations, the following deadlines are hereby prescribed: a. For the taxable year 1990 (Calendar Year 1990 and Fiscal Year ending January 31, 1991 to June 30, 1991), the deadline shall be as follows: Taxable Year Ending Deadline December 31, 1990 December 31, 1990 January 31, 1991 January 31, 1991 February 28, 1991 January 31, 1991 March 31, 1991 January 31, 1991 April 30, 1991 January 31, 1991 May 31, 1991 January 31, 1991 June 30, 1991 February 28, 1991 b. For the taxable year 1991 and subsequent years, the deadline for the submission of copies of engagement letters is not later than five (5) months before the end of the taxpayer's taxable year for income tax purposes. cdasia c. For new clients who engaged the services of the CPA after the above deadlines, the engagement letter shall be submitted within thirty (30) days from the date of approval of the contract of engagement by the client-taxpayer. Sec. 2. This Circular takes effect immediately. (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-10-90 Revenue Memorandum Circular No. 100-90 December 10, 1990 REVENUE MEMORANDUM CIRCULAR NO. 100-90 Subject : Memorandum of the President dated October 26, 1990. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum of the President dated October 26, 1990. casia "Please be advised that as reiterated by the Civil Service Commission in the recent Welga ng Bayan, "Government employees who join strikes or any form of work stoppage during office hours will face sanctions as provided for by law." You are therefore hereby directed to issue show cause orders to those government employees in your respective offices who participated in the strikes and mass actions during the Welga ng Bayan, enjoining them to explain in writing within seventy-two (72) hours from notice why no disciplinary action should be instituted against them; and should their explanation be unsatisfactory, appropriate administrative proceedings be commenced in accordance with the pertinent Civil Service laws, rules and regulations. cdtai

Please be guided accordingly. CORAZON C. AQUINO" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdtai (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner (Officer-in-Charge) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-26-90 Revenue Memorandum Circular No. 101-90 November 26, 1990 REVENUE MEMORANDUM CIRCULAR NO. 101-90 Subject : Determination of when cause of action for willful failure to pay deficiency tax occurs; and prescription under Section 280 of the Tax Code. To : All Internal Revenue Officers, Employees and Others Concerned. For the information and guidance of all concerned, the following are the salient features of the decision promulgated by the Supreme Court on October 19, 1990 in the case entitled "Emilio E. Lim, Sr., et al. vs. Court of Appeals, et al.", G.R. Nos. L-48134-37. casia 1. When cause of action for willful failure to pay deficiency tax occurs. The cause of action for willful failure to pay deficiency tax occurs when the final notice and demand for the payment thereof is served on the taxpayer. Prior thereto, no violation is committed. The offense is committed only after receipt is coupled with refusal to pay the tax within the allotted period. 2. Prescription under Section 280 of the Tax Code. a) The 5-year prescriptive period in an offense or willful failure to pay a deficiency tax assessment commences to run only after the receipt of the final notice and demand by the taxpayer and he refuses to pay. casia b) I a protested assessment, the 5-year period starts from the service of the final notice and demand disposing of the protest, and not from the date of the original assessment. c) An offense under the Tax Code is considered discovered only after the manner of commission and the nature and extent of the fraud has been definitely ascertained. This occurs when the BIR renders its final decision and requires the taxpayer to pay the deficiency tax. This is a departure from the usual practice of reckoning the date of discovery from the date of the examiner's report on the basis of what appears to have been enunciated by an obiter dictum in People vs. Tierra (G.R. Nos. L-17177-80, December 28, 1964, 12 SCRA 667, 671). d) The 5-year prescriptive period in Section 280 of the Tax Code does not commence to run by the mere fact of discovery. This must be coupled by judicial proceedings, such as a preliminary investigation before the Prosecutor's Office, before the five (5) year limitation period begins to run. The offenses under the Tax Code are seemingly imprescriptible for as long as the period from the discovery and institution of judicial proceedings for its investigation and

punishment, up to the filing of the information in court does not exceed five (5) years. cd i All concerned are enjoined to give this Circular as wide a publicity as possible. VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-13-90 Revenue Memorandum Circular No. 102-90 December 13, 1990 REVENUE MEMORANDUM CIRCULAR NO. 102-90 Subject : Publishing Sections 7(1), (2) and (5) and 8 of Republic Act No. 6971, otherwise known as the "Productivity Incentives Act of 1990". To : All internal revenue officers and others concerned. Sec. 1. For the information and guidance of all concerned, there are quoted hereunder Sections 7 (1), (2) and (5) and 8 of Republic Act No. 6971, otherwise known as the "Productivity Incentives Act of 1990". cdtai "Sec. 7. (1) Benefits and Incentives. - Subject to the provisions of Section 6 hereof, a business enterprise which adopts a productivity incentives program, duly and mutually agreed upon by parties to the labor-management committee, shall be granted a special deduction from gross income equivalent to fifty percent (50%) of the total productivity bonuses given to employees under the program over and above the total allowable ordinary and necessary business deductions for said bonuses under the National Internal Revenue Code, as amended. "(2) Grants for manpower training and special studies given to rank-and-file employees pursuant to a program prepared by the labor-management committee for the development of skills identified as necessary by the appropriate government agencies shall also entitle the business enterprise to a special deduction from gross income equivalent to fifty percent (50%) of the total grants over and above the allowable ordinary and necessary business deductions for said grants under the National Internal Revenue Code, as amended. casia "(5) The special deductions from gross income provided for herein shall be allowed starting the next taxable year after the effectivity of this Act. "Sec. 8. Notification. - A business enterprise which adopts a productivity incentives program shall submit copies of the same to the National Wages and Productivity Commission and to the Bureau of Internal Revenue for their information and record." FEATURES OF THE LAW 1. Presently, bonuses to employees are deductible from gross income of such bonuses meet the following requirements: a) b) the payment of bonuses is in fact compensation; it must be for personal services actually rendered; and

c) the bonuses when added to salaries are reasonable when measured by the amount and quality of the services performed with relation to the business of the particular employee. (See Kuenzle & Streiff, Inc. vs. Collector, 106 Phil. 355) In addition to the deductibility of bonuses under the foregoing circumstances, 50% of the total productivity bonuses given to employees of the business enterprise availing of the productivity incentives program shall be deductible from the gross income of the business enterprise. cd i 2. The business enterprise which grants manpower training and special studies to rank-and-file employees pursuant to a program prepared by the labor-management committee for the development of skills shall also be entitled to a 50% special deduction from gross income of the total grants. 3. Under the law, the productivity bonuses shall not be deemed as salary increases due the employees and workers. However, since the productivity bonuses are flow of wealth coming into the hands of the employees and workers, and there being no provision in the law exempting such bonuses from tax, the same are subject to income tax. 4. The special deductions under paragraphs 1 and 2 above shall be allowed starting the next taxable year after the effectivity of the law R.A. No. 6971 took effect on December 9, 1990, 15 days after its publication in newspapers of general circulation on November 24, 1990. 5. A business enterprise which adopts a productivity incentives program shall submit copies of the same to the Bureau of Internal Revenue for its information and recording purposes. cdtai Sec. 2. All internal revenue officers and others concerned are requested to give this circular a wide publicity as possible. (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-20-90 Revenue Memorandum Circular No. 103-90 December 20, 1990 REVENUE MEMORANDUM CIRCULAR NO. 103-90 Subject : Loss of Original Copy of Revenue Official Receipt (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the original copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 4762880 N One Copy (Original) The abovementioned copy of revenue official receipt which was reported as missing by Ms. Marilyn A. Madrista, Assistant Revenue Officer of Sirawai, Zamboanga del Norte, and the other copies of the set are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cd

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-18-90 Revenue Memorandum Circular No. 104-90 December 18, 1990 December 18, 1990 REVENUE MEMORANDUM CIRCULAR NO. 104-90 Subject : Conciliation and Mediation Service in the Public Sector To : All Revenue Officials and Employees and others concerned. For the information and guidance of all officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 47, series of 1990 dated November 14, 1990. cd "In the face of controversies and disputes between agency management and rank-and-file to dramatize and press their demands, the Civil Service Commission has often been the frequent recourse by either party in the settlement of their disputes. To provide a systematic and orderly mechanism for the settlement of such disputes, as well as to ensure fruitful dialogues and lasting agreements between the parties concerned, the Commission hereby issues the following policy guidelines on its conciliation/mediation service. These policy guidelines shall be followed in all official conciliation/mediation efforts of the Civil Services Commission. cda For your guidance and compliance. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner (Officer-in-Charge) Policy Guidelines on Conciliation/Mediation Service of the Civil Service Commission 1. The Civil Service Commission shall provide Conciliators/Mediators to assist in the settlement of public sector labor disputes under any of the following instances: casia a. upon request of management, employee union or citizens affected by disrupted public services; b. in cases of spreading employee unrest as reported to the Civil Service Commission;

c. any situation which requires immediate intervention to protect public interest; and d. when there is a notice of strike filed with the DOLE. 2. Conciliation/Mediation shall be resorted to after exhausting all the remedies under CSC MC No. 45, s. 1989, as certified by the concerned grievance committee; cd 3. Conciliation and Mediation conferences shall be participated in only by directly concerned parties i.e., representatives of management, rank-and-file union or association; 4. Proceedings shall be non-adversarial legal, federation and other representations are not required and shall not be allowed; 5. Conciliation/Mediation services shall only commence, if acceptable by both parties; 6. Political, ideological and other issues beyond the jurisdictional control of the agency concerned may not be the subject of Conciliation/Mediation; 7. All issues resolved in Conciliation/Mediation conferences should be made subject of a Voluntary Agreement between the parties; 8. A copy of any Voluntary Agreement shall be forwarded to this Commission for documentation and monitoring; and 9. If an issue or dispute remains unresolved after exhaustive Conciliation/Mediation efforts, the same shall be certified for arbitration by the Office for Personnel Relations to the Public Sector Labor Management Council. Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-21-91 Revenue Memorandum Circular No. 1-91 January 21, 1991 REVENUE MEMORANDUM CIRCULAR NO. 1-91 Subject : Missing of the one (1) Set of Confirmation Receipt (BIR Form 0808-02) To : All Internal Revenue Officers, Employees and Other concerned. Notice is hereby given of the missing one (1) set of confirmation receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------21051571 : one (1) set The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-03-91 Revenue Memorandum Circular No. 2-91 January 3, 1991

REVENUE MEMORANDUM CIRCULAR NO. 2-91 Subject : Policy on the Requirements of Clearances on the issuance of Appointments. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 48, s. 1990. "Pursuant to resolution No. 90-1036 dated November 15, 1990, the Civil Service Commission has adopted a uniform policy on the requirements of clearances submitted prior to the issuance of any appointment in the civil service. cdasia In view of its desire to simplify the appointment process, to avoid red tape and unnecessary delay in the issuance of appointments, the Commission hereby limits the requirements on clearances for purposes of appointment to the following: A. For original appointments 1. NBI Clearance B. For reinstatement/ reemployment 1. NBI Clearance 2. Clearance from previous/ former office or agency C. Renewal of temporary, casual or contractual No need for new clearances cda Other than the above, no other clearance need be submitted for the issuance of appointments. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-04-91 Revenue Memorandum Circular No. 3-91 January 4, 1991 January 4, 1991 REVENUE MEMORANDUM CIRCULAR NO. 3-91 Subject : Prohibiting the Practice of Issuing Job Orders in Hiring Casuals. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 46, series of 1990 dated November 14, 1990. "It has been observed that there are some offices hiring casual employees who are simply issued job orders. This practice has no legal basis. cd i Under Memorandum Circular No. 9, s. 1986 " . . . appointments of casuals, emergency and seasonal personnel shall only be resorted to when their services are essential and necessary and the regular staff is insufficient to carry out the demands of the service." However, ". . . casual appointments issued must be on plantilla form".

In view thereof, and as reports reaching this Commission indicate that irregularities have been committed in the hiring of casuals thru issuance of Job Orders, the discontinuance of such practice is enjoined. Agencies found insisting on such practice shall be dealt with accordingly. This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdtai (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-11-91 Revenue Memorandum Circular No. 4-91 January 11, 1991 January 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 4-91 Subject : Preventive Suspension To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 49, s. 1990 dated November 22, 1990. "The Civil Service Commission in its Resolution No. 90-1066 dated November 22, 1990 adopted the policy that the ninety (90) days preventive suspension of an erring officer or employee cannot be deducted from the penalty imposed upon them. cd i All circulars, guidelines, rules and regulations inconsistent with this Memorandum Circular are repealed, revoked or amended accordingly. This Memorandum Circular shall take effect immediately. Patricia A. Sto. Tomas" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-11-91 Revenue Memorandum Circular No. 5-91 January 11, 1991 January 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 5-91 Subject : Computation of Vacation Leave Without Pay Re: Implementation of Length of Service Step Increment To : All Revenue Officials and Employees and others concerned.

For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 50, s. 1990 dated December 12, 1990. acd "Pursuant to the provisions of Section 13(c) of the Republic Act No. 6758 and the Joint CSC-DBM Circular No. 1, Series 1990, step increments shall be granted to all deserving officials and employees of the government based on length of service and merit. In line with the effective and facilitative implementation of the length of service step increment, it is hereby promulgated that for purposes of computing the length of service for the grant of step increment, authorized vacation leave without pay for an aggregate number of fifteen (15) days, inclusive of Saturdays, Sundays and holidays, shall not interrupt the continuity of the three years service requirement for the grant of one (1) step increment, PROVIDED that: the total number of authorized vacation leave without pay incurred within the three-year period does not exceed fifteen (15) days. This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-91 Revenue Memorandum Circular No. 6-91 January 23, 1991 REVENUE MEMORANDUM CIRCULAR NO. 6-91 Subject : Automatic Grant of Civil Service Eligibility Pursuant to the Provisions of Republic Act No. 1080. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 57, s. 1990 dated December 27, 1990. casia "Effective January 2, 1991, the Commission pursuant to the provisions of Republic Act No. 1080, shall automatically consider as civil service eligibles those who have passed a bar or board examination and shall phase out the issuance of certificates of RA 1080 eligibility. For purposes of appointment, an appointee to a position requiring an RA 1080 eligibility who is not issued a certificate of eligibility under this scheme shall be required to submit a copy of his valid registration card (license) or Certificate of Title of the Philippine Bar or Guro Certificate, and his report of rating, which shall be attached to his appointment. Those who have been granted RA 1080 eligibility under the old scheme may submit their certificate of RA 1080 eligibility for this purpose. For your information and guidance. (Sgd.) Patricia A. Sto. Tomas"

Chaiman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-91 Revenue Memorandum Circular No. 7-91 January 23, 1991 REVENUE MEMORANDUM CIRCULAR NO. 7-91 Subject : Reclassifying Nepotism as a Grave Offense Punishable by Dismissal To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 53, s. 1990 dated December 19, 1990. casia "Nepotism or prohibited appointments made in favor of relatives in government is a ground for administrative disciplinary action and for criminal prosecution as provided in Section 46 (b) (30) and Section 67, respectively, of Chapter 7, Title I, Book V, of Executive Order No. 292, or the Administrative Code of 1987 CSC Resolution No. 89506 dated July 20, 1989 categorizes the offense as less grave, punishable by suspension of one month and one day to six months for the first offense, and dismissal for the second offense. Considering the seriousness of the offense, and its adverse implications on the merit system in the Civil Service, this Commission issued Resolution No. 90-1183 on December 19, 1990 reclassifying Nepotism as a grave offense punishable by dismissal from the service. Accordingly, disciplining authorities should act in conformity with said Resolution in the exercise of their disciplinary power. This Memorandum Circular shall take effect thirty (30) days after publication in a newspaper of general circulation. cd (Sgd.) Patricia A. Sto. Tomas" Chairman All Revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-91 Revenue Memorandum Circular No. 8-91 January 23, 1991 January 23, 1991 REVENUE MEMORANDUM CIRCULAR NO. 8-91 Subject : Additional Guidelines on the Confirmation/Approval of Contractual Appointments

To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 54, s. 1990 dated December 19, 1990. acd "Pursuant to CSC Resolution No. 90-1184 dated December 19, 1990 the Civil Service Commission hereby adopts and promulgates the following policies as additional guidelines on the confirmation and approval of contractual appointments: 1. All contracts of personnel services shall be submitted to this Commission or its proper Regional Office for review and approval. 2. Effective January 11, 1991, this Commission and its proper Regional Offices shall disapprove all contractual appointments submitted to it after the date of its effectivity or after thirty (30) days from issuance thereof. 3. Payment for services rendered by those whose contractual appointments were disapproved as mentioned in paragraph 2 hereof, shall be the personal liability of the appointing authority concerned pursuant to Section 65, Book V of Executive Order No. 292. 4. Services rendered by contractual personnel for the duration of their disapproved contractual appointment shall not be credited as government service for whatever purpose. 5. The following shall be the requirements for confirmation or approval of original contractual appointments, to wit: a. A copy of a duly notarized contractual appointment/contract of services which includes statement of functions and responsibilities. b. A copy of CS Form No. 212 (Personal Data Sheet) duly accomplished by the contractual appointee, which document shall be notarized and shall contain all his relevant experience and education as certified by the personnel officer of the contracting agency. c. Justification for the hiring of personnel on contractual basis within the contemplation of Section 9(4), Chapter 2, Book V of Executive Order No. 292, including a brief description of the project, job or work to be accomplished and its specific duration. 6. In the renewal of said contractual appointments, only the renewed contract is required if the original has been previously submitted. For strict compliance. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. aisa dc (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-91 Revenue Memorandum Circular No. 9-91 January 23, 1991

REVENUE MEMORANDUM CIRCULAR NO. 9-91 Subject : Policy Directions on the Right to Collective Negotiations in the Public Sector To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 55, S. 1990 dated December 19, 1990. "The Civil Service Commission has duly accredited and recognized as negotiating agents of appropriate organization units, no less than fifty (50) government employees' unions pursuant to Executive Order No. 180 and its implementing rules. Such unions may negotiate with corresponding authorities on terms and conditions of employment not specifically fixed by law, in order to promote and attain harmony and productivity in their respective organizations. acd To guide and assist parties in collective negotiations, this Commission has resolved to prescribe the attached policy directions thereof. For your guidance and compliance. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-91 Revenue Memorandum Circular No. 10-91 January 23, 1991 January 23, 1991 REVENUE MEMORANDUM CIRCULAR NO. 10-91 Subject : Guidelines on the Right to Access to Records Kept by the Civil Service Commission (CSC). To : All Revenue Officials and Employees and other concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 56, s. 1990 dated December 27, 1990. "The Civil Service Commission, through the Office for Central Personnel Records, is the official custodian and repository personnel records of government officials and employees. Being a quasi-judicial body, it also keeps and maintains legal records arising from administrative disciplinary and non-disciplinary cases. Personnel records, just like medical records, involve personal privacy. Information contained therein are considered confidential in nature (OP MC No. 78, s. 1864). Hence, access to such records is subject to certain limitations. cd To insure a consistent policy on the right to access to records on file with the Civil service Commission pursuant to the provisions of Section 5(e) of Republic Act 6713, otherwise known as the "Code of Conduct and Ethical Standards for Public Officials and

Employees" and Rule IV, Section 3 of its implementing rules, the following guidelines are hereby prescribed for the guidance of all concerned: 1. Copies or reproductions of CSC records may be made available to authorized parties who have submitted a written request, the purpose for which is valid and legitimate. 2. The following may be allowed access to CSC records: a. Any requesting party as it pertains to his personal records; b. The Head of the Agency/the Personnel Officer or the Administrative Officer of the Agency to which the employee concerned belongs; c. Courts and administrative bodies exercising quasi-judicial and/or investigative functions by means of the compulsory process of subpoena duces tecum, in aid to the determination or resolution of pending cases; d. Such other officials or entities duly authorized by competent authorities. 3. Official information, records of documents shall be provided to any authorized requesting party as defined above except the following: a. Such information, record or document comprises drafts of decisions, orders, rulings, opinions, memoranda, comments and other pleadings to the Supreme Court, Regional Trial Court, etc.; cdtai b. Such disclosure would put the life, safety and reputation of an individual in imminent danger; c. Such information, record or document, or statement must be kept in secret in the interest of national security; d. Such disclosure consists of unwarranted invasion of personal privacy, like counsel-client privilege communications. 4. Request for needed records shall be made in writing. Certified copy/ies shall be issued upon payment of the required fees. 5. Communications officially entered into CSC records may no longer be withdrawn. This Memorandum Circular take effect immediately. cdasia (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-23-91 Revenue Memorandum Circular No. 11-91 January 23, 1991 January 23, 1991 REVENUE MEMORANDUM CIRCULAR NO. 11-91 Subject : Directing the Continued Adoption of Economy Measures for Fiscal Year 1991. To : All Revenue Officials and Employees and others concerned.

For the information and guidance of all revenue officials and employees, quoted hereunder is Malacaang Administrative Order No. 205 dated January 3, 1991. "Pursuant to the powers vested in me by law, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: cd Sec. 1. All government offices and agencies including local government units and government owned or controlled corporations, are hereby directed to adopt and implement the following economy measures for FY 1991: a. Discontinuance of the grant and payment of all honoraria and similar allowances, excluding representation and transportation allowances as authorized in the General Appropriations Act. b. Deferment of hiring of consultants, except in foreign-assisted projects. Where the hiring of consultants and other related personnel to these projects is explicitly provided under the terms and conditions of the loan agreement. c. Suspension of all foreign travel, except those fully funded from grants or those expressly authorized by the Office of the President. d. Suspension of the conduct of all seminars, conventions, annual and anniversary celebrations, sports activities and festivals and other similar activities funded from agency budgets, except athletic meets and activities conducted by public schools and state universities and colleges; e. Reduction of staff initially by five percent (5%) by the end of June 1991 and by ten percent (10%) by the end of December 1991 through voluntary retirement and redeployment. For this purpose, the Department of Budget and Management is hereby directed to develop and enforce a staff reduction program, and to issue and corresponding rules, procedures and guidelines governing said program. On the basis of such rules, procedures and guidelines, all government agencies including government owned or controlled corporations and local government units shall submit their respective staff reduction program to the Department of Budget and Management, not later than 30 days after the issuance of the DBM rules, procedures and guidelines. Sec. 2. The sale of government vehicles to present users with the rank of Secretary, Undersecretary, Assistant Secretary, Director IV, V and VI, and their equivalent positions, is hereby authorized. As a primary condition to the sale of these vehicles for official government business and assume the cost of gasoline, repair and maintenance services arising therefrom subject to the rules and regulations to be promulgated pursuant to this provision. cda The officials who, in writing, shall opt to purchase the vehicles presently assigned to them may acquire the same through financing from the Government Service Insurance System (GSIS) and other government financial institutions. The GSIS and other government financial are hereby directed to make available a car financing plan for this purpose. The rules and regulations to implement this Section shall be jointly formulated by the Department of Finance, Department of Budget and Management and representatives from the government financial institutions, and in consultation with the Commission on Audit. The rules and regulations shall be issued within sixty (60) days from the effectivity of this Administrative Order. Sec. 3. The Department of Budget and Management shall submit a report every quarter on the status of the implementation of this Administrative Order to the Office of the President.

Sec. 4. Unless specified otherwise, all other economy measures directed by Administrative Order No. 177 and Administrative Order No. 197, both Series of 1990, are hereby reiterated. Sec. 5. All other rules, regulations and directives or provisions of Presidential issuances which are inconsistent with the provisions of this Administrative Order are hereby amended and modified accordingly. Sec. 6. This Administrative Order shall take effect immediately. Done in the City of Manila, this 3rd day of January, in the year of Our Lord, nineteen hundred and ninety one. (SGD.) CORAZON C. AQUINO By the President: (Sgd.) OSCAR M. ORBOS" Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd i (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-28-91 Revenue Memorandum Circular No. 12-91 January 28, 1991 January 28, 1991 REVENUE MEMORANDUM CIRCULAR NO. 12-91 Subject : Administrative Order No. 205 - For Staffing Summary To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Malacaang Memorandum Circular No. 122 dated January 14, 1991. "Administrative Order No. 205, dated January 3, 1991, enjoins all government offices and agencies, including local government units and government-owned and controlled corporations, to adopt and implement their respective staff reduction program as a key component of the economy measures for Fiscal Year 1991. aisa dc To ensure the immediate and government-wide implementation of this measure, all heads of departments, bureaus, offices and agencies, including local government units and government-owned or controlled corporations are hereby directed to submit on or before January 31, 1991 to the Office of the President, through the Department of Budget and Management, their respective staffing summary showing their actual manpower (warm bodies) complement as of December 31, 1990. For purposes of uniformity of style and format of the report, the STAFFING SUMMARY REPORT FORM NO. 91-1 hereto attached as Annex A, shall be accomplished by the Personnel Office of the agency concerned, and duly signed and certified correct by the head of office or agency. The accomplished form shall be supported by a certified true copy of the December 1990 PAYROLL of the agency concerned. This Memorandum Circular shall take effect immediately.

By authority of the President: (Sgd.) OSCAR M. ORBOS" Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-21-91 Revenue Memorandum Circular No. 13-91 January 21, 1991 January 21, 1991 REVENUE MEMORANDUM CIRCULAR NO. 13-91 Subject : "BALIKBAYAN" Travel Tax Exemption To : All Internal Revenue Officers and Others Concerned For the information of all those concerned, the following matters are presented pertaining to the "Balikbayan" Travel Tax Exemption program: 1. Filipino "Balikbayans" can request for exemption from travel tax when they depart for abroad amended by Executive Order No. 283. 2. For purposes of qualifying for travel tax exemption, the term "Balikbayan" refers to "Filipino citizens who are permanent residents of foreign countries, provided they present evidence that they have their income tax returns and paid income tax due thereon, if any, to the Philippine Government for the preceding year." (Section 1(f), Executive Order No. 283.) cdasia "Filipino Citizens who are permanent residents of foreign countries" refer to: (a) those who have been granted permanent resident status by the foreign government; or; (b) those who have resided uninterruptedly for a period of 5 years without having been absent therefrom for more than one 6 months in any one year in countries which have been restrictive immigration. The exemption shall not be granted if the passenger's permanent resident status has lapsed or has stayed in the Philippines for more than one (1) year, whichever comes first. (Section 6, Rule II, Department of Finance). 3. The applicant for the travel tax exemption must submit/present the following applicable documents to Room 409, International Tax Affairs Division (ITAD), BIR National Office Building, Diliman, Quezon City: (a) Philippine passport; (b) Proof of permanent residence abroad; Certification of Residence issued by Philippine Embassy/Consulate in the country which do not grant permanent resident status or appropriate entries in the passport; (c) If employed/with income, original and xerox copy of Philippine income tax return and official receipt of payment of tax due, if any, for the preceding year. If the Philippine passport was issued abroad this year, or is stamped as having paid income tax by Philippine Embassy/Consulate, submit xerox copy of stamped page on passport. The

applicant can file his income tax return in ITAD upon applying for the tax exemption. aisa dc (d) If applicant claims to be a dependent and 18 years old or above but below 65 years of age, Certification of Unemployment/No Income issued by the Philippine Embassy/ Consulate in the country of residence or from appropriate officer in the country wherein the Philippines does not maintain an Embassy or Consular Office. This takes effect immediately. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-28-91 Revenue Memorandum Circular No. 14-91 January 28, 1991 January 28, 1991 REVENUE MEMORANDUM CIRCULAR NO. 14-91 Subject : Filing of BIR Form 1701-C by non-resident citizens abroad. To : All foreign posts collection officers and other internal revenue officers concerned. In order to save on the use of BIR Form 1701-C (Income tax return for non-resident citizens) and on transporting costs of these forms to and from the foreign posts, the total number of these income tax returns that shall be accomplished and filed by the nonresident citizens in these posts shall be strictly limited to two copies, and distributed as follows: the original for the BIR and the duplicate for the file copy of the taxpayers. casia One copy (the original) is sufficient for BIR processing purpose and hence the previous practice of maintaining two copies of the income tax return for the BIR files is hereby discarded. This Order takes effect immediately. cdtai (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-29-91 Revenue Memorandum Circular No. 15-91 January 29, 1991 REVENUE MEMORANDUM CIRCULAR NO. 15-91 Subject : Observance of the Month of March as "WOMEN'S Role in History Month." To : All Revenue Officials and Employees and Others Concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Proclamation No. 227 dated March 17, 1988. "PROVIDING FOR THE OBSERVANCE OF THE MONTH OF MARCH AS "WOMEN'S ROLE IN HISTORY MONTH."

WHEREAS, the House of Representatives has designated under Resolution No. 20 the month of March, 1988 and every month of March thereafter as "Women's Role in History Month"; casia WHEREAS, said Resolution No. 20 highlights the historical contributions which Filipino women of every class, religion and ethic background have made to the growth and strength of the nation in countless recorded and unrecorded ways; WHEREAS, Filipino women have played and continued to play a critical economic, cultural, political, and social role in ever sphere of our nation's life by constituting a significant portion of the labor force working in and outside of the home; WHEREAS, Filipino women have played a unique and meaningful role throughout our history by providing the majority of the nation's volunteer force and have been particularly important in the establishment of early charitable, philanthropic cultural, and political institutions in the country; WHEREAS, Filipino women of every class, ethnic, and religious background served as early leaders in the forefront of ever major progressive social change movement, not only to secure their own right of suffrage and equal opportunity but also to create a more fair and just society for all; WHEREAS, it would be fair and fitting that those contributions of the Filipino women be given due recognition. NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by law, do hereby call upon the people of the Philippines to observe with appropriate ceremonies and activities. Towards this end, the National Commission on the Role of Filipino Women is hereby designated as the Secretariat to coordinate its nationwide observance. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. cdt (Sgd.) CORAZON C. AQUINO" By the President (Sgd.) Catalino Macaraig, Jr. Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-11-91 Revenue Memorandum Circular No. 16-91 February 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 16-91 Subject : Loss of twenty four (24) sets of Official Receipts (General Form No. 13-A) To : All Internal Revenue Officers, Employees and Others Concerned:

Notice is hereby given of the loss of twenty four (24) sets of Official Receipts (General Form No. 13-A), to wit: --------------------------Inclusive Serial Number : Quantity --------------------------9725077-C to 9725100-C : twenty four (24) sets --------------------------The abovementioned official receipts which were reported as missing by Mrs. Elena C. Pineda, Chief General Services Division are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-91 Revenue Memorandum Circular No. 17-91 February 18, 1991 REVENUE MEMORANDUM CIRCULAR NO. 17-91 Subject : Missing one (1) Set of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------B-22082250 : One (1) --------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

02-15-91 Revenue Memorandum Circular No. 18-91 February 15, 1991 REVENUE MEMORANDUM CIRCULAR NO. 18-91 Subject : Guidelines on the Search for Presidential (Lingkod Bayan) and Civil Service Commission (Pag-asa) Awardees for Outstanding Public Service Pursuant to Executive Order Nos. 334 and 292. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 59, s. 1990 dated December 27, 1990. "Executive Order No. 334 dated August 18, 1988 instituted the Presidential Awards for Outstanding Public Service. Subsequently, the implementing rules and regulations of the said order were approved by the Office of the President through the Executive Secretary on November 7, 1988. Moreover, Section 35, Chapter 5 of Executive Order No. 292 otherwise known as the Administrative Code of 1987, as amended established the government-wide Employee Suggestions and Incentives Award System which took effect on November 23, 1989. cd In view thereof, the following are the implementing Guidelines of the Search for the Presidential and Civil Service Commission Awardees for Outstanding Services: 1. Categories of Awards 1.1 Presidential Award- Lingkod Bayan This is given to an individual or group of individuals for highly exceptional or extraordinary contributions resulting from an idea or performance which benefit, enhance and safeguard national welfare, interest, security and patrimony. casia 1.2. Civil Service Commission Award-Pagasa Award This is given to an individual or group of individuals for contributions of an idea or performance resulting in direct benefits to more than one department or agency. 2. Bases of Awards Awards shall be granted for achievements made on the preceding year achievement is based on the following: 2.1 Consistent dedicated performance exemplifying the best in any of the profession or occupation in the public service. 2.2 Idea, suggestion or invention approved and/or adopted by the employing agency. 2.3 Performance of an extraordinary act or service in the public interest in connection with, or related to, one's employment or official function. 2.4 Outstanding community service or heroic act in the public interest (not related to his official function as public servant). 3. Qualifications for the Awards Officials and employees nominated for any of the awards must: 3.1 Hold permanent appointment in the career service; 3.2 Have been employed with the nominating agency for at least one year at the time of nomination; 3.3 Have been rated at least Very Satisfactory or its equivalent for two grading periods immediately preceding the nomination; and

3.4 Have not been found guilty of any criminal or administrative offense or does not have any pending case against them at the time of nomination. 4. Nominating Persons or Group 4.1 The immediate supervisor of the employee 4.2 His co-workers; or 4.3 A private person or group. 5. Procedure All nominations shall be submitted to the Suggestions and Incentive Awards Committee (SIAC) established in each Department or Agency, including SUC's and Local Government Units. The Committee screens all the nominations on the basis of the following evaluation procedure: 5.1 Regional Bureau 5.1.1 The immediate supervisor of the employee, his co-workers or any other private person(s) may submit nominations to the Regional Bureau/Agency SIAC Regional Department/Agency The immediate supervisor of the employee, his co-workers or any other private person(s) may submit nominations to the Regional/ Department/Agency SIAC. State Universities and Colleges The immediate supervisor of the employee, his co-workers or any other private person(s) may submit nominations to the SUC's SIAC. cdasia SUC's SIAC screens, evaluates and recommends nominations to the SUC's President. Local Government Units The immediate supervisor of the employee, his co-workers or any other private person(s) may submit nominations to the Provincial/Municipal/City SIAC. 5.1.2 Regional Bureau SIAC screens, evaluates and recommends nominations to Regional Bureau Head. Regional Department/Agency SIAC screens, evaluates and recommends nominations to Regional Department Agency Head, Provincial/Municipal/ City SIAC screens, evaluates and recommends nominations to the Governor or Mayor. 5.1.3 Regional Bureau Head reviews, selects and recommends nominees to Central Bureau SIAC. Regional Department/Agency Head reviews, selects and recommends nominees to the Central Department/Agency SIAC. SUC's President reviews, selects and recommends nominees to the Board of Trustees. The Governor/Mayor reviews, selects and endorses nominations to the Civil Service Regional Office which has jurisdiction over the local government unit. The Board of Trustees reviews, selects and endorses nominations to the Civil Service Central Office. 5.1.4 CSRO endorses the nominees to the Regional SIAC which is constituted by the CSC Regional Director. Regional SIAC reviews, selects and endorses nominations to the Civil Service Central Office. cda 5.2 Central Bureau 5.2.1 Central Bureau SIAC evaluates and recommends nominees to Central Bureau Head.

5.2.2 Central Bureau SIAC reviews nominations, selects/recommends nominees to Department Central Office SIAC. 5.3 Department/Agency 5.3.1 Central Department/Agency SIAC evaluates nominations from bureaus and regional offices including those from the Central Office and recommends deserving employees to Central Department/Agency Head. 5.3.2 Central Department/Agency Head reviews, selects and endorses nominations to the Civil Service Commission Central Office. 5.4 Civil Service 5.4.1 The technical Committee evaluates nominations from Department/Agencies' central offices, including those from the Regional SIAC's in CSRO's, and recommend selected candidates to the Special Committee on Awards. 5.4.2 The Special Committee on Awards evaluates and recommends to the President the Lingkod Bayan awardees, and to the CSC Chairman, the Pagasa Award. 6. Requirements Nominations must be made on the prescribed form and submitted together with the following supporting documents in five copies: 6.1 Certification that the nominee has been screened by the Department/Agency/Unit SIAC, signed by its Chairman. 6.2 Personal Data Sheet (CS Form 212) of the nominee duly subscribed and sworn to before the highest ranking personnel officer in that Agency. cda 6.3 Certification of the highest ranking Personnel Officer in the agency that nominee has not been found guilty of any criminal and or administrative offenses or he has no pending case at the time of nomination. 6.4 Accomplished Performance Appraisal System Form with Outstanding Performance Rating. 6.5 Copies of 5 cm. x 5 cm. photo of nominee with his name written on the back. IF THE ABOVE SUPPORTING DOCUMENTS ARE NOT SUBMITTED, THE NOMINATION SHALL NOT BE CONSIDERED. Supporting documents such as clippings, citations, publications and pictures, if any, will facilitate evaluation of the nominee's achievement. 7. How to Justify Individual or Group Nomination 7.1 Describe the situation or task/responsibilities leading to the employee's actions. These are often created by changes in work procedures, demands made by a superior or clientele, working conditions, job responsibilities, scheduling problems, or conflicts, among co-workers. These shall contain the information why particular action took place. cdasia 7.2 Describe the measures/procedures/systems and improvements undertaken. These refers to nominee's accomplishments. 7.3 Finally, describe the results or effects caused by these accomplishments. These must indicate whether the actions were effective in charging or improving the original situations. 8. Deadline for Submission of Nominations Nominations must be submitted to the Civil Service Regional Offices not later than May 1 of any given year and to the CSC Central Office, June 1 of any given year. cdt

Nominations received after June 15 of any given year will automatically be included for evaluation for succeeding year award. 9. Forms of Recognition LINGKOD BAYAN Award are in the form of gold medallions and plaques containing the citation and signature of the President of the Philippines. PAGASA Award is in the form of a gold medallion and a plaque containing the citation and signature of the CSC Chairman. 10. Composition of SIAC At the bureau or department level, including SUC's, the Suggestion and Incentive Awards Committee (SIAC) is composed of the highest Human Resource Management Officer, the Administrative Officer, the Legal Officer and the Supervisor of the nominated employee, and a representative of the rank and file employees chosen by the duly accredited employee association in the department or agency. In the absence of an accredited association, the representative shall be chosen at large by the employees through an election to be called for the purpose. At the Municipal, City or Provincial level, the SIAC is composed of the highest Human Resource Management Officer or any officer/employee in-charge of personnel, the Treasurer, the representative from the Office of Mayor/Governor, and the Supervisor of the nominated employee. casia 11. Source of Funding for the Awards Section 35, Chapter 5 of Executive Order No. 292, Section 27 of RA 2260 and PD 1177 are legal bases for agencies to incur necessary expenses relative to the incentive and award system, chargeable to the savings of the particular agency. 12. Awarding Rites LINGKOD BAYAN (Presidential) Award shall be conferred by the President in a fitting ceremony during the Civil Service Foundation Day Anniversary. PAGASA (Civil Service Commission) Award shall be conferred by the Chairman of the Civil Service Commission during the celebration of the Civil Service Week. cdt (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue By: (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner (Officer-in-Charge) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-04-91 Revenue Memorandum Circular No. 19-91 March 4, 1991 REVENUE MEMORANDUM CIRCULAR NO. 19-91

Subject : Loss of original copy of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions) BIR Form 1954. To : All Internal Revenue Officers, Employees and others Concerned. Notice is hereby given of the loss of original copy of Certificate Authorizing Registration (Taxable Capital Gains on Real Estate Transactions), to wit: ------------------------Serial Number : Quantity ------------------------CGC No. 193701 : One (1) original copy ------------------------The above copy which was reported as missing by Ms. Emerita A. Toleron, Revenue Administrative Assistant of Revenue District No. 90, Mati, Davao Oriental, and the other copies of the set have been cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the original copy of the said certificate is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-07-91 Revenue Memorandum Circular No. 20-91 February 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 20-91 Subject : Sanctions in Case of Cheating, Collusion and Other Anomalous Acts Committed in Taking any Civil Services Examination. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 1, s. 1991 dated January 9, 1991. "Pursuant to CSC Resolution No. 91-025 dated January 9, 1991 the Civil Service Commission hereby adopts and promulgates the following policies, rules and guidelines as Sanctions in Cases of Cheating, Collusion and other Anomalous Acts committed in taking any Civil Service Examinations. cdt 1. The release of the examination results of examinees in testing centers where there are high frequency of qualifiers, which results appear to be statistically improbable shall be withheld pending investigation thereof as well as in examination centers where massive cheating and such other anomalous acts were found to have been committed; 2. The results of the examinees involved shall be declared nullified and they shall be barred from taking any civil service examination for a period of three (3) years, if after investigation they are found guilty of such anomalous and/or dishonest acts; 3. In the event it is established that such anomalous practices were committed in collusion with the examiners, proctors and such other officials designed to conduct any civil service examination, they shall likewise be held administratively and/or criminally

liable for their participation including such other individuals who collaborated in the commission thereof; 4. Those who already acquired the appropriate civil service eligibility as a result of a given career service examination. The filing of application of said individuals may constitute a prima facie case against them for possible participation in any collusion or cheating in the conduct of said examination. cdasia (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-07-91 Revenue Memorandum Circular No. 21-91 February 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 21-91 Subject : Policy on Absenteeism and Tardiness To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 4, s. 1991 dated January 27, 1991. "The Civil Service Commission, pursuant to its mandate as the central personnel agency of the government, hereby promulgates the following guidelines and rules on absenteeism and tardiness: cd i A. HABITUAL ABSENTEEISM 1. An officer or employee in the civil service shall be considered habitually absent if he incurs unauthorized absences exceeding the allowable 2.5 days monthly leave credit under the leave law for at least three (3) months in a semester or at least three (3) consecutive months during the year; 2. In case of claim of ill health, heads of department or agencies are encouraged to verify the validity of such claim and, if not satisfied with the reason given, should disapprove the application for sick leave. On the other hand, cases of employees who absent themselves from work before approval of their application should be disapprove outright; and, 3. In the discretion of the Head of any department, agency or office, any government physician may be authorized to do a spot check on employees who are supposed to be on sick leave. Those found violating the leave laws, rules or regulations shall be dealt with accordingly by filing appropriate administrative cases against them. B. HABITUAL TARDINESS Any employee shall be considered habitually tardy if he incurs tardiness, regardless of the number of minutes, ten (10) times a month for at least two (2) months in a semester or at least two (2) consecutive months during the year. cd i C. SANCTIONS 1. The following sanctions shall be imposed for violation of the above guidelines:

a) for the first violation, the employee, after due proceedings, shall be meted the penalty of 6 months and 1 day to 1 year suspension without pay: b) for the second violation, and after due proceedings, he shall be dismissed from the service. Reports on punctuality and attendance of all employees should be submitted to the Personnel Office or Administrative Officer of every department or agency not later than two (2) weeks after the end of every semester (June and December). acd Heads of Department or Agencies shall oversee the strict implementation of this Circular and may prescribe their own internal rules and regulations in the use of bundy clock, logbook, pass slip and/or application for leave of absence. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-07-91 Revenue Memorandum Circular No. 22-91 February 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 22-91 Subject : Policy on the Use of Qualification Standards To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 3, s. 1991. "The Civil Service Commission, as the central personnel agency of the government, in pursuit of a more professionalized, efficient, competent and progressive civil service, hereby promulgates the following policies on the use of qualification standards: cdtai 1. The approved Qualification Standards of any agency shall be used as the standard minimum qualification requirements for positions in that agency for purposes of appointments and other personnel actions. 2. These minimum requirements shall, however, be used or considered sufficient for entrance positions in any agency, that is the lowest position in any occupational group. 3. Where the position to be filled up is not an entry position, the minimum qualifications prescribed shall no longer be sufficient unless there are no other applicants or contestants who exceed the minimum qualification standards. cd i The appointing authority shall determine who among the applicants is most qualified in terms of performance, qualifications and competence and appoint the best qualified candidate. 4. All other issuances of this Commission inconsistent with the foregoing are deemed modified accordingly. (Sgd.) Patricia A. Sto. Tomas" Chairman

All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-07-91 Revenue Memorandum Circular No. 23-91 February 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 23-91 Subject : Implementing Guidelines of the Incentives and Rewards System under RA No. 6713. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 56, s. 1989 dated December 28, 1989. "Section 6 of Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees, provides for the establishment of a system of annual incentives and rewards in order to motivate and inspire public servants to uphold the highest standards of ethics. acd To operationalize the Incentives and Rewards System, hereinafter referred to as the System, the following implementing guidelines are hereby adopted: 1. Scope The System shall apply to all officials and employees of the government; elective and appointive, permanent or temporary, whether in the career or non-career service, including military and police personnel, whether or not they receive compensation regardless of amount. 2. Name of Award The Award under the System shall be known as the Outstanding Public Officials and Employees Award. 3. Norms and Conduct as Bases for the Award The Award shall be granted to any public official or employee based on his consistent demonstration and observation of one or more of the following norms of conduct: 3.1 Commitment to Public Interest (Nananaig na Pagpapahalaga sa Kapakanang Pambayan) The official or employee always upholds the public interest over personal interest. All government resources and powers of his department, office or agency are employed and used efficiently, effectively, honestly and economically, particularly to avoid wastage in public funds and revenues. cda 3.2 Professionalism (Propesyonalismo) The official or employee performs and discharges his duties with the highest degree of excellence, professionalism, intelligence and skill. He entered public service with utmost devotion and dedication to duty. He endeavors to discourage wrong perceptions of his role as dispenser or peddler of undue patronage. 3.3 Justness and Sincerity (Pagkamakatarungan at Katapatan) The official or employee remains true to the people at all times. He acts with justness and sincerity and does not discriminate against anyone, especially the poor and the underprivileged. He, at all times, respect the rights of others, and refrains from doing acts

contrary to law, good morals, good customs, public policy, public order, public safety and public interest. He does not dispense or extend undue favors on account of his office to his relatives, whether by consanguinity or affinity, except with respect to appointments of such relatives to positions considered strictly confidential or as members of his personal staff whose terms are coterminous with his. 3.4 Political Neutrality (Pagkawalang Kinikilingan sa Pulitika) The official or employee provides service to everyone without unfair discrimination regardless of party affiliation or preference. 3.5 Responsiveness to the Public (Pagkamatugunin sa Madla) The official or employee extends prompt, courteous and adequate service to the public. Unless otherwise provided by law or when required by the public interest, the official or employee provides information on policies and procedures in clear and understandable languages, ensures oneness of information, public consultations and hearings whenever appropriate, encourages suggestions, simplifies and systematizes policy, rules and procedures, avoids red tape and develops an understanding and appreciation of the socioeconomic conditions prevailing in the country, especially in the depressed rural and urban areas. 3.6 Nationalism and Patriotism (Pag-ibig sa Bayan at Patriotismo) The official or employee, at all times, is loyal to the Republic and to the Filipino people, promotes the use of locally produced goods, resources and technology and encourages appreciation and pride of country and people. He endeavors to maintain and defend Philippine sovereignty against foreign intrusion. 3.7 Commitment to Democracy (Matibay na Pananalig sa Demokrasya) The official or employee commits himself to the democratic way of life and values, maintains the principle of public accountability and manifests by deeds the supremacy of civilian authority over the military. He at all times upholds the Constitution and puts loyalty to country above loyalty to persons or party. cd i 3.8 Simple Living (Payak na Pamumuhay) The official or employee and his family lead modest lives appropriate to his position and income. They do not indulge in extravagant or ostentatious display of wealth in any form. 4. Nomination Criteria and Percentage Weight Nominations shall be guided by the following criteria and percentage weight: Criteria Percentage Weight 4.1 Quality and consistency of Performance 30%

The behavioral performance, conduct or achievement in the observation of the norm(s) of conduct has been consistently outstanding or exemplary. 4.2 Unique and Exemplary Quality of Achievement The achievement is extraordinary and easily distinguishable for its uniqueness and 30%

originality. 4.3 Risk of Temptation inherent in the Work 15%

This refers to the dangerous element/factor or temptation substantially present in the work. 4.4 Obscurity of the Position 10%

This refers to the lowliness of insignificance of the position in relation to policy and decision making or to technical and supervisory positions. 4.5 Years of Service 5%

This refers to the cumulative years of service that the nominee has rendered the Philippine Government. 4.6 Level of Salary 5%

This shall be in accordance with the salary grades provided in Republic Act No. 6758. The Salary Standardization Law, or their equivalents in the local government, the military and the police. 4.7 Any similar circumstances or considerations in favor of the particular nominees 5% --100% ===== Forms of Incentives and Rewards

5.

Incentives and rewards may take the form of any of the following, as may be determined by the Committee on Awards. 5.1 5.2 5.3 5.4 5.5 Bonuses; or Citations; or Directorships in government-owned or controlled corporations; or Local and foreign scholarship grants; or Paid vacations; and

5.6 Automatic promotion to the next higher position suitable to his qualification and with commensurate salary, provided, that if there is no next higher position or it is not vacant, said position shall be included in the next budget of the office; except when the creation of a new position will result in distortion in the organizational structure of the department, office or agency. Where there is no next higher position immediately available, a salary increase equivalent to the next higher position shall be given and incorporated in the base pay. When a new position is created, that which is vacated shall be deemed abolished. 6. Conferment of the Award

The award shall be conferred in a ceremony conducted for the purpose, to be determined by the Committee on Awards. The Award shall likewise be granted to an awardee who dies before the actual grant of the awards. It shall be considered a posthumous award. 7. 7.1 Committee on Awards Composition

The Committee on Awards, hereinafter referred to as the Committee, which shall administer the System, shall be composed of the following: aisa dc 7.1.1 7.1.2 7.1.3 7.1.4 7.2 Ombudsman - Co-Chairman Chairman, CSC - Co-Chairman Chairman, COA - Member Two (2) Government Employees Appointed by the President - Members Functions and Responsibilities

The Committee shall perform the following functions and responsibilities 7.2.1 Conduct a periodic, continuing review of performance of officials and employees in all departments, offices and agencies; 7.2.2 Establish a system of annual incentives and rewards to the end that due recognition is given to officials and employees of outstanding merit on the bases of standards set forth in Section 2, Rule V of the Rules Implementing the Code of Conduct and Ethical Standards; 7.2.3 Determine the form of incentives and rewards to be granted;

7.2.4 Formulate and adopt its own rules to govern the conduct of its activities, which shall include guidelines for evaluating nominees, the mechanism for recognizing the awardees in public ceremonies and the creation of sub-committees. 7.3 Assistance to the Committee

In the evaluation of nominees, the Committee may be assisted by technical experts selected from the government and private sectors. 7.4 Finality of Decision

Decisions of the Committee on Awards shall be deemed final and unappealable. 8. Secretariat Services

The Merit and Rewards System Division under the Office for Career Systems and Standards, Civil Service Commission, in addition to its regular functions, shall be tasked to provide secretariat services to the Committee on Awards. As such, it shall perform the following duties and responsibilities: 8.1 Coordinate all activities and undertakings of the Committee, including liaison work; 8.2 Be responsible for the promotion, public information and dissemination in print and broadcast media of the activities and programs of the Committee; 8.3 Provide the Committee investigative work; 8.4 Keep and maintain records of the Committee and provide the necessary documentation of all grants, procedures and other related activities; 8.5 Prepare budget proposals; and 8.6 Do other related work necessary for the proper and orderly conduct of business of the Committee in the implementation of the System. 9. Requirements for Nomination

The following documents shall be submitted in six (6) copies: 9.1 Accomplished nomination form;

9.2 Personal Data Sheet of the Nominee duly subscribed the sworn to before the highest ranking Human Resource Management Officer in the department, office or agency; 9.3 9.3.1 9.3.2 Certification by the Head of the department, office or agency on the nominee's: Length of government service; Latest salary received; and

9.3.3 Record of criminal and/or administrative offense or pending case against nominee, if any. If none, state so. 9.4 10. Clippings, citations, publications, pictures, if any, in support of the nomination. Procedure in Nomination

Any person may nominate a public official or employee for the Award. He shall submit the accomplished nomination form and other supporting documents to the Secretariat, Committee on Awards, Civil Service Commission, Batasan Complex, Diliman, Quezon City. IN VIEW THEREOF, ALL CONCERNED ARE ENJOINED TO SUBMIT THEIR NOMINATIONS FOR THE OUTSTANDING PUBLIC OFFICIALS AND EMPLOYEES AWARD. FOR THE GUIDANCE OF ALL CONCERNED. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. aisa dc (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-11-91 Revenue Memorandum Circular No. 24-91 February 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 24-91 Subject : CLARIFICATORY CIRCULAR ON M.C. No. 41, s. 1990 re: Transfer of Employees to Agencies Over Which They Exercise Oversight Functions. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 51, s. 1990 dated December 18, 1990. "In our Memorandum Circular No. 41, series of 1990, it has been promulgated that Heads of units/field offices/provincial offices of any department/agency and their staff are prohibited from transferring or being appointed to any position in the department or agency which their units are assigned or designated to oversee, for a period of one (1) year after termination of such assignment or designation. cdasia Said Circular was prompted by the increasing number of cases where heads of resident auditing units or Civil Service Field Officers transfer to the management of the very government agencies they are servicing. The prohibition contemplates only transfer of

officials of those offices/units who are in a position to exert pressure or influence on the new or accepting agency but not to cover those occupying clerical and skilled positions such as clerks and drivers. The restriction on any transfer or resignation within the coverage of the prohibition stated in item 2 of M.C. No. 41, shall however remain effective. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-11-91 Revenue Memorandum Circular No. 25-91 February 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 25-91 Subject : The Search for the 1991 Outstanding Public Service Award To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 58, s. 1990 dated December 27, 1990. "Conferring awards on government officials and employees for their outstanding public service is an integral part of public personnel system. These awards are established in order to motivate and inspire public servants to enhance their competence, productivity and moral values. There are two (2) kinds of awards to be conferred in the 1991 Search for Outstanding Public Service, namely Award for Outstanding Work Performance and Award for Exemplary Ethical Behavior. cd The award for Outstanding Work Performance is conferred on an individual or group of individuals on the basis of job performance, suggestion, ideas or inventions that contribute to the efficiency, economy, productivity, or other improvements in government operations or other extraordinary acts or services in the public interest. The award for Exemplary Ethical Behavior is given to an official or employee for his consistent demonstration and observation of one or more of the eight (8) norms of conduct provided for in Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees. In this connection, the Civil Service Commission has began the search for 1991 Outstanding Public Service awardees and enjoins all concerned to actively participate in the Search. Attached are Memorandum Circular Nos. 59, s. 1990 and 56, s. 1989 implementing the 1991 Search for Public Service Awards and nomination forms. We anticipate submission of nominations any time on or before June 15, 1991, Nominations received after this date will automatically be included for evaluation in the succeeding year. cd i

For more information, you may visit the Office for Career Systems and Standards, Constitutional Hills, Diliman, Quezon City or call telephone nos. 96-65-96/97-59-36. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-18-91 Revenue Memorandum Circular No. 26-91 March 18, 1991 REVENUE MEMORANDUM CIRCULAR NO. 26-91 Subject : Loss of one (1) booklet of Revenue Official Receipts (BIR Form No. 25.24) bearing serial numbers 1537051-H to 1537100-H . To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) booklet of revenue official receipts (BIR Form No. 25.24), to wit: cdtai --------------------------Serial Numbers Quantity --------------------------: Forty (40) original copies 1537051-H to 1537090-H : Forty (40) triplicate copies and : Forty (40) quadruplicate copies 1537091-H to 1537100-H : Ten (10) sets --------------------------The abovementioned copies were reported as lost by Mr. Braulio A. Panotes, Revenue Collection Assistant of Paracale, Camarines Norte, Revenue Official Receipts bearing serial numbers 1537091-H to 1537100-H are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned revenue official receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-11-91 Revenue Memorandum Circular No. 27-91 March 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 27-91

Subject : Declaration of February of Every Year as the Civil Registration Month To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Civil Registrar-General Memorandum dated February 14, 1991. cdtai "We are pleased to inform your office that Her Excellency, President Corazon C. Aquino issued Proclamation No. 682 on 28 January 1991 declaring February of every year as the civil registration month. Attached is a copy of Proclamation No. 682 for your reference. TOMAS P. AFRICA" Civil Registrar General All Revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-15-91 Revenue Memorandum Circular No. 28-91 March 15, 1991 March 15, 1991 REVENUE MEMORANDUM CIRCULAR NO. 28-91 Subject : Adoption of a Performance Contract System as a Basis for the Evaluation of the Performance of Officials in the Career Executive Service. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder are Administrative Order No. 204 issued by the Office of the President and Career Executive Service Board Circulars No. 90-03 and 90-04 on the Performance Contract dated December 16, 1990, respectively. "WHEREAS, public officials are at all times accountable to the people and are required to serve them with utmost responsibility, integrity, loyalty and efficiency; WHEREAS, corollary to the principle that appointment of officials in the Civil Service shall be determined according to merit and fitness is the concomitant obligation and responsibility to maintain an acceptable level of performance, to keep fit, to maintain merit and to exercise responsiveness and efficiency in office; WHEREAS, the adoption of measures for the promotion of morale, efficiency, integrity, responsiveness and courtesy in the Civil Service is a continuing policy of the government to account for their accomplishments or performance while in office; casia

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the power vested in me by law, do hereby order: Sec. 1. Performance Contract. All department secretaries and heads of agencies of the National Government-Owned or Controlled Corporations shall require all third level officials in their respective Departments and Agencies to prepare and enter into a semiannual/annual performance contract with them. The performance contract shall be based on the mandates, objectives, programs, projects and activities of the respective offices of these officials for the Calendar Year. Sec. 2. Purpose of Performance Contract. The performance contract shall serve as a basis for the periodic evaluation of the performance of third level officials to be conducted by the heads Departments and Agencies. Sec. 3. This Administrative Order shall take effect immediately. DONE in the city of Manila, this 19th day of December, in the year of Our Lord, nineteen hundred and ninety. (Sgd.) CORAZON C. AQUINO By the President: (Sgd.) OSCAR ORBOS Executive Secretary Pursuant to the provision of the Career Executive Service Law and in the furtherance of Board Resolution No. 90-06, and of the directive of the President, the following guidelines are issued for the implementation of the Performance Contract System for officials in the Career Executive Service (CES). cdt Sec. 1. Performance Contract. All department secretaries and heads of agencies of the national government including government-owned or controlled corporations shall require all officials in the CES in their respective departments and agencies to prepare and enter into a semi-annual or annual performance contract with them or with their respective superiors. The performance contract shall focus on the primary responsibilities of the officials based on the mandates, goals and objectives of the offices where they belong. Sec. 2. Purpose of Performance Contract. The performance contract shall serve as the basis for the periodic evaluation by the superiors of the accomplishments of officials in the CES in accordance by the Career Executive Service Performance Evaluation System (CESPES) as prescribed by the Career Executive Service Board (CSEB). Sec. 3. Contents of Performance Contract. The Performance Contract shall contain the following:

a. List of projects, activities and other undertakings which the official binds himself to accomplish for a particular year. As far as practicable, it shall provide for measurable targets and outputs; and b. The Secretary's or superior's commitment and support to ensure successful implementation of the above undertakings. cdtai The performance Contract may also provide room for special assignments and other ad hoc activities that are given from time to time which may constrain successful implementation of the promised undertakings. Sec. 4. Drawing Up the Performance Contract. The performance contract shall be negotiated between an official in the CES and his superior at the start of each year. A final copy of the performance contract signed by both the official and his superior shall be furnished the Career Executive Service Board. Sec. 5. Non-Submission of Performance Contract. Non-submission of the Performance Contract shall be a valid ground for disciplinary action. Sec. 6. Effectivity. This circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas Chairman Attested by: (Sgd.) ELMOR D. JURIDICO Executive Director Pursuant to the provisions of the Career Executive Service Law and in the furtherance of Board Resolution No. 90-05, the following guidelines are issued for the implementation of the Performance Evaluation System for officials in the Career Executive Service. 1. Career Executive Service Performance Evaluation System (CESPES). The Career Executive Service Performance Evaluation System (CESPES) the parameters, methods and processes of which are provided below is hereby adopted as the system for the periodic evaluation of the performance of officials in the Career Executive Service. cdasia 2. Objectives of the Career Executive Service Performance Evaluation System. The CESPES has the following objectives: a. To evaluate the official's accomplishments of specific targets relative to his office's goals and objectives as defined in his performance contract;

b.

To evaluate the official's managerial competence; and

c. In general, to utilize the performance evaluation results, as applicable, for determining security of tenure in CES, appointment and promotion in rank, grant of incentives and awards and formulation of CES career development programs. 3. Coverage. The Career Executive Service Performance Evaluation System shall cover all Career Executive Service Officers (CESOSs), Career Executive Service Eligibles, and incumbents of CES positions in the various departments and agencies of the national government including government-owned or controlled corporations. 4. Frequency and Period of Evaluation. The Career Executive Service Performance Evaluation System shall be conducted annually and completed within the first quarter of the year. The performance of the official during the preceding year shall be the subject of the evaluation. 5. Criteria of Evaluation. An official in the Career Executive Service shall be evaluated on two (2) performance dimensions, namely: a. Accomplishments of office goals and objectives particularly those undertakings contained in his performance contract; and cda b. Managerial competence which refers to his effectiveness in managing work, people, resources, and linkages. 6. Performance Contract As A Basis for Evaluation of Accomplishments. To ensure an objective evaluation of accomplishments, an official in the CES shall be evaluated by his superior on the basis of his performance contract. The official shall provide the Board a copy of his performance contract. 7. Raters. The official shall be rated by his superior and by at least a majority of his subordinates who have personal knowledge of his performance. The subordinates shall include the official's immediate staff and all other office personnel directly reporting to him. 8. Rating Forms. Two rating forms shall be used in the evaluation of performance, namely: a. Superior Rating Form which mainly measures the official's accomplishments; and

b. Subordinate Rating Form which mainly measures the official's managerial competence. cd i 9. Rating Scale. The performance of the official in each of the two performance dimensions shall be rated on a 7-point scale ranging from Outstanding to Unsatisfactory.

10. Rating Formula. Each performance criteria and source of rating shall be assigned the following weights: Performance Criteria % Accomplishments 70 Managerial Competence 100% Sources of Rating % Superior (90% of 70) 63 Subordinate (10% of 70) Superior (50% of 30) 15 Subordinate (50% of 30) 100%

30

7 15

11. Conduct of CESPES. The Board shall conduct CESPES annually. In pursuance of such activity, the Board may seek the assistance of CES Coordinators in the central offices and on the CSC Regional Offices. 12. Reports of Ratings. The Board shall provide the Secretary and/or the head of the agency or corporation concerned with report agency. The Board shall also furnish all ratee-officials with copies of their performance ratings. 13. Repealing Provisions. The provisions of any rule or regulation previously issued by the Board inconsistent herewith are hereby repealed and/or modified accordingly. cdasia 14. Effectivity. This Circular shall take effect immediately.

(Sgd.) Patricia A. Sto. Tomas Chairman Attested by: (Sgd.) Elmor D. Juridico" Executive Director All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-04-91 Revenue Memorandum Circular No. 29-91

April 4, 1991 REVENUE MEMORANDUM CIRCULAR NO. 29-91 Subject : Loss of the triplicate copy of official receipt (Gen. Form No. 13-A) bearing serial no. 3479000-Q. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of the triplicate copy of official receipt (Gen Form No. 13-A), to wit: ------------------------Serial Number : Quantity ------------------------3479000-Q : one copy (triplicate) ------------------------The above copy which was reported as missing and the other copies of the set bearing the abovementioned serial number have been cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-91 Revenue Memorandum Circular No. 30-91 February 18, 1991 February 18, 1991 REVENUE MEMORANDUM CIRCULAR NO. 30-91 Subject : Revenue Regulations No. 3-90, prescribing additional requirements for certification by independent CPAs, and Revenue Regulations No. 6-90, requiring the submission of engagement letters. To : All internal revenue officers and others concerned. Sec. 1. Objectives. This Circular is issued to familiarize revenue personnel, taxpayers, and the independent CPAs with the provisions of Revenue Regulation Nos. 3-90 and 690. It is also the purpose of this Circular to clarify certain gray areas or doubtful provisions in the regulations. cdtai REVENUE REGULATIONS NO. 3-90 Sec. 2. Coverage of RR 3-90. 2.1 The submission of Certificate of Taxpayer Compliance (CTC) is optional; i.e., taxpayers may or may not submit the CTC with their tax returns. However, only taxpayers submitting CTCs with their tax returns may be entitled to the privilege of last priority in audit and investigation. 2.2 The privilege of last priority is limited to taxes certified to by the CPA, namely: income tax, including withholding tax, and value added tax. Thus, other national internal

revenue taxes like transfer taxes under Title III, other percentage taxes under Title V, excise taxes under Title VI, and documentary stamp taxes under Title VII, all of the Tax Code, may still be audited by the BIR although the taxpayer submitted CTCs covering its income tax, withholding tax, and value added tax liabilities. 2.3 To be entitled to the privilege, the taxpayer does not have to submit CTCs for both income tax and value added tax. If the CTC submitted covers only income tax and withholding tax, the privilege of last priority does not extend to value added tax liability of the taxpayer. In other words, partial certification is allowed. However, income tax and withholding tax, while they may be covered by two separate CTCs and filed separately at different dates, should always go hand-in-hand and both certifications should be unqualified to entitle a taxpayer to the privilege of last priority. 2.4 When a CTC is submitted by the taxpayer with his tax return, he does not automatically become entitled to the privilege of last priority. The taxpayer must submit an unqualified CTC to avail of the privilege herein granted. The privilege of last priority may also be extended to the taxpayer if the deficiency tax arising from the tax audit is paid by the taxpayer before or at the time of filing of the tax return and CTC. In such a case, the fact of payment and other relevant data should be indicated in the CTC. If the deficiency tax payment is made after the filing of the original qualified CTC, another CTC containing such payment of deficiency tax may be filed. acd 2.5 When the CTC attached to the VAT returns covers only the input tax aspects under RR 3-90, the privilege of last priority does not attach. The Independent CPA must also certify to the correctness of the output tax for the same period covered by the CTC in order to qualify for the privilege. 2.6 The CTC is required primarily for taxpayers whose gross sales and/or gross receipts of the taxpayer exceeds P100,000 per annum. Since Section 232(A) of the Tax Code requires the submission of audited financial statements when taxpayers' gross sales or receipts exceeds P25,000 per quarter, and considering that RR 3-90 merely prescribes additional requirements for certification by CPAs, it follows that no such CTC is necessary to be submitted by taxpayers whose gross sales and/or gross receipts do not exceed P100,000 a year. However, a taxpayer with gross sales and/or gross receipts of not more than P100,000 may still avail of the benefit of last priority under RR 3-90 if he should submit an unqualified CTC. 2.7 Should the CPA discover some errors during the tax audit and the taxpayer is willing to pay the deficiency tax, the regular surcharge and deficiency interest shall be imposed and collected . The reason for this requirement is that the waiver of penalties may tempt taxpayers to underpay their tax liabilities and pay the correct tax only during the tax audit. Moreover, there is no legal basis for the waiver of penalties under said circumstances. 2.8 The regulation covers only income required to be reflected in the regular income tax return - BIR Form 1701 for individuals with business or professional income and BIR Form 1702 for corporations. It does not include gain, profit, and income covered by special (income tax) returns like the capital gains tax returns on the sale or exchange of real property and shares of stocks. 2.9 The privilege of last priority attaches only when the taxpayer files a final tax return together with an unqualified CTC. And in order to protect the interest of taxpayers who submitted unqualified CTCs with their tax returns, only the Commissioner of

Internal Revenue and his Deputy Commissioners are hereby authorized to issue letters of authority to examine said taxpayers. aisa dc 2.10 Withholding tax on income subject to final tax shall be included in the CTC. Only withholding tax on salaries and wages are excluded. Therefore, verification as to whether the withholding tax is withheld and remitted or not shall be made on the books of the withholding agent, not of the income earner. 2.11 When a taxpayer files with his tax return a qualified CTC with a general statement, the BIR may still verify all the items of incomes and deductions. 2.12 The privilege of last priority in audit does not apply to the following cases: a. Claims for refunds or tax credits;

b. Cases covered by Sec. 235 (exceptions to the one-examination-in-a-taxable-year rule) of the Tax Code; c. Confidential information filed under Sec. 281 of the Tax Code. cda

2.13 Revenue Regulations No. 3-90 and 6-90 do not apply to Commission on Audit auditors who are tasked under the Constitution to conduct the audit of government owned or controlled corporations. Sec. 3. Responsibilities of Taxpayers and CPAs. 3.1 The primary responsibility of filing CTC rests upon the taxpayer. The taxpayer is also the party primarily responsible for the veracity of the accounts shown in the tax returns and in the financial statements attached to the returns. 3.2 The CPA shall perform his tax audits in the interim period in accordance with the sets of guidelines prescribed in Statement of Auditing Standards and Practices Statement (SASP) No. 11, Procedures to be Followed in the Review of Client's Income, Withholding and Value Added Tax Returns (Annex "A"). 3.3 The CPA shall substantially conduct the tax audit on the items stated in the regulations. The following guidelines, among others, shall be considered in determining substantial compliance with the regulations: a. System of internal control of the taxpayer (whether strong or weak);

b. Invoice amounts, particularly those issued by or to the major suppliers or customers of the taxpayer; c. Industry or sector to which the taxpayer belongs;

d. Acceptable range of variance between the correct amount and the tax return prepared and audited by the CPA.

3.4 A CPA who has been engaged to perform a tax audit is required to submit his report to the Commissioner on the results of his tax audit. Should the taxpayer cancel the contract of engagement or should the CPA withdraw from his engagement during the course of the tax audit, the CPA concerned shall inform in writing the appropriate revenue official of such cancellation or withdrawal within thirty (30) days from the date of the cancellation or withdrawal. 3.5 A CPA is not obligated to disclose his findings during a tax audit relating to withholding tax on salaries and wages, considering that such tax is not covered by the regulations. However, with respect to all other types of withholding tax, whether final or creditable, the findings of the CPA should be communicated to the BIR through the CTC. Sec. 4. Types of Certifications and Filing Dates. 4.1 There are three (3) types of tax returns under the regulations, namely: (a) returns without any certified financial statements; (b) returns with certified financial statements only (Sec. 232(A); and (c) returns with certified financial statements and CTCs. cdasia 4.2 The BIR allows taxpayers to file the CTCs with the tax returns concerned; i.e., monthly for the withholding tax, quarterly for value added tax, and yearly for income tax, whichever is most convenient for the taxpayer and his auditor. All the BIR requires is a CTC for income tax and a CTC for withholding tax submitted with the annual income tax return, and another CTC covering the four (4) quarters for VAT purposes depending upon the group or category assigned to the taxpayer. Taxpayers may, however, be allowed to file all CTCs covering income tax, withholding tax, and VAT liabilities not later than sixty (60) days from the due date for the filing of income tax returns, provided a written notice of its intention to submit a CTC shall have been attached to its income tax return at the time of filing. Sec. 5. In order to have a uniform CTC, the following pro forma annexes are recommended for adoption and use by independent CPAs: Annex "B" - Unqualified CTC (Income, Withholding Tax, and Value Added Tax); Annex "C" - Unqualified CTC (Income, & Withholding Tax); Annex "D" - Unqualified CTC (VAT & Inventory Valuation) REVENUE REGULATIONS NO. 6-90 Sec. 6. The submission of copies of the engagement letter (whether pertaining to financial audit or tax audit) by independent CPAs is compulsory. Sec. 7. The deadlines for the submission of copies of engagement letters for financial audit shall be as set forth in RMC 99-90 dated November 27, 1990. Copies of engagement letters for tax audit should be submitted to the appropriate revenue offices mentioned in the regulations within thirty (30) days from the due date for the filing of the income tax return.

Sec. 8. When required by the Commissioner of Internal Revenue, the CPA shall produce or present a set of working papers as proof that an audit for CTC purposes has been performed. The examiner shall determine only that the working papers (a) indicate the composition of the audit team performing the audit; (b) the audit/work programs used in the audit are duly and completely accomplished; and (c) more importantly, verification of such data in the working papers to prove or show that the working papers are those indeed prepared for the particular taxpayer under examination. cda Sec. 9. In cases of transfers of principal place of business of the taxpayer from one revenue district to another, the engagement letter shall be filed with the new district (if the new principal place of business is located outside of Metro Manila) or with the Office of the Commissioner of Internal Revenue (if within Metro Manila). Sec. 10. This Circular takes effect immediately. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-04-91 Revenue Memorandum Circular No. 31-91 April 4, 1991 REVENUE MEMORANDUM CIRCULAR NO. 31-91 Subject : Missing Three (3) Sets of Confirmation Receipts (BIR Form CB02-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing three (3) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------21411625 : One (1) Set 18803053 : One (1) Set 20071850 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-26-91 Revenue Memorandum Circular No. 32-91 March 26, 1991 March 26, 1991 REVENUE MEMORANDUM CIRCULAR NO. 32-91 Subject : Action on Unrenewed Temporary Appointments

To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Office Memorandum No. 6, series of 1988 dated January 25, 1988. aisa dc "It has been observed that temporary appointments covering several years back are still being submitted to the regional/field offices of the Commission for action without any record of previously approved appointments. In CSC Resolution No. 86-332, the Commission made the reminder that no person shall be allowed to render service and receive salaries without the benefit of a valid appointment and that the practice of allowing persons to continue rendering service without valid appointments, including those whose temporary appointments have lapsed, or have not been renewed on time is not only violative of the Civil Service Law and Rules but also inimical to the public service. In order, however, that such services and payment of salaries of employees despite nonrenewal, or non-submission or late submission of their temporary appointments to the Commission may be properly recorded for future references such as in cases of retirement or resignation or other modes of separation not arising from the employee's fault, the following shall henceforth be observed for uniformity of action: 1. Upon receipt of the set of temporary appointments, the appointing authority, treasurer/cashier or personnel officer shall be asked to accomplish and submit the following: "This is to certify that: cd "Mr./Mrs./Miss (Name of Employee) whose appointment as with compensation at (Position) the rate of (P_____) per annum, effective ____________, 19 and approved as temporary, has rendered services and paid his corresponding salaries/benefits from , ______________19 to ____, 19 with leaves to wit: _______ days with pay; _____ days without pay; and accumulated leaves as of this date _______ of sick leave and _______ vacation leave or a total of _______ days, all of which are supported by records of this office. "Issued this ______ day of ____________, 19____ Appointing Authority Treasurer/Cashier/Personnel Officer 2. Upon receipt of the above certification, a return indorsement shall be prepared as follows:

"Respectfully returned to (Name of Office/Agency) making of record in this Commission the certification dated ________________ issued by appointing authority/treasurer/ cashier/personnel officer, that Mr./Mrs./Miss_____________ whose appointment as (Position) with compensation at the rate of ___ _____________ (P ) per annum, effective ______ 19_____ which was approved as temporary, has rendered actual services and paid his corresponding salaries/benefits from ____________, 19___ to ________________, 19 with leaves, to wit: ______ days with pay; days without pay; and accumulated leaves as of this date of _____________ sick leave and _________ vacation leave or a total of days, all of which are allegedly supported by records of that Office. cdtai Regional Director/or any Authorized CSC Official 3. CSC Regional and Field Offices shall furnish the Office of the Central Personnel Records CSC copy of the form in No. 2. Upon receipt hereof, Regional Offices and Field Offices shall issue a circular informing the officials concerned within their jurisdiction or coverage of the need to accomplish the certification mentioned in No. 1 above so that the personnel matters therein can be made of record in the Commission. They should also be informed that by June 1, 1988 late renewal or submission to the Commission, Regional Office/Field Offices of temporary appointments which have lapsed will be disapproved and appropriate sanctions shall be taken on cases of unlawful employment such as those mentioned in the second paragraph above. cdasia For compliance. (Sgd.) Celerina G. Gotladera" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-10-91 Revenue Memorandum Circular No. 33-91 April 10, 1991 REVENUE MEMORANDUM CIRCULAR NO. 33-91 Subject : Participation of All New Entrants in Government's Alay sa Bayan (ALAB) Induction Program. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 5, s. 1991 dated February 5, 1991.

"The Civil Service Commission, through its Regional Offices will conduct Alay sa Bayan (ALAB) a special Induction Program for all new entrants to government service. acd This is part of government's effort to assist each worker make the entry into public service not only smooth but meaningful and significant as well. ALAB utilizes latest concepts and approaches in the behavioral sciences to direct and focus entrants' energies, resources, and resolve to contribute and share in the tasks of good government and nation building. With a unified and professional view of public service, the integration of employees into the organization and finally the civil service system will be facilitated and enhanced. The Commission therefore enjoins heads of agencies to see to it that all new entrants participate in the ALAB Induction Program within six (6) months from date of assumption to duty or from receipt of his/her permanent appointment which ever comes first. Relative to this, the CSC Regional Offices shall conduct Induction Programs as often as the number of participants warrant. CSC Regional Offices shall announce the quarterly schedule for ALAB for their respective jurisdictions. cda Attendance in the ALAB shall be considered official business with CSC and respective agencies maintaining each a roaster of graduates of the program. Appropriate follow-up and institutional support mechanisms for ALAB and participants thereto shall be established by agencies and supervisors following sound personnel management practices to ensure effective utilization of human resources. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-08-91 Revenue Memorandum Circular No. 34-91 April 8, 1991 April 8, 1991 REVENUE MEMORANDUM CIRCULAR NO. 34-91 Subject : Ante-dating of Deeds of Sale involving real properties. To : All Regional Directors, Revenue District Officers, and Others Concerned. There have been reports reaching this Office that taxpayers resort to ante-dating of the Deeds of Sale/Transfer involving real properties in order to avoid the imposition of income tax or the creditable withholding tax or reduce their tax liabilities on these transactions. There are several types of ante-dating commonly done by taxpayers, to wit: cdtai 1. Ante-dating the document before the effectivity of the capital gains tax law; 2. Ante-dating the document before the effectivity of the Finance Department Order establishing the zonal value for the particular area; and 3. Ante-dating the document before the effectivity of the regulations imposing the creditable withholding tax on sales or transfers of real property.

So as to stop further losses of revenue due to the above malpractices henceforth public instruments transferring real properties presented to the appropriate revenue official beyond three (3) months from the date of notarization shall be considered as ante-dated and the tax liabilities of the parties shall be determined in accordance with the rules and regulations obtaining at the time such documents are presented to the BIR. Strict compliance with this circular is enjoined. acd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-01-91 Revenue Memorandum Circular No. 35-91 April 1, 1991 June 1, 1991 REVENUE MEMORANDUM CIRCULAR NO. 35-91 Subject : Guidelines for the implementation of Revenue Regulations No. 890, as amended by Revenue Regulations No. 2-91, pertaining to the withholding of tax on income payments from the sale, exchange or transfer of motor vehicles. To : All internal revenue officers, withholding agents and others concerned. Revenue Regulations 8-90 requires the withholding of a creditable income tax of 2% on the gross selling price or total amount of consideration or its equivalent paid or payable to the seller/owner for the sale, exchange or transfer of motor vehicles, prior to its registration by the Land Transportation Office (LTO). The tax rate was reduced to 1% under Revenue Regulations No. 2-91 for sales, exchanges or transfers of motor vehicles that are considered as "brand new." This Circular setting forth the guidelines to be followed in the enforcement of Revenue Regulations Nos. 8-90 and 2-91 is hereby prescribed in order to have a uniform and consistent application of the rules. cda 1. Coverage. All sales, exchanges or transfers of motor vehicles, whether brand new or second hand, including transactions between two individuals not engaged in trade or business, on or after June 1, 1991, shall be subject to the creditable withholding tax, except the following: a. Motor vehicle sold, exchanged or transferred for P50,000 or less, which is of 1978 or earlier model. Both conditions must be satisfied to be exempt from withholding tax. b. Motorcycles and similar vehicles; c. Motor vehicles sold by manufacturers who participate in the Car Development Program (CDP) or Commercial Vehicle Development Program (CVDP) to their franchised dealers. But when such vehicle is sold to the person other than its franchised dealer, the same shall be subject to the creditable withholding tax. Illustrations: a. "A" purchased a car in 1988; he sold it to "B" in 1989; "B" sold it to "C" in 1990; "C" sold it to "D" in March, 1991 and "D" sold it to "E" on June 15,1991. No registration of the vehicle was made in all, the above transactions except the last one. Only the sale of the car by D to E is subject to the creditable withholding tax, since the regulations become effective only on June 1, 1991. If the series of transactions happened after June 1, 1991, each and every sale or transfer of motor vehicle shall be subject to the withholding tax. cdtai

b. "A" purchased engine chassis, body and other parts from car parts dealers and have them assembled by "B" for a fee. To register the vehicle with the LTO, he executes an Affidavit of Assembly and submits copy of the Contract to Assemble and invoices covering purchases of engine, chassis, body and other parts in the name of the owner. In this case, no withholding tax shall accrue because there is no sale of motor vehicle. However, if the above assembler/contractor supplies all the materials and labor, there is a sale of motor vehicle, which sale is subject to the 2% creditable withholding tax. c. "A" bought a new car as a gift to his son, "B." This donation is not subject to the creditable withholding tax, although it is subject to donor's tax. d. "A" exchanges his car with "B's" jeepney in June, 1991. In this case, there are two taxable transactions; both are subject to creditable withholding tax. Basis is the fair market value at the time of the exchange. e. "A" won in the public auction sale of motor vehicles conducted by the Bureau of Customs. Such sale is not subject to the withholding tax because the Bureau of Customs is a government agency exempt from income tax. However, foreclosure sales of motor vehicles shall be subject to the creditable withholding tax. 2. Withholding Tax Rates, Sales, exchanges or transfers of motor vehicles that are considered as "brand new" by persons participating in the government CDP or CVDP shall be entitled to the preferential rate of 1%. Thus, sales, exchanges, or transfers of motor vehicles assembled by a person who is not a participant to either of the above program shall be subject to the 2% creditable withholding tax. Sale of repossessed motor vehicles by franchised dealers shall be considered as "sale of second hand vehicles" and therefore subject to 2% of the gross selling price. 3. Tax Base. The 1% or 2% withholding tax shall be based on the gross selling price; i.e., without deducting discount or price adjustments, or the total amount of consideration or its equivalent. The value added tax (whether indicated as a separate item in the VAT invoice or not) passed on by the seller to the buyer shall not form part of the tax base. acd The gross selling price shall be the consideration so stated in the sales documents or the official Schedule of Values of Motor Vehicles, whichever is higher. In an exchange, the fair market value of the vehicles at the time of the exchange shall be used. 4. Time of Withholding and Remittance. The tax should be deducted and withheld by the buyer-withholding agent at the time the income payment is paid or payable and the tax withheld shall be remitted to the BIR within ten (10) days after the end of the month. 5. BIR Forms. The amount of withholding tax paid to the Bureau of Internal Revenue as evidenced by Confirmation/Official Receipts and covered by BIR Form No. 1743W is creditable against the income tax liabilities of the seller. In turn, the buyer shall furnish the seller a Certificate of Income Tax Withheld At Source (BIR Form No. 1743.1). 6. Venue of Filing of Tax Return. As provided in Revenue Regulations No. 6-85, the withholding tax return shall be filed with Revenue District Officer where the withholding agent's principal place of business is located. For purposes of Revenue Regulations No. 2-91 and as an exception to the above regulations, the withholding agent may file the withholding tax return and pay the tax in the Revenue District Office where the motor vehicle is or shall be registered.

7. Issuance of Certificates Authorizing Registration. The Land Transportation Office shall be requested not to register any sale, transfer or exchange of motor vehicle without a Certificate Authorizing Registration (CAR) indicating the Payment Order/Confirmation Receipt or Official Receipt number, date of payment and amount of creditable withholding tax, issued by the appropriate Revenue District Officer, unless the certificate indicates that the transaction is exempt from the withholding tax. 8. Monthly Report. In order to effectively implement the provisions of the regulations, all officials authorized to issue certificate authorizing registration are instructed to include in their monthly report to the Chief, Withholding Tax Division, Diliman, Quezon City, all withholding payments on the sale or transfer of motor vehicles, such report to be submitted not later than the 7th day of the following month. 9. Date of Effectivity. This Circular shall take effect on June 1, 1991. Subject to the rule against ante-dating of documents prescribed in Revenue Memorandum Circular No. 34-91 dated April 8, 1991, documents notarized before June 1, 1991 and presented to the BIR after said date shall be exempt from the coverage of this Circular. cd i This Circular should be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-01-91 Revenue Memorandum Circular No. 36-91 April 1, 1991 REVENUE MEMORANDUM CIRCULAR NO. 36-91 Subject : Loss of Twenty Five (25) Sets of Confirmation Receipts (BIR Form CB-02-03) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing twenty five (25) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBER : --------------------------18497476 to 18497500 --------------------------QUANTITY : Twenty five (25) sets

The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-06-91 Revenue Memorandum Circular No. 37-91

May 6, 1991 May 6, 1991 REVENUE MEMORANDUM CIRCULAR NO. 37-91 Subject : Filing of Statement of Assets, Liabilities and Disclosure of Business Interest and Financial Connections. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 9, s. 1991 dated March 25, 1991. "It has come to the attention of this Office that there are regional and local officials and employees who file their Statements of Assets, Liabilities and Networth directly with the Civil Service Commission, Quezon City. To insure a uniform implementation of the provisions of Section 8 (A) of Republic Act No. 6713, otherwise known as the "Code of Conduct and Ethical Standards for Public Officials and Employees" and Rule VII, Section 1 of its implementing rules, Statements of Assets, Liabilities and Networth and the Disclosure of Business Interests and Financial Connections shall be filled by the Officials and employees concerned as follows: cda Official/Employee Office where to file

President, Vice-President National Office of the and Constitutional Officials Ombudsman Senators Secretary of the Senate

Congressmen Secretary General of the House of Representatives Justices Clerk of Court of the Supreme Court National executive officials Office of the President, such as members of the Republic of the Philippines Cabinet, Undersecretaries, including the foreign service and heads of government-owned or controlled corporations with original charters and their subsidiaries, and state colleges and universities Regional and local officials Deputy Ombudsman in and employees, both their respective regions appointive and elective, including other officials and employees of governmentowned or controlled corporation

and their subsidiaries and state colleges and universities Officers of the Armed Forces Office of the President, from the rank of Colonel or Republic of the Philippines Naval Captain Officers of the Armed Forces Deputy Ombudsman in with rank below those their respective regions mentioned above All other public officials and employees not mentioned above Civil Service Commission

A copy of said statement shall also be filed with their respective departments, offices or agencies. cda Strict compliance is hereby enjoined. (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-06-91 Revenue Memorandum Circular No. 38-91 May 6, 1991 REVENUE MEMORANDUM CIRCULAR NO. 38-91 Subject : Panibagong Sigla 2000 (PS 2000) To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 12, s. 1991 dated April 5, 1991. "In Cabinet Resolution No. 1, s. 1991, Her Excellency, President Corazon C. Aquino and the Cabinet adopted the implementation of Panibagong Sigla 2000 (PS 2000). It is a project which shall renew public service to meet the challenges and opportunities in the year 2000. cdt To attain this objective, PS 2000 shall focus critical areas of concerns in public service administration. Existing policies, structures and systems which cut across departments and agencies of government shall be examined for the purpose of instituting the necessary reforms. The Civil Service Commission, as the central personnel agency of the government, shall spearhead the implementation of this project. A Steering Committee composed of the

Civil Service Commission (CSC), the National Economic and Development Authority (NEDA) and the Department of Budget and Management (DBM) shall act as the overall coordinator of the program. Thirteen Task Forces have organized themselves for the identified areas of concern. These task forces shall review existing policies and programs and recommend measures and action steps to include administrative reforms and legislative proposals. The success of this initiative, however, requires the active involvement of all agencies of government. It may be recalled that the First National Congress of Workers in Government was conducted nationwide last year in three (3) phases. The Second National Congress will be held this year using the same structural framework with PS 2000 as the theme. This shall be done in three assemblies - agency, regional and national - to ensure extensive participation and consultation of employees in the government from the local to the national levels. cd The agency assembly shall be conducted in each local government (municipal, city and provincial) and in all government agencies, government owned and controlled corporations and state colleges and universities. These agency assemblies should be held not later than May 15, 1991. The issues and recommendations raised in these assemblies shall be forwarded immediately to the PS 2000 Secretariat of the Civil Service Commission which in turn will refer these to the concerned Task Forces for appropriate action. At the regional level, the CSC, DBM, NEDA, and OPPMS shall constitute themselves into a regional steering committee and oversee the regional assembly for PS 2000. Said assembly shall be coordinated by the Civil Service Commission Regional Offices which will also act as the Regional PS 2000 Secretariat. Participants in this assembly are elected representatives, three (3) from each agency within the respective region(s). All regional assemblies should be held not later than June 30, 1991. The third activity is a two-day National Congress on September 18 and 19, 1991 to coincide with the Civil Service Week. The first day will be participated in by 260 delegates selected from the regional assemblies. The second day will be a general assembly of workers in government from all ranks and sectors. This shall be the culminating forum wherein the government workers will present their proposed plan of action towards a renewed bureaucracy in the year 2000. The venues of the activities will be announced later. Due to fiscal constraints, all assemblies should be conducted in as economical a manner as possible. All participants in the regional and national assemblies are authorized to attend on official time and are allowed travelling expenses and per diems subject to COA rules and regulations. This endeavor can only succeed if we all get involved. The Commission, therefore enjoins all departments, bureaus and agencies of the national and local governments including government owned and controlled corporations to participate in the abovementioned assemblies. The structural format and mechanics and other relevant documents are hereby attached for your guidance and information.

(Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-06-91 Revenue Memorandum Circular No. 39-91 May 6, 1991 REVENUE MEMORANDUM CIRCULAR NO. 39-91 Subject : Policy on Status of Appointments To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 11, s. 1991 dated April 5, 1991. "Pursuant to its powers as the central personnel agency of the government and in order to set a uniform standard in the determination of the appropriate employment status for every appointment, the Civil Service Commission, hereby promulgates the following guidelines: cd (1) Permanent status shall be issued to a person who meets all the requirements for the positions to which he is being appointed/promoted, including the appropriate eligibility prescribed in accordance with the provisions of law, rules and standards promulgated in pursuance thereof. (2) Temporary status shall be issued to a person who meets the requirements for the position he is being appointed except the civil service eligibility and only in the absence of qualified civil service eligible willing to accept the appointment: Provided, further, that such temporary appointment, if issued in the interest of the service shall not exceed twelve months, but the appointee may be replaced sooner if a qualified civil service eligible becomes available and is willing to accept the appointment. (3) Co-terminous status shall be issued to a person whose entrance in the service is characterized by confidentiality by the appointing authority or that which is subject to his pleasure or co-existent with his tenure. The foregoing status (co-terminous) may be further classified into the following: (a) co-terminous with the project - when the appointment is co-existent with the duration of a particular project for which purpose employment was made or subject to the availability of funds for the same; (b) co-terminous with the appointing authority - when appointment is co-existent with the tenure of the appointing authority. cd i (c) co-terminous with the incumbent - when appointment is co-existent with the appointee, in that after the resignation, separation or termination of the services of the incumbent the position shall be deemed automatically abolished; and (d) co-terminous with a specific period, e.g. "co-terminous for a period of 3 years" the appointment is for a specific period and upon expiration thereof, the position is deemed abolished.

It is stressed, however, that in the last two classification (c) and (d), what is termed coterminous is the position, and not the appointee-employee. Further, in (c) the security of tenure of the appointee is guaranteed during his incumbency in (d) the security of tenure is limited to a specific period. In the case of teachers, the Commission recognizes the provisional and substitute status of appointment as provided for and defined under the Magna Carta for Public School Teachers (RA 4670). Henceforth, the Commission shall not act on any appointment where the status of appointment does not conforms with this policy. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-07-91 Revenue Memorandum Circular No. 40-91 May 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 40-91 Subject : Kabisig People's Movement To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Memorandum dated April 22, 1991. "The Kabisig Month for all the line Departments will be observed from 11 May to 11 June 1991. Corollarily, in conjunction with the celebration of the first anniversary of the Kabisig People's Movement on 12 June 1991, the search for outstanding Kabisig projects has also been launched. In this connection and to further promote the objectives of the Kabisig People's Movement, the following activities have been proposed to be undertaken: acd 1. For each line Department and its attached offices to declare a particular month in 1991 as its "Kabisig Month" wherein some Kabisig projects shall be undertaken (e.g. a "Kabisig-CARP Month" for DAR, or a "DA-Kabisig Month" as exemplified in the attached memorandum issued by the Office of Secretary Senen Bacani). The DOF has the Department and its attached Bureaus and Agencies as their "Kabisig Month." 2. One or two Kabisig projects during the Kabisig Month from 11 May to 11 June 1991 should be launched for possible visit by the President. 3. Information campaign on the search for the outstanding Kabisig projects including those in the regional and other extension offices of each respective Offices should be launched. In the spirit of Kabisig, we would like to solicit your cooperation in implementing the abovenamed activities. We would appreciate receiving a copy of your Office/Memorandum Order with respect to Item No. 1 and your proposed Kabisig projects for launching or re-launching during the over-all Kabisig Month (11 May to 11

June), on or before 26 April 1991. Please indicate the date of launching of your proposed projects, a brief project description/ profile and its specific program of activities. cda (Sgd.) MILWIDA M. GUEVARA Assistant Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-08-91 Revenue Memorandum Circular No. 41-91 May 8, 1991 REVENUE MEMORANDUM CIRCULAR NO. 41-91 Subject : Prohibition of Disclosure of an individual income tax return to a Senate Committee To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder Opinion No. 72, Series of 1991 of the Secretary of Justice to the effect that a BIR official or employee who discloses to a Senate Committee, e.g., Senate Committee on Ways and Means, an individual income tax return even in compliance with its subpoena duces tecum is liable under Section 269 of the National Internal Revenue Code because Regulations No. 33 enumerated the instances in which individual income tax returns may be revealed, but disclosure to a Senate Committee is not among those instances. "April 24, 1991 "The Commissioner Bureau of Internal Revenue Quezon City Sir: "This has reference to your query on whether or not your disclosure of an individual income tax return to a Senate committee would make you liable under Section 269 of the National Internal Revenue Code. "You state that the Senate Committee on Ways and Means, in connection with its investigation of one Mr. Ahmor Estebanlar, has issued a subpoena duces tecum for his income tax returns for the years 1985 to 1990; that despite your request, the said committee has refused to disclose the purpose of the said subpoena; and that you want the "correct interpretation" of the above cited codal provision, which reads" Sec. 269. Unlawful divulgence of trade secrets. - Except as provided in Section 64 of this Code and Section 26 of Republic Act Numbered 6388, any officer or employee of the Bureau of Internal Revenue who divulges to any person or makes known in any other

manner than may be provided by law information regarding the business, income or estate of any taxpayer, the secrets, operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, shall, upon conviction for each act or omission, be fined in a sum of not less than five thousand pesos but not more than ten thousand pesos, or imprisoned for a term of of not less than six months but not more than five years, or both." "The foregoing provision of law imposes penal discloses "information regarding the business, income, or estate of any taxpayer", unless such disclosure comes within the purview of Section 64 of the Tax Code, which reads: "Sec. 64. Disposition of income tax returns; publication of lists of persons filing returns and paying taxes. - After the assessment shall have been made, as provided in this Title, the returns together with any corrections thereof which may have been made by the Commissioner, shall be filed in the office of the Commissioner of Internal Revenue and shall constitute public records and be open to inspection as such upon the order of the President of the Philippines under rules and regulations to be prescribed within sixty days from the date of the effectivity of this Code by the Secretary of Finance. The Commissioner of Internal Revenue may in each year cause to be prepared and published in any newspaper and otherwise make available to public inspection upon written request and pursuant to regulations to be prescribed by the Secretary of Finance, lists containing the names and addresses of persons who have filed income tax returns with the amount of income declared and the income tax paid by each. The list of taxpayers for the preceding taxable year in each municipality or city shall be posted at the main entrance of the respective municipal building or city hall." "By the first paragraph of the aforequoted section of law, individual income tax returns" shall constitute public records and be open to inspection as such upon the order of the President of the Philippines under rules and regulations to be prescribed xxx by the Secretary of Finance". The existing rules on inspection of such returns provide that such inspection is allowed only to (a) BIR officials and employees whose official duties require such inspection; (b) the person who made the return, or his duly constituted attorney-in-fact; (c) the administrator, executor, or trustee of the taxpayer's estate or the duly constituted attorney-in-fact of such administrator, executor, or trustee, where the maker of the return has died; and (c) in the discretion of the Commissioner of Internal Revenue, one of the heirs of law or next kin of such deceased person upon showing that he has a material interest which will be affected by the information contained in the return. (See Section 4) of Regulations No. 33 cited in de Leon, The National International Revenue Code Annotated, 1989 Ed., pp. 501-502; See also Vera vs. Cusi, Jr., 91 SCRA 153). "Based upon the foregoing, it is believed that there is sufficient basis for your reluctance in complying with the subpoena in question. The above-cited regulations enumerate the instances in which individual income tax returns may be revealed, but disclosure to a

Senate committee is not among those instances. Section 269 requires that to avoid liability thereunder, the disclosure of the information must be in the manner provided by law. This Department has had previous occasion to point out that the compliance of a legislative subpoena is subject to pertinent provisions of existing laws (Secretary of Justice Opn. No. 68, s. 1988). aisa dc "The query is answered accordingly. "Very Truly yours, (Sgd.) FRANKLIN M. DRILON Secretary" It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-28-91 Revenue Memorandum Circular No. 42-91 May 28, 1991 REVENUE MEMORANDUM CIRCULAR NO. 42-91 Subject : Annual EDP Proficiency Test on Computer Programming and System Analysis and Design To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is a letter from the National Computer Institute announcing the annual EDP Proficiency Test. "The National Computer Center will conduct the EDP Proficiency Examination in (1) Systems Analysis and Design, and (2) Computer Programming. Certificates of Proficiency issued by the National Computer Institute to successful examinees shall be the basis in granting EDP Specialists Eligibility by the Civil Service Commission. 1. Examination Schedule: cdt

Computer Programming - October 5, 1991 Systems Analysis and Design - October 12 and 13, 1991 2. Qualification Requirements:

* Must be a Filipino Citizen. * Must be a Bachelor's degree holder from a college or university or recognized standing. Deficiency in college education may be offset by any of the following which is equivalent to one (1) year formal education, the substitution not to exceed two (2) years.

* Six (6) months work experience in any of the positions in the EDP group; * One hundred (100) hours of one or more relevant training courses or seminars; * Three (3) months relevant training. * Must have undergone formal training in the area the applicant wants to apply for, and/or work experience in the EDP work for at least one year. 3. Application Procedures:

* Application form may be obtained personally or by postal (with enclosed application fee and self-addressed stamped envelope) at: The Registrar NCI Building National Computer Center Camp Gen. Emilio Aguinaldo, Q.C. Tel. Nos. 78-90-41 loc. 233 or 78-15-43 * Applicants must submit the duly accomplished form to the NCI Registrar's Office together with the following: * Two (2) recent ID pictures (1x1); * Duplicate copies of college diploma or transcript of records and certificates of formal EDP training. Bring original copies for authentication purposes. * Service record, if deficient in college education and/or formal EDP training. * Self-addressed stamp envelope for examination result. * Deadline for submission of applications is on September 30, 1991. * An application fee of Ten Pesos (P10.00) plus an examination fee of Seventy Pesos (P70.00) must be paid in cash or postal money order at the above mentioned office upon submission of the required forms. * Test reference materials for the chosen examination may be obtained at a minimal cost from the Registrar's Office upon payment of examination fee. cd EXAMINATION SCOPE For Systems Analysis and Design

Scope: This includes concepts, principles and application of: * Management: organization, structure and function * Information Systems Development Life Cycle: systems investigation or fact-finding, systems requirements definition, logical design, output design, input design, file design, computer process design, implementation, evaluation, cost benefit analysis * Systems Control * Information Systems Development Methodologies/Tools * Communication Skills Type of Exam: * Written (3 hours) to determine IT knowledge/skills - Multiple choice, essay (2-3 hours) - Case Study (5-6 hours) * Oral Presentation of case solution (30-40 minutes per individual) To determine oral communication skills For Computer Programming: Scope: Covers concepts and application of: * Basic Computer Concepts (Internal Data Representation, Software Systems, Hardware Components) * Programming and Stages of Program Development - Problem Analysis, Program Design, Problem Coding, Testing and Debugging, Documentation. * File Access Methods * Programming Languages * Programming Environment Type of Exam: * Written: multiple choice, program revision, program design and coding (8 hours)" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

05-02-91 Revenue Memorandum Circular No. 43-91 May 2, 1991 REVENUE MEMORANDUM CIRCULAR NO. 43-91 Subject : Clarification of Revenue Memorandum Circular Nos. 15-91 and 34-91 and Revenue Audit Memorandum Order No. 2-91. To : All internal revenue officers and others concerned. There have been reports reaching in this office that Revenue Memorandum Circular Nos. 15-91 and 34-91 and RAMO 2-91, which were recently issued by this Bureau, should be clarified in order to prevent irritations between revenue officers and taxpayers due to conflicting interpretations and to achieve uniform application of the rules prescribed therein. This Circular is hereby issued to provide additional guidelines in the implementation of the policies and rules embodied in the above-stated circulars and order. 1. RMC 15-91 dated March 11, 1991: This Circular subjects to the 5% lending investor's tax the gross income of pawnshops pursuant to Section 116 of the Tax Code, and it thus revokes BIR Ruling Nos. 6-90, and VAT Ruling Nos. 22-90 and 67-90. In order to have a uniform cut-off date, avoid unfairness on the part of taxpayers if they are required to pay the tax on past transactions, and so as to give meaning to the express provision of section 246 of the Tax Code, pawnshop owners or operators shall become liable to the lending investor's tax on their gross income beginning January 1, 1991. Since the deadline for the filing of percentage tax return (BIR Form No. 2529A-0) and the payment of the tax on lending investors covering the first calendar quarter of 1991 has already lapsed, taxpayers are given up to June 30, 1991 within which to pay the said tax without penalty. If the tax is paid after June 30, 1991, the corresponding penalties shall be assessed and computed from April 21, 1991. cd i Since pawnshops are considered as lending investors effective January 1, 1991, they also become subject to documentary stamp taxes prescribed in Title VII of the Tax Code. BIR Ruling No. 325-88 dated July 13, 1988 is hereby revoked. 2. RMC 34-91 dated April 8, 1991: This Circular prescribes the rule against ante-dating of sales documents for sales, exchanges or transfers of real properties. The same rule has been extended to transactions involving motor vehicles pursuant to RMC 35-91 dated April 1, 1991. In order to remove doubts as to what rules to apply and when to impose penalties for late filing of tax return and payment of tax, the following rules are hereby prescribed: a. When there is only a delay in the presentation of sales document, the rules on the kind of tax, rate of tax, zonal or fair market value, obtaining at the date of notarization shall be applied but the penalties for late filing of return and payment of tax shall be imposed. There is a delay in the presentation of sales document when the taxpayer submit said document to the BIR after 30 days from date of notarization. The delay could be in terms of days, months or even years. For this purpose, taxpayers have the burden of proving by the submission of other documents such as cancelled checks, official receipts, contract to sell, or certification of the archive official, to show that there is no ante-dating of public instrument. cd i b. When the document is presented to the BIR after three months from date of notarization and the taxpayer cannot present additional receipts or documents to show

that the same is not ante-dated, then the rules applicable at the time of presentation of the document shall be applied but no penalty shall be imposed. It is expected that by applying the current rules, a higher tax will be collected from the taxpayer than when the old rules plus penalties had been followed. 3. RAMO 2-91 dated February 18, 1991: The revised rules in determining the taxable base for sales, transfers or other disposition of real property including improvements thereon, shall be applied to transactions consummated and documents notarized on or after June 1, 1991. cda This Circular should be given the widest publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-04-91 Revenue Memorandum Circular No. 44-91 June 4, 1991 June 4, 1991 REVENUE MEMORANDUM CIRCULAR NO. 44-91 Subject : CSC Policy on Leave of Absence Without Pay On a Day Immediately Preceding or Succeeding Saturday, Sunday or Holiday. To : All Revenue Officials and Employees. For the guidance of all revenue officials and employees, quoted hereunder is Civil Service Memorandum Circular No. 16 series of 1991. MEMORANDUM CIRCULAR NO. 16 SERIES OF 1991 The Civil Service Commission in the past had adopted the policy that when an employee is on leave of absence without pay on a day immediately preceding or succeeding Saturday, Sunday or Holiday, he shall likewise be without pay on the said days; Pursuant to CSC Resolution No. 91-540 dated April 23, 1991, the Commission amended the aforementioned policy considering that employees paid monthly basis are not required to work on those days; aisa dc The Commission pursuant to the said Resolution and being the central personnel agency of the government, hereby adopts and promulgates the policy that when an employee, regardless of whether he has leave credits or not, is absent on a day immediately preceding or succeeding Saturday, Sunday or Holiday, he shall NOT be considered absent on the said days. Head of Departments or Agencies are hereby directed to oversee the strict implementation of this Circular. cdasia This Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas Chairman Please be guided accordingly. (Sgd.) JOSE U. ONG Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

06-10-91 Revenue Memorandum Circular No. 45-91 June 10, 1991 REVENUE MEMORANDUM CIRCULAR NO. 45-91 Subject : Perpetual Disqualification from Taking Any Civil Service Examination as an Accessory Penalty To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 15, s. 1991 dated May 20, 1991. "Any act which includes the procurement and/or use of fake/ spurious civil service eligibility, the giving of assistance to ensure the commission or procurement of the same, cheating, collusion, impersonation, or any other anomalous act which amounts to any violation of the integrity of civil service examination, has been categorized as a grave offense of Dishonesty, Grave Misconduct or Conduct Prejudicial to the Best Interest of the Service. Pursuant to CSC MC No. 01, s. 1991, any person found guilty of any cheating, collusion and other anomalous acts committed in taking any civil service examination shall be barred from taking any civil service examination for a period of three (3) years only. cd i Conformably with CSC MC No. 30, s. 1989 (July 20, 1989) the Commission, being the central personnel agency of the government which is mandated to safeguard the sanctity of any civil service examination, has resolved that any person found guilty of any of the anomalous acts aforementioned and who after due notice and hearing is meted the penalty of DISMISSAL from the service shall likewise suffer the accessory penalty, among others, of perpetual disqualification from taking any civil service examination. CSC Memorandum Circular Nos. 8, s. 1990 and 01, s. 1991, are hereby modified/amended accordingly. THIS MEMORANDUM CIRCULAR SHALL TAKE EFFECT THIRTY (30) DAYS AFTER PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-10-91 Revenue Memorandum Circular No. 46-91 June 10, 1991 June 10, 1991 REVENUE MEMORANDUM CIRCULAR NO. 46-91 Subject : Guidelines on the Granting of Permits to Officials or Employees Who Wish to Run as Candidates for the Board of Directors in Electrical Cooperatives. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Department Order No. 14-91 dated May 15, 1991.

"In the interest of the service and in order to expedite the granting of permits to officials or employees in this Department who wish to run as candidates for the Board of Directors in electrical cooperatives, the following guidelines are hereby prescribed: 1. Procedure a) Officials or employees in this Department (OSEC) are requested to submit their applications to the Personnel Services Division, through the Office of the Assistant Secretary, Policy Development and Management Services Group (PDMSG); b) Officials or employees in the Bureaus and Attached Agencies are requested to submit their applications to the respective Bureau/Agency Heads concerned; c) Officials or employees in Regional Offices are requested to submit their applications to the Regional Directors/Heads of Office in their respective localities. casia d) Pursuant to Section 12, Rule XVIII of the Civil Service Rules, the applications shall be evaluated to determine whether there is incompatibility between the permission being applied for and the official duties and functions of the applicant. 2. Authorized Signatories After proper evaluation of the applications, the following are authorized to approve the same: a) The Assistant Secretary, Policy Development and Management Services Group (PDMSG) is authorized to sign permission granted to officials/employees in the Department of Finance (OSEC); b) Bureau/Agency Heads concerned are authorized to sign permission granted to their respective officials/ employees; c) Regional Directors/Heads of Office are authorized to sign permission granted to officials/employees in their respective jurisdictions. aisa dc This Order shall take effect immediately and all concerned be guided accordingly. (Sgd.) Jesus P. Estanislao Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdasia (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-11-91 Revenue Memorandum Circular No. 47-91 June 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 47-91 Subject : Taxability of Copra. To : All Revenue Officials and Employees and Others Concerned. For the information and guidance of all officials and employees and others concerned, quoted hereunder in its entirety is VAT Ruling No. 190-90 dated August 17, 1990: "Office of the Commissioner VAT Review Committee (Per RSO 190-89)

VAT Ruling No. 190-90 cda August 17, 1990 COCOFED MARKETING CORPORATION 6th Floor Cocofed Building 144 Amorsolo Street Legaspi Village, Makati Metro Manila Attention: Ms. Esmyrna E. Reyes Vice President-Finance Sirs: This has reference to your letter dated January 16, 1990 wherein you represented that inspite of your VAT registration of your copra trading company, you are supposed to be exempt from VAT on the basis of BIR Ruling dated January 8, 1988 which considered copra as an agricultural food product in its original state. In this connection, you request for a confirmation of your opinion as aforestated. In reply, please be informed that copra, being an agricultural non-food product, is exempt from VAT only if sale is made by the primary producer pursuant to Section 103(a) of the Tax Code, as amended. Thus, as a trading company and a subsequent seller, your sale of copra is already subject to VAT pursuant to Section 9(b)(1) of Revenue Regulations 5-87. This revokes VAT Ruling Nos. 009-88 and 279-88. cda Very truly yours, (Sgd.) JOSE U. ONG Commissioner of Internal Revenue" As a clarification, this is the present and official stand of this Office unless sooner revoked or amended. All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-18-91 Revenue Memorandum Circular No. 48-91 June 18, 1991 REVENUE MEMORANDUM CIRCULAR NO. 48-91 Subject : Publishing the Provisions of Articles 61 and 62 of Republic Act No. 6938, otherwise known as the "Cooperative Code of the Philippines", Prescribing the

extent of the tax exemption of Cooperatives and providing the guidelines for the availment thereof. To : All Internal Revenue Officers and others concerned. Sec. 1. For the information and guidance of all concerned, there are quoted hereunder Articles 61 and 62 of Republic Act No. 6938, otherwise known as the "Cooperative Code of the Philippines". "Art. 61. Tax Treatment of Cooperatives - Duly registered cooperatives under this Code which do not transact any business with nonmembers or the general public shall not be subject to any government taxes or fees imposed under the internal revenue laws and other tax laws. Cooperatives not falling under this article shall be governed by the succeeding section. "Art. 62. Tax and Other Exemptions - Cooperatives transacting business with both members and nonmembers shall not be subject to tax on their transactions to members. Notwithstanding the provisions of any law or regulations tot the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions: "(1) Cooperatives with accumulated reserves and undivided net savings of not more than ten million pesos (P10,000,000.00) shall be exempt from all national, city, provincial, municipal or barangay taxes of whatever name and nature. Such cooperatives shall be exempt from customs duties, advance sales or compensating taxes on their importation of machinery, equipment and spare parts, used by them and which are not available locally as certified by the Department of Trade and Industry. All tax-free importations shall not be transferred to any person until after five (5) years, otherwise, the cooperative and the transferee or assignee shall be solidarily liable to pay twice the amount of the tax and/or duties thereon. cd "(2) Cooperatives with accumulated reserves and undivided net savings of more than ten million pesos (P10,000,000.00) shall pay the following taxes at the full rate: (a) Income Tax - On the amount allocated for interest on capitals: Provided, That the same tax is not consequently imposed on interest individually received by members; (b) Sales Tax - On sales to nonmembers: Provided, however, That all cooperatives, regardless of classification, are exempt from the payment of income and sales taxes for a period of ten (10) years. "For cooperatives whose exemptions were removed by Executive Order No. 93, the tenyear period shall be reckoned from the effectivity date of said executive order. Cooperatives created after the approval of this Code shall be reckoned from the date of registration with the Authority: Provided, That at least twenty-five centum (25%) of the net income of the cooperatives is returned to the members in the form of interest and/or patronage refunds; (c) All other taxes unless otherwise provided herein; and (d) Donations to charitable, research and educational institutions and reinvestment to socioeconomic projects within the area of operation of the cooperative may be tax deductible. "(3) All cooperatives, regardless of the amount of accumulated reserves and undivided net savings shall be exempt from payment of local taxes and taxes on transactions with banks and insurance companies: Provided, That all sales or services rendered for nonmembers shall be subject to the applicable percentage taxes except sales made by producers, marketing or service cooperatives; Provided, Further, That nothing in this

article shall preclude the examination of the books of accounts or other accounting records of the cooperative by duly authorized internal revenue officers for internal revenue tax purposes only, after previous authorization by the Authority." Sec. 2. Definition of Cooperative: A cooperative is a voluntary organization of people who have agreed to pool their resources together in order to undertake an economic enterprise for the purpose of meeting their common needs, and which they themselves democratically manage and control, and share in the economic benefits on the basis of participation and patronage. (page 2, Primer on CCP by Senator Agapito "Butz" Aquino) casia A cooperative is a duly registered association of persons with a common bond of interest, who have voluntarily joined together to achieve a lawful common social and economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles. R.A. 6938, Section 3. Sec. 3. Types of Cooperatives that may avail of the Tax Exemption Privileges. (a) Credit Cooperative - one which promotes thrift among its members and creates funds in order to grant loans for productive and provident purposes; (b) Consumers Cooperative - one the primary purpose of which is to procure and distribute commodities to members and nonmembers; (c) Producers Cooperative - one that undertakes joint production whether agricultural or industrial; (d) Marketing Cooperative - one which engages in the supply of production inputs to members and markets their products; (e) Service Cooperative - one which engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication and other services; and (f) Multipurpose Cooperative - one which combines two (2) or more of the business activities of these different types of cooperative. Sec. 4. Tax EXEMPTION, extent allowable. 4.1 Cooperatives dealing/ transacting business with members only shall be exempt from all taxes or fees imposed under the National Internal Revenue Code and other tax laws. However, when this particular Cooperative distributes interest on capital, such interest shall be taxable to the recipient member and shall be declared in his/its income tax return for tax purposes. 4.2 COOPERATIVES DEALING/TRANSACTING BUSINESS WITH MEMBERS AND NON-MEMBERS WITH ACCUMULATED RESERVES AND UNDIVIDED NET EARNING OR NOT MORE THAN TEN MILLION PESOS 4.2.1 Shall be exempt from all taxes of whatever name and nature on their transactions with members. 4.2.2 Shall be exempt from value added tax, ad valorem and excise taxes on their importations of machinery, equipment and spare parts used by them and which are not available locally as certified by the Department of Trade and Industry, as defined in DOF-CDA Joint Circular No. 1-90, to wit: a. machinery - any mechanical or electrical device actually, exclusively and directly needed by the cooperative in the operation of its primary business activity.

b. equipment - a contrivance or tool actually, exclusively and directly needed by the cooperative in the operation of its business activity. c. Spare Parts - a duplicate of any parts of machinery or equipment kept as a replacement in case of damage or loss. 4.3 COOPERATIVES DEALING/TRANSACTING BUSINESS WITH BOTH MEMBERS AND NON-MEMBERS WITH ACCUMULATED RESERVES AND UNDIVIDED NET EARNINGS OF MORE THAN TEN MILLION PESOS (P10M) shall pay the following taxes at full rates: 4.3.1 Income tax on the amount allocated for interest on capital; PROVIDED that the same tax shall not be imposed on interest individually received by members. 4.3.2 Sales tax on sales to non-members. cda 4.3.3 All other taxes unless otherwise provided herein. 4.3.4 Taxes on importation of machinery, equipment and spare parts to be used by them and which are not locally available as Certified by the DTI. Sec. 5. DEDUCTIBILITY OF DONATIONS AND REINVESTMENTS Donations made by the cooperatives to charitable, research and non-stock, non-profit or government educational institutions and reinvestments in socio-economic projects within the area of operation of the cooperative may be deductible for tax purposes subject to the limitations provided for in Section 29(h) of the Tax Code. cda Sec. 6. PERIOD OF TAX EXEMPTION 6.1 Registered and qualified cooperatives regardless of their classification, shall be exempt from income and sales taxes for a period of ten (10) years, reckoned from the date of registration with The Cooperative Development Authority. 6.2 Previously registered cooperatives under P.D. 175, P.D. 775 or E.O. 898, whose tax exemptions therein provided were withdrawn by E.O. 93, shall be granted the same tax exemption under RA 6938 upon registration and qualification and the ten (10) year period of exemption shall be reckoned from March 10, 1987, the date of effectivity of E.O. 93. Sec. 7. PASSIVE INVESTMENT INCOME All cooperatives are subject to the 20% final withholding tax on interest from Philippine currency deposits, yield from deposit substitutes, trust funds and similar arrangements, and royalties, derived from sources within the Philippines, the said income not being derived from cooperative economic activity. They shall also be taxed on prizes, winnings and capital gains realized on sales or exchange of property. Sec. 8. DOCUMENTATION REQUIREMENTS 8.1 For the issuance of Tax Exemption Certificate: A Letter-Application signed by the President/General manager, or his duly authorized representative of the Cooperative, should be submitted to BIR, attaching thereto the following documents: a. Articles of Cooperation and By-Laws b. Certificate of Registration with the CDA c. Certification under oath by the President/General Manager that the Cooperative is not transacting business with non-members. d. Certificate of Confirmation of Registration from the CDA (in the case of Cooperatives already existing and previously registered under P.D. 175, P.D. 775, and E.O. 898, before the creation of the CDA), and

e. Certification under oath by the Chairman/President/General Manager of the Cooperative (if previously registered as above stated), as to the amount of accumulated reserves and undivided net savings, and that at least 25% of the net income is returned to the members in the form of interest and or patronage refund. f. Latest Financial Statement duly audited by an independent CPA. 8.2 For the release of importations: a. Certification of Registration and/or Confirmation issued by the CDA, b. Bill of Lading/Airway Bill, Parcel Post notice and other shipping documents, c. Commercial invoice and packing list, d. Sworn Statement of the Chairman/ President/General Manager that the imported articles (machinery, equipment and spare parts) are actually, exclusively and directly needed by the Cooperative in the operation of its primary business/cooperative activity and that they are not for sale, barter or hire, e. Certification from the Department of Trade and Industry that the machinery, equipment and spare parts are not locally available, f. Certificate of undertaking that upon release and physical possession of the machinery and equipment the words "Entered duty-tax free" under R.A. 6938 shall be printed on a conspicuous space on the machinery and equipment. (See Sec. 3, DOF-CDA Joint Circular No. 1-90 dated Nov. 7, 1990) Otherwise, the tax exemption shall be withdrawn and the corresponding taxes shall be collected on the importation. Sec. 9. NON-TRANSFERABILITY OF TAX FREE IMPORTATIONS 9.1 All Tax Free importation of cooperatives shall not be transferred to any person for a period of five (5) years from date of importation, otherwise, the Cooperative and the transferee or assignee shall be solidarily liable to pay twice the amount of the tax and/or duties thereon. Sec. 10. Newly organized cooperatives transacting both with members and nonmembers shall be issued certificate of tax exemption on the basis of the CDA certification of status (whether or not their accumulated reserves and undivided net savings are more than P10M), which shall be submitted to the BIR, together with the Articles of Cooperation and By-Laws. cdasia Sec. 11. All internal revenue officers and others concerned are requested to give this Circular as wide publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-14-91 Revenue Memorandum Circular No. 49-91 June 14, 1991 REVENUE MEMORANDUM CIRCULAR NO. 49-91 Subject : Digest of VAT Rulings for July, August, September, October and November 1990. To : All Revenue Officials and Others Concerned. Attached herewith as Annex "A" are the Digests of VAT Rulings issued in the months of December 1990 and January 1991. For the information and guidance of all concerned. acd

(Sgd.) JOSE U. ONG Commissioner of Internal Revenue ANNEX "A" Digest of Additional VAT Rulings for July, 1990 1. Educational services rendered by private educational institutions duly accredited by the Department of Education, Culture and Sports (DECS), and those rendered by government educational institutions are exempt from VAT pursuant to Section 103(m) of the Tax Code, as amended, subject to the following conditions: a. The VAT exemption is limited only to the school year 1989-1990 mentioned in the DECS Temporary Permit issued therefor. b. The VAT exemption is limited only to the gross receipts from the operation of the educational institution and does not extend to other activities involving sale of goods and/or services. (VAT Ruling No. 187-90 dated July 10, 1990, supports VAT Ruling No. 150-90) 2. Pursuant to Section 103(u) of the Tax Code, transactions, such as importation of equipment used solely for educational and religious purposes and under the provisions of the UNESCO Florence Agreement, classified as "Scientific Instruments or Apparatus" under Annex D(b) which are exempt under international agreements to which the Philippines is a signatory are exempt from VAT. However, when the imported equipment are sold, transferred or exchanged in the Philippines to non-exempt persons and entities, the purchasers, transferees or recipients shall be liable for the payment of the VAT (Section 101(b) of the Tax Code, as amended), and that the Bureau of Internal Revenue (BIR) shall be notified of such transactions. (VAT Ruling No. 191-90 dated July 25, 1990, supports VAT Ruling Nos. 274-89 and 105-90) Digest of VAT Rulings for August, 1990 1. Professional services, such as architectural and engineering services rendered by individuals in the exercise of their professional or performed by registered professional partnerships, are exempt from VAT pursuant to Sec. 103(r) of the Tax Code, as amended. However, architectural and engineering consultancy firms registered as corporations are subject to VAT. (VAT Ruling No. 181-90 dated Aug. 17, 1990) 2. Proprietors or operators of restaurants, refreshment parlors and other eating places are exempt from VAT in accordance with Sec. 103(j) of the Tax Code, as amended. On the other hand, suppliers of processed food items to groceries are subject to VAT pursuant to Sec. 100(a) of the same Code. However, if their gross receipts do not exceed P200,000.00, they are exempt from VAT and subject to 2% on their gross receipts pursuant to Sec. 112 of the same Code. (VAT Ruling No. 182-90 dated Aug. 17, 1990) aisa dc 3. By operation of law, the 10% VAT is always considered passed-on and forms part of the total amount billed by the contractor against the contractee whether the said 10% VAT is billed separately in the invoice or not separately billed. Thus, assuming that the

contractor's billing and collection amounts to a total of P110, VAT included, his taxable gross receipts therefor shall be P100, computed as follows: (Total billing/collection of P110 less 1/11th thereof, representing 10% VAT (i.e., P10) equals taxable gross receipts of P100.) If the contract calls for the contractor to supply both labor and materials, his total billing/collections therefor, excluding 10% VAT, shall be constituted as his taxable gross receipts, hence, it may not be legally contended that only the portion of the total gross receipts, viz., pertaining to labor component, shall be subject to VAT. Rather, the total amount received from such contract, excluding VAT, is the taxable gross receipts. (VAT Ruling No. 183-90 dated Aug. 17, 1990) 4. Sale of goods to a representative company of a foreign principal, who after shipping the goods, receives payment in US dollars, then pays the goods in pesos, shall be considered local sale subject to VAT under Sec. 100 of the Tax Code, as amended. (VAT Ruling No. 184-90 dated Aug. 17, 1990) 5. Domestic sales of goods manufactured by companies registered and operating within the Bataan Export Processing Zone shall be subject to the rules and regulations governing imported merchandise under Article 77(4) of Executive Order No. 226. Hence, in accordance with Sec. 101 of the Tax Code, as amended, such goods shall be subject to VAT based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges. Furthermore, they shall also be subject to the customs duties and other charges as determined by the Bureau of Customs pursuant to the Tariff and Customs Code. (VAT Ruling No. 185-90 dated Aug. 17, 1990) 6. A general art studio engaged in the business of acting as a consultant, adviser, agent, contractor and provider of art services shall be subject to VAT on its sale of services based on gross receipts. The recording of accounting (journal) entries for commission income and gross receipts therefrom should be consistent wit Sec. 102, of the Tax Code, as amended, i.e. the 10% VAT on the sale of service shall be excluded from the recorded income but shall rather be accounted as output tax. On the assumption that the total billing is P1,100.00, (10% VAT included) the 10% VAT (i.e., P100.00) shall be excluded in computing the commission income/gross receipts, and, shall be recorded in the Sales Journal, as follows: A. At the time of billing (selling price P1,000 plus 10% VAT, or P100). - The journal accounting entries should be as follows: DR. Account Receivable P1,100.00 CR. Commission incomeP1,000.00 CR. Deferred Output Tax P100.00 B. Upon collection of the receivable and to take up accrued 10% VAT (Output Tax). - The journal entries should be:

DR. Cash P1,100.00 DR. Deferred Output Tax P 100.00 CR. Account Receivable P1,100.00 CR. Output Tax P100.00 The gross taxable receipts, based on the above illustration, is computed as follows: Total Amount collected P1,100.00 Less: 10% VAT Included P 100.00 Gross Receipts P1,000.00 (VAT Ruling No. 186-90 dated Aug. 17, 1990) Digest of VAT Rulings For September 1990 1. The third requirement of Sec. 6(g) of Rev. Reg. No. 5-87 which states that "the contractor has recorded in his books of accounts for the year 1987 the amount receivable," is deemed to have been substantially complied with in inspite of the failure of the contractor, Kawasaki Steel Corp. (KSC), to record the amount receivable from Metropolitan Waterworks and Sewerage System (MWSS) in its books of accounts for such failure was due to the billing policy of the MWSS which is in procedure (as per Implementing Rules and Regulations of P.D. No. 1594). (VAT Ruling No. 192-90 dated Sept. 3, 1990) cdasia 2. Refined sugar to be used as raw materials in the manufacture of products for export which may either be exempt or subject to 0% VAT, thus, not resulting in any output tax against which any advance payment of VAT can be credited, can be withdrawn from milling companies as required under Sec. 3 of Rev. Reg. No. 7-89 upon compliance of the following: a. On the basis of the data supplied by the Sugar Regulatory Administration (SRA) on the amount of "D" sugar, quedans properly surcharged by it against the amount allocated to the company, the VAT Division of the BIR shall advise the Revenue District Office (RDO) where the refinery is located of the number of 50 kilo bags of refined sugar that can be withdrawn without the advance payment of VAT. b. Actual withdrawal of refined sugar shall be made only upon (i) issuance by the RDO of the authority to release the allowable quantity of refined sugar to be withdrawn and (ii) presentation by the manufacturer-exporter of the "D" sugar quedan properly surcharged by the SRA to the RDO. After withdrawal and within 10 days after the end of each regular quarter the manufacturer-exporter shall submit to the Chief, VAT Division a copy of the Quarterly Sugar Usage Report (SRA Form No. 003-A) as prescribed by SRA Circular No. 16 and the pertinent supporting papers, including copies of export documents. Finally, VAT registered entities are required to file quarterly VAT returns for their export transaction pursuant to Sec. 100 of the Tax Code, as amended. (VAT Ruling Nos. 193-90, 193-90, 196-90 all dated Sept. 7, 1990 and VAT Ruling No. 198-90 dated Sept. 14, 1990) 7. Sale of vaccines and chemicals to the cooperatives duly registered under Republic Act No. 6938 (Cooperative Code of the Philippines) is subject to VAT pursuant to Sec.

100(a) of the Tax Code, as amended, since the tax exemptions of said cooperatives are limited only to taxes on their sale of goods and services to members and nonmembersand not extended to their purchases of goods and services. (VAT Ruling No. 188-90 dated Aug. 17, 1990) 8. Previous importations of negative films in bulk which were exempted from sales tax due the nature of the shipments, that is, bulk, which needs to be manufactured into retail form cannot at this time be exempted from VAT for lack of legal basis. (VAT Ruling No. 189-90 dated Aug. 17, 1990) 9. Copra, being an agricultural non-food product is exempt from VAT only if sale is made by the primary producer pursuant to Sec. 103(a) of the Tax Code, as amended. Thus, as a trading company and a subsequent seller, sale of copra is already subject to VAT pursuant to Sec. 9(b)(1) of the Revenue Regulations No. 5-87. (VAT Ruling No. 190-90 dated Aug. 17, 1990, revokes VAT Ruling Nos. 009-88 and 279-88) Digest of VAT Rulings for October and November 1990 1. Persons engaged in the selling of pre-need medical services are considered as persons engaged in the sale of securities, hence they are exempt from VAT but subject to tax at 6% based on gross income as "dealer of securities" pursuant to Sec. 116 of the Tax Code, as amended. (VAT Ruling No. 200-90 dated Oct. 2, 1990; also refer to BIR Ruling No. 546-88) 2. A business league which is not organized for profit, relies solely on the mandatory contributions of its members for its operating expenses, and performs functions exclusively for the benefit of its members, is not considered rendering service in the course of trade or business; hence, it is not subject to VAT imposed under Sec. 102(a) of the Tax Code, as amended. (VAT Ruling No. 801-90 dated October 11, 1990, supporting VAT Ruling No. 861-89) 3. Sales of finished rattan furniture products by a VAT and BOI-registered export producer to export traders, whether BOI or non-BOI registered, does not fall under the category of "export sales", even if the export trader subsequently exports the products. However, the VAT exemption privilege under Sec. 103(u) of the Tax Code, as amended, can be extended to a domestic BOI-registered corporation's sale of rattan furniture products to export traders for the following reasons: cd (1) As a domestic sale by a BOI-registered pioneer enterprise, it is covered by the business/sales tax exemption privilege (to a limited extent in terms of diminishing rates) under Article 46(a) of Presidential Decree No. 1789, and (2) The said exemption privilege is covered by a special law. (VAT Ruling No. 20290 dated Oct. 12, 1990) 4. Article 77(1) of the Omnibus Investments Code of 1987 (E.O. No. 826) provides that the sale of merchandise to EPZA registered enterprises are considered export sale and subject to zero-rate under Sec. 100(a)(1) of the Tax Code, as amended. The exemption granted under said law is limited only to sales of raw materials, supplies, spare parts, etc. which are directly or indirectly used in the export activity of zone enterprises. Hence, the sale of services to EPZA registered entities are subject to VAT. (VAT Ruling No. 203-90 dated Oct. 16, 1990)

5. Discounts granted to Ice Cream Houses in the form of rebates (determined at the end of the month) for meeting a pre-set monthly quota, cannot be allowed as deductions from the gross selling price for VAT purposes. Sec. 6 of Rev. Reg. No. 5-87 explicitly states that "discounts conditioned upon the subsequent happening of the event or fulfillment of certain conditions, such as prompt payment or attainment of sales goals, shall not be allowed as deductions from the gross selling price for VAT purposes. (VAT Ruling No. 204-90 dated Oct. 16, 1990) 6. Management contracts with affiliates which provide for an agreed management fee for services rendered, such as legal and corporate secretarial works, accounting, personnel and others; and for reimbursement of the expenses incurred in connection with such services, i.e., salary and fringe benefits (SSS, Medicare, pension/retirement) paid to employees assigned to the managed company, fall within the coverage of VAT. The taxable base is the gross receipts which comprise the management fee and the reimbursement for the expenses incurred for services rendered to such managed corporation. (VAT Ruling No. 205-90 dated Oct. 16, 1990) 7. Pursuant to Art. 46(a) of P.D. No. 1789, the local sales of the BOI-registered pioneer enterprise is exempt from all taxes (including sales taxes, now VAT) except income tax at the same diminishing rates up to the 15th year from the date the area of investment is included in the Investment Priorities Plan pursuant to Sec. 103(u) of the Tax Code, as amended. However, export sales of a BOI-registered enterprise who is also VAT registered, are automatically subject to VAT at zero percent (0%) in accordance with Sec. 100(a)(1) of the same Code. (VAT Ruling No. 206-90 dated Oct. 16, 1990, supports VAT Ruling Nos. 534-88 and 100-89) 8. Sale of technical services made only to one person, the same although only one and isolated transaction, constitutes a sale made in the course of trade or business pursuant to Sec. 99 of the Tax Code, as amended. Whether or not a person is engaged in business is determined by his intent for doing an act or series of acts. An initial or single act may be constituted done in the course of business if the same is done with the intent of carrying on a business. That its transaction was isolated may not, however, detract from the fact that the same was entered into because it was, as it is presently, its line of business. (VAT Ruling No. 207-90, dated Nov. 8, 1990; request for reconsideration of VAT Ruling No. 087-90, dated April 5, 1990 denied for lack of legal basis). 9. The sale of scrap vessels by a company engaged in inter-island shipping business subject to the 3% common carriers tax pursuant to Sec. 115 of the Tax Code, as amended is exempt from the 10% VAT pursuant to Sec. 108(j) of the same Code. The sale is exempt from VAT since such transaction, which is merely incidental to the main line of business, is already a part of the common carriage business rather than another independent business. It is neither subject to the 3% common carriers tax since the percentage tax is levied on the gross receipts representing compensation for the carriage of passenger and/or goods. (VAT Ruling No. 208-90 dated Nov. 15, 1990) 10. A private employment agency is subject to VAT on the total amount of placement fee excluding reimbursable expenses. Such reimbursable expenses shall be limited to fees for passport/visa, medical examination, clearances, inoculation, trade and skill testing, airport terminal, performances bond premiums and notary public, supported by receipts issued by the supplying company or government agency in the name of the applicantworker. All other receipts or income of said agency shall be subject to VAT. On the other

hand, the agency is required to pay the VAT on the entire placement fee including the reimbursable expenses if the above mentioned expenses are supported by the receipts issued in the name of the agency. (VAT Ruling No. 209-90 dated Nov. 16, 1990, supports VAT Ruling No. 087-88) 11. Service fees charged by contractors which are paid in domestic currency and not in foreign currency are not qualified for effective zero rating but instead subject to VAT pursuant to Sec. 102(a) of the Tax Code, as amended. (VAT Ruling No. 210-90 dated Nov. 16, 1990) 12. Importation of dog food is subject to VAT pursuant to Sec. 101(a) of the Tax Code, as amended, and as implemented by Sec. 7(a) of Rev. Reg. No. 5-87. (VAT Ruling No. 211-90 dated Nov. 16, 1990, revoking VAT Ruling Nos. 016-88 and 051-88) 13. Indent commissions received for soliciting orders from local companies which are paid for in foreign currency inwardly remitted to the Philippines in accordance with Central Bank rules and regulations are subject to VAT at zero percent (0%) pursuant to Sec. 102(a)(2) of the Tax Code, as amended. (VAT Ruling No. 212-90 dated Nov. 19, 1990) cd i 14. Commissions of collection agents of a company engaged in a VAT-exempt activity are subject to VAT since such commissions are paid for the performance of services, which are subject to VAT under Sec. 102(a) of the Tax Code, as amended. Sale of books is exempt from VAT pursuant to Sec. 103(f) of the Tax Code, as amended. (VAT Ruling No. 213-90 dated Nov. 19, 1990) 15. A VAT-registered company is directed to pay the VAT on its gross receipts derived from services it renders. However, the VAT, being an indirect tax, may legitimately be passed on to its clients, including the Philippine Navy. (VAT Ruling No. 214-90 dated Nov. 19, 1990) 16. Importation of logs is subject to VAT pursuant to Sec. 101 of the Tax Code, as amended. (VAT Ruling No. 215-90 dated Nov. 19, 1990) 17. Internal revenue taxes on imported goods are to be paid upon withdrawal or removal from customs custody (Hamlin vs. Collector of Internal Revenue, 106 Phil. 723). If imported logs are brought in a Customs Bonded Manufacturing Warehouse and are processed therein, said logs are considered to have not yet been withdrawn or removed from customs custody. Consequently, the said logs are not yet subject to VAT. However, if said imported logs shall be removed from customs custody for local sale, consumption, or processing the same shall be subject to VAT. (VAT Ruling No. 216-90 dated Nov. 19, 1990, supporting VAT Ruling No. 085-90) 18. Outright deduction of the VAT from the invoices of purchased goods for export is not allowed under existing laws. An exporter (whether a trader or a manufacturer of goods), who is a VAT-registered person, can simply apply for the issuance of a tax credit certificate or refund of input taxes attributable to goods exported under Sec. 106(a) of the Tax Code, as amended, with two years from the date of exportation. (VAT Ruling No. 217-90 dated Nov. 19, 1990) 19. The exemption from contractor's tax (now VAT) of a BOI-registered domestic producer is limited only to taxes for which it is directly liable; thus, its purchases of goods and services are not exempt from VAT. Its suppliers of goods and services therefore may pass-on the VAT on the goods and services sold to this BOI-registered domestic producer. (VAT Ruling No. 218-90 dated Nov. 21, 1990) aisa dc

20. The importation of one unit Fuji Xerox Machine by the Asia Foundation is exempt from VAT pursuant to Sec. 103(u) of the Tax Code, as amended, since Asia Foundation was granted tax exemption in the Philippines Diplomatic Note Verbale No. 3001, an international agreement to which the Philippines is a signatory. (VAT Ruling No. 219-90 dated Nov. 27, 1990) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-05-91 Revenue Memorandum Circular No. 50-91 June 5, 1991 REVENUE MEMORANDUM CIRCULAR NO. 50-91 Subject : Loss of quadruplicate and original copies of revenue official receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of quadruplicate and original copies of revenue official receipts (BIR Form No. 25.24), to wit: cd -----------------------Serial Number : Quantity -----------------------A-00934345 : One copy (Quadruplicate) A-00934346 : One copy (Original) -----------------------The above copies which were reported as lost and the other copies of the sets bearing the abovementioned serial numbers are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-11-91 Revenue Memorandum Circular No. 51-91 June 11, 1991 REVENUE MEMORANDUM CIRCULAR NO. 51-91 Subject : Missing official receipt (General Form No. 13-A); To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of official receipt (General Form No. 13-A), to wit: ---------------------------Serial Number : ---------------------------4373500 R : ---------------------------Quantity One copy (triplicate)

The above copy which was reported as missing and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. cdt Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. aisa dc EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-17-91 Revenue Memorandum Circular No. 52-91 June 17, 1991 June 17, 1991 REVENUE MEMORANDUM CIRCULAR NO. 52-91 Subject : Amending the Provision on Maternity Leave in the Manual on Leave Administration Course for Effectiveness (LACE) To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 17, s. 1991 dated May 17, 1991. "This Civil Service Commission as the central personnel agency of the government, has ruled in many cases that in case of doubt, it should be resolved in favor of those whom the law intends to benefit. The Commission resolved in Resolution No. 91-617, s. 1991 that the commuted money value of the unexpired portion of the leave need not be refunded and that, when the employee returns to work before the expiration of her maternity leave, she may receive the benefits granted under the maternity leave law and the salary for actual services rendered effective the day she reports for work. The provision in the Manual on Leave Administration Course for Effectiveness (LACE) is hereby amended to read, as follows: aisa dc "When an employee wants to report back for duty before the expiration of her maternity leave, she may be allowed to do so provided she presents a medical certificate that she is physically fit to assume the duties of her position. However, she need not refund the commuted money value of the unexpired portion of her maternity leave. She may receive the benefits granted under the maternity leave law and the salary for actual services rendered effective the day she reports for work prior to the expiration of the sixty (60) day period." All rulings and/or issuances inconsistent herewith are hereby superseded. cd This MEMORANDUM CIRCULAR shall take effect upon approval. (Sgd.) Patricia A. Sto. Tomas Chairman" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG

Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-07-91 Revenue Memorandum Circular No. 53-91 June 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 53-91 Subject : Loss of Three (3) Sets of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing three (3) sets of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------22450245 : One (1) Set 22450365 : One (1) Set 22450366 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-21-91 Revenue Memorandum Circular No. 54-91 June 21, 1991 REVENUE MEMORANDUM CIRCULAR NO. 54-91 Subject : Loss of Five (5) Sets of Confirmation Receipts (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing five (5) sets of Confirmation Receipts, to wit: ------------------------SERIAL NUMBER ------------------------22057952 : 22058037 : 22058109 : 22058113 : 22058249 : ------------------------: QUANTITY

One (1) Set One (1) Set One (1) Set One (1) Set One (1) Set

The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said form is therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-16-91 Revenue Memorandum Circular No. 55-91 May 16, 1991 REVENUE MEMORANDUM CIRCULAR NO. 55-91 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------19198205 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office has been cancelled and any official transactions involving the use of said form is therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-28-91 Revenue Memorandum Circular No. 56-91 June 28, 1991 June 28, 1991 REVENUE MEMORANDUM CIRCULAR NO. 56-91 Subject : Publishing Administrative Order No. 224, Directing the Continued Adoption of Certain Economy Measures for FY 1991. To : All Internal Revenue Officials and Others Concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Administrative Order No. 224 dated June 13, 1991 of Her Excellency, President Corazon C. Aquino. cdt "Malacaang Manila

ADMINISTRATIVE ORDER NO. 224 DIRECTING THE CONTINUED ADOPTION OF CERTAIN ECONOMY MEASURES FOR FY 1991 WHEREAS, the emergency situation has been alleviated and the fiscal condition has correspondingly improved; WHEREAS, while certain economy measures may be lifted to free more authorized resources to carry out government programs, there is still a need to maintain prudence in government spending; WHEREAS, there is a need to clarify the remaining measures that need to be adopted by all agencies concerned; NOW, THEREFORE, I CORAZON C. AQUINO, President of the Philippines, by virtue of the power vested in me by law, do hereby order. Sec. 1. Coverage. All national government agencies, including government-owned or controlled corporations, and local government units shall be covered by the economy measures prescribed hereunder for FY 1991, except the following. cd a. Local government activities funded from local funds which, for the purpose of this Administrative Order, shall mean the Internal Revenue Allotment (IRA), Specific Tax Allotment (STA), Local Government Revenue Stabilization Fund (LGRSF) and other locally-generated revenue sources; and b. Government-owned or controlled corporations which do not receive any form of government financial assistance, specifically equity, subsidy, advances for debt servicing and tax subsidy. Sec. 2. Specific Economy Measures. The following economy measures shall continue to be adopted in FY 1991. a. Deferment of the Hiring of Consultants, Contractuals and Casuals. The hiring of consultants, contractuals and casuals shall be deferred, except in the following cases: 1. For foreign-assisted projects where the hiring of consultants and other related personnel to these projects is explicitly provided under the terms and conditions of the loan agreement; 2. Agencies which are staffed by contractuals pursuant to existing Policy or by law; Provided, That in no case shall the actual number of existing personnel or warm bodies as of 31 December 1990 be exceeded; 3. The hiring of contractuals and casuals whose salaries are changeable against lump sum funds specifically authorized by law for the purpose subject to the determination by the Department Secretary or head of agency concerned of the essentiality of their services; cd 4. The rehiring of part-time physicians by government hospitals; 5. The hiring of substitutes to personnel on leave. b. Discontinuance of the grant and payment of honoraria and similar allowances. The grant and payment of honoraria and similar allowances shall be discontinued, except the following: 1. Representation and transportation allowances as authorized in the General Appropriation Act; 2. Allowances to barangay captains as authorized in the General Appropriations Act;

3. Honoraria to day-care workers of the Department of Social Welfare and Development; 4. Allowances to scholars; 5. Service fees authorized under the General Appropriations Act; 6. Allowances to military personnel detailed with members of Congress and officials of the national government with at least a cabinet rank, or assigned as security in ongoing infrastructure projects and critical government facilities located in strife-torn, embattled and security areas as certified by the Secretary of National Defense; and 7. Payment of honoraria to officials and employees who are entitled thereto under existing law, jurisprudence and policy while rendering services in inter-agency committees created by law or by Presidential directive; For purposes of this Administrative Order, the following payments are not considered honoraria: 1. For teaching overload in the Department of Education, Culture and Sports, schools and state universities and colleges; cdt 2. For teaching in schools maintained by special hospitals under the Department of Health; 3. For duly authorized per diems of members of the Board of Regents or Board of Directors/Trustees of state universities and colleges; 4. For executive positions in state universities and colleges filled by designation from among the faculty members; 5. For duly authorized per diems and/or fees of members of the Board of Directors/Trustees of government-owned or controlled corporations subject to the decision of the Supreme Court in G.R. No. 83896 entitled Civil Liberties Union of the Philippines vs. The Executive Secretary; 6. For services of lecturers and resource persons in training programs, where the conduct of such training program is a regular function of the agency concerned; 7. For services rendered by a private sector representative in a duly authorized interagency committee; 8. For the services of a judge by virtue of his designation as Executive Judge; 9. For municipal treasurers deputized by the Bureau of Internal Revenue to collect and remit revenue collections; 10. For government personnel including teachers deputized by the Commission on Elections during electoral exercises; 11. For government personnel deputized by the National Statistics Coordination Board for the conduct of census and statistics surveys; 12. For Zoning Administrators deputized by the Housing and Land Use Regulatory Board; and 13. For duly authorized per diems and reimbursement of expense incurred in official travels. c. Suspension of all foreign travels. All foreign travels shall be suspended, except those fully funded from grants, or those expressly authorized by the Office of the President. In case where funding by the donor agencies does not include clothing allowance and pre-travel expenses, the recipients of scholarship or training grants may collect clothing allowance and funding for pre-travel expenses against the funds of their

respective agencies, subject to the terms and conditions specified in Executive Order No. 401. d. Disallowances of the purchase of motor vehicles. The purchase of motor vehicles for management and staff use shall continue to be disallowed. casia e. Disallowances of overtime payment in excess of sixty (60) hours per month. The payment of overtime services in excess of sixty (60) hours per month shall be disallowed, except as may be authorized by the Department Secretary or head of agency concerned pursuant to the provisions of Memorandum Order No. 228, series of 1989. Further, the total overtime compensation which may be allowed an employee for a given calendar year shall not exceed fifty percent (50%) of his basic annual salary. Furthermore, total overtime payments made in any given calendar year shall not exceed five percent (5%) of the agency payroll for personal services; Provided, That allowances drawn for actual official expenses incurred in special projects shall be excluded from the said ceiling. Sec. 3. Responsibility of the Department of Budget and Management. The Department of Budget and Management shall continue to submit to the Office of the President a quarterly report on the status of the implementation of this Administrative Order. Sec. 4. Repealing Clause, Administrative Order No. 205, Series of 1991, is hereby superseded. All other issuances on economy measures and their corresponding rules and regulations inconsistent with the provisions of this Administrative Order are hereby repealed and/or modified accordingly. Sec. 5. Effectivity. This Administrative Order shall take effect immediately. cdasia DONE in the City of Manila, this 13th day of June, in the year of Our Lord, nineteen hundred and ninety-one. (Sgd.) CORAZON C. AQUINO By the President: (Sgd.) OSCAR M. ORBOS Executive Secretary" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-28-91 Revenue Memorandum Circular No. 57-91 June 28, 1991 REVENUE MEMORANDUM CIRCULAR NO. 57-91 Subject : Addendum to Clarificatory Guidelines on Time of Payment of Documentary Stamp on Deeds of Sale To : All Internal Revenue Officers and Others Concerned It has been observed that a great majority of our Revenue Regional and District Offices are still in a quandary as to the correct time of payment of the documentary stamp tax on deeds of sale as required under Section 173 in relation to Section 196 both of the Tax Code as amended. Initially, the BIR addressed the said problem with the issuance of

Revenue Memorandum Circular No. 45-88 dated 07 September 1988. Considering that there are certain problems in its implementation, it is deemed best that in fairness to the taxpayers, further clarifications be made in this regard. cdt Payment of the documentary stamp tax is effected by the purchase, affixture and subsequent cancellation of documentary stamps (or notation of payment of documentary stamp tax with denomination of P10.00 or more) on the documents at the time such ACT IS DONE OR TRANSACTION HAD, meaning of the date of execution or signing of the document by the parties thereto, and not at the time of its notarization. Any delay, therefore, in the purchase and affixture (or notation of DST payment, as the case may be) of the documentary stamps on the deeds of sale shall render the same subject to the statutory penalties of 25% surcharge, or plus 20% interest per annum prescribed by Sections 248 and 249 of the Tax Code as amended except, of course, in exceptional circumstances where the taxpayer can prove by clear and convincing evidence other than the Deed of Sale/Transfer that the delay in the payment of the documentary stamp tax was due to a reasonable and justifiable cause, such as when due to a non-working holiday or a strong typhoon and flooded streets, BIR offices are closed and so it was impossible to purchase the required documentary stamps. In that case, the Commissioner of Internal Revenue may exercise his power to abate an imposition or assessment of penalty pursuant to Section 204 of the Tax Code as amended. acd All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-08-91 Revenue Memorandum Circular No. 58-91 July 8, 1991 REVENUE MEMORANDUM CIRCULAR NO. 58-91 Subject : Adoption of a New Taxpayer Identification Number (TIN) To : All internal revenue Officers and others concerned A database for BIR-MIS As part of its systems simplification and modernization program, the BIR will develop a comprehensive management information systems (MIS) in line with its long-term integrated information systems plan (ISP) which it has drawn jointly with the Development Academy of the Philippines (DAP). A database - papers stored in a file cabinet, a box of ledger cards, or records stored on computer tape or disk - is a necessity for virtually every MIS installation. It is managed by a set of integrated software called a database management system or DBMS. cd i Inadequacy of the present numbering systems A numbering system is an indispensable requirement for DBMS. It facilitates the identification of taxpayers, sorting and encoding of data from source documents and generation of management information, as well as information for day-to-day operations of the organization. In order to be effective as such, an identification number must function as an attribute that uniquely identifies a taxpayer or his record. Currently, the users of information in the BIR have stand alone-manual or PC-based application systems that handle only their own data. Thus, for example, a revenue district officer (RDO) has

his own information system for taxpayers coming under his jurisdiction; The Special Operations Service developed its own taxpayer profile based on data from tax returns its revenue officers have audited; the Collection Services maintains accounts receivables and delinquent accounts information system; the Withholding Tax Division keeps records of withholding agents which cannot directly serve as primary information source for investigating units; and the special investigation units or groups do not share their own data with other audit units. The data-oriented rather than decision and policy-making emphasis of the present system emerged in which too much of the unnecessary data became part of the disparate unintegrated databases. It is within this conventional file environment with no data integration which led to the adoption and use of a variety of numbering systems and made data sharing across applications a complex process. Each of the four different kinds of numbering systems, namely: the tax account number (TAN), assessment number, withholding agent number, VAT registration number and non-VAT registration number presently used by the BIR to identify the same taxpayer lack the unique feature required for computerization. The absence of integrated information systems and the technical deficiency of existing numbering systems which do not function as a single, unique identification number not only caused control problems but needlessly wasted computer capacity and did not achieve efficient and speedy processing of data for conversion into a more useful and timely information for management. The development of an effective DBMS depends on the adoption of a single taxpayer numbering system and assignment of a unique taxpayer identification number (TIN) to each taxpayer. The TIN, to be used in properly tracking all transactions of a taxpayer with the tax administration systems regardless of type of tax, will ultimately replace the existing numbering systems, including the present TAN. acd The function and structure of the present TAN Any person required to file a return, statement, or other document with the BIR must indicate in such documents a taxpayer account number to be supplied to him by the BIR for proper Identification. Accordingly, the present structure of the TAN was developed as an indispensable requirement for computer processing of income and other tax documents. It consists of twelve-digit alphanumeric code generated under the so-called "Soundex System" which translates all consonants of a name into numbers. Deficiency of the current TAN Technical deficiency The structure of the present TAN has not effectively served the purpose for which it was designed. Technically, it lacks the unique feature required for effective computerization. For instance, it does not have any digital indicators for the type of taxpayer and the revenue district office having jurisdiction over the taxpayer. Consisting of 12 alphanumeric digits, the TAN is more difficult to encode with the present design of the computer numeric keypad because it is longer (which is more costly to store in the computer storage space) and is alphanumeric (which makes encoders more prone to commit errors). Improper implementation

The absence of an integrated information systems and a relational database system led to the relegation of designing the TAN as a unique taxpayer identification number to a lesser importance in tax administration. Accordingly, it has been poorly implemented. Many TANs have not been properly indicated on documents filed with the BIR. Out of the 2.5 million income tax filers in 1988, only 19% or 475,000 properly indicated their respective TANs on their returns. A great majority of Payment Orders/Confirmation Receipts and Revenue Official Receipts issued for the same taxable year are without the TAN. The number of TANs issued have ballooned to unmanageable proportions, not only due to its expanded use but also because of lack of maintenance procedures which could eliminate duplicate or multiple TANs issued to the same taxpayer and the TANs previously issued to those but who ceased to be taxpayers from the master file. Applicants for jobs and business permits, as well as those who pay residence tax (which is collected by the local governments and not by the BIR), are required to have a TAN. Other government agencies require the indication of TANs in documents filed with them. While the Tax Code requires that the TAN should be indicated only in a return, statement or document filed with the BIR for tax purposes, the present practice is that even persons who are not filing such documents with the BIR apply for and are issued TANs. For example, mere applicants for employment (many of whom are not actually accepted for employment by the prospective employers), students, and many others apply for TANs. cd Many taxpayers who had already been supplied with TAN request issuance of a new TAN if they do not remember their TAN, RISSI, due to its capacity-limited and obsolete hardware, is incapable of completely matching present holders of TAN with new applicants for purposes of preventing duplication. Upon implementation of the permanent 12-character TAN designed under the Soundex System many taxpayers, due to lack of adequate information drive, have continued using the "old TAN" consisting of eight (8) numeric digits or the "temporary TAN" which is prefixed with a "T" followed by six (6) numeric digits, the masterfiles of which had previously been junked. Consequence of the failure of the present numbering systems The TAN The technical deficiency and poor implementation of the TAN system has dire consequences to the attainment of an efficient tax administrative system. Names and addresses of taxpayers have to be encoded on every source document - approximately 8.5 million - processed annually and are used to collate data on individual internal revenue tax payments. Moreover, the use of separate numbering systems for VAT, withholding tax and other taxes has utilized more computer storage space and personnel entailing costly maintenance cost. Had the TAN been designed to function as a unique taxpayer identification number and properly implemented, it could have served as a primary key for a relational database management system that effectively controls redundant or repetitious data, waste of storage space and inconsistencies.

In view of the currently large magnitude of TANs issued and with all its drawbacks, maintenance of the TAN system (which would entail unnecessary cost) will be discontinued. cdasia The other numbering systems The VAT number consists of the RDO number issued chronologically and is entered in a separate logbook for each of the 97 RDOs. The non-VAT registration number consists of the RO number, RDO number, serial number and the branch number. The withholding agent's ID number consists of the RO number, RDO number, serial number and the year of registration. Since all of these numbers are issued at the revenue district office, a change in a taxpayer's principal place of business or office requires a change in his number. Cross referencing from one numbering system to another is virtually impossible with the various numbering systems which have different design characteristics. The need to replace TAN with TIN To maintain the TAN requires extensive information drive to educate taxpayers for its proper indication on all tax documents they file with the BIR. The TAN masterfile must be cleaned up to eliminate duplicates which will entail communicating with taxpayers. Nevertheless, purging duplicate TANs and non-taxpayer numbers from the masterfile will not cure its technical infirmity and will remain useless for a relational database management system that can suitably be designed for tax administration. Therefore, although adoption of a new and single TIN will require similar information drive and purging of old TANs in the masterfile, it has the significant advantage of functioning technically as a unique number. The phased implementation of the integrated ISP and the success of the systems simplification and modernization project is anchored on the formulation and adoption of a unique TIN. Transition procedures from TAN to TIN Design of TIN Structure As designed by the RISSI the new, unique TIN will consist of 9-digit numeric code in contrast to TAN's alphanumeric code. The first digit will identify the type of taxpayer. The digit zero ("0") will signify a corporation and digits "1" to "9" will denote individual taxpayers. The succeeding seven (7) digits will be sequential and the 9th digit will be a check digit. TIN is shorter, easier to encode, and will replace the TAN and the other multiple numbering systems. Although it has the same objective as the TAN, the new number will be called TIN to distinguish it from the old TAN. acd Referral to and for endorsement by the National Computer Center In line with the National Computer Center (NCC) policy guidelines on the development of computerization programs by or for government agencies, the proposed TIN was referred to the NCC for review, evaluation and comment. The NCC in its letter dated has favorably endorsed, with helpful observations and suggestions on, the adoption and structure of the new numbering system. The BIR will implement the adoption of the TIN which will replace all existing numbering systems in accordance with Revenue Memorandum Order No. Publicity All internal revenue officers and others concerned are hereby enjoined to give this Circular a wide publicity as possible.

(Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-21-91 Revenue Memorandum Circular No. 59-91 June 21, 1991 REVENUE MEMORANDUM CIRCULAR NO. 59-91 Subject : Amended Guidelines on Substitution of the Education/Training/Experience Qualification Standards. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 23, s. 1991 dated June 4, 1991. "The Civil Service Commission in its continuous effort to ensure and promote the Constitutional mandate that appointments in the civil service shall be made only according to merit and fitness issued the following amended guidelines on substitution of the education/training/experience requirements: casia A. DEFINITION OF TERMS 1. Course - refers to a specialized field of academic study leading to a degree. 2. Degree - a title conferred to a student by a college university or professional school upon completion of the required minimum credits of study of a particular academic discipline. 3. Education - refers to the formal academic attainment of an individual required for an optimum performance of the duties and responsibilities of the position. 4. Eligibility - is a requirement for entrance in the career service which is conferred upon an individual after passing a Civil Service Commission examination, whether assembled/unassembled or specialized examination conducted by the Civil Service Commission (CSC) or department or agencies with the assistance of, or in coordination with the CSC, to determine one's fitness to assume the duties of public office or position. The passing of board or bar examinations given by the Professional Regulation Commission and the Supreme Court is also considered eligibility. 5. Experience - refers to skills or knowledge gained or acquired by an individual in a previous employment in a public or private organization which would enable him to perform his job better. Experience must be relevant and material to the duties and functions of the position. a) Relevant experience - is an appropriate knowledge/skill acquired from previous employment which has significant closeness and functional relationship with the qualification requirements of the position to be filled up. b) Specialized experience - refers to a distinct line of knowledge/skill which is specifically required of the position. 6. Subject - refers to a particular field of study knowledge included in the curriculum.

7. Training - refers to the development of a particular skill, knowledge, and ability, profession or occupation acquired through formal or informal learning usually measured in terms of number of hours, days or months. cdasia B. GUIDELINES ON SUBSTITUTION OF THE EDUCATION/TRAINING/EXPERIENCE REQUIREMENTS I. General Policies

Where necessary, education, experience, or training shall be used interchangeably to offset deficiencies, except the civil service eligibility which shall not be substituted. The following policies must be observed: 1. For appointment to positions covered by bar or board examinations, and other positions for which the law prescribes the specific minimum education and/or experience requirement, no substitution shall be allowed for deficiency in the education requirement, unless otherwise provided for by law. 2. For appointment to first and second level positions, substitution for deficiency in the education requirement shall be allowed for promotional appointments but only to a maximum of two years. 3. For appointment to positions covered by CSC Resolution No. 435, series of 1980, MC # 10, series of 1977, and other positions not requiring civil service eligibilities, substitution for deficiency in the education requirements shall be allowed. 4. Only education, relevant experience and/or training in excess of the minimum required may be used to offset any of the deficiencies, in accordance with the rate of substitution herein prescribed. 5. For appointment to entrance positions in any government agency, experience may not be required of those who meet the education requirement. II. Rate of Substitution 1. For Education 1.1 Except as otherwise provided, the rate of substitution for every academic year of deficiency in the education requirements shall be any or a combination of the following: 1.1.1 One year of specialized/relevant experience 1.1.2 Six months of relevant training grant 1.1.3 Two hundred hours consisting of one or more specialized/relevant training or seminars 1.2 Where units in specialized courses are required, every three units deficiency may be substituted by any or a combination of the following: 1.2.1 1.2.2 1.2.3 One year of specialized/relevant experience Two months of specialized training grant One Hundred hours consisting of one or more relevant training or seminars

1.3 Where a training course is required, deficiency may be substituted by any or a combination of the following:

1.3.1 1.3.2 2.

One year of specialized/ relevant experience Six units of relevant academic subject For experience

Every six months of deficiency in the specialized/relevant experience may be substituted by any or a combination of the following: 2.1.1 2.1.2 Six units of relevant academic subjects Two months of relevant training grant

2.1.3 One Hundred hours consisting of one or more relevant in-service training or seminars C. INSTRUCTIONS ON HOW TO USE AND MAINTAIN QUALIFICATION STANDARDS 1. Determining the appropriate qualification standards to be used 1.1 The specific qualification standards to be used in filling a position are usually determined by the duties and responsibilities attached to the position. The position title will indicate the occupational service and the particular group to which it belongs. Example: The position of Cashier I is found in the Cashiering Group under Financial Service and the qualification standards for Cashier I may be found in that occupational group. 1.2 When the position title is not found in any of the Occupational Services in the Qualification Standards Manual of the agency, the duties attached to the position should be compared with any comparable and functionally related positions available in the approved Qualification Standards Manual of other agencies. When a comparable position has been identified, the approved qualification standards of that position may be used. 1.3 If certain positions in the agency are not found in the Qualification Standards Manual, the agency should prepare and submit the proposed qualification standards to the Civil Service Commission for approval. acd 2. Other Relevant Requirements

2.1 Meeting the required education, experience, civil service eligibility and other special requirements of a particular position is not sufficient to merit employment in the public service. In addition, the appointee must not possess any of the disqualifications embodied in the Civil Service Law and Rules, Presidential Decrees, and existing policies relative to employment in the Civil Service. 2.2 When two or more applicants meet the minimum requirements for the position, objective criteria must be set by the agency to determine who is the most fit and meritorious among all the applicants. 3. Crediting Education and Training

3.1 All education requirements specified in this Manual should mean education acquired in schools duly accredited and/or recognized by the Philippine Government. 3.2 All "Associate" level of education shall mean the completion of 2 or 3 years of college work and therefore considered subprofessional. 3.3 When all relevant in-service training hours and training grants obtained from abroad are not used for substitution for deficiencies in experience, they should be credited as education requirements when allowable at the rate of substitution specified. 4. Crediting Experience All relevant experience specified in the qualification standards shall be considered regardless of whether such experience were gained in a private or in a government employment unless otherwise excluded by the Civil Service Commission. All experience submitted to fulfill experience requirements should be duly authenticated and certified by the approving Agency. Experience gained on detail or under designation may also be credited to substantiate his claim. 5. Crediting Civil Service Eligibility Civil service eligibilities resulting from bar or board examinations, or assembled specialized written examination conducted by the Civil Service Commission or department or agencies with the assistance of, or in coordination with, the Civil Service Commission, and eligibilities granted under PD 907 as amended, PD 997 and PD 1408 shall be allowed for permanent appointment to corresponding level of positions in the career service, provided that the appointee meets the education, training and experience and other requirements of the position prescribed in the approved qualification standards. 6. Physical and other Special Requirements 6.1 When additional specific requirements are needed of the position such as license, certificates, or character vouchers, applicant should submit such requirements before he is considered for appointment to a particular position. 6.2 Any physical condition which would prevent the applicant from performing the duties of his position should be considered a disqualifying factor even if he meets the other requirements of the position. 7. Amending Existing Qualification Standards Whenever changes in duties and responsibilities of a position occur or where the position has been reclassified and/or upgraded, the head of the particular government unit may request for the amendment of the existing qualification standards. The reasons/ justifications for each amendment must be stated in the letter request and the necessary documents submitted. No amendment shall be allowed within six months from the establishment of the qualification standards without the approval of this Commission. 8. Maintaining and keeping Current the Qualification Standards Manual. aisa dc It is the responsibility of every department head/agency to update the qualification standards for unique positions. The manual must include qualification standards for all positions/classes found in their respective agencies. They shall also be responsible for amending/revising every five (5) years their Qualification Standards Manual to keep it current. Please be guided accordingly.

(Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-09-91 Revenue Memorandum Circular No. 60-91 July 9, 1991 REVENUE MEMORANDUM CIRCULAR NO. 60-91 Subject : Tax Treatment of Representation and Transportation Allowances (RATA) granted to public officer or employee under the General Appropriations Act. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published hereunder BIR Ruling No. 21(a) 000-00-062-91, dated April 15, 1991, adopting the opinion of Secretary of Budget and Management to the effect that RATA is in fact a reimbursement for the expenses incurred in the performance of one's duties rather than as an additional compensation and therefore are not compensation subject to withholding tax pursuant to Section 2(2)(c) of Revenue Regulations No. 12-86. acd "April 15, 1991 "Mr. Beatriz B. Alaan Executive Director Postal Office Liwasang Bonifacio 1000 Manila Sir: Reference is made to your letter dated March 4, 1991 requesting clarification on whether the Representation and Transportation Allowance (RATA) granted to a public officer or employee should be reported as income for income tax purposes. RATA is granted under Section 34 of the General Appropriations Act: "Sec. 34. Representation and Transportation Allowances. The following officials and those of equivalent rank as may be determined by the Department of Budget and Management are hereby granted monthly commutable representation and transportation allowances payable from the programmed appropriations provided for their respective offices, not exceeding the rates indicated below, which shall apply to each type of allowance: 'a. At P2,500 for Secretaries or equivalent; 'b. At P1,700 for Department Undersecretaries or equivalent; 'c. At P1,500 for Assistant Secretaries, Bureau Directors and Department Regional Directors or equivalent;

'd. At P1,400 for Assistant Bureau Directors, Department Assistant Regional Directors, Bureau Regional Directors, Department Service Chiefs or equivalent; 'e. At P1,200 for Assistant Bureau Regional Directors or equivalent; 'f. At P1,100 for Chiefs of Divisions, identified as such in the Personal Services Itemization.' The issue is whether the RATA constitutes compensation income taxable under Section 21(a) of the Tax Code, as amended by Executive Order No. 37 (E.O. 37) which was approved on July 31, 1986. aisa dc Please be informed that under Section 2(2)(c) of Revenue Regulations No. 12-86, implementing Section 21(a) of the Tax Code, as amended by E.O. 37: "Amounts received by an employee, either as advance or reimbursement for transportation, representation and other bonafide ordinary and necessary expenses incurred or reasonably expected to be incurred by the employee in the performance of his duties are not compensation subject to withholding. However, if the reimbursement exceeds the actual expenses, the excess if not returned to the employer, constitutes taxable income. . . . " (Emphasis supplied) In implementing the abovequoted provisions of Revenue Regulations No. 12-86, this Office ruled in BIR Ruling No. 217-90 that: . . . . Fixed or variable transportation, representation and other allowances which are received by a public officer or employee is compensation subject to withholding. However, amounts paid specifically either as advances or reimbursement for transportation, representation or entertainment and other bonafide ordinary and necessary expenses incurred or reasonably expected to be incurred by the employee in the performance of his duties are not compensation subject to withholding, if the following conditions are satisfied: '1) It is for ordinary and necessary travelling and representation or entertainment expenses paid or incurred by the employee in the pursuit of the trade or business of the employer; '2) The employee is required to, and does, make an accounting/liquidation for such expense in accordance with the specific requirements of substantiation for each category of expense. 'If the reimbursements or advances exceed the actual expenses, the excess if not returned to the employer constitutes taxable compensation (Section 2, Revenue Regulations No. 682 as amended by Rev. Reg. No. 12-86 implementing Batas Pambansa Blg. 135).' In a letter to this Office dated March 8, 1991, the Secretary of the Budget and Management confirmed that "RATA is in fact a reimbursement for the expenses incurred in the performance of one's duties rather than an additional compensation and therefore are not compensation subject to withholding," pursuant to the aforequoted provisions of Section 2(2)(c) of Revenue Regulations No. 12-86. However, although the amount of RATA is not subject to withholding, the excess of RATA, if not returned to the employer, constitutes taxable income which should be declared in the recipient's income tax return for the year in which the RATA was received by him. cdtai Very truly yours, (Sgd.) JOSE U. ONG

Commission of Internal Revenue" In the light of the provision of Section 246 of the National Internal Revenue Code on non-retroactivity of rulings, the above ruling shall be applicable beginning taxable year 1991. Any amount of tax withheld on RATA received from January, 1991 by the concerned official and employee shall be credited against his income tax due for 1991, when the annualized withholding tax is determined in accordance with Section 22(b) of Revenue Regulations No. 6-32, as amended. casia This Circular should be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-14-91 Revenue Memorandum Circular No. 61-91 May 14, 1991 REVENUE MEMORANDUM CIRCULAR NO. 61-91 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: -------------------------SERIAL NUMBER : QUANTITY -------------------------19397601 : One (1) Set 19310180 : One (1) Set -------------------------The above receipts which were reported missing by the Accredited Bank to this office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-21-91 Revenue Memorandum Circular No. 62-91 June 21, 1991 REVENUE MEMORANDUM CIRCULAR NO. 62-91 Subject : Classification of Private Secretary Position To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 22, s. 1991 dated June 4, 1991.

"The Civil Service Commission issued Memorandum Circular No. 14, s. 1987 which identified the personal and confidential positions located in the offices of the Elective Officials, Department Heads and other officials of cabinet rank whose tenure is at the pleasure of the President as well as Chairman and Members of Commissions and Boards with fixed terms of office per approved Position Allocation List (PAL) as primarily confidential in nature. This includes the positions of Private Secretary. cdt However, it is noted that there are also Private Secretary positions found in the Offices of officials not mentioned in Section 9, Chapter 9, Book V of Executive Order No. 292 but, whose duties likewise require utmost confidentiality. For consistency and uniformity, it is hereby declared, pursuant to Resolution No. 91-676, that all Private Secretary positions irrespective of their locations are primarily confidential in nature. The term of office of the appointees to said positions shall be coterminous with the officials they serve. Incumbents of positions of Private Secretary prior to this declaration whose appointments are permanent shall retain their permanent status until the positions are vacated. Heads of agencies who may want to retain the position of Private Secretary in the career service should request the Department of Budget and Management for a change of their position titles to Secretary. cdt Please be guided accordingly. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-31-91 Revenue Memorandum Circular No. 63-91 July 31, 1991 July 31, 1991 REVENUE MEMORANDUM CIRCULAR NO. 63-91 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB-0203) To : All Internal Revenue Officers and Others Concerned Sec. 1. Objective. This Circular is issued to clarify and to expound on the provisions of Revenue Memorandum Order (RMO) No. 23-91 concerning issuance of the new Taxpayer Identification Number (TIN) to taxpayers and its use on documents/receipts. Sec. 2. Procedures for the Issuance of TIN ID Cards and Pre-printed Labels Thru Local Employer. 2.1 Existing (Old) Employees/ Wage Earners. cdt A. Local Employer shall 2.1.a. Determine existing employees from its company/office roster or list of personnel and/or workers.

Note: Existing (old) employees/ wage earners are local employees/ workers, including casual employees who are employed or hired as of July 31, 1991, whether or not they were previously issued/holders of TANs. 2.1.b. Accomplish TIN application (Annex A), reflecting all the necessary information required therein. 2.1.c. File TIN application with the Revenue District Office (RDO) where its principal office is located, or Revenue Information Systems Services, Inc. (RISSI) not later than August 30, 1991. 2.1.d. Secure claim stub indicating scheduled date of release. 2.1.e. Secure TIN ID Cards and pre-printed labels from the RDO or RISSI on scheduled date of release. 2.1.f. Distribute TIN ID Cards and pre-printed labels to employees/workers concerned. B. Existing (Old) Employee shall 2.1.g. Inform BIR/RISSI by mail if his/her TIN ID Card and pre-printed label are not received by October 31, 1991. acd 2.2 New Employees/Wage Earners. A. New Employee/Wage Earner shall 2.2.a. Request his/her employer for his/her inclusion in the list of company or office employees/workers applying for TIN, if he/she has not yet been issued the TIN and/or has not yet applied previously for a TIN. Note: New employees/wage earners are those local employee/worker first timers employed or hired after July 31, 1991. B. Local Employer shall 2.2.b. Accomplish the TIN application (Annex A), reflecting all the necessary information required therein. 2.2.c. File the TIN application with the RDO or RISSI. (The frequency of the filing of TIN application, whether on a weekly or monthly, basis, depends upon the employer, but should not be later than the 10th day of the following month the new employee was hired.) 2.2.d. Secure claim stub indicating scheduled date of release. 2.2.e. Secure TIN ID Cards and pre-printed labels from RDO or RISSI on scheduled date of release. 2.2.f. Distribute TIN ID Cards and pre-printed labels to employees/ workers concerned. Sec. 3. Procedures for the Issuance of the TINs/Pre-printed Labels Thru the Philippine Overseas Employment Agency (POEA) and/or Accredited Recruitment Agency. 3.1 Returning Overseas Contract Workers (OCWs) - (Balik Manggagawa). A. Returning OCW shall 3.1.a. Accomplish the TIN application (Annex B), reflecting all the necessary information required therein. 3.1.b. File the TIN application with the BIR counter located in POEA upon filing his/her employment papers with POEA. 3.1.c. Secure claim stub indicating scheduled date of release from the BIR counter. 3.1.d. Pick up the TIN ID Card and pre-printed label or authorize a representative to do such from the BIR counter (located in the POEA) on scheduled date of release.

3.2 New OCWs. A. New OCWs whose papers are processed by an accredited recruitment agency New OCW shall 3.2.a. Request the accredited recruitment agency processing his/her employment papers for his/her inclusion in the list of OCWs applying for TIN if he/she has not yet been issued the TIN and/or has not previously applied for TIN. cdasia Accredited Recruitment Agency shall 3.2.b. Accomplish the TIN application (Annex A), reflecting all the necessary information required therein. 3.2.c. File the TIN application with the POEA when its "Request for Processing" (RFP) papers are filed therein. 3.2.d. Inform the OCW to pick up his/her TIN ID Card and pre-printed label or to authorize a representative to do such from the BIR counter (located in the POEA) after ten (10) days from the filing of the RFP with POEA. B. New OCWs who personally process his/her papers with the Government Placement Branch (GPB), POEA. New OCW shall 3.2.e. Accomplish the TIN application (Annex A), reflecting all the necessary information required therein, if He/she has not yet been issued the TIN and/or has not yet applied previously for a TIN. 3.2.f. File the TIN application with the BIR counter located in POEA upon filing his/her employment papers with GPB. 3.2.g. Secure claim stub indicating scheduled date of release from the BIR counter. 3.2.h. Pick up the TIN ID Card and pre-printed label or authorized a representative to do such from the BIR counter (located in the POEA) on scheduled date of release. Sec. 4. Procedures for the Issuance of TIN ID Cards and Pre-printed Labels to SelfEmployed Taxpayers and Business Entities (Include Professional Practitioners, Withholding Tax Agents, Estates/Trusts) 4.1. Existing (Old) Self-Employed Taxpayers/Business Entities. A. Existing (Old) Self-Employed Taxpayer/Business Entity as of July 31, 1991 shall 4.1.a. Await either delivery by the RDO of his/her TIN ID Card and pre-printed labels to his local address/ residence or notification by RDO requesting the taxpayer to pick up his/her TIN ID Card and pre-printed labels from said RDO. 4.1.b. Inform BIR (RISSI) by mail if his/her TIN ID Card and pre-printed labels are not received by October 31, 1991. 4.2. New Self-Employed Taxpayers/ Business Entities. A. New Self-Employed Taxpayer/ Business Entity Established after July 31, 1991 shall 4.2.a. Secure an application form (refer to Annex B, in case of individuals; and C, in case of corporations) from the nearest RDO/ RISSI, if he/she has not yet been issued the TIN and/or has not yet applied previously for a TIN. 4.2.b. Fill up the application form, taking careful note of the instructions printed thereon.

4.3.c. Submit the accomplished form and present business permit and/or SEC Registration and/or such other documents when applicable, to the receiving clerk of RDO/RISSI. 4.3.d. Secure claim stub indicating the scheduled date of issuance/release of TIN ID Card and pre-printed labels. 4.3.e. Secure TIN ID Card and labels from the Office where the application was filed on the scheduled date of issuance. acd Sec. 5. Use of the New TIN. 5.1. Only persons required to make, render or file a return, statement or document with the Bureau of Internal Revenue shall be supplied with or assigned a taxpayer identification number to be indicated on such documents. In addition to the persons enumerated in RMO 23-91, Filipinos who are immigrants to other countries may apply for the issuance of a TIN with the RISSI/RDO by accomplishing the pertinent application form and presenting his/her passport. 5.2 The new TIN shall replace the existing TANs, VAT registration numbers, nonVAT registration number and withholding tax agent identification numbers. Therefore, only the TIN shall be reflected on all documents, papers and/or records that previously required the indication/reflection of any of the aforementioned numbers. 5.3 On Invoices/Receipts. 5.3.a. The new TIN shall be reflected/super-imposed on all unexpended/unissued VAT/non-VAT receipts/invoices. 5.3.b. All receipts/invoices to be printed subsequently shall contain the TIN, with the letter(s) "V" (for VAT registered) or "NV" (for non-VAT registered) placed after the last digit of the TIN. This shall facilitate the determination of whether the taxpayer is VAT registered or not. Sec. 6. This Circular takes effect immediately. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-91 Revenue Memorandum Circular No. 64-91 July 24, 1991 July 24, 1991 REVENUE MEMORANDUM CIRCULAR NO. 64-91 Subject : Adoption of Economy Measures in the Conduct of Training and Development Activities. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 20, s. 1991 dated May 30, 1991. "The national effort towards the continued observance and adoption of economy measures in government expenditures for Fiscal Year 1991 has been outlined in Administrative Order No. 205 and its implementing guidelines (Memorandum Circular No. 124), both issued by the Office of the President. cda The Civil Service Commission, as the central personnel agency of the government, charged with the adoption of measures to promote morale, efficiency, integrity, responsiveness, and courtesy in the civil service, while recognizing the need for austere

measures in the conduct of government operations similarly pursues a continuing crusade for total manpower development. In order to reconcile the exigencies of the current situation and the government's thrust towards people-powered development, the following guidelines in the conduct of training and development programs are hereby reiterated/adopted for implementation and observance: 1. On the Conduct of Training Programs 1.1 All government agencies may conduct in-house training programs for the development and productivity of agency personnel with the use of minimal expenses for the following items: 1.1.1 Supplies and materials; 1.1.2 Materials reproduction (hand-outs); 1.1.3 Rental for training venues/facilities for offices/agencies which do not have any; 1.1.4 Resource person services; and 1.1.5 Communication and transportation expenses. For this purpose, training programs shall refer to those activities involving instruction and strategies whereby participants will be required to undergo manual or practical exercises and action learning as a means of strengthening work and job related skills. In all instances of training administration, efforts shall be exerted in utilizing available resources and government facilities. aisa dc In-house training programs shall, as much as possible, be conducted on a non-residential basis and without any provision for participants' meals or snacks. 1.2 Training programs for government-wide participation conducted by government training institutions for specific clientele groups and aimed at skills development and capability building shall be conducted in the most economical manner possible. These institutions include, among others, the Civil Service Commission, the Career Executive Service Board, the Commission on Audit, the Department of Interior and Local Government, the Development Academy of the Philippines, the Foreign Service Institute, the National Manpower and Youth Council, the National Computer Center, the Statistical Research and Training Center, UP Law Center and the National Defense College of the Philippines. Residential training programs shall also be allowed for those activities conducted by these and similar institutions. 1.3 Basic information dissemination, orientation or appreciation program concerning issues and laws of general application shall be conducted free of charge for all employees by their respective agencies. 1.4 The Civil Service Commission and its staff/regional/provincial/field offices shall provide consultancy and technical assistance/services in the formulation, administration or conduct, and evaluation of training programs and other Human Resources Development strategies especially for departments/agencies/local government units which do not have an existing Human Resource Management (HRM) Office, Division, or its equivalent. 2. On the Participation of Government Personnel to Training Programs Conducted by Non-Government Organizations, Private Institutions or Training Centers. cd Government employees may participate in external training and other development programs conducted by non-government organizations, private institutions or training centers on official time only at no additional expense to the agency concerned, subject to the approval by their respective agency heads.

3. On the Payment for Resource Person Services Payment for resource person services may be allowed for outside lecturers, discussants and speakers or agency personnel who are not members of the training staff of the office or agency conducting the in-house training programs. Payments for such services shall not exceed P250.00 an hour, based on the qualification and expertise of the resource persons. This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-91 Revenue Memorandum Circular No. 65-91 July 24, 1991 REVENUE MEMORANDUM CIRCULAR NO. 65-91 Subject : Clarificatory Circular/Addendum to the Dress Code (MC No. 14, S. 1991) To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 25, s. 1991 dated June 20, 1991. cda "It has been observed that since the promulgation of CSC Memorandum Circular No. 14, s. 1991 on the Dress Code, numerous requests and clarificatory questions have been raised with the Commission. In view thereof, and in order to give clarity to certain points, the Commission hereby promulgates the following rules relative to said Circular: 1) The Dress Code applies to both male and female employees in the civil service subject to the following distinctions: a) The wearing of "maong" pants among male employees is allowed provided that the same is worn with collared T-shirts; b) The wearing of maong among female employees is allowed only on instances when these employees are regularly performing their duties and functions in the field, or if temporarily assigned in actual field operations. In other words, female office workers are not allowed to wear maong. cdt 2) T-shirts, the wearing of which is prohibited in the Circular, refer to non-collared ones. Simply stated collared T-shirts are allowed for both male and female employees. Other matters such as those involving hair cuts, beards and mustache shall be governed by the internal rules and regulations promulgated by the agencies concerned. This Circular shall be treated as an addendum to MC No. 14, s. 1991. acd (Sgd.) PATRICIA A. STO. TOMAS" Chairman

All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-91 Revenue Memorandum Circular No. 66-91 July 24, 1991 July 24, 1991 REVENUE MEMORANDUM CIRCULAR NO. 66-91 Subject : Policy on Government Working Hours for Government Officials and Employees To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 21, s. 1991 dated June 4, 1991. "It has been observed that there have been numerous request from different government agencies/offices for the rescheduling of working hours of its employees as well as on other matters relative thereto. The Civil Service Commission, being the central personnel agency of the government, in order to establish a uniform application and proper observance of the schedule of the working hours in all government offices for the convenience of the public, and pursuant to CSC Resolution No. 91-677 dated June 4, 1991 hereby adopts the following policies in connection therewith: cd i A. Forty-Hour Work Week: 1. All government officials and employees are required to render eight (8) working hours a day for five working days a week or a total of forty (40) hours a week, exclusive of time for lunch. 2. The normal working hours of government officials and employees shall be from, viz: 8:00 a.m. - 12:00 a.m. 1:00 p.m. - 5:00 p.m. 3. In the exigency of the service, or when necessary by the nature of the work of a particular agency and upon representations with the Commission by the Department heads concerned, requests for the rescheduling or shifting of work schedule of a particular agency for a number of working days lesser than the required five (5) days may be allowed provided that government officials and employees render a total of forty hours a week and provided further that the public is assured of core working hours of eight in the morning to five in the afternoon continuously for the duration of the entire work week. B. Flexible Working Hours 1. In no case shall the working hours be reduced in the event officials and employees elect to adopt flexi-time in reporting for work, in which case, CSC MC No. 14, s. 1989 (Adoption of Flexible Working Hours in the Government Service) shall be strictly complied with.

C. Use of Bundy Clock and Other Record of Attendance cdt 1. All officers and employees shall record their daily attendance on the proper form or, whenever possible have them registered on the bundy clock. Any other means of recording attendance may be allowed provided their respective names and signatures as well as the time of their actual arrival to and departure from office are indicated, subject to verification. This shall include those serving in the field, that is, outside the office proper, and those on the water or service rendered on board a vessel as the usual place of work. The Record of Attendance which shall be kept in a conspicuous place, shall be in the custody of a responsible officer who shall monitor the arrival, departure of officials and employees. 2. All other officials including presidential appointees who are not required to use the bundy clock shall hereinafter record their attendance in the manner prescribed by the Office and their absences shall be covered with the requisite leave of absence. D. Overtime Services 1. When the interest of public service so requires, the daily hours of work for officers and employees may be extended by the head of the agency concerned, which extension shall be fixed in accordance with the nature of work. They may also be requested to render overtime work which shall be paid except when rendered in the exigency of the service or when service requires them to work urgently, subject to existing regulations. 2. Off-setting of tardiness or absences by working the equivalent number of minutes or hours by which an officer or employee has been tardy beyond the regular or approved working hours of the employees concerned shall not be allowed. E. Undertime Any employee who incurs undertime regardless of the number of minutes/hours, ten (10) times a month in a semester or at least two (2) consecutive months during the year shall be subject to administrative sanctions prescribed under CSC MC No. 04, s. 1991 (Policy on Absenteeism and Tardiness). cd i THIS MEMORANDUM CIRCULAR SHALL TAKE EFFECT IMMEDIATELY. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-91 Revenue Memorandum Circular No. 67-91 July 24, 1991 July 24, 1991 REVENUE MEMORANDUM CIRCULAR NO. 67-91 Subject : Swap-Work Assistance Program (SWAP) To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 24, s. 1991 dated June 16, 1991.

"Pursuant to CSC Resolution No. 91-695 dated June 11, 1991, the Swap-Work Assistance Program (SWAP) is adopted. It is a mechanism for orderly exchange of posts and items in the government. I. OBJECTIVES General To revitalize and enhance performance of government workers and to increase their productivity through a job-swapping scheme. cdtai Specific 1. To provide an opportunity for government workers to exchange posts/work stations together with their respective items, to work in agencies geographically closest to their residence. 2. To enable employees to reduce their travel time, expenses, and attendant physical, emotional and mental stresses caused by difficulties of commuting to and from their place of work. 3. To further enhance and enrich their work skills, attitudes and capabilities. II. THE SCHEME

Under SWAP, the Civil Service Commission (CSC) will help government workers exchange posts and items with the approval of their respective heads. Thru this scheme, an Accounting Clerk of the House of Representatives living in San Pedro, Laguna, may swap posts and item with an Accounting Clerk of the Department of Science and Technology (DOST) in Bicutan living in Fairview, Quezon City. III. SCOPE AND COVERAGE

SWAP shall cover first and second level employees with permanent status occupying service-wide positions. cdt IV. MECHANICS 1. A post exchange system will be established with the Civil Service Commission as the Central Post Exchange and the agency Human Resource Management (HRM) Offices as the System outposts. 2. The Outposts will accept applications from employees who wish to avail of the Program assistance scheme. 3. The applicant shall fill up the SWAP Application Form that contains the following information. a. b. c. d. e. Name of employee Position Salary and other Benefits Residence Three (3) government agencies to which the employee wishes to transfer.

4. The Source Agency Outposts will submit four (4) copies of the accomplished form of the CSC. 5. The CSC will send a copy of the accomplished form to each of the three (3) target agency outposts and enjoin them to post the same on their Bulletin Boards for the benefit of those who also wish to avail of the scheme. 6. Within two (2) days from receipt of the Form, the Target agency outposts will inform the CSC of the action they have taken. 7. Any incumbent of a similar position in the target agency interested in the post occupied by the applicant-employee may inform the target agency outpost which will contact the source agency. 8. A target agency may also accept applications from its own employees who may wish to avail of the Program assistance scheme. Upon receipt of such applications, the CSC will process same for matching purposes. If a match is established, the CSC will inform the employees and the agencies concerned. cd i 9. The necessary clearances will then be effected and the appointment papers prepared for the signature of the respective heads of the Source and Targets agencies. This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-26-91 Revenue Memorandum Circular No. 68-91 July 26, 1991 REVENUE MEMORANDUM CIRCULAR NO. 68-91 Subject : Grant of Personnel Economic Relief Allowance (PERA) To All Employees Of The Government To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Budget and Management Budget Circular No. 4-A dated July 1, 1991. "1.0 PURPOSE

This Circular is issued to clarify certain items in Budget Circular No. 4, dated June 28, 1991, prescribing guidelines for the grant of PERA to employees of the national government, government-owned and controlled corporations (GOCCs), including government financial institutions (GFIs), and local government units (LGUs). 2.0 For purpose of the grant of said PERA, items in Budget Circular No. 4 enumerated hereunder should be construed to mean as follows:

2.1 The requirement of twelve (12) months of continuous or uninterrupted service as of January 1, 1991 referred to in Sub-Par. 2.1 therein shall apply only to casual and contractual employees. For this purpose, service from other government offices/agencies, GOCCs/GFIs and LGUs shall be considered only if it is continuous or without break. Casual and contractual employees who may have rendered service for one (1) year in 1991, whether such government service was in one or more government offices/agencies, GOCCs/ GFIs, and LGUs, but not continuous, shall not be entitled to the PERA therein authorized. Determination as to when such an employee may be granted PERA is shown in Item No. 1 in Annex "A". cd Appointive employees occupying regular itemized plantilla positions as of January 1, 1991 or thereafter shall be automatically entitled to said PERA. 2.2 Leave Without Pay: 2.2.1 In the case of casual and contractual employees, for purposes of computation of the required twelve (12) months continuous or uninterrupted service, service corresponding to leave without pay shall be considered. They, however should not be paid PERA during the period of their leave without pay. 2.2.2 In case of appointive employees in itemized plantilla positions, they should not be paid PERA corresponding to the days they were on leave without pay during the month whether such leave without pay is broken or continuous. aisa dc 2.3 Appointive employees of the government occupying itemized plantilla positions with salary grade 23 and below referred to therein are employees appointed to regular positions authorized in the organization structure/staffing pattern duly approved by the Department of Budget and Management (DBM) for government offices/agencies, GOCCs/GFIs, and LGUs. Such appointment may be either on a permanent status or temporary appointments of this nature shall likewise not be included in the required twelve (12) months of continuous or uninterrupted service referred to in Sub-Par. 2.1 of subject Budget Circular No. 4. 2.4 Transportation allowance granted to messengers, liaison officers and other work assignments of similar nature, on a reimbursable basis is not included in the "Reimbursable RATA" referred to therein. 2.5 Employees qualified to receive PERA therein authorized but are appointed as Officer-In-Charge to a higher position authorized to receive RATA and are paid said RATA shall no longer be paid PERA during the period that such employees receive said RATA. 2.6 Computation of PERA of employees paid on an hourly or part-time basis which shall not exceed P500.00 per month is shown in Item No. 2 in Annex "A". 2.7 Government employees who were still in the service as of January 1, 1991 and are qualified to receive said PERA but were separated from the service either thru retirement, voluntary resignation or for reasons not due to disciplinary action, prior to the approval of the General Appropriations Act of CY 1991 and Budget Circular No. 4, dated January 28, 1991, shall likewise be paid from the period they are entitled to said PERA to the date of their separation. 2.8 PERA of government employees working on a part-time basis in more than one government office/agency, GOCC/ GFI, LGU, shall be paid and shared by the offices where such government employees render services on a part-time basis. In no case,

however, shall total PERA receive in one month by such employees from said offices exceed P500. aisa dc 2.9 PERA of government employee who had transferred from one office to another shall be paid by the office where such employee is presently employed at the time of the approval of the General Appropriations Act for CY 1991 and Budget Circular No. 4, dated June 28, 1991. In case of a government employee already separated from the service at the time of said approval as discussed in Item 2.6 above, PERA shall be paid by the last employer. 3.0 Employees with pending administrative case and/or under preventive suspension shall be paid PERA therein authorized only upon exoneration. 3.0 Cases not covered and/or fully clarified by any of the foregoing statements shall be submitted to the Secretary of Budget and Management for appropriate resolution. (Sgd.) Guillermo N. Carague" Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-24-91 Revenue Memorandum Circular No. 69-91 July 24, 1991 REVENUE MEMORANDUM CIRCULAR NO. 69-91 Subject : Clarificatory Circular/Addendum to the Dress Code (MC No. 14, S. 1991) To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circulated No. 25, s. 1991 dated June 20, 1991. "It has been observed that since the promulgation of CSC Memorandum Circular No. 14, s. 1991 on the Dress Code, numerous requests and clarificatory questions have been raised with the Commission. In view thereof, and in order to give clarity to certain points, the Commission hereby promulgates the following rules relative to said Circular: cdasia 1) The Dress Code applies to both male and female employees in the civil service subject to the following distinctions: a) The wearing of "maong" pants among male employees is allowed provided that the same is worn with collared T-shirts; b) The wearing of maong among female employees is allowed only on instances when these employees are regularly performing their duties and functions in the field, or if temporarily assigned in actual field operations. In other words, female office workers are not allowed to wear maong. 2) T-shirts, the wearing of which is prohibited in the Circular, refer to non-collared ones. Simply stated, collared T-shirts are allowed for both male and female employees. Other matters such as those involving hair cuts, beards and mustache shall be governed by the internal rules and regulations promulgated by the agencies concerned.

This Circular shall be treated as an addendum to MC No. 14, s. 1991. cdasia (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-29-91 Revenue Memorandum Circular No. 70-91 August 29, 1991 REVENUE MEMORANDUM CIRCULAR NO. 70-91 Subject : Extending the Deadline for the Submission of Requirements Under Revenue Memorandum Circular (RMC) No. 63-91, and Clarifying Certain Portions Thereof. To : All Internal Revenue Officers and Others Concerned This Circular is hereby issued to modify and to amplify certain provisions of RMC No. 63-91 on the implementation of the New TIN System. acd 1. Section 2.1.c For existing (old) employees/ wage earners. The local employer shall "file the TIN application with the Revenue District Office (RDO) where its principal office is located, or Revenue Information Systems Services. Inc. (RISSI) not later than October 31, 1991." 2. Sections 2.1.b and 2.2.b The TIN application (Annex A) to be accomplished by the local employer shall reflect the list of employees as of the date the application is filed. Subsequent TIN application/s shall be filed everytime there is a new employee/s who has not yet been issued the TIN and/or has not yet applied previously for a TIN. However, the frequency of the filing of TIN application, whether on a weekly or a monthly basis, shall depend upon the employer but shall not be later than the 10th day of the following month the new employee was hired. 3. Employers who have computerized data on their employees may file their TIN applications in computer diskettes or tapes. cda Those opting to use the computer media shall contact Mr. ORLANDO TOMACRUZ, General Manager, RISSI, BIR Complex (Tel. No. 994623), for compatibility and format. All revenue officials, employees and others concerned are hereby enjoined to give this Circular the widest publicity possible. (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner of Internal Revenue Officer-In-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-09-91 Revenue Memorandum Circular No. 71-91 August 9, 1991 August 9, 1991 REVENUE MEMORANDUM CIRCULAR NO. 71-91

Subject : Effectivity of separation from the government service due to compulsory retirement. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 28, s. 1991 dated July 2, 1991. "The CSC in its Resolution No. 91-769 dated July 2, 1991 adopted the policy that government officials and employees who compulsory retire under Section 11(b) of P.D. 1146, otherwise known as the "Revised Government Service Act of 1977" are separated from the government service at the close of office or working hours on their sixty fifth (65th) birthday. acd This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-09-91 Revenue Memorandum Circular No. 72-91 August 9, 1991 REVENUE MEMORANDUM CIRCULAR NO. 72-91 Subject : Clarification on Memorandum Circular No. 48, s. 1990 To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 29, s. 1991 dated July 2, 1991. aisa dc "Relative to MC #48, s. 1990, Policy on the Requirements of Clearances on the Issuance of Appointments, and Resolution No. 91-774, dated July 2, 1991 the following clarification is hereby issued particularly on the requirement for NBI clearance for original appointment, reinstatement or reemployment: 1. Original appointment, reinstatement or reemployment may now be submitted to the Civil Service Commission Regional/ Provincial Offices for approval subject to the submission of NBI clearance within a period of six months. Please be guided accordingly. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. casia (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner

Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-09-91 Revenue Memorandum Circular No. 73-91 August 9, 1991 REVENUE MEMORANDUM CIRCULAR NO. 73-91 Subject : SMOKING PROHIBITION To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 30, s. 1991 dated July 4, 1991. cd "Pursuant to CSC Resolution No. 91-787 dated July 4, 1991, the Civil Service Commission hereby adopts and promulgates the following prohibition against smoking: 1. Smoking shall be prohibited in places, to wit: a. Inside government offices, buildings, hospitals, medical, dental and optical clinics and dispensaries including but not limited to corridors, stairways, inside of elevators, canteens; b. In classrooms and within the premises of all public schools in all levels provided that for all collegiate and higher levels, this prohibition shall apply only to classrooms and all other enclosed rooms within the premises including public libraries and public research rooms/areas; c. Inside all enclosed government places used for gatherings or assembly such as mess halls, faculty room, staff room, session halls, function rooms; d. Inside places for government storage such as store-rooms or records room or carriers of inflammable liquids and combustible materials, including government vehicles or vessels. WHEREAS, it has been clinically proven that smoking is dangerous to one's health causing, among others, lung cancer, heart disease and may result in premature birth, fetal injury, and low birth weight in the case of pregnant women. Likewise, cigarette smoke inhaled by others (indirect smoking) prejudices and poses greater danger to the health of non-smokers. acd NOW, THEREFORE, the Commission resolved to adopt, as it hereby adopts and promulgates the following policies and guidelines in connection therewith: 1. Smoking shall be prohibited in these places, to wit: a. Inside government offices, buildings, hospitals, medical, dental and optical clinics and dispensaries including but not limited to corridors, stairways, inside of elevators, canteens; b. In classrooms and within the premises of all public schools in all levels provided that for all collegiate and higher levels, this prohibition shall apply only to classrooms and all other enclosed rooms within the premises including public libraries and public research rooms/areas; c. Inside all enclosed government places used for gatherings or assembly such as mess halls, faculty room, staff room, session halls, function rooms; d. Inside places for government storage such as store-rooms or records rooms or carriers of inflammable liquids, and combustible materials, including government vehicles or vessels.

2. The above prohibition shall not apply to all areas which have been designated as smoking areas with sufficient ventilation and available exhaust fans. 3. Legible "NO SMOKING" signs shall be provided and posted in conspicuous places. 4. The act of smoking shall cover the carrying of lighted cigar, cigarette or pipe or other smoking paraphernalia. cda Quezon City, July 4, 1991. (Sgd.) Patricia A. Sto. Tomas Chairman (Sgd.) Samilo N. Barlongay Commissioner Attested by: C.V. USAC" Board Secretary VI All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. acd (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-16-91 Revenue Memorandum Circular No. 74-91 August 16, 1991 REVENUE MEMORANDUM CIRCULAR NO. 74-91 Subject : Loss of Nineteen (19) Sets of Payment Order (BIR Form RC-8202-02) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of nineteen (19) sets of Revenue Payment Order, to wit: --------------------------SERIAL NUMBER : --------------------------10814707 to 10814725 --------------------------QUANTITY : Nineteen (19) Sets

The above receipts which were reported missing by Revenue Collection Agent - Corazon E. Basco of RR #4-B1, Quezon City have been cancelled and any official transactions involving the use of said forms are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipts are found, taking the necessary

steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-09-91 Revenue Memorandum Circular No. 75-91 September 9, 1991 REVENUE MEMORANDUM CIRCULAR NO. 75-91 Subject : Observance of the 91st Anniversary of the Philippine Civil Service To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 39, s. 1991 dated August 13, 1991. "In connection with the 91st Anniversary of the Philippine Civil Service which will be observed from September 13 to 19, 1991, all heads of departments, bureaus and agencies of the national and local governments including government-owned and controlled corporations with original charters and state universities and colleges, are hereby enjoined to extend full support and participation in the programs and activities that will be undertaken for the weeklong celebration. The celebration will feature daily activities which will revolve around this year's theme: Panibagong Sigla: "Kaya Nating Magbago". Activities for each day will reflect vital functions and services of the department or agency on focus for that particular day. cdasia In this regard, we have designated specific Offices from the Commission to coordinate with you on the activities of your department or agency. The culminating activities of the weeklong celebration which will be held on September 19 are the conferment of Presidential Awards for Outstanding Public Service and the Exemplary Ethical Behavior or Dangal ng Bayan Awards to Public Officials and Employees and the National Congress of Workers in the Government. All Heads of departments, bureaus and agencies are authorized to allow their officials and employees to visit and view the exhibits of the different offices on official time for one half day anytime during the Civil Service Week celebration. For further details, you may contact the Office for Career Systems and Standards of this Commission thru Telephone numbers 983281-82; 991848 or 966505 locals 249/262. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd i (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-12-91 Revenue Memorandum Circular No. 76-91 September 12, 1991

REVENUE MEMORANDUM CIRCULAR NO. 76-91 Subject : Applicable Exchange Rate of U.S. Dollar and Other Foreign Currencies to Philippine Peso for the Collection of Income Taxes of Non-Resident Citizens, supplementing Revenue Memorandum Circular No. 77-89, dated December 19, 1989. To : All Revenue Attaches, Revenue Representatives, Finance Revenue Attache and Officers Authorized to Collect Income Taxes Abroad, and Others Concerned. For the information and guidance of all concerned, the following rules are hereby prescribed to govern the conversion of U.S. dollar and other foreign currencies to Philippine pesos: aisa dc a) The exchange rate to be applied in converting items of gross income and deductions from gross income from other foreign currency to U.S. dollar shall be the average interbank reference rate for the taxable year when said gross income and deductions were earned and incurred, respectively. This average rate is contained in the U.S. Dollar Rates of Selected Currencies obtainable from the Treasury Department of the Central Bank of the Philippines. If pertinent foreign currency is not among those listed, the International Tax Affairs Division shall furnish the reference rate to utilize. For the taxable year 1990, the U.S. Dollar Rate of Selected Currencies are shown in EXHIBIT A. b) These amounts as converted to U.S. dollar at the average interbank reference rate discussed in (a) above shall subsequently be converted to Philippine peso using the average peso/dollar interbank reference rate during the taxable year when said gross income and deductions were earned and incurred, respectively. This rate is contained in the Peso/Dollar Monthly Averages report issued by the Central Bank of the Philippines. For the taxable year 1990, the average peso/dollar interbank reference rate is P24.3105 as the equivalent of one (1) U.S. dollar. aisa dc c) For the purpose of converting the tax liability in U.S. dollar to Philippine peso, the prevailing peso/dollar interbank reference rate at the time this tax liability shall actually be paid shall apply. This exchange rate is being published daily in selected national newspapers. d) If the tax liability is to be paid in other foreign currency, the amount of the tax liability in U.S. dollar shall be converted to the other foreign currency using the prevailing exchange rate in the foreign post at the time of actual payment. e) In the event of any deficiency income tax becoming due after audit by the BIR, this deficiency tax, determined by deducting from the income tax due in U.S. dollar per audit any previous income tax payments also stated in U.S. dollar, shall be converted to Philippine peso using the prevailing interbank reference rate at the time of assessment or preparation of the Transcript of Assessment. acd All previous revenue memoranda and portions thereof inconsistent herewith are hereby amended or modified accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-24-91 Revenue Memorandum Circular No. 77-91 September 24, 1991 September 24, 1991

REVENUE MEMORANDUM CIRCULAR NO. 77-91 Subject : Publishing Department of Environment & Natural Resources (DENR) Memorandum dated July 13, 1989, and prescribing Guidelines for an Effective Monitoring and investigation of Excise and Income Tax Payments on Mineral, Forest and Rattan Products. To : All Regional Directors, Revenue District Officers, Chiefs of Excise Tax Area, and Others Concerned. For the information and guidance of all concerned, there is published hereunder the full text of Department of Environment & Natural (DENR) Memorandum dated July 13, 1989 directed to all DENR Regional Executive Directors: cdt "DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES July 13, 1989 MEMORANDUM To Attention From : : : All Regional Executive Directors All Community Environment and Natural Resources Officers The Undersecretary for Field Operations

You are hereby instructed to furnish the nearest Bureau of Internal Revenue District Officer copies of all issued Certificates of Origin of Mineral Ores (for income and mining tax purposes) and Certificates of Origin of Forest Products and Rattan Products (for income tax purposes) and copies of reports of confiscation of Ores or products transported without such certificates. For compliance. (Sgd.) VICTOR O. Ramos Undersecretary" The above Memorandum was issued in response to the letter-request of the Commissioner of Internal Revenue. Under the said DENR Memorandum, transporters/shippers of mineral ores are now required by the DENR to cover every shipment with a Certificate of Origin of Mineral Ores (COMO) issued by DENR Regional Director or other DENR officials upon application with the local DENR Office. Mineral ores transported without such certificate are subject to confiscation by DENR officers. Similar requirement and sanction are provided for every transport/ shipment of forest or rattan products. In line with the foregoing requirements and sanctions imposed by the DENR, the following guidelines are to be strictly complied with by all concerned, for an effective

monitoring and investigation of payment/ non-payment of excise and income tax due on mineral, forest and rattan products: 1) Upon receipt of copies of issued certificates of Origin of Mineral Ore or reports of confiscation of mineral ores transported without cover of COMOs, the Revenue District Officer shall immediately transmit said copies to the Chief, Excise Tax Area in the Revenue Regional Office; xerox copies thereof and copies of Certificates of Forest Products (or their equivalents, Certificates of Timber Origin, CTOs, and Certificates of Lumber Origin, CLOs) and related confiscation reports, as well as Certificates of Rattan products (or their equivalent) and related confiscation reports, shall likewise be transmitted simultaneously, to the Chief of the Intelligence & Investigation Office, National Office, Quezon City. cdtai 2) In case of delay in transmittal, the RDO or his representative shall secure every week, copies of consecutively-issued COMOs, CTOs, CLOs, CORPs, or chronologicallydated confiscation reports from the local DENR official. 3) Upon receipt of aforesaid copies, the Chief, Excise Tax Area, shall immediately coordinate with the local DENR office which issued the COMO or caused the confiscation of mineral ores, and shall verify the excise tax payments on the mineral ores covered by such certificates, or confiscated for lack of the required certificate. 4) Upon the termination of his verification, the Chief, Excise Tax Area shall submit without delay, a report of his findings to the Assistant Commissioner, Excise Tax Office, National Office Bldg., Quezon City, with a copy of the report furnished the Chief, of the IIO, National Office, Quezon City. acd 5) The Chief, of the IIO, upon receipt of the transmittal from the RDO, shall immediately order the appropriate investigation (in the case of confiscation, the inquiry shall establish the facts thereof, with confirmatory evidence from the local police, PC, LTO, Coast Guard, military or other government units; in the case of COMO-indicated payment of excise tax on mineral products, verification shall be made with the files in the Collection Officer's Office and Collection Branch in order to ferret out instances of double/multiple use of BIR Official Receipts, use of fake BIR ORs and similar fraudulent practices; and in case of non-payment of excise or income tax, the usual prescribed steps shall be taken to protect the interest of the government), with a copy of the report furnished the Assistant Commissioner of the Excise Tax Office, National Office, Quezon City. 6) The Chief, Excise Tax Area and the Chief of the Intelligence and Investigation Office, National Office, Quezon City shall make available and furnish copies of COMOs, CTOs, CLOs, CORPs reports of findings and other pertinent papers and documents necessary for the investigation of the income and business tax returns of mining and wood producing/processing companies by the Industry Audit Division, as per Revenue Administrative Order No. 5-88 dated January 21, 1988 without the need of prior request and approval from the CIR or his Deputies. All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. cda This Circular takes effect immediately. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

09-23-91 Revenue Memorandum Circular No. 78-91 September 23, 1991 REVENUE MEMORANDUM CIRCULAR NO. 78-91 Subject : Loss of Two (2) Sets of Confirmation Receipts (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipts, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------23424357 : One (1) Set 23348710 : One (1) Set --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-19-91 Revenue Memorandum Circular No. 79-91 July 19, 1991 REVENUE MEMORANDUM CIRCULAR NO. 79-91 Subject : Buying and Selling of TV Air time is VAT-taxable. To : All Internal Revenue Officers and Others Concerned. Rulings have been issued by this Office (i.e., BIR Ruling Nos. 188-83 dated November 4, 1983; 397-87 dated December 15, 1987; undated letter ruling dated February 11, 1988) holding that a person engaged in the buying and selling of TV airtime is not subject to the contractor's tax as well as the broker's tax because he/it does not sell services or labor; nor does he/it brings about sales or purchases of merchandise for other persons; and that he/it is not subject to the value-added tax because such business activity is not a sale of service, labor or goods, but a sale of intangible property rights. cdasia However, after a restudy of the above rulings, we find the same devoid of legal basis. Under Article 416(3) of the Civil Code, forces of nature which are brought under control by science is a personal property. TV airtime is such a property. It is personal and intangible property, yet it can be sold. As distinguished from mere airtime which cannot be sold because it is res nullius, TV airtime can be sold and is being sold for a consideration that is determinable. That makes TV airtime personal, appropriable and transferable property except that it is not movable, like any ordinary taxable goods. Article 1458 of the Civil Code defines contract of sale as one where one of the contracting parties obligates himself to transfer the ownership of and to deliver a

determinate thing, and the other to pay therefore a price certain in money or its equivalent. While airtime itself is an intangible property, the sale of a specific TV airtime contemplates the use by the contractee-buyer of television broadcast facilities of the station owner, and/or availment of the services of the latter. Therefore, while no actual transfer of ownership takes place in the "buying and selling of TV airtime", such "sale" could in fact be referred to as a contract for the use of TV broadcast facilities within a space of time wherein the consideration is measured by the length of time allowed to the buyer. It is akin to the use of parking space facilities the consideration of which is subject to VAT. Such being the case, the conclusion is justified that the use of TV airtime should likewise be considered sale of service; hence, subject to value-added tax under Section 102(a) of the Tax Code. In other words, when a person buys TV airtime to telecast programs and shows through the use of the facilities of the station owner, sells time spots to advertisers and flash their advertisements within a specific time in between programs or shows, this constitutes rendering of services for a consideration. cd In view thereof, this Office issued BIR Ruling Nos. 134-91, 135-91, 136-91, all dated July 16, 1991 revoking the aforesaid rulings and holding that the buying and selling of TV airtime constitutes the rendition of service to others for a consideration subject to the 10% value-added tax imposed under Section 102(a) of the Tax Code. Accordingly, persons engaged in the buying and selling of TV airtime shall be liable to VAT effective July 17, 1991. This Circular should be given the widest publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-12-91 Revenue Memorandum Circular No. 80-91 August 12, 1991 REVENUE MEMORANDUM CIRCULAR NO. 80-91 Subject : Publishing the Resolution of the Supreme Court dated March 7, 1990 in G.R. No. 76573 entitled "Marubeni Corporation vs. Commissioner of Internal Revenue and Court of Tax Appeals" re: pre-requisites for the availment of 15% preferential tax rate under then Section 24 (b)(1) [now Sec. 25(b)(5)(B)] of the tax Code, as amended. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is quoted hereunder the Resolution of the Supreme Court dated March 7, 1990: "G.R. No. 76573 (Marubeni Corporation vs. Commissioner of Internal Revenue and the Court of Tax Appeals). - In our decision dated September 14, 1989, we ruled that petitioner was a non-resident foreign corporation subject to Section 24 (b) (1) of the National Internal Revenue Code of 1977 which states: cdt "Tax on foreign corporations. - (1) Nonresident foreign corporations - . . . (iii) On dividends received from a domestic corporation liable to tax under this Chapter, the tax shall be 15% of the dividends received which shall be collected and paid as provided in Section 53 (d) of this Code, subject to the condition that the country in which the nonresident foreign corporation is domiciled shall allow a credit against the tax due from the non-resident foreign corporation taxes deemed to have been paid in the Philippines

equivalent to 20% which represents the difference between the regular tax (35%) on corporations and the tax (15%) on the dividends provided in this section; . . . ." "Based on this finding, we reversed the decision of respondent Court of Tax Appeals dated February 12, 1986 which affirmed the denial by respondent Commissioner of Internal Revenue of petitioner's claim for refund. We thus ordered the Commissioner of Internal Revenue to refund or grant as tax credit in favor of petitioner the amount of P144,452.40. "On October 5, 1989, the Solicitor General, representing the public respondent, filed a motion for reconsideration stating that although we correctly ruled that petitioner is a non-resident foreign corporation still petitioner could not avail itself of the preferential tax rate of 15% under said Section 24(b)(1) because it failed to comply with the requisites set forth thereunder. "On October 9, 1989, petitioner similarly filed its motion for reconsideration remaining steadfast to its position that it is a resident foreign corporation subject only to the ten percent (10%) final intercorporate dividend tax. "We grant the motion for reconsideration filed by the Solicitor General. "Section 24(b)(1) is explicit on the conditions for the availment of the preferential fifteen percent (15%) tax rate. Under said provision, petitioner must show that Japan grants a tax credit to Marubeni, taxes deemed to have been paid in the Philippines equivalent to at least twenty percent (20%) against the tax due from Marubeni. aisa dc "Noteworthy is the recent case of Commissioner of Internal Revenue vs. Procter and Gamble PMC (G.R. No. 66835, April 15, 1988, 160 SCRA 560). In that case we denied Procter and Gamble's claim for refund for its parent company in the United States since it failed to meet the following conditions necessary for the availment of the preferential fifteen percent (15%) tax namely: (1) to show the actual amount credited by the U.S. Government against the income tax due from PMC-USA on the dividends received from private respondent; (2) to present the income tax return of its mother company for 1975 when the dividends were received; (3) to submit any authenticated document showing that the US Government credited 20% of the tax deemed paid in the Philippines. "In the case at bar, petitioner similarly failed to comply with the requisites set forth under Section 24(b)(1). Petitioner reasons that it cannot furnish the Commissioner of Internal Revenue with the confidential income tax return of Marubeni Japan since such a requirement is beyond the power of Philippine taxation laws. (Rollo, p. 238). "Such reasoning finds no merit. Section 24(b)(i) of the National Internal Revenue Code of 1977 is clear and explicit on the conditions for the availment of the preferential fifteen percent (15%) tax rate. Normally the Philippines imposes a higher thirty five percent (35%) tax rate on corporations. But since the Philippines seeks to lessen the impact of double taxation between countries, we impose only the lower tax rate of fifteen percent (15%) on dividends subject to the condition that the country in which the non-resident foreign corporation is domiciled allows a tax credit of twenty percent (20%). Such prerequisite must be strictly complied with because the fifteen percent (15%) tax rate is a concession in the nature of a tax exemption vis-a-vis the normal rate of thirty five (35%) on corporations. "Petitioner's motion for reconsideration merely reiterates the same arguments previously raised in its petition and does not raise substantial issues not raised upon in our decision dated September 14, 1989.

Accordingly, since petitioner failed to comply with the conditions set forth under Section 24 (b)(1) of the National Internal Revenue Code of 1977, we hereby modify the decision dated September 14, 1989 and rule that petitioner corporation is subject to the twenty five percent (25%) tax rate on dividends pursuant to Article 10(2) of the Philippine-Japan Tax Convention. The Commissioner of Internal Revenue is hereby ordered to recompute the tax due from petitioner corporation using the correct tax base and rate." "Very truly yours, (Sgd.) JULIETA Y. CARREON T/W JULIETA Y. CARREON Clerk of Court (Sgd.) Alfredo P. Marasigan, Jr. T/W Alfredo P. Marasigan, Jr. Asst. Div. Clerk of Court SALIENT FEATURES 1. If the head office abroad, without passing its branch office in the Philippines, directly invested shares of stock in a domestic corporation, and therefore cash dividends were remitted likewise directly to the office, the said Office is considered a non-resident foreign corporation regarding said transaction. cdasia 2. Dividends earned/received by the non-resident foreign investor-stockholder shall be subject to the preferential tax rate of 15% imposed under then Section 24(b)(1) [now Sec. 25(b)(5)(B)] of the Tax Code provided the following documentation requirements are punctiliously complied with, viz: a) to show the actual amount credited by the Japanese Government against the income tax due from the non-resident foreign investor-stockholder (head office abroad) on the dividends received from a domestic corporation; b) to present the income tax return of its mother company for the taxable year when the dividends were received; and, c) to submit any authenticated document showing that the Japanese Government credited 20% of the tax deemed paid in the Philippines. acd 3. Having failed to comply with the aforementioned requirements, Marubeni, the non-resident foreign investor-stockholder is subject to the 25% income tax rate on dividends pursuant to Article 10(2) of the RP-Japan Tax Treaty. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-22-91 Revenue Memorandum Circular No. 81-91 October 22, 1991 REVENUE MEMORANDUM CIRCULAR NO. 81-91

Subject : Missing Certificate Authorizing Registration (Taxable Real Property Transaction), BIR Form No. 1954. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing Certificate Authorizing Registration (Taxable Real Property Transaction), BIR Form No. 1954, to wit: acd ----------------------------Serial Number : Quantity ----------------------------368524-A : One Copy (Duplicate) ----------------------------The above copy which was reported as missing and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-07-91 Revenue Memorandum Circular No. 82-91 November 7, 1991 REVENUE MEMORANDUM CIRCULAR NO. 82-91 Subject : Loss of revenue official receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of revenue official receipts (BIR Form No. 25.24), to wit: Inclusive Serial Number Quantity

A-02088151 to A-02088200 50 sets A-02088239 to A-02088250 12 sets 6468649-H to 6468700-H 52 sets (38 Revenue Computer (Center's copies A-02088201 to A-02088238 (38 Auditor's copies (38 Collection Officer's (copies (8 National Office copies 6468641-H to 6468648-H (8 Auditor's copies (8 Collecting Officer's (copies

The above receipts were reported as lost by Ms. Lilian Lantin and Ms. Angelina E. Valenzuela, Revenue Collection Officers of San Narciso and San Marcelino, Zambales, respectively. Revenue official receipts bearing inclusive serial numbers A-02088151 to A-02088200, A-02088239 to A-02088250, and 6468649-H to 6468700-H are hereby cancelled and all official transactions involving the use thereof are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdtai EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-12-91 Revenue Memorandum Circular No. 83-91 November 12, 1991 REVENUE MEMORANDUM CIRCULAR NO. 83-91 Subject : Publishing the Resolution of the Supreme Court in the case of "Commissioner of Internal Revenue vs. The Court of Appeals and Efren P. Castaeda", G.R. No. 96016 promulgated October 17, 1991, re: non-taxability of terminal leave pay received by officials/employees retiring from the government service. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is the Resolution of the Supreme Court in G.R. No. 96016: "R E S O L U T I O N "PADILLA, J. "The issue to be resolved in this petition for review on certiorari is whether or not terminal leave pay received by a government official or employee on the occasion of his compulsory retirement from the government service is subject to withholding (income) tax. cdt "We resolve the issue in the negative. "Private respondent Efren P. Castaeda retired from the government service as Revenue Attache in the Philippine Embassy in London, England on 10 December 1982 under the provisions of Section 12(c) of Commonwealth Act 186, as amended. Upon retirement, he received, among other benefits, terminal leave pay from which petitioner Commissioner of Internal Revenue withheld P12,557.13 allegedly representing income tax thereon. "Castaeda filed a formal written claim with petitioner for a refund of the P12,557.13, contending that the cash equivalent of his terminal leave is exempt from income tax. To comply with the two-year prescriptive period within which claims for refund may be filed, Castaeda filed on 16 July 1984 with the Court of Tax Appeals a Petition for Review, seeking the refund of income tax withheld from his terminal leave pay.

"The Court of Tax Appeals found for private respondent Castaeda and ordered the Commissioner of Internal Revenue to refund Castaeda the sum of P12,557.13 withheld as income tax. (Annex "C", petition). "Petitioner appealed the above-mentioned Court of Tax Appeals decision to this Court, which was docketed as G.R. No. 80320. In turn, we referred the case to the Court of Appeals for resolution. The case was docketed in the Court of Appeals as CA-G.R. SP No. 20482. "On 26 September 1990, the Court of Appeals dismissed the petition for review and affirmed the decision of the Court of Tax Appeals. Hence, the present recourse by the Commissioner of Internal Revenue. acd "The Solicitor General, acting on behalf of the Commissioner of Internal Revenue, contends that the terminal leave pay is income derived from employer-employee relationship, citing in support of his stand Section 28 of the National Internal Revenue Code: that as part of the compensation for services rendered, terminal leave pay is actually part of gross income of the recipient. Thus '. . . . It (terminal leave pay) cannot be viewed as salary for purposes which would reduce it. . . . there can thus be no commutation of salary when a government retires applies for terminal leave because he is not receiving it as salary. What he applies for is a commutation of leave credits. It is an accumulation of credits intended for old age or separation from service. . . . .' "The Court has already ruled that the terminal leave pay received by a government official or employee is not subject to withholding (income) tax. In the recent case of Jesus N. Borromeo vs. The Hon. Civil Service Commission, et. al., G.R. No. 96032, 31 July 1991, the Court explained the rationale behind the employee's entitlement to an exemption from withholding (income) tax on his terminal leave pay as follows: '. . . commutation of leave credits more commonly known as terminal leave is applied for by an officer or employee who retires, resigns or is separated from the service through no fault of his own. (Manual on leave Administration Course for Effectiveness published by the Civil Service Commission, pages 16-17). In the exercise of sound personnel policy, the Government encourages unused leaves to be accumulated. The Government recognizes that for most public servants, retirement pay is always less than generous if not meager and scrimpy. A modest nest egg which the senior citizen may look forward to is thus avoided. Terminal leave payments are given not only at the same time but also for the same policy considerations governing retirement benefits.' "In fine, not being part of the gross salary or income of a government official or employee but a retirement benefit, terminal leave pay is not subject to income tax. (Emphasis supplied) "Accordingly, the petition for review is hereby DENIED. "SO ORDERED. (Sgd.) TEODORO PADILLA Associate Justice "W E C O N C U R: (on leave)

Ameurfina A. Melencio-Herrera Associate Justice Chairman (Sgd.) Edgardo L. Paras Associate Justice (Sgd.) Florence D. Regalado Associate Justice" SALIENT FEATURES (1) Commutation of leave credits more commonly known as terminal leave is applied for by an officer or employee who retires, resigns or is separated from the service through no fault of his own. (Manual on Leave Administration Course for Effectiveness published by the Civil Service Commission, pages 16-17, cited in Castaeda case, supra) (2) The terminal leave pay received by a government official or employee is not part of his gross salary or income but a retirement benefit which is not subject to income tax and consequently to the withholding tax on wages prescribed by Section 72, Chapter 10, Title II of the Tax Code, as amended and as implemented by Revenue Regulations No. 682, as amended. cdtai (3) Accordingly, the amount of income tax which had been withheld from the terminal leave pay or the money value of the accumulated/unused vacation and sick leave credits of retiring official/employee in the government service shall be refunded/credited to such retires provided that the claim for credit or refund is filed by him in writing with the Commissioner of Internal Revenue within two (2) years reckoned from the date of the withholding or payment of tax pursuant to Sec. 204(3) of the Tax Code, as amended. aisa dc It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-12-91 Revenue Memorandum Circular No. 84-91 November 12, 1991 REVENUE MEMORANDUM CIRCULAR NO. 84-91 Subject : Loss of revenue official receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of revenue official receipts (BIR Form No. 25.24), to wit: -----------------------------Inclusive Serial Numbers -----------------------------0006780-H to 0006800-H 7191011-G to 7191050-G -----------------------------: : : Quantity 21 sets 40 sets

The above revenue official receipts were reported by Revenue Collection Officer Ms. Hedriga Miranda of Lanuza and Carmen, Surigao del Sur, as having been lost during the fire that razed the Municipal Building of Lanuza where her Office was located. The abovementioned receipts are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case any of the abovementioned receipts is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. casia VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-18-91 Revenue Memorandum Circular No. 85-91 November 18, 1991 REVENUE MEMORANDUM CIRCULAR NO. 85-91 Subject : Presidential Action Center (PACE) To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum dated September 30, 1991. cdasia 1. This Office received a letter dated 26 September 1991 from General Manager Eduardo O. Carrascoso of the Manila International Airport Authority inquiring as to whether or not someone "who introduced himself as Executive Assistant" of the Office of the Executive Secretary, has authority to discuss with him a proposed contract of the International Aeradio Limited (IAL). Upon verification, the said individual was once among the "volunteers" in PACE. 2. To obviate incidents similar to that aforementioned, please be advised that the Presidential Action Center (formerly the Malacaang Public Assistance Center) has already been streamlined and reorganized. PACE now performs only the functions prescribed by the provisions of Executive Order No. 479 dated 27 August 1991 (Annex "A"). The sole PACE office is based in the Office of the President of Malacaang. It is headed by Director Miguel V. Sison, Jr., and manned by the personnel named in the enclosed list (Annex "B"), all of whom are organic employees of the Office of the President. Only Director Sison and the personnel listed in Annex "B" have the authority to attend to official matters falling within the areas of concern of PACE. Such matters, it should be underscored, do not include the solicitation of funds or donations in cash or kind ostensibly for projects of the Office of the President or of any of the officials thereof. cdasia 3. Should any person misrepresent himself as an employee of the PACE or the Office of the President, and attempt to transact business and/or secure funds or donations from any of the departments, offices and agencies, including government-owned or controlled corporations, and local government units, the matter should be immediately reported to the Office of the Executive Secretary.

(Sgd.) Franklin M. Drilon Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-03-92 Revenue Memorandum Circular No. 1-92 January 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 1-92 Subject : Publishing the full text of Republic Act No. 7167 which provides for increased basic personal and additional exemptions allowable to individual taxpayers for income tax purposes; and clarifying the effectivity date as well as applicability of said Act. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7167: "REPUBLIC ACT NO. 7167 "AN ACT ADJUSTING THE BASIC PERSONAL AND ADDITIONAL EXEMPTIONS ALLOWABLE TO INDIVIDUALS FOR INCOME TAX PURPOSES TO THE POVERTY THRESHOLD LEVEL, AMENDING FOR THE PURPOSE SECTION 29, PARAGRAPH (L), ITEMS (1) AND (2) (A), OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES "Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: "Sec. 1. The first paragraph of item (1) paragraph (1) of Section 29 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: cdt "(1) Personal exemptions allowable to individuals, - (1) Basic personal exemption. For the purpose of determining the tax provided in Section 21(a) of this Title, there shall be allowed a basic personal exemption as follows: "For single individual or married individual judicially decreed as legally separated with no qualified dependents P 9,000 "For head of a family P12,000 "For married individual P18,000 "Provided, That husband and wife electing to compute their income tax separately shall be entitled to a personal exemption of P9,000 each." "Sec. 2. The first paragraph of item (2) (A), paragraph (1) of Section 29 of the same Code, as amended, is hereby further amended to read as follows: "(2) Additional exemption "(A) Taxpayers with dependents. - A married individual or a head of family shall be allowed an additional exemption of Five thousand pesos (P5,000) for each dependent. Provided That the total numbers of dependents for which additional exemptions may be

claimed shall not exceed four dependents: Provided further, That an additional exemption of One thousand pesos (P1,000) shall be allowed for each child who otherwise qualified as dependent prior to January 1, 1980: Provided, finally, That the additional exemption for dependents shall be claimed by only one of the spouses in the case of married individuals electing to compute their income tax liabilities separately." "Sec. 3. This Act shall take effect upon its approval. "Approved, xxx xxx xxx "Approved: December 19, 1991 (Sgd.) CORAZON C. AQUINO President of the Philippines" SALIENT FEATURES (1) Under Section 29, paragraph (i), (1) and (2) of the National Internal Revenue Code, as amended by Republic Act No. 7167, the increased basic personal exemptions are as follows: cd i (a) For single individual or married individual judicially decreed as legally separated with no qualified dependents P 9,000 (b) For head of a family P12,000 (c) For married individual P18,000 (d) For husband and wife electing to compute their income tax separately P 9,000 each while the increased additional exemption allowed to a married individual or a head of family shall be P5,000 for each dependent as defined under Section 29(1) of the Tax Code. (2) The provision that "This Act shall take effect upon its approval." (Sec. 3, R.A. No. 7167) cannot be construed to mean that the law (R.A. No. 7167) shall be considered effective as of its approval by the President of the Philippines which was on December 19, 1991. It must first satisfy the legal requirement of Publication and shall take effect after fifteen (15) days following the completion thereof, either in the Official Gazette or in a newspaper of general circulation in the Philippines, as amended by Executive Order No. 200. That publication either in the Official Gazette or newspaper of general circulation is a sine qua non requirement for the effectivity of laws is well expounded by the Supreme Court, in the case of Taada, et al. vs. Tuvera, et al. (G.R. No. 63915, December 29, 1986; 46 SCRA 446), wherein it ruled that "After a careful study of this provision and of the arguments of the parties, both on the original petition and on the instant motion, we have come to the conclusion, and so hold, that the clause "unless it is otherwise provided" refers to the date of effectivity and not to the requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislature may make the law effective immediately upon approval, or on any other date, without its previous publication. cdtai "Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-day period shall be shortened or extended." An example, as

pointed out by the present Chief Justice in his separate concurrence in the original decision, is the Civil Code which did not become effective after fifteen days from its publication in the Official Gazette but "one year after such publication." The general rule did not apply because it was "otherwise provided." It is not correct to say that under the disputed clause publication may be dispensed with altogether. The reason is that such omission would offend due process insofar as it would deny the public knowledge of the laws that are supposed to govern it. Surely, it the legislature could validly provide that a law shall become effective immediately upon its approval notwithstanding the lack of publication (or after an unreasonably short period after publication), it is not unlikely that persons not aware of it would be prejudiced as a result; and they would be so not because of a failure to comply with it but simply because they did no know of its existence. . . ." (Underscoring supplied) Thus, in the more recent case of Caltex (Phils.), Inc. vs. the Commissioner of Internal Revenue, G.R. No. 97281, the Supreme Court in its Resolution dated June 26, 1991 construed Section 3 of R.A. No. 6965 containing the effectivity clause (Similar to R.A. No. 7167) which provides, "This Act shall take effect upon its approval." To mean that inasmuch as R.A. No. 6965 has no specific date for its effectivity and neither can it become effective upon its approval notwithstanding its express statement, following Article 2 of the Civil Code and the doctrine enunciated in Taada, supra, R.A. No. 6965 took effect fifteen (15) days after September 20, 1990 (date of publication in Phil. Journal) or specifically on October 5, 1990. Besides, it has been the constant and uniform holding that exemption from taxation is not favored and is never presumed, so that if granted it should be construed "strictissimi juris". (Resins Inc. vs. Auditor General & Central Bank of the Philippines, 25 SCRA, 754) This is so, even as to the effectivity of the statute granting such exemption for if Congress intended that Republic Act No. 7167 would apply to income earned beginning taxable year 1991, it would have so provided as in the case of Republic Act No. 5431 where the effectivity clause of said Act provides succinctly that it "shall apply to income for taxable years beginning after June thirty, nineteen hundred sixty-eight." (65 O.G., No. 28, p. 7114; The Manila Times Publishing Co., Inc. vs. Commissioner of Internal Revenue, CTA Case No. 2263) Moreover, it is a rule of statutory construction that all statutes are to be construed as having only a prospective operation unless the purpose and intention of the legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In every case of doubt, the doubt must be resolved against the retrospective effect. (Montilla vs. Agustinian Corp., 24 Phil. 220) Such being the case, the increased personal and additional exemptions under the amendatory provisions of Republic Act No. 7167 shall apply to earnings/income of individual taxpayers starting taxable year 1992 (and not 1991) which shall be declared for income tax purposes in their income tax returns to be filed on or before April 15, 1993. cdt It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

12-09-91 Revenue Memorandum Circular No. 2-92 December 9, 1991 REVENUE MEMORANDUM CIRCULAR NO. 2-92 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: --------------------------SERIAL NUMBER : QUANTITY --------------------------5917793 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-09-92 Revenue Memorandum Circular No. 3-92 January 9, 1992 REVENUE MEMORANDUM CIRCULAR NO. 3-92 Subject : Missing Certificates Authorizing Registration (Real Property Transaction Not Subject to Capital Gains Tax), BIR Form No. 1954-A. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing Certificates Authorizing Registration (Real Property Transaction Not Subject to Capital Gains Tax), BIR Form No. 1954-A, to wit: cd Inclusive Serial Number/s Quantity 291887 to 291888 Two (2) sets The abovementioned sets which were reported as missing by Ms. Ma. Antonia Mazalunga, Revenue Officer III of Revenue District No. 30, North Quezon City are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-10-92 Revenue Memorandum Circular No. 4-92 January 10, 1992

REVENUE MEMORANDUM CIRCULAR NO. 4-92 Subject : Status of Philippine Income Tax Treaties To : All Internal Revenue Officers and Others Concerned Hereunder is the complete list of tax treaties which the Philippines has entered into with other countries. The following tax treaties are in effect as of this date: cd EFFECTIVITY 1. RP - DENMARK 1 JANUARY 1974 2. RP - SINGAPORE 1 JANUARY 1977 3. RP - CANADA 1 JANUARY 1977 4. RP - FRANCE 1 JANUARY 1978 5. RP - UNITED KINGDOM 29 JANUARY 1978 6. RP - PAKISTAN 1 JANUARY 1979 7. RP - AUSTRALIA 1 JANUARY 1980 8. RP - JAPAN 1 JANUARY 1981 9. RP - BELGIUM 1 JANUARY 1981 10. RP - NEW ZEALAND 1 JANUARY 1982 11. RP - FINLAND 1 JANUARY 1982 12. RP - INDONESIA 1 JANUARY 1983 13. RP - AUSTRIA 1 JANUARY 1983 14. RP - UNITED STATES 1 JANUARY 1983 15. RP - THAILAND 1 JANUARY 1983 16. RP - GERMANY 1 JANUARY 1985 17. RP - MALAYSIA 1 JANUARY 1985 18. RP - KOREA 1 JANUARY 1987 19. RP - SWEDEN 1 JANUARY 1990 20. RP - ITALY 1 JANUARY 1990 21. RP - NETHERLANDS 1 JANUARY 1992 22. RP - BRAZIL 1 JANUARY 1992 For additional information on any of these tax treaties, direct all requests for said information to the International Tax Affairs Division, Telephone Number 96-57-29 or 9800-22. cdtai All concerned are hereby enjoined to give this Revenue Memorandum Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-28-92 Revenue Memorandum Circular No. 5-92 January 28, 1992 January 28, 1992 REVENUE MEMORANDUM CIRCULAR NO. 5-92 Subject : Policies to Professionalize the Civil Service. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 42, s. 1991 dated December 12, 1991.

"Pursuant to CSC Resolution No. 91-1560 dated December 12, 1991 and Section 12(1) of Subtitle A (Civil Service Commission), Title I, Book V of E.O. No. 292 empowering it to enforce the constitutional and statutory provisions on the merit system for all levels and ranks in the civil service, the Civil Service Commission hereby promulgates the following policies: cdtai 1. Effective January 1, 1993: a. No substitution shall be allowed for the education and experience requirements of specific positions in government. If graduation from a college course is in the second level (PROFESSIONAL), deficiencies in college education may no longer be substituted with experience or vice versa; b. Except for civil service eligibility requirement, appointees to confidential/personal staff and other positions in the non-career service must meet the requirements of the position involved. Neither shall appointments be allowed in favor of persons 65 years old or over, even in coterminous positions; c. No extension of services shall be allowed for those who have reached the compulsory retirement age except for those under consultancy status; d. Policies requiring an appointee to possess an eligibility resulting from a Bar or Board examination will be strictly enforced. For example, an appointee to any Accountant position must hereafter possess a CPA (RA 1080, as amended) eligibility; e. Accreditation of services for appointments not submitted to the Civil Service Commission will no longer be entertained. 2. Starting January 1, 1995: a. Except full-pledged lawyers and Doctors of Medicine, all appointees to division chief positions (SG-24) or equivalent rank must possess a Masteral degree in addition to the eligibility and experience requirement. cdtai In no case shall an appointment be made effective prior to the publication of the vacancy in a newspaper of general circulation/Bulletin of Vacant Positions in the Government, prior to the date on which the appointee reports for duty, or its issuance by the appointing authority, whichever occurs later. All those holding permanent appointments even if they do not meet the above-mentioned standards for the specific positions as of the effectivity of these rules shall continue in a permanent capacity. However, they may not be promoted anymore to a higher position until they meet the qualification requirements of that higher position. Agency heads are encouraged to identify staff members whose performance prefigures possible promotions. Staff development activities must be pursued to allow promising and deserving employees to finish requirements either for a basic college degree or graduate courses leading to a Master's degree. Government employees are likewise advised to develop themselves either through their own initiative or by availing of development opportunities provided by the government or private institutions. acd (Sgd.) Patricia A. Sto. Tomas Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-12-92 Revenue Memorandum Circular No. 6-92 February 12, 1992 REVENUE MEMORANDUM CIRCULAR NO. 6-92 Subject : Prohibition on the solicitation and collection of Political contributions through any government office, particularly through the Bureau of Internal Revenue (BIR) or the Bureau of Customs (BOC). To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, there is published hereunder the Memorandum dated February 11, 1992 of the Secretary of Finance underscoring the instruction of the President not to allow contributions for the political campaign of any candidate to be solicited and collected through any government office particularly through the BIR or the BOC. cda "February 11, 1992 "MEMORANDUM To: BIR Commissioner Jose U. Ong BOC Commissioner Tomas V. Apacible From: Secretary Jesus P. Estanislao On: Instructions from the President 1. The President asked me to relay to you her clear instructions on ensuring that both the BIR and the BOC be insulated from any possible abuse for political purposes, especially during this election period. 2. The President has made this clear to you previously, but she has asked me to remind everyone in the Department of Finance about her basic policy: in no way can we allow contributions for any political campaign of any candidate to be solicited and collected through any government office, particularly through either the BIR or the BOC. 3. Please articulate this instruction of the President to all your subordinates. 4. I am certain about the utmost cooperation from you and everyone in BIR and BOC. cdt (Sgd.) Jesus P. Estanislao" This Circular should be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-13-92 Revenue Memorandum Circular No. 7-92 January 13, 1992 REVENUE MEMORANDUM CIRCULAR NO. 7-92 Subject : Attendance of Central/Regional and Provincial members and officers of the Council of Personnel Officers (CPO) in CPO meetings and other CPO activities. To : All Revenue Officials and Employees and others concerned.

For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 39, s. 1991 dated November 6, 1991. "The Civil Service Commission pursuant to Section 19, Chapter IV, Subtitle A, Book V of Administrative Order No. 292 CSC Memorandum Circular No. 38, s. 1991, and CSC Office Memorandum No. 60, s. 1990, organized the Council of Personnel Officers in the national, regional and provincial levels to perform primarily the function of developing policies, standards, procedures and regulations relative to the improvement of personnel systems in the departments and agencies of the government. cdasia To ensure greater participation of Human Resource Management Officers who are members of the Council, all heads of departments and agencies in the national and local governments are enjoined to allow members and officers to attend CPO meetings and other activities of the Council on official time which shall be conducted at least once every quarter or as the need arises. They shall be authorized to collect travelling and other allowances subject to the usual accounting and auditing regulations. Your cooperation in hereby enjoined. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdt (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-13-92 Revenue Memorandum Circular No. 8-92 January 13, 1992 REVENUE MEMORANDUM CIRCULAR NO. 8-92 Subject : Jurisdiction of the Civil Service Commission Over Decisions, Orders or Actions of the Merit Systems Protection Board in Administrative Cases and Personnel Actions. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 41, s. 1991 dated November 12, 1991. "The Civil Service Commission, as a central personnel agency of the Government, is mandated by law to prescribe, amend and enforce rules and regulations to carry out provisions of Book V of Executive Order 292, otherwise known as the "Administrative Code of 1987". Due to seemingly conflicting interpretations of Section 12 (11) and Section 16 (a) (b) of Book V, E.O. 292 relative to the jurisdiction of the Commission over the decisions of Merit Systems Protection Board in administrative and protest cases and personnel actions, the Commission hereby promulgates the following guidelines: cda A. The following may be subject of APPEAL to the Commission: I. Administrative Cases

1.1 Where the penalty imposed by the MSPB is dismissal/separation from the service; 1.2 Where the penalty imposed by the disciplining authority is dismissal/separation from the service; II. Protest/Personnel Action 2.1 Where the position level involved is Division Chief and or above. In these instances, appeal is a matter of right on the part of the aggrieved party, however, it must be filed within 15 days from receipt of MSPB decision. B. The following may be subject of REVIEW by the Commission motu propio or by way of petition/request for review: 1. Administrative Cases: Where the penalty imposed by both the disciplining authority and the MSPB is less than or short of dismissal; cdtai 2. Protest Cases and Other Personnel Actions: Where the position level involved is below Division Chief. The grant of petition for review is discretionary on the part of the Commission. Hence, the petition may be dismissed outright for lack of merit. Errors of judgment, question of law and/or grave abuse of discretion may be raised in the petition for review. The petition for review must be filed within 15 days from receipt of MSPB Decisions. This Memorandum shall take effect fifteen (15) days from publication in a newspaper of leading circulation. cdasia (Sgd.) Patricia A. Sto. Tomas Chairman All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-13-92 Revenue Memorandum Circular No. 9-92 January 13, 1992 REVENUE MEMORANDUM CIRCULAR NO. 9-92 Subject : Implementation of Step Increments Based on Merit Pursuant to Joint CSC-DBM Circular No. 1, 1990 To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 40, s. 1991 dated November 6, 1991. "The Joint CSC-DBM Circular No. 1, s. 1990 authorizes the grant of step increments based on merit to officials and employees who have achieved Outstanding and Very Satisfactory performance for two consecutive rating periods starting January 1, 1990. Under Section 1, Rule III of the Joint Circular, particularly on Merit Schedule, the grant of step increments to deserving officials and employees on the basis of merit shall be in accordance with the following: cdtai 1. Very Satisfactory performance for two (2) consecutive rating periods based on agency approved performance appraisal system shall be given a one (1) step increment

based on merit which shall take effect the day following the end of the second rating period. 2. Outstanding performance for two (2) consecutive rating periods based on approved agency performance appraisal system, shall be given a two (2) step increments based on merit and will take effect the day following the end of the second rating periods. 3. The total number of recipients of step increments based on merit in any one (1) calendar year shall not be more than ten per cent (10%) of the total number of personnel actually employed in the department or agency, provided that the total number of recipients of two step increments shall not exceed three per cent (3%) thereof. Should there be more than 10% who would qualify for the grant, the head of the Department or Agency shall develop a forced ranking system to determine the ten per cent requirement of the Joint Memorandum Circular. In the initial implementation of step increments based on merit, performance for 1990 under an approved Agency Performance Appraisal System (PES) shall made the basis of the grant. In view thereof, all agencies with approved PES are enjoined to implement the grant of step increment based on merit in accordance with the Joint CSC-DBM Circular No. 1, s. 1990. cda Head of agencies are required to monitor strict compliance of the Joint Circular. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-28-92 Revenue Memorandum Circular No. 10-92 January 28, 1992 January 28, 1992 REVENUE MEMORANDUM CIRCULAR NO. 10-92 Subject : Prohibition Against Appointments or Hiring of New Employees, Creating or Filling of New Positions, Giving Any Salary Increase and Other Related Personnel Actions. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 1, s. 1992 dated January 13, 1992. "In its Resolution No. 2333 dated January 2, 1992, the Commission on Elections (COMELEC) promulgated rules implementing the provisions of Section 261 subparagraph (g), (h) and (x) of the Omnibus Election Code of the Philippines. These pertain to prohibitions against appointment or hiring of new employees of filling up of new positions, promotion or giving salary increases within a prescribed period in view of the forthcoming national and local elections on May 11, 1992. Said Resolution fixes the period of prohibition or election ban from March 27, 1992 until May 11, 1992. It also prohibits any transfer or detail whatsoever of any officer or employee in the civil service, including public school teachers except upon prior written approval of the COMELEC.

The prohibitive period in this case is the election period provided under the Constitution which is from January 12, 1992 to June 10, 1992. cdtai In the same Resolution, the CSC, including all its field offices, is enjoined not to approve the appointments of new employees where no prior approval of the COMELEC is presented by the appointing authority. In view thereof, the following specific guidelines are hereby prescribed: I. Prohibited Acts within the election ban: (March 27, 1992-May 11, 1992) Hiring of new employees, creation and filling up of new position, promotion, or giving salary increase or remuneration or privilege to any government official or employee: (a) All appointments of "new employees" to vacant positions or newly created positions in an existing organizational set-up or under any authorized reorganization scheme whether permanent, provisional, temporary or casual which were issued, executed, made effective and received by the Civil Service Commission (CSC) within the said period. Those received after the ban, but issued or made effective during the ban. aisa dc Those issued during the ban, received after the ban, but effective after the ban, but effective after the ban shall be approved subject to compliance with other conditions in the processing and approval of appointments. (b) All promotional appointments issued, executed, made effective or received by the CSC within the ban. Those received after the ban but issued or made effective during the ban. Those issued during the ban, received after the ban but effective after the ban shall be approved subject to compliance with other conditions in the processing and approval of appointments. (c) Appointments issued before the ban but received during the ban shall be returned to be resubmitted after the ban provided the effective date is after the ban. II. Prohibited acts within the election period: (January 12, 1992-June 10, 1992) The phrase "transfer or detail whatsoever" shall be construed in its general terms. Thus, any movement of officer or, employee in the civil service, including public school teachers, from one agency to another or from one station or place of assignment to another within the same agency, is prohibited and is considered an election offense. (a) Any authority to transfer, detail or secondment of any officer or employee in the civil service including public school teachers without approval of the COMELEC shall not be approved or allowed by the appropriate authorities. (b) No appointment through transfer or secondment issued, made effective or received by the CSC or its field office within the election period shall be approved. acd This circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-31-92 Revenue Memorandum Circular No. 11-92 January 31, 1992 REVENUE MEMORANDUM CIRCULAR NO. 11-92 Subject : Second Management Aptitude Test Battery To : All Assistant Commissioners, Regional Directors, Division Chiefs, Chiefs of Branches, Revenue District Officers and all others concerned. In a letter dated January 20, 1992, Executive Director Elmor D. Juridico of the Career Executive Service Board has informed us that the Career Executive Service Board will hold the Second Management Aptitude Test Battery (MATB) on August 16, 1992. MATB is the first in a four-stage examination process for CES Eligibility. Only those who pass this test can participate in the succeeding examination stages. casia Attached for the information and guidance of all concerned is a copy of said letter and application forms which can be photocopied for purposes of filing with the Board. cdt (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-20-92 Revenue Memorandum Circular No. 12-92 February 20, 1992 February 20, 1992 REVENUE MEMORANDUM CIRCULAR NO. 12-92 Subject : Ombudsman Clearance To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Ombudsman Memorandum Circular No. 1, series of 1992 dated February 11, 1992. "Section 12 of Republic Act No. 3019, as amended, otherwise known as the "Anti-Graft and Corrupt Practices Act" provides that "(No) public officer shall be allowed to resign or retire pending an investigation, criminal or administrative, or pending a prosecution against him, for any offense under this Act or under the provisions of the Revised Penal Code on bribery". aisa dc In order that the foregoing prohibition may be strictly observed, all concerned are hereby enjoined not to allow the retirement, or accept the resignation of any "public officer" as defined under said Act without first securing/presenting a clearance to the effect that he has no pending criminal or administrative case with this office. Any person found to be not complying with this Circular may be punished for contempt pursuant to Section 15(9) of Republic Act No. 6770 (Ombudsman Act of 1989). This circular takes effect immediately. February 11, 1992. (Sgd.) Conrado M. Vasquez" Ombudsman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdasia (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-19-92 Revenue Memorandum Circular No. 13-92 February 19, 1992 REVENUE MEMORANDUM CIRCULAR NO. 13-92 Subject : Missing Pad of Revenue Official Receipts (BIR Form No. 25.24) To : All Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing pad of revenue official receipts (BIR Form No. 25.24), to wit: cda Inclusive Serial Numbers Quantity A 02046451 - A 02046500 One (1) pad The abovementioned receipts which were reported as missing by Ms. Cecilia A. Porras, Administrative Officer of Revenue District No. 76, Malaybalay, Bukidnon are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned pad is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-27-92 Revenue Memorandum Circular No. 14-92 February 27, 1992 REVENUE MEMORANDUM CIRCULAR NO. 14-92 Subject : Launching of the Search for the 1992 Outstanding Public Officials/Employees. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 4, s. 1992 dated January 28, 1992. "Recognizing outstanding performance and exemplary behavior in the government service is an integral part of public personnel administration. Conferring awards is one form of recognition in order to motivate and inspire public servants to enhance their competence, creativity, innovativeness, integrity and productivity in the performance of their functions. aisa dc In this connection, the Civil Service Commission hereby launches the Search for the 1992 Outstanding Public Officials/Employees under the following categories: a. President or LINGKOD BAYAN AWARD which is conferred on an individual or group of individuals in recognition of highly exceptional or extraordinary contributions resulting from an idea or performance whose effect is nationwide and principally affects the national interest, security and patrimony. b. The Civil Service Commission Award or the PAGASA AWARD which shall be given to an individual or group of individuals in recognition of contributions from an idea

or performance resulting in direct benefits to more than one department or to the government though not of such extraordinary or exceptional degree as to warrant the Lingkod Bayan Award. Consistent dedicated performance exemplifying the best example in any of the professions or occupations in the public service shall be considered for this category. c. Outstanding Public Official/Employee Award or DANGAL NG BAYAN AWARD which shall be granted to officials and employees in the government who have demonstrated exemplary service and behavior on the basis of their observance of the eight (8) norms of conduct as provided for under RA 6713. Aside from those mentioned above, the Department of KAPWA AWARD shall be given to an individual or group of individuals in recognition of contributions from an idea or performance resulting in direct benefits to a single department or agency in the government. However, nominations for this type of award need not be submitted to the CSC for screening and evaluation. It shall be the responsibility of the Department or Agency SIAC to screen and evaluate nominations for this award and recommend further to the Head of the Department or Agency the most qualified nominees. cdt The Commission hereby enjoins all concerned to actively participate in this undertaking, and to submit nominations to the Office for Career Systems and Standards, 3rd Floor, Civil Service Commission, Constitution Hills, Diliman, Quezon City on or before June 15, 1992. Attached are MC. No. 56, s. 1989, and MC No. 03, s. 1992 together with the information kits and nomination forms. aisa dc For more information, you may visit said office or call telephone nos. 983282, 983281 or 991848 local 249 and 262. (Sgd.) Samilo N. Barlongay" Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-11-92 Revenue Memorandum Circular No. 15-92 March 11, 1992 REVENUE MEMORANDUM CIRCULAR NO. 15-92 Subject : Tax Treatment of Personnel Economic Relief Allowance (PERA) To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is B.I.R. Ruling dated March 2, 1992: "March 2, 1992 "Ms. Ma. Mileguas M. Leyno Officer-in-Charge Accounting Division Commission on Audit Commonwealth Avenue, Quezon City

"Madam: "This refers to your letter dated February 14, 1992 requesting that in view of the Memorandum Circular No. 145 of President Corazon C. Aquino, dated 17 January 1992, adopting the opinion dated 3 July 1991 of the Secretary of Justice that the Personnel Economic Relief Allowance (PERA) is not taxable, you be allowed to make the necessary adjustment on BIR Form W3 (Annual Return of Withholding Tax on Compensation Income) which will be submitted to this Office on or before the 28th of February, 1992, such that PERA will no longer be reflected in the BIR Form W2 (Statement of Income) of the individual employees for 1991 and that the excess tax withheld be refunded by your Office to your personnel. acd "In reply, please be informed that in pursuance of the President's directive in her Memorandum Circular No. 145 government offices, agencies and instrumentalities including government-owned and controlled corporations should now stop deducting or withholding any income tax on PERA for 1992. However, pending resolution of our request for reconsideration of the Opinion of then Secretary of Justice Franklin M. Drilon stating that PERA, like RATA should not be subject to the mandatory withholding tax, the concerned employees may file in writing with the BIR, Attn.: Appellate Division, their individual claims for refund of the withholding tax on PERA for 1991 or those already paid to them, within two (2) years after the payment of the tax pursuant to Section 204 of the Tax Code, as amended. Appropriate action on the claim for refund will accordingly be taken as soon as a reply to said request for reconsideration is received from the Office of the President. "It should be understood however, that should our request for reconsideration be upheld, you will resume the deduction and remittance of the withholding tax on PERA for 1992. We shall also assess and collect from your office the corresponding tax on PERA already paid to your employees, but not subjected to withholding. "Very truly yours, (Sgd.) JOSE U. ONG Commissioner of Internal Revenue" On the other hand, since for taxable year 1991, the PERA has been subjected to the withholding tax and the same was remitted to the BIR, PERA should therefore be declared as income for 1991 and the tax withheld therefrom could be tax credited in the income tax return to be filed on or before April 15, 1992. As heretofore stated, the individual recipient - employees may, however, file a written request for refund of the tax withheld on PERA for 1991 with the BIR, Attn.: Appellate Division, within two (2) years after payment/remittance of the tax pursuant to Section 204 of the Tax Code. cdt It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-27-92 Revenue Memorandum Circular No. 16-92 February 27, 1992 REVENUE MEMORANDUM CIRCULAR NO. 16-92 Subject : Revised Guidelines on the Search for Presidential (Lingkod Bayan) and Civil Service Commission (Pagasa) Awardees for Outstanding Public Service

To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 3, s. 1992 dated January 28, 1992. "Pursuant to Executive Order No. 334 dated August 18, 1988 and its implementing Rules and Regulations dated November 7, 1988, the Presidential Award for Outstanding Public Service was instituted. Moreover, Section 35, Chapter 5 of Executive Order No. 292, otherwise known as the Administrative Code of 1987, as amended, established the government-wide Employee suggestions and Incentive Award System which took effect on November 23, 1989. cdtai The Civil Service Commission, in its MC No. 59, s. 1990, issued the implementing guidelines on the search for these outstanding public servants. However, the nomination procedures and some substantial contents have to be revised to conform with the existing needs of the program. In view thereof, the following are the revised implementing guidelines on the Search for the Presidential and Civil Service Commission Awardees for Outstanding Public Service: casia 1. Categories of Awards 1.1 Presidential or Lingkod Bayan Award Presidential or Lingkod Bayan Award is conferred on an individual or group of individuals for highly exceptional or extraordinary contributions resulting from an idea or performance whose effect is Nationwide and principally affects the National interest, security and patrimony. The Lingkod Bayan Award is in the form of gold (gilded) medallion and plaque containing the citation and signature of the President of the Philippines. 1.2 Civil Service Commission Award or Pagasa Award is given to an individual or group of individuals in recognition of contributions from idea or performance resulting in direct benefits to more than one department or to the government though not of such extraordinary or exceptional degree as to warrant the Lingkod Bayan Award. Consistent dedicated performance exemplifying the best example in any of the professions or occupations in the public service shall be considered for this category. The Pagasa Award is in the form of a gold (gilded) medallion and a plaque containing the citation and signature of the CSC Chairman. 1.3 The Department or Kapwa Award The Departmental or Kapwa Award shall be given to an individual or group of individuals in recognition of contributions from an idea or performance resulting in direct benefits to a single department or agency in the government. Nominations for this category need not be submitted to the Civil Service Commission for screening and evaluation. The Department of Agency Suggestions and Incentive Awards Committee shall evaluate the nominations for this category and recommend to the head of the department or agency the most qualified nominees. cdt 2. Bases for the Awards Awards shall be granted for achievements made on the preceding year based on the following: 2.1 Consistent dedicated performance exemplifying the best in any of the professions or occupations in the public service.

2.2 Idea, suggestion or invention approved and/or adopted by the employing agency. acd 2.3 Performance of an extraordinary act or service in the public interest in connection with, or related to, one's employment or official functions. 2.4 Outstanding community service or heroic act in the public interest (not related to his official functions as a public servant). 3. Qualifications for the Awards These awards shall be open to all officials and employees in the career or non-career service of the national and local government, including those in the state universities and colleges, and government-owned or controlled corporations with original charters, whether or not they receive compensation, regardless of the amount. Officials and employees nominated for any of the awards must: 3.1 Have been employed with the nominating agency for at least one year at the time of the nomination. 3.2 Have been rated at least Very Satisfactory or its equivalent for two grading periods immediately preceding the nomination; and 3.3 Have not been found guilty of any criminal offense involving moral turpitude or administrative offense or does not have any pending case against them at the time of the nomination. 4. Nominating Person or Group 4.1 the immediate supervisor of the employee 4.2 his co-workers 4.3 a private person or group 5. Procedure 5.1 The immediate supervisor of the employee, his co-workers or any other private person(s) or association(s) may submit the nomination in the prescribed form to the Suggestions and Incentive Awards (SIAC) in the department or agency or bureau or regional office, or SUC or local government unit or government-owned and controlled corporation with original charter where the nominee is employed. acd 5.2 The SIAC shall screen the nominations and evaluate the summary of achievements and justification contained therein and shall submit to the head of the department of agency, etc. its recommendation. 5.3 The head of the department or agency, etc., reviews, selects and endorses his nominations on the prescribed form directly to the Service Commission or to any of its regional, provincial or field offices. 5.4 Upon receipt by the Civil Service Commission, a Technical Committee evaluates the nominations from all departments and agencies and recommend selected candidates to the Special Committee on Awards. aisa dc 5.5 The Special Committee on Awards evaluates and recommends to the President the Lingkod Bayan Awardees, and to the CSC Chairman, the Pagasa Awardees. 5.6 The President approves recommendations and confers the Lingkod Bayan Award. The CSC Chairman approves recommendations and confer the Pagasa Award. 6. Nomination Form The Civil Service Commission shall prescribe the nomination forms for the Presidential or Lingkod Bayan and CSC or Pagasa Awards. All departments and agencies may secure

such forms from the Civil Service Commission or from any of its regional, provincial or field offices. 7. Required Documents/Attachments Nominations must be made on the prescribed form duly signed by the Chairman of the Department or agency or bureau or LGU SIAC and by the Head of office approving the nomination and submitted together with the following supporting documents in five (5) copies. 7.1 Personal Data Sheet (CS Form 212) including service record of the nominee duly prescribed and sworn to before the highest ranking Human Resource Management Officer in that agency. aisa dc 7.2 Certification of the highest ranking Human Resource Management Officer/Legal Officer in the Agency that the nominee has not been found guilty of any criminal offense involving moral turpitude and/or administrative offense or has no pending case against him at the time of nomination. 7.3 Accomplished Performance Appraisal Form for two consecutive rating periods immediately preceding the nomination, duly signed by proper authorities. 7.4 Copies of 5 cm. x 5 cm. photo of nominee with his name written at the bottom side of the picture. cd IF THE ABOVE SUPPORTING DOCUMENTS ARE NOT SUBMITTED, THE NOMINATIONS SHALL NOT BE CONSIDERED. Supporting documents such as clippings, citations, publications and pictures, if any, will facilitate evaluation of the nominee's achievement. 8. Summary of Achievement 8.1 Describe the specific accomplishment of the nominee that warrant outstanding recognition in not less than 200 words. Cite the situation or the existing environment that prompted the nominee to take that specific action, at the same time mention the tasks or responsibilities required from the nominee. Describe the improvements made or the impact of such accomplishments. Justify as well why he should be nominated or granted the award. 9. Deadline for Submission of Nominations Nominations must be received by the Civil Service Commission on or before June 15 of any given year. Those received after June 15 will automatically be included for evaluation in the next year's award. cd 10. Composition of SIAC At the bureau or department level, including SUC's and GOCC's, the Suggestion and Incentive Awards Committee (SIAC) shall be composed of the highest Human Resource Management Officer, the Legal Officer, the President of the duly accredited employee organization in the agency, and a rank and file employee to be elected at large. In the absence of an accredited association, two (2) representatives shall be chosen at large by the employees through an election to be called for the purpose. At the Municipal, City or Provincial level, the SIAC shall be composed of the highest Human Resource Management Officer or any officer/employee in-charge of personnel, the Treasurer, the representative from the Office of the Mayor/Governor, the President of the duly accredited employee organization in the agency, and a rank and file employee to be elected at large. In the absence of an accredited association, two (2) representatives

shall be chosen at large by the employees through an election to be called for the purpose. cd i 11. Source of Funding for the Awards Section 35, Chapter 5 of Executive Order No. 292, and Section 27 of RA 2260 are legal bases for agencies to incur necessary expense relative to the incentive and award system, chargeable to the savings of the particular agency. 12. Awarding Rites The Lingkod Bayan (Presidential) Award shall be conferred by the President in a fitting ceremony during the Civil Service Foundation Day Anniversary. The Pagasa (Civil Service Commission) Award shall be conferred by the Chairman of the Civil Service Commission during the celebration of the Civil Service week. aisa dc (Sgd.) Samilo N. Barlongay" Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-12-92 Revenue Memorandum Circular No. 17-92 March 12, 1992 March 12, 1992 REVENUE MEMORANDUM CIRCULAR NO. 17-92 Subject : Prohibition Against Partisan Political Activity/Campaign. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 2, s. 1992 dated January 28, 1992. "To ensure the holding of free, orderly, honest, peaceful and credible registration of voters on February 1, 1992 and the national and local elections on May 11, 1992, the Commission on Elections, in its Resolution No. 2331 promulgated on January 2, 1992, deputized the Civil Service Commission, through the Chairman and other officials, among others, to enforce and implement the prohibition against electioneering or partisan political activity/campaign specifically provided in paragraph 4, Section 2(b), Article IXB of the 1987 Constitution which reads, thus: "4) No officer or employee in the civil service shall engage, directly or indirectly, in any electioneering or partisan political campaign." cdtai In relation thereto, Section 55 Chapter 8, Subtitle A, Book V of Executive Order No. 292 (Administrative Code of 1987), reads "Sec. 55. Political Activities. - No officer or employee in the civil service including members of the Armed Forces, shall engage directly or indirectly in any partisan political activity or take part in any election except to vote nor shall he use his official authority or influence to coerce the political activity of any other person or body. Nothing herein provided shall be understood to prevent any officer from expressing his views on current political problems or issues, or from mentioning the name of candidates for public office whom he supports: Provided, That public officers and employees holding political offices may take part in political and electoral activities but it shall be unlawful for them to

solicit contributions from their subordinates or subject them to any of the acts involving subordinates prohibited in the Election Code." The aforequoted constitutional and legal provisions prohibit government officers and employees from engaging in any electioneering or in partisan political activities or campaign. As defined under Section 79, Article X of the Omnibus Election Code of the Philippines (BP 881), the term "election campaign" and "partisan political activity" refers to an "act designed to promote the election or defeat of a particular candidate or candidates or a public office which shall include. 1) Forming organizations, associations, clubs, committees or other groups of persons for the purpose of soliciting votes and/or undertaking any campaign for or against a candidate; 2) Holding political caucuses, conferences, meetings, rallies, parades, or other similar assemblies, for the purpose of soliciting votes and/or undertaking any campaign or propaganda for or against a candidate, cdasia 3) Making speeches, announcements or commentaries or holding interviews for or against the election of any candidate for public office; 4) Publishing or distributing campaign literature or materials designed to support or oppose the election of any candidate; 5) Directly or indirectly soliciting votes, pledges or support for or against a candidate. In addition, the following specific acts are likewise considered partisan political activities and are grounds for disciplinary action, to wit: 1. Being a delegate to any political convention or member of any political committee or directorate or an officer of any political club or other similar political organization. 2. Making speeches or publications to draw political support in behalf of any particular party or candidate for public office. 3. Soliciting or receiving contribution for political purposes, either directly or indirectly. 4. Becoming publicly identified with the success or failure of any candidate or candidates. It may be further stressed that the rationale behind this policy of the aforequoted provisions of law is to ensure that civil servants maintain strict neutrality based on considerations that such officers and employees should primarily concern themselves with the efficient administration of the affairs of the government and politics should be left entirely to politicians. The principle of political neutrality for civil servants finds its justifications in the desire to secure discipline and efficiency in the public service by doing away with the spoils system. It may be mentioned that many government employees have been accustomed to work for the candidacy of particular persons to ensure security of tenure or to get reward in the form of appointments or promotions in government positions as spoils of victory. It is therefore the considered view that public service "would be more truly devoted to the public welfare if public servants were not over active politically. (De Leon, Textbook on the New Philippine Constitution, p. 374, citing United Public Workers vs. Mitchel, 330, US 100). Moreover, it may be stated that the purpose of the prohibition against partisan political activity is likewise aimed to prevent the members of the civil service from using the resources of the government for

the benefit of their candidates and to insulate them from political retaliation from winning candidates whom they have opposed or not supported. (Cruz, Philippine Political Law, p. 279). Furthermore, for practical reasons and in view of the nature of their positions and responsibility the aforementioned inhibitions shall not be made to apply to government officials holding political offices, such as: cdtai 1. The President of the Philippines; 2. The Vice-President of the Philippines; 3. The Executive Secretary/Department Secretaries and other members of the Cabinet; 4. All other elective officials at all levels; and 5. Those in the personal and confidential staff of the above officials. In addition, these prohibitive acts should be differentiated from the right of all citizens, including public officers and employees to express their views on current political problems or issues or to mention the names of candidates for public office whom they support or believe to have the best platform of government. However, while expression of opinion may not necessarily constitute a violation of law or rule against partisan political activity, there may be instances where the exercise of said right to express an opinion or view, by its tenor or term, may escalate into an offensive and emotional discourse as to invite criticisms or provoke hostile comments and disruptive reactions which actuations could be a ground for disciplinary action as "conduct prejudicial to the best interest of the service" under Section 46, paragraph (b) 27, Chapter 7, Subtitle A, Book V of Executive Order No. 292 (Administrative Code of 1987). It is further informed that the offense of engaging directly or indirectly in partisan political activities by one holding non-political office is classified as a grave offense punishable by the penalty of DISMISSAL from the service pursuant to CSC No. 30, s. 1989 (Guidelines in the Application of Penalties in Administrative Cases). aisa dc For strict compliance. This Memorandum shall take effect immediately. (Sgd.) Samilo N. Barlongay" Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-24-92 Revenue Memorandum Circular No. 18-92 March 24, 1992 REVENUE MEMORANDUM CIRCULAR NO. 18-92 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB-0203). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: cd i --------------------------SERIAL NUMBER : QUANTITY

--------------------------22493691 : One (1) Set --------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-23-92 Revenue Memorandum Circular No. 19-92 March 23, 1992 REVENUE MEMORANDUM CIRCULAR NO. 19-92 Subject : Management Aptitude Test Battery (MATB) To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Career Executive Service Board Announcement dated January, 1992. "The Career Executive Service Board (CESB) announces the holding of the MANAGEMENT APTITUDE TEST BATTERY (MATB), the first step in the fourstage CES ELIGIBILITY EXAMINATIONS to establish a register of CES eligibles from which appointment to rank in the Career Executive Service and assignment to positions of Undersecretary, Assistant Secretary, Bureau and Assistant Bureau Director, Regional and Assistant Regional Director, Department Service Chief and other positions of equivalent rank will be made, provided the other requirements are met. A. DATE OF EXAMINATION: August 16, 1992 B. PLACE OF EXAMINATION: Manila, Cebu City, and Davao City cdt C. SCOPE OF EXAMINATION: The examination is a mental ability test that will focus on Management and related areas, namely: Reading Comprehension, Communication Arts, Quantitative Reasoning and General Information. It is the first in the series of examinations for CES eligibility. Only successful examinees will qualify to participate in the second examination. D. WHO MAY APPLY: The examination is open to the following: 1. Incumbents of Career Executive Service positions who are not more than sixty (60) years of age. 2. Division Chiefs in any national government office including government-owned and controlled corporations and local government units with at least three (3) years managerial experience and who are not more than fifty-five (55) years of age. 3. Those from the private section holding executive positions with at least three (3) years managerial experience and who are not more than fifty-five (55) years of age. 4. In addition to the above, an applicant must: a. be a holder of a Bachelor's degree; b. be a Filipino citizen, in good health and of good moral character; c. not be in the active military service; and

d. not have any pending administrative and/or criminal charges. E. APPLICATION AND ADMISSION PROCEDURES 1. Application forms may be obtained personally or by postal service (please include self-addressed stamp envelope) from the: CAREER EXECUTIVE SERVICE BOARD (CESB) 4th Floor, Development Academy of the Philippines Building, San Miguel Avenue, Pasig, Metro Manila or from any Regional Office of the Civil Service Commission 2. Applicant must file the application form directly with CESB accompanied by the following documents: a) Copy of appointment paper duly authenticated by the office personnel officer attesting to the position occupied and to the length of managerial experience. Certification of experience may be appended to the application where necessary; b) Birth certificate. In case a birth certificate cannot be presented, the applicant shall submit: (i) a baptismal certificate (ii) a birth affidavit; c) A certification from the head of office that the applicant has no pending administrative or criminal cases against him; d) Three (3) photographs, size 2 inches by 2 inches, taken not more than six (6) months before the date of examination; e) Two (2) self-addressed stamped envelopes; and f) An admission fee of TWO HUNDRED PESOS (P200.00) which may be paid in cash or postal money order payable to CESB. Personal checks will not be accepted. 3. DEADLINE FOR FILING OF APPLICATION. Deadline for filing of application is on April 30, 1992. aisa dc F. NOTICE OF ADMISSION: A notice of admission will be sent to a qualified applicant informing him of the exact venue of the examination and the schedule of the tests. This notice of admission for the tests should be brought by the applicant on the date of the examination and presented to the examination proctor. G. NOTIFICATION OF RESULTS: The results of the examination will be sent to the applicant by mail. The notice will likewise indicate whether the applicant is qualified to participate in the second-stage of the examination process. STATEMENTS CONCERNING QUALIFICATIONS WILL BE SUBJECT TO VERIFICATION BY THE BOARD. ANY FALSE STATEMENT MADE WILL BE A SUFFICIENT CAUSE FOR DISAPPROVAL OF THE APPLICATION OR REMOVAL FROM THE ROSTER OF CES ELIGIBLES." cd i All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-24-92 Revenue Memorandum Circular No. 20-92 March 24, 1992 REVENUE MEMORANDUM CIRCULAR NO. 20-92

Subject : Publishing the Joint BIR-LBP Regulations No. 1-92 relative to the use of the matured/maturing portion of the 10-year Land Bank Bond as payment for internal revenue tax liabilities. To : All internal revenue officers and others concerned. For the information and guidance of all concerned, quoted hereunder is the Joint BIRLBP Regulations signed February 12, 1992 governing the use of the matured/maturing portion of the 10-year Land Bank (LB) Bond as payment of internal revenue taxes. JOINT BIR-LBP REGULATIONS NO. 1-29 "Sec. 1. Objective - These joint BIR-LBP Regulations are issued pursuant to Section 245 and Section 4, both of the Tax Code, in relation to Section 18(4)(b)(v) of Republic Act 6657 otherwise known as the Comprehensive Agrarian Reform Law (CARL) and in accordance with the Memorandum of Agreement dated December 15, 1988, entered into by the Department of Finance and the Land Bank of the Philippines and other Government agencies, for the strict observance of the officers of the Bureau of Internal Revenue (BIR), the Land Bank of the Philippines (LBP) and the various holders of 10year LB bonds desiring to utilize the same as payment for internal revenue taxes. "Sec. 2. Scope - These Regulations shall govern the use of the matured/maturing portion of the 10-year LB bond held by the taxpayer/bondholder as payment for the following internal revenue tax liabilities, except withholding tax for non-withholding or nonremittance of taxes withheld: aisa dc "a) Income Taxes - Individual and Corporate "b) Final Capital Gains Tax Due from Individual Taxpayers "c) Estate Tax "d) Donor's Tax "e) Value-Added Tax (VAT) "f) Excise Tax "g) Other Percentage Taxes "Sec. 3. Definition of Terms - As used in these Regulations the terms and phrases shall be taken to mean as follows: "3.1 Ten-year LB Bond - an instrument of indebtedness issued by the Land Bank of the Philippines to landowners whose agricultural landholdings were covered by the Government's agrarian reform programs. "3.2 Matured Portion of the Bond - that part of the outstanding principal amount of the bond that has become due and redeemable by the Land Bank and may be equivalent to ten percent (10%) of the principal or more depending upon the number of years that had elapsed from the date of its issue. "3.3 Maturing Portion of the Bond - ten percent (10%) of the outstanding principal amount of the bond that shall become due and redeemable by the Land Bank within the same year that the tax is due for payment. acd "3.4 Bondholder - a holder in good faith of a "Bearer" 10-year LB bond or a landowner in whose name the 10-year LB bond was issued, as well as his assigns or successors-in-interest. "3.5 Taxpayer Identification Number (TIN) - a number supplied by the BIR to the taxpayer under the single taxpayer numbering system for proper identification. This shall be used by the taxpayer in lieu of his tax account number (TAN).

"3.6 Increments - surcharges, interest and compromise penalty as addition to the basic tax for late filing and/or late payment. cdtai "3.7 Deficiency Tax Assessment - a deficiency tax liability that is determined after a tax audit and examination. "3.8 Authority to Accept Payment (ATAP) - an order addressed to a BIR collection officer for him to accept payment. This order is issued in cases when a taxpayer pays his tax after the due date or when a deficiency tax, which is not covered by a tax return, is to be paid. The order indicates the name and address of the taxpayer, the kind of tax due, the taxpayer identification number (TIN), and the computation of the basic tax due as well as the increments, if any. "3.9 Deed of Assignment - a legal instrument executed by the taxpayer/bondholder indicating therein his intention to pay his/her tax/es due with the matured/maturing portion of his 10-year LB bond and assigning to the Government, for the account of BIR, the redemption proceeds thereon. "Sec. 4. Policy Guidelines - Unless found to be contrary to existing laws, the following policy guidelines shall be observed: "4.1 Only the principal portion of the 10-year LB bond that has matured or shall be maturing within the same year that the tax is due shall be acceptable as payment for internal revenue taxes. "4.2 The LBP shall have the sole responsibility for determining the matured/maturing portion of the bond that shall be acceptable as payment for taxes. "4.3 Interest accruing on the maturing portion of the bond assigned as payment for taxes shall be paid proportionately as follows: interest accrued and payable to the landowner shall be computed up to the date that he assigned the bond as payment for taxes; interest accrued and payable to the BIR shall be computed from the day following the date that the landowner assigned his bond as payment for taxes. "4.4 The following tax liabilities pertaining to the taxes referred to under Section 2 of these Regulations may likewise the paid with the 10-year LB bond; deficiency tax assessments arising from tax investigations; surcharges, interests and penalties arising from late filing of returns and/or payment of taxes; tax arrearages and penalties as of June 15, 1988. cdt "4.5 A taxpayer/bondholder intending to use his 10-year LB bond as payment of taxes shall file his tax returns and pay his tax/es only at the Land Bank Head Office or at any of the LBP Branches servicing the area where his/her residence or principal place of business is located. "4.6 Returns filed after the deadline fixed for the payment of taxes shall be submitted to the ATAP Issuing Office (BIR) which shall issue ATAP in three (3) copies for presentation to the Land Bank Cash Department or Branch Office where the delinquent tax is to be paid. The increments, in addition to the tax proper, shall be collected by the Land Bank teller concerned. acd "4.7 For deficiency tax/es, the bondholder shall present the Notice of Tax Deficiency Assessment to the ATAP Issuing Office and shall secure ATAP in three (3) copies for presentation to the Land Bank Cash Department or Branch Office where payment of the deficiency tax is to be made.

"4.8 The tax return or the ATAP, in case of late payment, deficiency assessment or delinquent account, along with the Deed of Assignment, shall be the only documents to be accepted and validated by Land Bank teller as taxpayer's evidence of the filing of the tax return and payment of tax. "4.9 Receipt of tax returns/ATAPs and corresponding payments in LB bond either fully or partially, shall be evidenced as follows: Machine validation reflecting date of payment, amount paid and transaction code; or Stamp pad mark showing the word "Received", the bank's name and branch code, teller's code, and initial, and date of receipt. "4.10 In case the matured portion as well as the maturing portion of the bond are not enough to pay off the tax due and its increments, if any, the taxpayer shall pay the balance in cash. "4.11 On the other hand, if the maturing portion is more than the amount of tax/es due, the Land Bank shall issue check representing redemption proceeds payable to the landowner, after remitting to the Central Bank the amount intended for tax payment. "4.12 No penalty charges shall be computed/collected on taxes paid with the 10-year LB bond regardless of the due date of the maturing portion assigned for tax payment. Tax/es due shall be deemed paid upon presentation of the deed of assignment and machine validation of the tax return/ATAP by Land Bank teller. "4.13 The Land Bank Cash Department and Branch Offices concerned shall be authorized to compute and collect 25% surcharges and compromise penalties from the taxpayers for out-of-district tax returns, late filing of the same, or late payment of taxes. "4.14 In places where no revised tax forms (under the New Payment Control System) are available, the Payment Order-Confirmation Receipt System (PO-CR) shall be applied. "4.15 The Payment Order-Confirmation Receipt System shall also be applied in the payment of the following internal revenue taxes: Final Capital Gains Tax Estate/Donor's Tax Excise Tax "4.16 All tax collections made by Land Bank on the first day of every month shall be remitted to the Central Bank, for the account of BIR, on the 26th day of the month; tax collections made on the second day shall be remitted on the 27th; tax collections made on the third day shall be remitted on the 28th, and so on. cdt "Sec. 5. Procedures - Except for tax payments indicated in Sections 4.14 and 4.15 of these Joint Regulations, the following procedures shall be observed by all concerned. "A. Filing of Tax Returns and Subsequent Payment of Tax On or Before Deadline "5.1 Taxpayer/Bondholder "5.1.1 If the Tax Identification Number (TIN) has already been secured from the BIR, the taxpayer shall prepare a tax return and execute a Deed of Assignment (DA), both in four copies, assigning the matured/maturing portion of his 10-year LB bond in favor of the Government for the account of BIR. Otherwise, the taxpayer shall first secure his TIN from BIR before preparing his tax return and DA. "5.1.2 Presents the tax return and DA to the BIR District Office for signature by the BIR authorized official on the "Conforme" portion. "5.1.3 Receives the tax return together with DA and submits the same together with the 10-year LB bond certificate to:

Bond Servicing Department (LBP Head Office); or LBP Branch Office within the jurisdiction of the Revenue District Office where he is required to file his return. "a) Upon submission of the tax return, DA and bond certificate to the Bond Servicing Department (LBP Head Office), the taxpayer shall entrust the bond certificate to that Office but he shall keep the DA (duly stamped "Approved for tax payment" and his tax return. "b) Proceeds to LBP Cash Department and submits DA and tax return. "c) Pays additional tax due, if there is any. cdt "d) If the tax return, DA and bond certificate are submitted to the LBP Branch Office, the taxpayer shall likewise entrust the bond certificate to the Branch Office, but he shall keep his copy each (duplicate) of the DA and tax return duly stamped "Approved for tax payment" and machine validated. He shall pay additional tax, if any. "e) On the due date for interest and redemption payments, the taxpayer shall claim from the Land Bank the portion payable to him, if there is any, and shall retrieve his bond certificate. "5.2 Land Bank "5.2.1 Bond Servicing Department "a) Receives DA, tax return and bond certificate. "b) Verifies bond against "Stop/Pledged" file. "c) Verifies authenticity of signature of taxpayer/bondholder against specimen signature on file. "d) If in order, stamps "Approved for tax payment" on the DA. Otherwise, informs taxpayer/bondholder of defects/deficiencies noted on documents. cdasia "e) Releases to taxpayer/bondholder three copies of DA together with the tax return. "f) Keeps original copy of DA along with the bond certificate for processing and redemption. "g) Processes (or pre-processes) redemption of the assigned portion and computes amount due for tax payment and amount due to landowner, if any. cda "h) Computes interest accrued on the assigned portion that shall be payable proportionately to the taxpayer/bondholder. "i) Prepares checks (or post-dated checks) representing redemption and interest proceeds payable to taxpayer/bondholder, duly notes portion of redemption proceeds earmarked as tax payment in an appropriate logbook. "j) Files original copy of DA along with pertinent documents in bondholder's file. "k) On the due date for payment of redemption proceeds assigned as tax payment, prepares Ticket/Advice to Cash Department indicating the amount of tax due and paid with the redemption proceeds. "l) Releases bond certificate and checks for the redemption and interest proceeds payable to the taxpayer/bondholder on the date payment of the same becomes due. "5.2.2 Cash Department "a) Checks the stick-on label on the original copy of the return to ascertain if the RDO code in the label of the tax return is the same as that of the revenue district where the bank is situated. Refuses returns without the stick-on label or returns not within the RDO's jurisdiction and advises taxpayers/bondholders to file return with appropriate RDO or to secure label from RDO. In case the taxpayer insists, informs him that a 25%

surcharge is due on out-of-district tax returns and computes penalties if taxpayer is willing to pay for the same. "b) Verifies if "TIN" is duly indicated on all copies of the tax return. If there is none, advises bondholder/taxpayer to indicate or secure "TIN" from nearest BIR District Office. "c) Verifies whether taxpayer: has fully accomplished and signed all copies of the tax return; is not a late filer "d) If taxpayer is a late filer, advises him to secure ATAP from the BIR. "e) Stamps "Received" on the three (3) copies of the DA and on the appropriate portion of all copies of the tax return indicating therein the date of receipt, bank name, teller's code and initial. "f) Determines if matured/maturing portion assigned for tax payment is equal to amount of tax due. acd "g) If amount assigned is not enough, informs and requests taxpayer/bondholder to pay the balance in cash, check or tax debit memo (TDM). "h) Machine-validates the date of payment, amount paid and the transaction code. Stamps the bank name and teller's code on every copy of the return and the DA. Validates separately the payment thru DA and the payment in cash. There is no corresponding machine validation for the TDM. "i) Releases to the taxpayer the duplicate copy of the tax return the DA and TDM, if any. "j) Segregates original from the triplicate copies of the tax returns and batches them separately in 25s or less. "k) Prepares daily, in six (6) copies of Batch Control Sheet-A1 (BCS-A1), for each batch of tax returns with bond and cash/check or TDM payments for tax due and/or penalties, to be distributed as follows. Original - RISSI, BIR (with original copies of tax returns) Duplicate - Processing Section, RAD (BIR) Triplicate - COA Resident Auditor Quadruplicate - RDO, BIR (with triplicate copies of tax returns) Quintuplicate - Proof and Transit Department, Land Bank Sextuplicate - Land Bank Cash Department or Branch file copy "l) Prepares daily, in four (4) copies Batch Control Sheet-B1 (BCS-B1), for each batch of tax returns with tax due fully paid in Land Bank bonds for distribution as follows: Original - RISSI (with original copies of tax returns) Duplicate - RDO (with triplicate copies of tax returns) Triplicate - Proof and Transit Department Quadruplicate - Land Bank Cash Department or Branch file copy "m) Numbers separately but consecutively, BCS-A1 and BCS-B1, each starting from 001 for the first batch of tax returns received during the year, 002 for the second batch and so on, regardless of whether there are less than 25 tax returns received per banking day. Each BCS number shall be preceded by the year of receipt of tax return. Note: If during the first day of filing of tax returns, less than 25 tax returns filed pursuant to these Regulations were received, the BCS-A1 or BCS-B1 of the batch of tax returns

will be numbered 001. On the other hand, if during the first day of filing there were 35 tax returns filed, there will be two batches, the first BCS-A1 or BCS-B1 containing 25 tax returns will be numbered 001 and the second BCS-A1 or BCS-B1 containing 10 tax returns will be numbered 002. "n) Forwards to Proof and Transit Department, within three (3) days from receipt of tax returns, the following copies of BCS (with adding machine tapes) in separate bundles together with tickets/advices contra PTD duly signed by Bank's Authorized Signatory (for cash/checks paid by the bondholder in addition to his bond) and copies of tax returns: For BCS-A1 Copy Distribution Original - RISSI, with original copies of tax returns Duplicate - Processing Section, RAD Triplicate - COA Resident Auditor Quintuplicate - Proof and Transit Dept. For BCS-B1 Copy Distribution Original - RISSI, with original copies of tax returns. Triplicate - Proof and Transit Dept. "o) Retains sextuplicate copies of BCS-A1 and quadruplicate copies of BCS-B1 for file. cdasia "p) Upon receipt of ticket/advice from Bond Servicing Department, prepares ticket (contra PTD) for the amount of redemption proceeds used as payment for taxes. "5.2.3 Land Bank Branch "a) Performs activities (a) to (i) of Item 5.2.2. (Cash Department). "b) Keeps bond certificate for processing and redemption, along with remaining copies and the tax return, DA and TDM, if any. "c) Reports, at the end of each collection day or not later than 10:00 A.M. of the following banking day, to the Proof and Transit Department by fax, telephone, telex, radiogram or any means of fast communication the total amount of taxes collected at the end of each banking day, indicating how much in cash and how much is in LB Bonds or TDM, if any. "d) Performs activities (j) to (m) of Item 5.2.2 (Cash Department). "e) Forwards to Proof and Transit Department within three (3) days from receipt of tax returns, the following copies of BCS (with adding machine tapes) in separate bundles, together with inter-office memo (IOM) duly signed by Bank's Authorized Signatory (for cash/checks paid by the bondholder in addition to his bond) copies of tax returns. For BCS-A1 Copy Distribution Original - Rissi, with original copies of tax returns Duplicate - Processing Section, RAD Triplicate - COA Resident Auditor Quintuplicate - Proof and Transit Dept. For BCS-B1 Copy Distribution Original - Rissi, with original copies of tax returns Triplicate - Proof and Transit Dept. "f) Retains sextuplicate copies of BCS-A1 and quadruplicate copies of BCS-B1 for file. "g) Processes (or pre-processes) redemption of the assigned portion and computes amount due for tax payment and amount due to landowner, if any.

"h) Computes accrued interest on the assigned portion that shall be payable proportionately to the taxpayer/bondholder. "i) Prepares checks (or post-dated checks) representing redemption and interest proceeds payable to taxpayer/bondholder. Duly notes portion of redemption proceeds earmarked as tax payment in an appropriate logbook. "j) Files original copy of DA along with pertinent documents in bondholder's file. "k) On the due date of redemption payment, prepares and submits to the Proof and Transit Department inter-office memo (IMO) duly signed by the Bank's Authorized Signatory, indicating therein the amount of redemption proceeds previously assigned as tax payment. "l) Releases checks for interest and redemption proceeds payable to landowner. "B. Filing of Tax Return and Payment of Tax After Deadline "5.3 Taxpayer/Bondholder "5.3.1 Prepares tax return and executes Deed of Assignment. "5.3.2 Secures Authority to accept Payment (ATAP) in three (3) copies from the ATAP Issuing Office (BIR). "5.3.3 Submits ATAP/return as well as DA and bond certificate to Bond Servicing Department or LB Branch as in item 5.1.3. "5.4 LBP "5.4.1 Cash Department/Branch Office "a) Checks the stick-on label on the original copy of the ATAP to ascertain if RDO code in the label of the ATAP corresponds to the code of the revenue district where the bank belongs. Denies acceptance of ATAP without stick-on label or ATAP not within jurisdiction and advises taxpayer/bondholder to file ATAP with appropriate RDO or secure label from RDO. In case the taxpayer insists, informs him that penalties are imposed on out-of-district tax returns/ATAP; if taxpayer is willing to pay the same, computes accordingly said penalties. "b) Verifies if "TIN" is duly indicated on all copies of the ATAP. If there is none, advises bondholder/taxpayer to indicate or to secure "TIN" from nearest BIR District Office. "c) Stamps "Received" on the three (3) copies of the DA and on the appropriate portion of all copies of the ATAP indicating therein the date of receipt, bank name, teller's code and initial. "d) Computes the corresponding penalties if the taxpayer is willing to pay for the same; Otherwise, stamps "Increments Not Paid" on every copy of the ATAP filed. "e) Determines if matured/maturing portion assigned for tax payment is equal to amount of tax due and increments, if any. "f) If amount assigned is not enough, informs and requests taxpayer/bondholder to pay the balance. "g) Accepts additional payment from taxpayer/bondholder either in cash, check or TDM and machine-validates the date of payment, amount paid and the transaction code. Stamps the bank name and teller's code, on every copy of the return and the DA. Validates separately the payment thru DA and the payment in cash. There is no corresponding machine validation for the TDM. "h) Releases to taxpayer the duplicate copy of the ATAP and TDM, if any.

"i) Segregates original from the triplicate copies of the ATAP's and batches them separately in 25s or less. cda "j) For Cash Department, performs activities in 5.2.2 items (k) to (p), incorporating tax returns and ATAP's in the same BCS-A1 or BCS-B1 Batch, as the case may be. "k) For LBP Branch, keeps bond certificate for processing and redemption along with remaining copies of DA, Tax return and TDM, if any, "l) Performs activities in item 5.2.3 items (c) to (j), and incorporates tax returns and ATAPs in the same BCS-A1 or BCS-B1 batch, as the case may be. "C. Transmittal of Reports/Returns/ATAPs and Remittance of Collection "5.5 Proof and Transit Department (PTD), Land Bank "a) Books all collections and credits the same to the Special Account "Due to Central Bank - Bureau of Internal Revenue" "b) Summarizes in the Advance Report of Daily Collections (ARDC) the collections reported daily by the different branches. Indicates in the ARDC the amount of tax payment in LB bond/s and particular date/s when no collections were received. "c) Sends the ARDC to the following offices, thru Fax/telex, within three (3) days from date of collection: Processing Section, RAD, BIR Bureau of Treasury "d) Receives, in batches, original copies of tax returns/ATAPs with their corresponding BCS-A1 and BCS-B1 from Cash Department and Branches. "e) Prepares four (4) copies of Consolidated Report of Daily Collections (CRDC), based on sequentially arranged BCS-As, A1s or BCS-B1s per batch for distribution to the following: Original - Accounting Department, CB Duplicate - Accounting Division, BIR Triplicate - Bureau of Treasury Quadruplicate - PTD File "f) Indicates in the CRDC, in a separate column, the amount of tax payments in LB bond/s and the dates when there were no tax payments. "g) Bundles separately each type of documents according to their office destination and forwards to BIR receiving Unit, CB Complex the segregated documents intended for BIR: Office Destination Contents RISSI - Batches of original copies of tax returns or ATAPs attached to and corresponding to BCS-As, A1s or BCS-Bs, B1s Processing Section, - duplicate copies of BCS-A duplicate copy of CRDC with attached acknowledged original copy of BIR Form No. 1258, if any. COA Resident Auditor-triplicate copies of BCS-A, A1 and BCS-B1 "h) Prepares and submits report on the returned/dishonored checks using BIR Form No. 1258, in accordance with Revenue Regulations No. 5-84. cd "i) Prepares and submits to offices concerned an adjusted CRDC to notify them of the errors discovered in the report; indicates the word "adjustment" opposite the affected collection date;

"j) Authorizes the Central Bank of the Philippines, Manila, thru Accounting Department, to debit its demand deposit accounts maintained thereat for the total daily collection which shall be due for remittance in accordance with Section 4.16 of these Joint Regulations. Such amount shall be credited to the "Special Account - BIR Collections" of the Treasurer of the Philippines. "D. Receipt of Reports, Returns/ATAPs and Monitoring "5.6 Bureau of Internal Revenue (BIR) "5.6.1 BIR Receiving Unit, CB Complex "a) Stamps "Received" on each bundle (per office destination) of the BCS-As, A1s, Bs, B1s, BIR Forms 1258 and CRDC to acknowledge the documents from PTD, Land Bank for pick-up by the PO/CR Monitoring Division. "5.6.2 PO/CR Monitoring Division "a) Receives documents from the BIR Receiving Unit, CB Complex and distributes said documents within the day of receipt to the following offices: RISSI - batches of original copies of tax returns/ATAPs attached to corresponding BCSA, A1 or BCS-B, B1 Processing Sections, RAD - duplicate copies of BCS-A, A1 BCS-B1 - duplicate copy of CRDC - BIR Form 1258, if any COA Resident Auditor - triplicate copies of BCS-A, A1, BCS-B1 "b) Receives exception reports from RISSI, Revenue Accounting Division, and RDOs. "c) Communicates to the Land Bank any exception report received and bills the bank with corresponding penalties, if necessary. "5.6.3 RISSI "a) Receives bundles/batches of original copies of tax returns/ATAPs, with their corresponding copies of BCS-As, A1s and BCS-Bs, B1s, from the PO/CR Monitoring Division. aisa dc "b) Checks the number of tax returns/ATAPs against the attached BCS-As, A1s and BCS-Bs, B1s; notes down any discrepancy or inconsistency. "c) Encodes data from the tax returns/ATAPs. "d) Generates computer totals of the different batches and matches them with their respective BCS-As, A1s, BCS-Bs, B1s, totals; notes any discrepancy discovered. "e) Generates in four (4) copies exception reports based on the discrepancies or inconsistencies noted in the documents. "f) Forwards exception reports within ten (10) days from the receipt of the returns to the following offices: Original - Processing Section, RAD Duplicate - PO/CR, Monitoring Div. Triplicate - RISSI, file copy Quadruplicate - PTD, Land Bank (thru PO/CR, Monitoring Div.) "g) Generates Payment in Bond Control Ledger, in addition to the usual Bank Collection Control Ledger, in the prescribed format and forwards the same to the PO/CR Monitoring Division for monitoring purposes.

"h) Segregates the ATAPs from the batches of original copies of the tax returns and transmits the same, together with a terminal list, to the ATAP Issuing Officer concerned, for attachment of ATAP to the docket. "i) Generates the following and forward to the offices concerned, copy furnished the Collection Service and/or Collection Branch" - Monthly Alpha List of Tax Filers by Type of Tax (containing the name of drawee bank, check number and the amount paid by the taxpayer) by revenue regions - Regional Offices concerned by city/municipality - Revenue District Office concerned listing of non-resident citizens of foreign countries - RDO concerned - Statistical data required by the Statistical Analysis Division. - Monthly Alpha List of Tax Filers Who Paid in LB Bond (indicating the amount of tax due, the due date of redemption payment, amount paid in cash or check if there is any, check number and drawee bank) "j) Generates a copy of Monthly Alphabetical List of Stop/Non-Filers and Late-Filers by RDO using the previous filers' records. "k) Generates in three (3) copies reminder letters to stop/non-filers within ten (10) days from receipt of tax return for distribution to the following: Original - taxpayer Duplicate - RDO Triplicate - taxpayer (as follow-up letter) cd "l) Forwards the Monthly Alphabetical List of Stop/Non-Filers and Late Filers to RDO concerned together with the three (3) copies of reminder letters. "m) Transmits original copies of processed tax returns to Administrative Branch not later than twenty (20) days from receipt of said documents, for safekeeping. "5.6.4 Revenue District Office "a) Picks-up daily, triplicate copies of tax returns/ATAPs attached with duplicate copies of BCS from bank branch. "b) Checks the tax returns/ATAPs against BCS to determine the correctness of entries therein, particularly the amounts indicated. "c) Checks with the bank concerned on discrepancies noted. "d) Segregates out-of-district tax returns. "e) Prepares transmittal list for out-of-district tax returns/ATAPs received during the week indicating therein the bank branch and the BCS number of the batch where the tax returns were taken; attaches therein the copies of out-of-district tax returns/ATAPs and forwards the same to the respective RDO/ATAP Issuing Office not later than three (3) days upon receipt of the tax returns/ATAPs. "f) Segregates ATAPs from the tax returns and attaches ATAP to the corresponding tax docket. "g) Classifies tax returns and number in accordance with RMO Nos. 9-91 and 10-91 in case of Income Tax Returns; numbers other tax returns in the following manner; Bank Branch - BCS Number - TIN (Assign additional code for tax paid with LB bond) "h) Segregates according to type of tax return (BIR Form Nos. 1701, 1701A, 1701C, 1704, 1702, 1702Q, 1702A-1, 2550, 1743-W, 1745, 750A and 2529A-1) and prepares in three copies "Monthly Summary of Tax Returns Filed" in the prescribed format (duly

indicating payment in LB bond) and distributes to the following offices not later than twenty (20) days from the receipt of the tax returns: Original - Statistical Analysis Div. Duplicate - RISSI Triplicate - Assessment Branch "i) Forwards tax returns stamped with "Increments Not Paid" to Collections Unit for the issuance of the necessary collection letter/s to the taxpayer/s. "j) Receives from RISSI the Monthly Alpha List of Stop/Non-Filers and Late Filers together with the reminder letter/s and the Monthly Alpha List of Tax Filers by Type of Tax. "k) Delivers personally to stop/non-filer(s) the original copy of the reminder letter(s); Mails the triplicate copy fifteen (15) days after the taxpayer fails to respond to the original copy of the letter. casia "l) Conducts inquiry with the bank branch concerned in case taxpayer shows proof/evidence of tax return filed; Reports to PO/CR Monitoring Division the nontransmittal/reporting of tax return filed in case the tax return presented by the taxpayer is authentic, otherwise, conduct investigation of the taxpayer. "m) Conducts verification of stop/non-filers who did not respond to the reminderletters sent. "n) Prepares report addressed to RISSI on taxpayers who stopped filing due to closure of business as discovered during verification. "o) Prepares report to Tax Fraud Evaluation Committee on tax evaders discovered during the verification of stop/non-filers. "p) Submits to the Revenue Regional director a list of stop/non-filers who failed to respond to the two (2) reminder-letters fifteen (15) days after mailing the second reminder letter. "5.6.5 Revenue Accounting Division (RAD) "a) Summarizes advance collection reports received thru fax/telex from the different Bank Head Offices and generates Daily Report of Collection per ARDC, duly indicating amount of tax paid in LB bond/s: Original - RAD Accountabilities Sec. Duplicate - Statistical Analysis Div. "b) Processes daily the BCS and CRDC reports received thru PO/CR Monitoring Division or RISSI as regards mathematical accuracy and completeness of data. cdt "c) Encodes data on collections from BCS and CRDC reports; Matches computer totals of BCS against CRDC. "d) Generates Daily Collection Reports per BCS and CRDC. "e) Reconciles exception reports on inaccurate BCS-A, A1s received from RISSI against its copies of BCS and the corresponding CRDC and makes the necessary adjustments. "f) Receives Central Bank Credit Advice (CBCA) on remittances or collection per RR No. 5-84. "g) Reconciles CBCA against corresponding CRDC. "h) Generates the Monthly Report of Collection per CRDC and BCS with adjustment, if any, and the Monthly Report of Remittances per CBCA and forwards to RAD-

Bookkeeping and Reconciliation Section and RAD-Accountabilities Section respectively, for recording in the books of accounts. "i) Prepares exception reports on inaccurate/late reporting and remittances of collections using the Schedule of Delayed Reporting/Remittances of Internal Revenue Tax Collections thru Banks and submit to PO/CR Monitoring Division. cd "Sec. 6. Repealing Clause This Joint BIR-LBP Regulations supersede other issuances, insofar as the Land Bank of the Philippines is concerned, prescribing the procedures on the receipt, transmittal and processing of tax returns filed thru the banks under the new payment control system (NPCS). "Sec. 7. Effectivity This Joint BIR-LBP Regulations shall take effect upon approval. "RECOMMENDING APPROVAL: "(Sgd.) JESUS F. DIAZ Executive Vice President, LBP "(Sgd.) JOSE U. ONG Commissioner of Internal Revenue "APPROVED: "(Sgd.) Deogracias N. Vistan President, LBP (Sgd.) Jesus Estanislao Secretary of Finance" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-07-92 Revenue Memorandum Circular No. 21-92 April 7, 1992 REVENUE MEMORANDUM CIRCULAR NO. 21-92 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: cdasia -------------------------SERIAL NUMBER : QUANTITY -------------------------24244001 : One (1) Set -------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. no date Revenue Memorandum Circular No. 22-92 No date supplied 1992 REVENUE MEMORANDUM CIRCULAR NO. 22-92 Subject : Digest of VAT Rulings for May, June, July and August 1991. To : All Revenue Officials and Others Concerned. Attached herewith as Annex "A" are the Digests of VAT Rulings issued in the months of May, June, July and August 1991. For the information and guidance of all concerned. cdtai JOSE U. ONG Commissioner of Internal Revenue By: (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge Annex "A" DIGEST OF VAT RULINGS FOR MAY 1991 1. Commissions on the sale of real property earned by individual agents who are not employees of real estate companies are subject to VAT if such commissions per twelve month period exceeds P200,000. However, it is not subject to withholding of VAT. On the other hand, commissions not exceeding P200,000 are subject to the 2% tax prescribed in Sec. 112 of the Tax Code, as amended. (VAT) Ruling No. 028-91 dated May 22, 1991) 2. The operator who has contracted with a landowner/permittee to extract and dispose quarry materials is the one liable for the payment of VAT pursuant to Secs. 99 and 100(a) of the Tax Code, as amended, rather than the landowner with whom the contract was executed. Pursuant to Art. 415(10) of the Civil Code, a quarry permittee holds a real right over an immovable property. Thus, the royalty fee received by the permittee from the quarry operator is, in effect, rental for the use of a real right over an immovable property and is exempt from VAT pursuant to Sec. 103(q) of the Tax Code, as amended. Furthermore, the royalty fee is not subject to VAT, and since VAT is not determinable at the time of payment, there is, therefore, no legal basis for the operator to deduct or withhold periodically the VAT from the said fees to the permittee. (VAT Ruling No. 029-91 dated May 23, 1991) cd i

3. Only the VAT, and not any other kind of import duties and charges paid on imported raw materials, can be claimed as input tax credit against output tax liabilities (Sec. 10, Revenue Regulations (RR) No. 5-87). Any Tax Credit Certificate (TCC) received covering the VAT paid on imported materials, whether issued by the BIR, BOI or BOC, shall reduce the BOI-registered enterprise's available input tax credit, pursuant to Sec. 11 of RR No. 5-87. The TCC issued by the BOI does not form part of the taxable gross income of the grantee pursuant to Sec. 21 of E.O. No. 226. Upon receipt thereof and in accordance with RR No. 9-89, the book entries shall be: TCC . . . . . . . x x x Input tax . . . . . . .x x x (VAT Ruling No. 030-91 dated May 29, 1991) 4. Transactions which are tax exempt under the provisions of special laws are exempted from VAT pursuant to Sec. 103(u) of the Tax Code, as amended by E.O. No. 273. Thus, BOI-registered enterprises which are exempt from the payment of the contractor's tax pursuant to Art. 39(e) of the Omnibus Investment Code (E.O. No. 226) are now exempt from VAT which merely replaced the contractor's tax upon the promulgation of E.O. No. 273. (VAT Ruling No. 031-91 dated May 29, 1991) 5. The exemption privilege granted to enterprises registered under the Kalakalan 20, as well as those registered as foundations/charitable institutions is limited only to taxes for which they are directly liable. Since VAT is an indirect tax, it can be passed on to said entities and once shifted, it forms part of the cost of goods purchased. The shifting of the VAT to said entities does not make them directly liable for the payment of the VAT, hence, they cannot invoke the exemption privilege granted to avoid the passed-on VAT. Such being the case, sale of goods to them is subject to VAT under Sec. 100(a) of the Tax Code, as amended. (VAT Ruling No. 032-91 dated May 29, 1991) 6. Pursuant to Sec. 102(a)(2) of the Tax Code, as amended, the commissions earned from the sale of airline tickets shall only be zero-rated when they are paid for in acceptable foreign currency actually or constructively remitted to the Philippines and accounted for in accordance with the rules and regulations of the Central Bank of the Philippines. Otherwise, the commissions shall be subject to 10% VAT in accordance with Sec. 102(a) of the same Code. (VAT Ruling No. 032-91 dated May 29, 1991) 7. The exemption of the Nayong Pilipino Foundation from all taxes under P.D. No. 37 has been repealed by P.D. No. 1931 which withdrew all tax and duty exemption privileges granted to government-owned or controlled corporations. Moreover, even if such decree remains valid, it cannot be invoked by Nayong Pilipino Foundation for VAT exemption of its purchases from Datagraphics, Inc., inasmuch as the tax exemption privileges provided thereto are applicable only to direct taxes. VAT, being an indirect tax, may be passed on by Datagraphics to the Foundation who will shoulder the VAT as an additional cost to its total goods purchased. Such being the case, the Foundation is liable to the payment of all forms of taxes including VAT. (VAT Ruling No. 034-91 dated May 29, 1991) 8. The exemption privilege of electric cooperatives withdrawn by E.O. No. 93 but restored by FIRB Resolution No. 24-87 is limited only to the taxes for which the electric cooperatives are directly liable. Since VAT is an indirect tax, it can be shifted to the

purchasers and once shifted, it forms part of the cost of the goods and services purchased. The shifting of the VAT to the customers/clients does not make them directly liable therefor; hence, they cannot invoke their tax exemption privilege. Such being the case, the purchases made by the electric cooperatives are subject to VAT pursuant to Sec. 100(a) of the Tax Code, as amended. (VAT Ruling No. 035-91 dated May 29, 1991) casia 9. A company engaged in the operation of a refreshment parlor or eating place for baked foods and drinks and which also maintains a take-out counter for its goods is subject to the 4% caterer's tax pursuant to Sec. 114 of the Tax Code, as amended, on its operations as an eating place, as well as to VAT as a bakeshop on its operation of takeout counters. In effect, the company is operating two lines of businesses for which it has to register as a non-VAT taxpayer for its operation of a refreshment parlor or eating place pursuant to RR No. 6-88 and as a VAT taxpayer for its operation of a take-out counter in accordance with Sec. 18 of RR No. 5-87. However, if the sales from its take-out counter do not exceed P200,000 in any 12-month period, it may not register as a VAT taxpayer in which case its receipts therefrom shall be subject only to 2% percentage tax pursuant to Sec. 112 of the same Code. (VAT Ruling No. 036-91 dated May 29, 1991, as supported by BIR Ruling No. 199-90) 10. All approved applications for zero-rating granted to any sellers of goods to AFPCES and PC/INPSSS became ineffective and/or considered revoked as of January 1, 1990. However, input taxes generated by the seller on its purchases of raw materials and supplies used in the production of finished goods sold to AFPCES and PC/INPSSS prior to January 1, 1990 may be credited against his output tax liability or claimed as refund and/or tax credit pursuant to Sec. 104(b) and Sec. 106(b) of the Tax Code. (VAT Ruling No. 037-91 dated May 29, 1991) 11. If an account executive is an employee of a company, there being an employeremployee relationship, his commission income shall be exempted from VAT pursuant to Sec. 103(s) of the Tax Code, as amended. However, the employer shall deduct and withhold the withholding tax on wages. If there is no employer-employee relationship, he shall be subject to VAT as a seller of service in the course of his business or practice of profession, pursuant to Sec. 102(a) of the same Code. Moreover, he shall not be subject to the expanded withholding tax because VAT is not covered by the Expanded Withholding Tax Regulations (RR No. 6-85, as amended). Furthermore, the payor is neither allowed by law to impose the VAT nor is he allowed to withhold the same from the payee vis-a-vis his income payment to the latter, whether or not such payee is a VAT or non-VAT person. Accordingly, the aforesaid account executive cannot claim for a refund or credit of the VAT imposed and withheld from him by his employer. Rather, his recourse is to make a demand from his employer of such amount which was purportedly imposed and withheld from his compensation. Before engaging in the practice of his profession, a commission agent has an option to: i) register as a non-VAT person, if his gross commission for the next 12-month period is estimated not to exceed the P200,000 ceiling, he shall register as a VAT person. As a non-VAT registered person, he shall be liable for payment of the 2% percentage tax, based on his gross receipts, rather than the 10% VAT, but without the benefit of input tax credit vis-a-vis his purchases; or ii) register as a VAT person and become liable for the

payment of the 10% VAT against which he can deduct from his output taxes any input tax attributable to his purchases. (VAT Ruling No. 038-91 dated May 29, 1991) 12. The VAT exemption granted to breeding stocks, and genetic materials under Sec. 103(b) of the Tax Code, as amended, is limited only to those that are intended for the raising of poultry and livestock (which includes cows, bulls, calves, pigs, goats and rabbits). It refers only to live animals that are generally used as or yielding or producing food for human consumption (Sec. 9(b)(2) of RR No. 5-87). Hence, the importation of horses (thoroughbred broodmares) for breeding purposes to be used in sports or games, which cannot be classified as livestock, is not exempt from VAT. (VAT Ruling No. 03991 dated May 29, 1991, as supported by VAT Ruling Nos. 102-89 and 243-90) 13. Hospital and medical services rendered by Ospital ng Maynila is not subject to VAT pursuant to Sec. 103(1) of the Tax Code, as amended. The exemption, however, applies only to taxes for which it is directly liable and does not apply to taxes which are being passed on to it by its suppliers. Consequently, as regards purchases of goods and services, the VAT thereon paid by the supplier can be passed on to said hospital and ultimately be considered as added cost of the goods and services procured, for the VAT at this stage is merely an indirect tax. (VAT Ruling No. 040-91 dated May 29, 1991) cd 14. The sale "as is" of imported goods subjected to final tax in 1985 and prior years, whether included or not in the December 31, 1987 inventory list, remains subject to the 10% VAT pursuant to Secs. 99 and 100 of the Tax Code, as amended. However, transitional input tax credits are allowed to be recognized only on goods included in the inventory list as of December 31, 1987 submitted pursuant to RR 5-87. As an example, for goods imported prior to January 1, 1986, the advance sales tax paid on which was accordingly a final tax rather recognized as a deferred sales tax credit when sold beginning January 1, 1986 and thereafter. In general, such imported goods are embraced by the transitory input tax provision under Sec. 25(a)(3) of E.O. No. 273. If unsold as of December 31, 1987 the importer-seller/VAT person can recognize a presumptive 8% transitory input tax credit therefrom, provided, however, that he reported such unsold inventory lists as of December 31, 1987. This rule applies whether or not such importer failed to take up in his books of accounts as of January 1, 1988 the transitory 8% presumptive input tax thereon, as a separate account under Input Taxes. Under this situation, the importer-seller should make a correcting entry in his books of accounts to segregate the amount previously recorded alone under his inventory account into: (i) inventory account; and (ii) input tax account. (VAT) Ruling No. 041-91 dated May 29, 1991) 15. The tax exemption privileges granted to coal operators (i.e., exemption from all taxes except income tax) under Sec. 16 of P.D. No. 972 depends upon the provisions of its duly approved coal operating contract with the government. Furthermore, since the said incentives are available only to said operators, the same may not be extended to other persons with whom such operators may contract with even where such contract is incidental or in furtherance of their coal operating contracts. Hence, if they have awarded some of their coal mining areas to sub-contractors/permittees with an agreement that they will buy latter, such sub-contracting of their coal operating contract is not entitled to said tax exemption privileges. Hence, said sub-contractors are subject to the applicable national internal revenue taxes, including VAT on their sales of coal to coal operators

pursuant to Secs. 99 and 100 of the Tax Code, as amended. (VAT Ruling No. 042-91 dated May 29, 1991) 16. In accordance with Sec. 149 of the Tax Code, as amended, the purchase of a brand new car, intended as a prize in a fund-raising project undertaken by a parish church, shall be subject to the ad valorem tax based on the manufacturer's selling price net of excise tax and VAT. Furthermore, under Sec. 99 of the same Code, the VAT is imposed on the person who sells goods, renders services or imports goods. Since VAT is an indirect tax, the seller can pass it on to the buyer, who will have to pay the VAT as an additional cost of the goods purchased. On the other hand, when the car shall be given as a prize, it shall be subject to a final withholding tax of 20% pursuant to Sec. 21 (c)(1) of the same Code, which shall be withheld and remitted by the person or entity awarding the prize. (VAT Ruling No. 043-91 dated May 29, 1991) 17. The business of leasing a space on public utility vehicles for the purpose of putting up advertising boards, which are then sublet or offered to the general public for a fee, invoices a sale of service. Hence, companies engaged in said business activity is subject to VAT pursuant to Secs. 99 and 100 of the Tax Code, as amended. This applies regardless of whether the company makes the advertising paraphernalia by itself or subcontracts production of the same to outside contractors. (VAT Ruling No. 044-91 dated May 29, 1991) 18. The requirement under Sec. 2 of RR No. 2-88 that in order for sales of raw materials to export-oriented BOI-registered enterprises to qualify for zero-rated VAT, export sales of such enterprise must exceed seventy percent (70%) of its total production, is not merely a requirement of the BOI but rather forms part of the VAT law, consistent with the doctrine that the implementing regulations of a law are part of the said law. Hence, the request for zero-rated VAT on purchases of a company which did not satisfy said requisite is necessarily denied for lack of legal basis. (VAT Ruling No. 045-91 dated May 29, 1991) 19. An agency which is engaged in the business of selling security guard services is subject to the 10% VAT based on the agency's quarterly gross receipts which, in this case, is composed of the salary and allowance of the guard, employer's share in the SSS, Medicare and State Insurance contributions, and the agency's administrative overhead and profit margin. If such gross receipts already include the 10% VAT, the taxable gross receipts should be computed by excluding the VAT forming part of said amount, such VAT being equivalent to 1/11 of the gross receipts. Accordingly, the VAT cannot be based solely on the agency's administrative overhead and profit margin. (VAT Ruling No. 046-91 dated May 29, 1991, as supported by VAT Ruling No. 232-89) 20. Molasses is not an agricultural product in its original state. Rather, the agricultural product in its original state is sugar cane, the milling of which to produce sugar generates molasses as a by-product. Neither can molasses be considered as "raw sugar cane", as the latter refers to "crystallized or solidified juice of sugarcane, distinctly brown in color resulting from the simple and primary milling process such as treating the juice with lime to remove impurities, boiling and spinning the syrup to force out the molasses," pursuant to Sec. 9(b)(2) of Revenue Regulations (RR) No. 5-87, as amended by RR No. 5-89. The same regulations cited that molasses and bagasse, among others, are not covered by the exemption under Sec. 103 of the Tax Code, as amended. In view of this, the sale of

molasses, is subject to VAT pursuant to Sections 99 and 100 of the same Code. (VAT Ruling No. 047-91 dated May 29, 1991) 21. Local purchases of equipment (e.g., motorcycle units) by the USAID for the Bureau of Local Government Finance is exempt from VAT pursuant to Sec. 103(u) of the Tax Code, as amended, hence, are not qualified for zero-rated VAT. (VAT Ruling No. 048-91 dated May 29, 1991, as supported by BIR Ruling No. 275-89 dated November 8, 1989) aisa dc 22. Coffee beans are agricultural food products in their original state, hence, the sale and subsequent sale thereof is not only exempt from VAT pursuant to Sec. 103(h) of the Tax Code, but the seller is likewise exempt from registering as a VAT taxpayer. However, when the seller opts to register as such pursuant to Sec. 107(d) of the same Code, his local sales become subject to the 10% VAT, while his export sales are zerorated under Sec. 100(a)(1) of the same Code. On the other hand, if the coffee bean trader is not VAT-registered, the sale, subsequent sale, or export of the coffee beans are exempt in accordance with Sec. 103(h) of the same Code. (VAT Ruling No. 049-91 dated May 29, 1991) 23. Copra cake, also known as copra meal, is a by-product of copra, which comes out in pellet form after the oil is extracted using solvents or through pressing. Since it is a processed product ultimately used as ingredient or supplement to animal feeds, it cannot be considered exempt under either Sec. 103(h) or Sec. 103(c) of the Tax Code, as amended. All input taxes available to a taxpayer can be credited against his/its output tax due on the sale of VAT taxable products with the exception of those attributable to exempt transactions. (VAT Ruling No. 050-91 dated May 29, 1991) 24. A sale-and-leaseback transaction in acquiring capital equipment between a company/borrower and a financing company partakes the nature of a sale of personal property from the former to the latter. Hence, the borrower/company is subject to VAT on its sale of said equipment pursuant to Sec. 100(a) of the Tax Code, as amended. However, if the equipment is immobilized by incorporation to an immovable structure at the time of sale (Art. 415(3) of the New Civil Code), or by distribution in premises where it is used to meet the needs of the industry or works therein carried on (Art. 415(5) of the New Civil Code), the sale thereof by the company/borrower is exempt from VAT pursuant to Sec. 2(p) of RR No. 5-87 which limits the scope of the VAT to objects which are movable, tangible and which are appropriable or transferrable. On the part of the financing company, rental received from its leaseback transactions is not subject to VAT but to the 5% gross receipts tax since it is treated as part of its gross income under Title V of the Tax Code, as amended. Besides, the lease rentals during the term of the lease cover principal and interest payments of the credit extended by the financing company. Such being the case, the VAT on the sale of equipment, if taxable, passed on by the lessee/borrower shall be recorded by the financing company as part of its expense or cost. (VAT Ruling No. 051-91 dated May 29, 1991) 25. A contract with an owner/operator of cold storage facilities is not a lease of real property but, rather a warehousing contract. As such, the warehouse operator is subject to VAT pursuant to Sec. 102 of the Tax Code, as amended. (VAT Ruling No. 052-91 dated May 31, 1991)

26. Charter hire contracts for vessels are of two types, namely, charter of demise and charter of affreightment. A charter of demise, also known as bareboat charter, is a charter wherein the vessel owner delivers the chartered vessel to the lessee without provisions and complement of the crew, with the lessee himself supplying the necessary provisions and crew for the operation of the vessel. This type of charter is considered a contract of lease. On the other hand, in a charter of affreightment, commonly known as a time charter, the vessel owner himself operates and runs the vessel through his own crew for the purpose of transporting the person and/or cargo of the charterer. This type of charter hire is considered a contract of carriage and company engaged in such, is subject to the 3% common carrier's tax based on its gross quarterly receipts pursuant to Sec. 115 of the Tax Code, as amended, hence, exempted from the 10% VAT pursuant to Sec. 103(j) of the same Code. Revenues from port services business, as an independent line of business, are understood to include revenues from berthing, terminalling lease of service equipment at the port and warehousing services, such activities being mainly connected to, if not incidental or as a necessary consequence of port services business. The same are, accordingly, indivisible, hence, may not be detached and treated as revenues arising from different independent lines of businesses. Thus, berthing fees and receipts from warehousing services may not be considered revenues from distinct, separate and independent lines of businesses with the end in view of treating them as lease of real property. Accordingly, the same will not be exempted from the 10% VAT under Sec. 103(q) of the Tax Code, as amended. Rather, the same are all classified as gross receipts from port services business, which involves sale of services other than the real estate leasing and, accordingly, subject to the 10% VAT pursuant to Sec. 102 of the same Code. As a further clarification, warehousing business is not considered a leasing of real property and the warehouseman's compensation for his warehousing services cannot be considered rentals from lease of real property. Instead, a warehouseman's services consist of receiving and storing goods and merchandise for others, for a fee and his gross receipts from the sales of such services are subject to VAT in accordance with Sec. 102 of the Tax Code, as amended. This also follows from the fact that such warehousing activities are part of the port services business which is subject to VAT. (VAT Ruling No. 053-91 dated May 31, 1991) cda DIGEST OF VAT RULINGS FOR JUNE 1991 1. The term "animal feeds" exempted under Sec. 103(c) of the Tax Code, as amended, is limited only to animal feeds as a complete product and does not include raw materials, ingredients or supplements to animal feeds. The exemption from VAT of soya bean and fish meal arises from their being an independent and distinct tax exempt class of products under Sec. 103(c) and not because the same are used in the production of animal feeds. Hence, the importation of "D-L Methione" which is used as an essential additive in the formulation and manufacture of animal feeds is subject to VAT. (VAT Ruling No. 054-91 dated June 17, 1991) 2. Service contractors under the Oil Exploration Development Act (P.D. No. 87) are exempt from all taxes except income tax. The exemption is limited, however, to taxes for which they are directly liable. Since the VAT on the sales to said contractors is the liability of the sellers and not of the purchasers, and said contractors have no indirect tax

exemption, they cannot claim the privilege of making purchases from said sellers, net of VAT. (VAT Ruling No. 055-91 dated June 17, 1991) 3. VAT-registered freight forwarders whose services are rendered to clients outside the Philippines and paid for in acceptable foreign currency inwardly remitted to the Philippines and accounted for in accordance with Central Bank rules and regulations are zero-rated pursuant to Sec. 102(a)(2) of the Tax Code, as amended. There is no need for them to apply for zero-rating on their sale of services to said clients. Only transactions covered by Secs. 100(a)(2) and 102(a) (3) of the same Code will require an application for zero-rating. (VAT Ruling No. 056-91 dated June 21, 1991, as supported by VAT Ruling No. 060-89) 4. Importations are subject to VAT, whether donated or purchased. Such being the case, importation of articles consigned to charitable, religious, cultural or social welfare corporations or institutions, e.g., church bells and spares consigned to a parish church, are not exempt but are subject to 10% VAT pursuant to Sec. 101 of the Tax Code, as amended. This, however does not apply to transactions where the recipient is granted special exemption privileges, i.e., exemption from indirect taxes like VAT, under it charter or provided for under the Constitution. (VAT Ruling No. 057-91 dated June 21, 1991, as supported by VAT Ruling No. 169-89) 5. If a chemical, e.g., xylene, is used as a raw material in the manufacture of pesticides, its importation is exempt from VAT pursuant to Sec. 103(c) of the Tax Code, as amended. However, if it is not used as a raw material in the manufacture of pesticides by the importer himself and used for agricultural purposes as duly certified by the Fertilizer and Pesticides Authority (FPA), its importation is subject to VAT in accordance with Sec. 101 of the same Code. (VAT Ruling No. 058-91 dated June 26, 1991, which clarified BIR Ruling No. 092-91) 6. In accordance with Sec. 2 of Revenue Regulations (RR) No. 2-88, only sales of raw materials to BOI-registered export producers exporting at least 70% of their actual production shall qualify for zero-rating. Hence, sale of manpower services to a BOI registered domestic corporation is subject to VAT pursuant to Sec. 102(a) of the Tax Code, as amended, and cannot be zero-rated for lack of legal basis. (VAT Ruling No. 059-91 dated June 26, 1991, as supported by VAT Ruling No. 134-90) 7. The input taxes which were generated from the purchase of services for the construction of pier facilities which form part of the manufacturing plant of a company are creditable against output taxes, or a tax credit or refund of such input taxes which are attributed to export sales may be availed of subject to the condition that such input taxes have not been applied against output taxes. (VAT Ruling No. 060-91 dated June 26, 1991, as supported by VAT Ruling No. 086-90) 8. Under Sec. 100(a) of the Tax Code, as amended, as implemented by Sec. 8(b)(1) of RR No. 5-87, internal exports under the Incentives for Internal Exports Program pursuant to LOI No. 1355 are subject to zero-rate VAT, even if suppliers of the goods will quote their prices in Philippine peso rather than the present pricing scheme in which prices are quoted in US dollar, provided that the goods are subsequently sold by the Philippine International Trading Corporation (PITC), the implementing agency for such program, to qualified buyers and paid for in acceptable foreign currency inwardly remitted to the Philippines. (VAT Ruling No. 061-91 dated June 26, 1991)

9. The term "internal export" under P.D. No. 1820 and E.O. No. 765 (which are laws prior to E.O. No. 273) does not apply for VAT purposes, being inconsistent with the term "export sales" under the VAT law (subsequent law), which is restricted to actual export and foreign currency denominated sales. Such being the case, the sale of domestic manufacturers for the supply of articles for government project, financed from the proceeds of foreign loans cannot be considered subject to zero percent VAT. cda Moreover, although loan agreements between the government and foreign creditors may provide for the exemption from taxes, charges and other levies of local contractors and suppliers for projects utilizing proceeds from said loans, this exemption privilege is extended only to the awardee of the contract (i.e., the contractor) and not to suppliers of such contractors. Hence, the sale of steel pipes to a contractor of a government agency for a waterworks project, funded by the World Bank cannot be legally considered VAT exempt nor zero-rated. (VAT Ruling No. 062-91 dated June 26, 1991) 10. A foreign contractor, which is organized under the laws of a foreign country, rendering services for the construction of the National Power Corporation (NPC) Gas Turbine Plant Project funded from a foreign loan agreement, is subject to VAT, notwithstanding the fact that NPC is tax exempt under its Charter and their contract stipulated that NPC will assume the responsibility for taxes due said foreign contractor. Such a stipulation is binding only between NPC and the contractor, in their private capacities, and the latter's personal liability to pay its taxes may not be transferred to the former with binding effect on the BIR. However, in case the loan agreement was made pursuant to the Foreign Borrowings Act (RA No. 4860, as amended by PD No. 150), the contractor may be accorded VAT exemption if such agreement contained a proviso that a contractor shall be exempt from taxes, including the 10% VAT. Otherwise, VAT exemption cannot be granted the NPC, for and in behalf of said contractor, for lack of legal basis. (VAT Ruling No. 063-91 dated June 27, 1991) 11. The exemption privilege granted to cooperatives under RA No. 6938 is limited only to taxes for which they are directly liable. The VAT, being an indirect tax, can be shifted to them and once shifted, it forms part of the cost of goods purchased. The shifting of the VAT to purchasers does not make them directly liable therefor; hence, they cannot invoke exemption privileges granted to them. Such being the case, sale of goods to cooperatives is subject to the 10% VAT under Sec. 100(a) of the Tax Code, as amended, hence, does not qualify for zero-rated VAT. (VAT Ruling No. 064-91 dated June 27, 1991) 12. Hamburger patties are "processed meat products" having undergone manufacturing process thru mixture of salt, pepper, garlic powder, monosodium glutamate, hydrolyzed vegetable protein and water; hence, are no longer meat products in their original state. Such being the case, their sales are subject to 10% VAT pursuant to Sec. 100 of the Tax Code, as amended. (VAT Ruling No. 065-91 dated June 27, 1991) 13. The agricultural and marine food products in their original state, which are exempted from VAT under Sec. 103(b) of the Tax Code, as amended, refer only to those intended, as food for human consumption. Said products are considered remaining in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, smoking or stripping.

Polished and/or husked rice, corn grits and raw cane sugar shall be considered in their original state for purposes of said law. The following, which are all products in their original state and are food for human consumption, may be considered VAT-exempt under Sec. 103(b) of the Tax Code, as amended: 1. Green peas 2. Dried peas 3. Mongo peas 4. Mung beans 5. Navy beans 6. White beans 7. Kidney beans 8. Unpopped popcorn 9. Sunflower seed 10. Pepper 11. Wheat grains "Pepper" shall be classified as in its original state, only if it has undergone processing limited to the aforementioned simple processes. Otherwise, the same will no longer be considered agricultural food product in its original state. (BIR Ruling No. 092-88 dated March 10, 1988) casia Other agricultural products, such as "Chick peas", "Dun Peas", "Lucerne", "Barley", "Flowers", "Safflowers" and "Millet" shall not be VAT-exempt under Sec. 103(b) of the Tax Code, as amended, if they are not intended as food for human consumption, even if they are in their original state. Thus, when they are actually used as supplements or ingredients of "animal feeds", the same shall not qualify for VAT exemption under this part of the law. (VAT Ruling No. 244-90 dated Dec. 28, 1990) Moreover, "Chick peas", if intended as supplement or ingredient to animal feeds, shall not be VAT-exempt since only animal and poultry feeds, as finished product, qualifies for VAT exemption under Sec. 103(c) of the Tax Code, as amended. (VAT Ruling No. 244-90) "Whole oats are husked wheat, hence, not in their original state since husked (or milled) grains are generally not considered in their original state except only vis-a-vis "rice, corn grits and raw cane sugar". (supra) "Raw cotton" and "raw-hide" are not agricultural food products but are rather non-food agricultural products. Sale thereof is VAT-exempt only if the seller is its primary producer or owner of the land where the same is produced. (Sec. 103(a) of the Tax Code, as amended) "Fertilizers" are VAT-exempt in all stages of sale under Sec. 103(c) of the Tax Code, as amended. (VAT Ruling No. 066-91 dated June 27, 1991) DIGEST OF VAT RULINGS FOR JULY 1991 1. In accordance with Sec. 102(a)(3) of the Tax Code, as amended, and in relation to Art. XVIII of the RP-US Military Bases Agreement and the diplomatic exchange of notes between the Philippines and the United States (US), services rendered to US Military Bases are effectively zero-rated effective Jan. 1, 1988, the effectivity of the VAT Law. (VAT Ruling No. 067-91 dated July 5, 1991)

2. In case of sales of goods, the VAT is based on the gross selling price or gross value in money of the goods sold, bartered or exchanged pursuant to Sec. 100 of the Tax Code, as amended. While the law allows deduction of discounts from gross sales, such discounts must not be conditioned upon the subsequent happening of an event or fulfillment of certain conditions. It then follows that discounts given, but the enjoyment of which is conditioned upon the subsequent happening of an event or the fulfillment of certain conditions imposed, may not be deducted from gross sales for VAT purposes, e.g., a discount to be given is the purchase price is paid upon delivery or a discount to be given if the buyer pays within seven days after delivery. (VAT Ruling No. 068-91 dated July 5, 1991) 3. Indent service income which is paid for in acceptable foreign currency and inwardly remitted in accordance with Central Bank rules and regulations qualifies for zero-rate VAT pursuant to Sec. 102(A)(2) of the Tax Code, as amended. (VAT Ruling No. 069-91 dated July 5, 1991, as supported by VAT Ruling No. 212-90) 4. The tax exemption privileges of AFPCES and PC/INPSSS had been withdrawn effective Jan. 1, 1990. Such being the case, sales to AFPCES and PC/INPSSS are now subject to VAT, except (a) those sales of goods that are specifically enumerated to be VAT exempt under Sec. 103 of the Tax Code, as amended; and (b) those that were purchased before Dec. 31, 1989 but were delivered in 1990 or any subsequent year (VAT Ruling No. 169-90). However, the AFPCES and PC/INPSSS are entitled to subsidy availment under FIRB Res. Nos. 28-90, 38-90 and 39-90 by means of the application and issuance of a Tax Compliance Certificate which may be used by their suppliers as payments of their VAT liabilities pursuant to Revenue Regulations No. 9-90. (VAT Ruling No. 070-91 dated July 5, 1971) 5. The following processed food products which are packed in bulk plastic bags and sold for resale or further processing are no longer in their original state as contemplated in Sec. 103(b) of the Tax Code, as amended: a) Dried fruits (e.g., mangoes, papayas) - made from fresh fruits which are dried using a locally fabricated dryer; sold to wholesalers/repackers; b) Dried and ground fruits and tubers (e.g., guava, tamarind, ubi) - made by blanching, slicing, drying and grinding the fruits/tubers; sold to blenders for the manufacture of soup mixes and other products; and c) Fruits preserved in syrup (e.g., jackfruit, banana, mango) - made by adding sugar to raw fruits, then heat sterilizing, packing and chilling the same; sold to manufacturers of ice cream and other products. Hence, producers thereof shall be subject to VAT pursuant to Sec. 100 of the Tax Code, as amended. (VAT Ruling No. 071-91 dated July 5, 1991) cd 6. A non-stock, non-profit organization, e.g., Our Blessed Mother of Victory Mission Foundation, is exempt only from income tax on income received by it as a social welfare organization under Sec. 26(g) of the Tax Code, as amended, and is not exempt from other taxes. As such, imported relief goods and equipment received as donation from abroad by such organization are subject to VAT pursuant to Sec. 101 of the same Code. (VAT Ruling No. 072-91 dated July 17, 1991) DIGEST OF VAT RULINGS FOR AUGUST 1991 1. Production of live concerts which involves rendering of amusement services is not subject to VAT, since the jurisdiction to impose amusement tax on gross receipts

from admission to places of amusement shall be exercised by the provincial government, to the exclusion of the national or municipal government (Sections 11 and 13 of the Local Tax Code). However, other revenues or receipts from the conduct or production of live or televised concerts, other than admission receipts, which are in the nature of revenues or receipts from advertising services rendered, such as payments received from sponsors of the live/televised concert whose products are advertised in the course of such concert, shall be subject to 10% VAT pursuant to Sec. 102 of the National Internal Revenue Code (NIRC), as amended. Moreover, gross receipts from management of local talent involves sales of services, hence, are also subject to the 10% VAT under Sec. 102 of the NIRC. (VAT Ruling No. 073-91 dated August 5, 1991, amended VAT Ruling No. 092-90) 2. Only the VAT component on the purchase of coal from coal miners/producers to be used in the manufacture of cement shall be considered and taken up as input tax since coal is subject not only to 10% VAT under Section 100(a) of the Tax Code, as amended, but also to excise tax of P10.00 per metric ton under Section 151 of the same Code. However, the excise tax paid on coal forms part of the taxable base in computing the VAT. Furthermore, the input tax on the coal purchased and used in the manufacture of said finished product is creditable against the output tax on the manufacturer's sales pursuant to Section 104 of the same Code. (VAT Ruling No. 074-91 dated August 7, 1991) cda 3. A BOI-registered enterprise is exempt from contractor's tax pursuant to Section 39(e) of E.O. No. 226 (Omnibus Investments Code) if it is the party directly liable therefor as when it is the one selling the service, but not where it is the buyer thereof. Thus, a company who sells general construction service to a BOI-registered firm is not entitled to claim the benefit of zero-rating under Sec. 102(a)(3) of the Tax Code, as amended, nor the exemption under the Omnibus Investments Code in relation to Sec. 103(u) of the same Code. Such privileges are granted to BOI-registered firms only for its direct tax liability, and not to tax liabilities of its suppliers which can be passed on to the former, for said law does not provide for the extension of tax exemption to suppliers of the grantee. (VAT Ruling No. 075-91 dated August 7, 1991) 4. The VAT is imposed on the taxable sales of the seller. Accordingly, the output VAT should be based on the gross sales price appearing in the seller's VAT invoice and not the sales price appearing in the VAT invoice of the customer. Corporations are distinct persons, hence, an act of one corporation cannot be legally assigned to another corporation. The tax shall be determined by multiplying the gross selling price, including the amount intended to cover the tax by the factor 1/11 under Sec. 100(d)(2) of the same Code. (VAT Ruling No. 076-91 dated August 7, 1991) 5. The sale of services by stock transfer agents to stockbrokers through clearing houses is subject to VAT pursuant to Section 102(a) of the Tax Code, as amended. The VAT, being an indirect tax, can be passed on by the agents to the clearing house (which is registered as a bank, hence, a non-VAT entity) and once shifted, forms an additional and integral part of the cost of goods and/or services that the non-VAT entity has to shoulder. (VAT Ruling No. 077-91 dated August 21, 1991) cdasia Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-21-92 Revenue Memorandum Circular No. 23-92 April 21, 1992 April 21, 1992

REVENUE MEMORANDUM CIRCULAR NO. 23-92 Subject : Clarifying Memorandum Circular No. 1 To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Ombudsman Memorandum Circular No. 3, series of 1992 dated March 20, 1992. "Pursuant to Memorandum Circular No. 1, all concerned are enjoined not to allow the retirement, or accept the resignation of any public officer/employee without first securing/presenting a clearance to the effect that he has no pending criminal or administrative case with this office. cd By way of compliance with the same Circular, heads of various government agencies have directed retiring or resigning officials and employees to personally apply for and secure the required clearance from this Office. It has been observed, however, that such a procedure entails some inconvenience on the part of the applicants especially those coming from the provinces who still have to come to Manila for that purpose alone. The processing of clearances on the other hand, takes at least three (3) to five (5) days and applicants are therefore obliged to return to this Office for the release of the clearance applied for. In order to smoothen the producers for the issuance of clearance as required under Memorandum Circular No. 1, the following guidelines be observed: 1. Heads of departments/offices/ agencies/bureaus/regional offices or their duly authorized representatives shall be responsible in securing the required clearance by sending to this Office a formal request to that effect which shall be done at least on a semi-monthly basis. The request shall include all applicants for the particular period covered. 2. Request for clearance emanating from offices located in the Luzon area shall be sent to or filed directly with the Office of the Ombudsman Central Office located at 176 Arroceros Street, Manila while those in the Visayas and Mindanao areas shall be coursed through the Offices of the Deputy Ombudsman for Visayas (Cebu City) and Mindanao (Davao City), respectively, which after proper verification shall forward the same to the OMB Central Office for issuance of the necessary clearance. 3. For purposes of easy verification, requests for clearance must be sent to the channels referred to above at least forty-five (45) day prior to the earliest effectivity date of the retirement resignation of the applicants covered by the request and must be accompanied by certified true copies of the service records of the respective applicants. acd 4. Issuance of clearances under Memorandum Circular No. 1 is free of charge. This circular shall take effect immediately. (Sgd.) Conrado M. Vasquez" Ombudsman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. acd (Sgd.) Eufracio D. Santos Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

04-24-92 Revenue Memorandum Circular No. 24-92 April 24, 1992 REVENUE MEMORANDUM CIRCULAR NO. 24-92 Subject : Digest of VAT Rulings for September, October, November and December 1991. To : All Revenue Officials and Others Concerned. Attached herewith as Annex "A" are the Digests of VAT Rulings issued in the months of September, October, November and December 1991. For the information and guidance of all concerned. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Annex "A" Digest of VAT Rulings, for September 1991 1. P.D. No. 1442 does not exempt service contractors engaged in the exploration and development of geothermal resources from indirect taxes. Rather, said law only exempts service contractors from tax on their importation of machinery and equipment, spare parts and materials required for their geothermal operations, i.e., exemption from import taxes for which they may otherwise be directly liable. Said exemption does not include the 10% VAT on their local supplies because this tax is a direct liability of suppliers of goods and services and which is only indirectly passed on by such suppliers to customers, hence, in the nature of an indirect tax. In the hands of such customers, the VAT paid by suppliers on their sales (direct tax) and passed on indirectly to their customers as part of the invoice price (indirect tax) losses the character of a tax and becomes a mere part of the purchase price. (See Phil. Acetylene Co. vs. CIR, CTA Case No. 708, Sept. 17, 1965) (VAT Ruling No. 078-91 dated September 9, 1991) cdtai 2. A VAT-registered cement manufacturer utilizing coal for heating purposes in its cement plant, is entitled to transitory input tax credits under Sec. 25(a)(1) and (2) of E.O. No. 273 as follows: a) On the balance of its accumulated deferred sales tax credits as of Dec. 31, 1987 vis-a-vis raw materials, parts, accessory or other articles purchased for conversion into or intended to form part of the cement manufacture, i.e., direct materials to manufacture cement, pursuant to Sec. 25(a)(1), E.O. No. 273; and b) A statutory presumptive transitory input tax credit equivalent to 8% of the value of its coal inventory as of Dec. 31, 1987, i.e., indirect materials in the manufacture of cement, the tax components of which were not claimed as part of the manufacturer's deferred sales tax credit. However, coal purchased from service contractors who entered into a contract with the government and who are exempted from all taxes except income tax pursuant to PD's 87, 972 and 1442, should not form part of the inventory of coal of the manufacturer to be entitled to the 8% presumptive transitional input tax. (VAT Ruling No. 079-91 dated September 9, 1991) 3. A VAT-registered importer of children's books is exempt from VAT pursuant to Sec. 103(f) of the Tax Code, as amended. The aforesaid tax exemption provision applies on the total landed cost of the importation which includes the 9% import levy as provided

under E.O. No. 443. Since the importation of children's books is an exempt transaction, the imposition of the import levy will not affect the exemption granted on the transaction. (VAT Ruling No. 080-91 dated September 9, 1991) 4. Printing, publication or sale of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements, is exempt from VAT under Sec. 103(f) of the Tax Code, as amended. However, if a company engaged in the aforementioned services opts to be VAT-registered in accordance with Sec. 107(d) of the same Code, it shall become liable to pay the VAT on its printing services that it renders to others, e.g., publishers. Since VAT is an indirect tax, it can be passed on to the buyer as an additional cost for the printing services. (VAT Ruling No. 081-91 dated September 9, 1991) acd 5. A VAT-registered exporter, which exports all of its manufactured products is entitled to claim for refund of the input taxes on its purchases of services from a contractor engaged to construct its factory and other civil works to be used exclusively in its VAT-registered business operation, provided that the contractor is VAT-registered and it issued VAT official receipts to the registered exporter for its compensation or service fees; and that the proceeds of the export sales of said exporter have been accounted for in accordance with Central Bank (CB) regulations. Said claim for refund may be applied for within two years from the date of exportation and to the extent that such input tax has not been applied against output tax and upon presentation of proof that the foreign exchange proceeds have been accounted for in accordance with CB regulations. (VAT Ruling No. 082-91 dated September 9, 1991, as supported by VAT Ruling No. 086-90) 6. The sale of cotton, which is an agricultural non-food product in its original state, by the producer, whether cooperative or not, or by the owner of the land where the same is produced, is exempt from VAT pursuant to Sec. 103(a) of the Tax Code, as amended. If the cotton sold by the producers to a ginnery is, subsequently, sold by the latter to textile mills after removing the cotton seeds, the latter sale is subject to 10% VAT under Sec. 100(a) of the same Code. Furthermore, the sale by textile mills of the cotton finally manufactured into textile mills of the cotton finally manufactured into textile to garment manufacturers is also subject to 10% VAT. However, if the garment manufacturer exports the finished products, its export sales shall be subject to 0% VAT. Moreover, the 10% VAT that has been passed on by the textile mill to the garment manufacturer may be credited against the VAT liability of the garment manufacturer, tax credited or refunded. acd Imported cotton is subject to 10% VAT pursuant to Sec. 101 of the Tax Code, as amended. If the imported cotton is processed into textile by textile mills and subsequently sold to garment manufacturers, the sale is also subject to 10% VAT in the same manner as the sale of textile manufactured out of locally-produced cotton. (VAT Ruling No. 08791 dated September 4, 1991) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-27-92 Revenue Memorandum Circular No. 25-92 May 27, 1992 REVENUE MEMORANDUM CIRCULAR NO. 25-92

Subject : Publishing the full text of Republic Act No. 7496 which provides for a Simplified Net Income Taxation Scheme (SNITS) for the Self-Employed and Professionals engaged in the practice of their profession, amending further for this purpose, Sections 21 and 29 of the National Internal Revenue Code, As Amended. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7496: "REPUBLIC ACT NO. 7496 "AN ACT ADOPTING THE SIMPLIFIED NET INCOME TAXATION SCHEME FOR THE SELF-EMPLOYED AND PROFESSIONALS ENGAGED IN THE PRACTICE OF THEIR PROFESSION, AMENDING SECTIONS 21 AND 29 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. "Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: "Sec. 1. It is hereby declared the policy of the State to have a uniform and equitable tax system as mandated by the Constitution. The tax structure must be such that all tax groups shall pay their fair share of taxes. The higher income groups shall bear a higher tax burden than the low income groups. "Sec. 2. As used herein, the term: "(a) 'Self-employed' means persons engaged in business and who derive their personal income from such business. This includes single proprietorships, i.e., manufacturers, traders, market vendors, owners of eateries, farmers and service shops; and cdasia "(b) 'Professionals' means persons who derived their income from the practice of their profession. This includes lawyers and other persons who are registered with the Professional Regulation Commission such as doctors, dentists, certified public accountants and other similarly situated. The term 'professionals' also refers to one who pursues an art and makes his living therefrom such as artists, athletes and others similarly situated. "Sec. 3. The first sub-paragraph of Section 21(a) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "(a) Taxable compensation income. - A tax is hereby imposed upon the taxable compensation income as defined in Section 27, other than the incomes subject to tax under paragraphs (b), (c), (d), (e) and (f) of this section, received during each taxable year from all sources determined in accordance with the following schedule: Not over P2,500 0% "Over P2,500 but not over P5,000 1% "Over P5,000 but not over P10,000 P25 + 3% of excess over P5,000 "Over P10,000 but not over P20,000 P175 + 7% of excess over P10,000 "Over P20,000 but not over P40,000 P875 + 11% of excess over P20,000 "Over P40,000 but not over P60,000 P3,075 + 15% of excess over P40,000 "Over P60,000 but not over P100,000 P6,075 + 19% of excess over P60,000 "Over P100,000 but not over P250,000 P13,675 + 24% of excess over P100,000 "Over P250,000 but not over P500,000 P49,675 + 29% of excess over P250,000

"Over P500,000 P122,175 + 35% of excess over P500,000 "Sec. 4. A new paragraph to be known as paragraph (f) is hereby inserted at the end of Section 21 of the National Internal Revenue Code, as amended, which shall read as follows: "(f) Simplified Net Income Tax for the Self-employed and for Professionals Engaged in the Practice of Profession. - A tax is hereby imposed upon the taxable net income as determined in Section 27 received during each taxable year from all sources, other than income covered by paragraphs (b), (c), (d) and (e) of this section by every individual whether a citizen of the Philippines or an alien residing in the Philippines who is selfemployed or practices his profession therein, determined in accordance with the following schedule: "Not over P10,000 3% "Over P10,000 but not over P30,000 P300 + 9% of excess over P10,000 "Over P30,000 but not over P120,000 P2,100 + 15% of excess over P30,000 "Over P120,000 but not over P350,000 P15,600 + 20% of excess over P120,000 "Over P350,000 P61,600 + 30% of excess over P350,000 "Sec. 5. The opening paragraph of Section 29 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "In computing taxable income subject to tax under Sections 21(a); 24(a), (b), and (c); and 25(a)(1), there shall be allowed as deductions the items specified in paragraphs (a) to (i) of this section: Provided, however, That in computing taxable income subject to tax under Section 21(f) in the case of individuals engaged in business or practice of profession, only the following direct costs shall be allowed as deductions: "(a) Raw materials, supplies and direct labor; casia "(b) Salaries of employees directly engaged in activities in the course of or pursuant to the business or practice of their profession; "(c) Telecommunications, electricity, fuel, light and water; "(d) Business rental; "(e) Depreciation; "(f) Contributions made to the Government and accredited relief organizations for the rehabilitation of calamity-stricken areas declared by the President; and "(g) Interest paid or accrued within a taxable year on loans contracted from accredited financial institutions which must be proven to have been incurred in connection with the conduct of a taxpayer's profession, trade or business. "For individuals whose cost of goods sold and direct costs are difficult to determined, including professionals as herein defined, a maximum of forty percent (40%) of their gross receipts shall be allowed as deductions to answer for business or professional expenses as the case may be. "Sec. 6. The Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue, shall promulgate and publish the necessary rules and regulations for the effective implementation of the provisions of this Act. "Sec. 7. If any provision of this Act is declared unconstitutional or the application thereof to any person, circumstance or transaction is held invalid, the validity of the remaining provisions of this Act or the applicability of such provision to other persons, circumstances or transactions shall not be affected thereby.

"Sec. 8. The provisions of Sections 21 and 29 of the National Internal Revenue Code, as amended, and all other laws, decrees, orders, rules and regulations, or parts thereof, inconsistent with this Act are hereby repealed or amended accordingly. "Sec. 9. After three (3) years from the effectivity of this Act, the Commissioner of Internal Revenue may implement a withholding tax scheme to further enhance the taxation of the self-employed and professionals as defined under this Act. "In furtherance of this section the Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue, shall issue and publish the implementing rules and regulations to implement this mandate. "Sec. 10. This Act shall take effect upon its approval. "Approved, xxx xxx xxx "Approved: May 15, 1992 (SGD) CORAZON C. AQUINO President of the Philippines" SALIENT FEATURES (1) Section 21(f) of the National Internal Revenue Code, as amended by Republic Act No. 7496, now subjects to a Simplified Net Income Taxation (SNIT), the taxable income received during each taxable year from all sources, exclusive of the following, viz: (a) foreign source gross income derived by a non-resident citizen; (b) certain passive incomes, i.e., interest income/yield from Philippine currency bank deposits and deposit substitute instruments; royalties; prizes exceeding P3,000 and winnings (except Philippine Charity Sweepstakes winnings); dividends received from domestic corporation and share of the individual partner in a partnership subject to income tax under Section 24(a), NIRC; aisa dc (c) capital gains from sales of shares of stock; and (d) capital gains from sales of real property by every individual, whether a citizen of the Philippines or an alien residing in the Philippines who is self-employed or a professional engaged in the practice of his profession therein, at a new schedular income tax rates of 3% to 30%. (2) Individuals, whether citizens or residents, who are pure compensation income earners shall as usual be subject to the schedular income tax rates of 0% to 35% imposed under Section 21(a) of the NIRC as amended on their taxable compensation income (exclusive of the incomes covered by items (1)(a) to (d) above-enumerated and SNIT) received during each taxable year from all sources, and consequently to the withholding tax on wages prescribed by Section 72 in relation to Section 21(a), both of the NIRC as amended and implemented by Revenue Regulations No. 6-82 as amended. (3) The SNIT of professionals and self-employed may also be subject to a withholding tax scheme after three (3) years from effectivity of R.A. No. 7496. (4) Only the following direct costs shall be allowed as deductions for purposes of computing the taxable income subject to the SNIT, viz: (a) Raw materials, supplies and direct labor; (b) Salaries of employees directly engaged in activities in the course of or pursuant to the business or practice of their profession; (c) Telecommunications, electricity, fuel, light, and water;

(d) Business rental; (e) Depreciation; (f) Contributions made to the Government and accredited relief organizations for the rehabilitation of calamity-stricken areas declared by the President; and (g) Interest paid or accrued within a taxable year on loans contracted from accredited financial institutions which must be proven to have been incurred in connection with the conduct of a taxpayer's profession, trade or business. For individuals whose cost of goods sold and direct costs are difficult to determine, including professionals as herein defined, a maximum of forty percent (40%) of their gross receipts shall be allowed as deductions to answer for business or professional expenses as the case may be. cdtai For purposes of the SNIT, R.A. No. 7496 amending Sections 21 and 29 of the NIRC defines the terms "Self-employed" and "Professionals". It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-04-92 Revenue Memorandum Circular No. 26-92 June 4, 1992 REVENUE MEMORANDUM CIRCULAR NO. 26-92 Subject : Applicability of increased basic personal and additional exemptions allowable to individual taxpayers for income tax purposes under Republic Act No. 7167. To : All Internal Revenue Officers, Withholding Agents and Others Concerned On December 26, 1991 and January 3, 1992, Revenue Regulations No. 1-92 and Revenue Memorandum Circular No. 1-92 were respectively issued by this Office clarifying that the increased basic personal and additional exemptions under the amendatory provisions of Republic Act No. 7167 shall apply to earnings/income of individual taxpayers starting taxable year 1992 (and not 1991) which shall be declared for income tax purposes in their income tax returns to be filed on or before April 15, 1993. Likewise, Revenue Regulations No. 1-92 shall take effect on compensation income earned or received from January 1, 1992. However, in a decision in the consolidated cases of Reynaldo V. Umali vs. Hon. Jesus P. Estanislao, Secretary of Finance, and Hon. Jose U. Ong, Commissioner of Internal Revenue, G.R. No. 104037 and Rene B. Gorospe, et al. vs. Commissioner of Internal Revenue G.R. No. 104069, promulgated May 29, 1992, the Supreme Court held that "WHEREFORE, Sections 1, 3 and 5 of Revenue Regulations No. 1-92 which provide that the regulations shall take effect on compensation income earned or received from 1 January 1992 are hereby SET ASIDE. They should take effect on compensation income earned or received from 1 January 1991. cd i "Since this decision is promulgated after 15 April 1992, the individual taxpayers entitled to the increased exemptions on compensation income earned during calendar year 1991 who may have filed their income tax returns on or before 15 April 1992 (later extended to 24 April 1992) without the benefit of such increased exemptions, are entitled to the

corresponding tax refunds and/or credits, and respondents are ordered to effect such refunds and/or credits. No costs." The BIR is filing a Motion for Reconsideration of the aforementioned decision. Accordingly, pending resolution of our Motion for Reconsideration, the basic personal and additional exemptions allowable to individual taxpayer for income tax purposes under Section 29(L) of the National Internal Revenue Code before its amendment by R.A. No. 7167 shall still apply for purposes of the withholding of income tax on wages as well as in the computation of the second installment payable on or before July 15, 1992 of individual income tax for taxable year 1991. casia It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-02-92 Revenue Memorandum Circular No. 27-92 June 2, 1992 REVENUE MEMORANDUM CIRCULAR NO. 27-92 Subject : Publishing the provisions of Republic Act No. 7499 - An Act restructuring the estate and donor's taxes, amending for the purpose Sections 77, 79(a), 83(b) and 92(a) and (b) on Transfer Taxes of the National Internal Revenue Code, as amended. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7499: "REPUBLIC ACT NO. 7499 "AN ACT RESTRUCTURING THE ESTATE AND DONOR'S TAXES, AMENDING FOR THE PURPOSE SECTIONS 77, 79(a), 83(b) AND 92(a) AND (b) ON TRANSFER TAXES OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. "Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: "Sec. 1. Section 77 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 77. Rates of estate tax. - There shall be levied, assessed, collected and paid upon the transfer of the net estate as determined in accordance with Sections 78 and 79 of every decedent, whether resident or non-resident of the Philippines, a tax based on the value of such net estate, as computed in accordance with the following schedules: "If the net estate is: "Over But notThe Tax Plus of Excess over shall be Over P 200,000 Exempt P 200,000 500,000 5% P 200,000 500,000 2,000,000 P 15,000 8% 500,000 2,000,000 5,000,000 135,000 12% 2,000,000 5,000,000 10,000,000 495,000 21% 5,000,000 10,000,000 And Over 1,545,000 35% 10,000,000

"Sec. 2. Section 79(a) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "(a) In the case of a citizen or resident of the Philippines by deducting from the value of the gross estate "(1) Expenses, losses, indebtedness, and taxes. - Such amounts "(A) For actual funeral expenses or in an amount equal to five per centum of the gross estate, whichever is lower, but in no case to exceed P100,000; "(B) For judicial expenses of the testamentary or intestate proceedings; "(C) For claims against the estate: Provided, That at the time the indebtedness was incurred the debt instrument was duly notarized and, if the loan was contracted within three years before the death of the decedent; the administrator or executor shall submit a statement showing the disposition of the proceeds of the loan; cd "(D) For claims of the deceased against insolvent persons where the value of decedent's interest therein is included in the value of the gross estate; and "(E) For unpaid mortgages upon, or any indebtedness in respect to property, where the value of decedent's interest therein, undiminished by such mortgage or indebtedness, is included in the value of the gross estate, but not including any income taxes upon income received after the death of the decedent, or property taxes not accrued before his death, or any estate tax. The deduction herein allowed in the case of claims against the estate, unpaid mortgages, or any indebtedness, shall when founded upon a promise or agreement, be limited to the extent that they were contracted bona fide and for an adequate and full consideration in money or money's worth. There shall also be deducted losses incurred during the settlement of the estate arising from fires, storms, shipwreck, or other casualties, or from robbery, theft, or embezzlement, when such losses are not compensated for by insurance or otherwise, and if at the time of the filing of the return such losses have not been claimed as a deduction for income tax purposes in an income tax return, and provided that such losses were incurred not later than the last day for the payment of the estate tax as prescribed in sub-section (a) of Section 84. "(2) Property previously taxed. - An amount equal to the value specified below of any property forming a part of the gross estate situated in the Philippines of any person who died within five years prior to the death of the decedent, or transferred to the decedent by gift within five years prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise, or inheritance, or which can be identified as having been acquired in exchange for property so received. "One hundred per centum of the value if the prior decedent died within one year prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; "Eighty per centum of the value if the prior decedent died more than one year but not more than two years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; acd "Sixty per centum of the value if the prior decedent died more than two years but not more than three years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

"Forty per centum of the value if the prior decedent died more than three years but not more than four years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; and "Twenty per centum of the value if the prior decedent died more than four years but not more than five years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death. "These deductions shall be allowed only where a gift tax, or estate tax imposed under this Title were finally determined and paid by or on behalf of such donor, or the estate of such prior decedent, as the case may be and only in the amount finally determined as the value of such property in determining the value of the gift, or, the gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent's gross estate, and only if in determining the value of the estate of the prior decedent no deduction was allowable under paragraph (2) in respect of the property or properties given in exchange therefor. Where a deduction was allowed of any mortgage or other lien in determining the gift tax, or the estate tax of the prior decedent, which were paid in whole or in part prior to the decedent's death then the deduction allowable under said paragraph shall be reduced by the amount so paid. Such deduction allowable shall be reduced by an amount which bears the same ratio to the amounts allowed as deductions under paragraphs (1) and (3) of this subsection as the amount otherwise deductible under said paragraph (2) bears to the value of the decedent's estate. Where the property referred to consists of two or more items the aggregate value of such items shall be used for the purpose of computing the deduction. "(3) Transfers for public use. - The amount of all bequests, legacies, devises, or transfers to or for the use of the Government of the Republic of the Philippines, or any political subdivision thereof, for exclusively public purposes. "(4) The Family Home. - An amount equivalent to the current or fair market value or zonal value of the decedent's family home, whichever is higher: Provided, however, that, if the said current or fair market value or zonal value exceeds one million pesos (P1,000,000), the excess shall be subject to estate tax. As a sine qua non condition for the exemption or deduction, said family home must have been the decedent's family home as certified by the barangay captain of the locality. "Sec. 3. Section 83(b) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "(b) Time for Filing. - For the purpose of determining the estate tax provided for in Section 77 of this Code, the estate tax return required under the preceding subsection (a) shall be filed within six months from the decedent's death. "A certified copy of the schedule of partition and the order of the court approving the same shall be furnished the Commissioner within thirty days after the promulgation of such order. aisa dc "Sec. 4. Section 92(a) and (b) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 92. Rates of tax payable by donor. - (a) In general. - The tax for each calendar year shall be computed on the basis of the total net gifts made during the calendar year in accordance with the following schedule: "If the net gift is: "Over But notThe Tax Plus of Excess

over

shall be

Over

P 50,000 EXEMPT P 50,000 100,000 1.5% P50,000 100,000 200,000 P 750 3% 100,000 200,000 500,000 3,750 5% 200,000 500,000 1,000,000 18,750 8% 500,000 1,000,000 3,000,000 58,750 10% 1,000,000 3,000,000 5,000,000 285,750 15% 3,000,000 5,000,000 558,750 20% 5,000,000 "(b) Tax payable by donor if donee is a stranger. - When the donee or beneficiary is a stranger, the tax payable by the donor shall be ten per cent (10%) of the net gifts. For the purpose of this tax, a stranger is a person who is not a: "(i) Brother, sister (whether by whole or half blood), spouse, ancestor, and lineal descendant, or "(ii) Relative by consanguinity in the collateral line within the fourth degree of relationship. "(C) Any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes, shall be governed by the Election Code, as amended. acd "Sec. 5. All laws, decrees, orders, rules, regulations and other issuances, or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly. "Sec. 6. This Act shall take effect upon its approval. "Approved, xxx xxx xxx "Approved: May 18, 1992 "(SGD) CORAZON C. AQUINO President of the Philippines" SALIENT FEATURES a. Before the present amendment by R.A. No. 7499, Section 77 of the National Internal Revenue Code provides that if the net estate is P10,000 or less, it is exempt from the estate tax. Under R.A. 7499, the value of a tax exempt net estate was increased from P10,000 or less to P200,000 or less. In addition, the fifteen (15) schedular rates (3%60%) was reduced to five schedular rates only (5%-35%), and the maximum rate was reduced from 60% to 35%. b. The maximum amount for actual funeral and burial expenses that can be allowed as a deduction from gross estate was increased from P50,000 to P100,000. c. A new subsection (a)(4) is added under Section 79 of the Tax Code which authorizes the deduction from the gross estate, of the decedent's family home in an amount equivalent to the fair market value or zonal value of such family home but not to exceed P1,000,000. aisa dc d. The filing of the estate tax return was extended from a period of ninety days to 6 months from the decedent's death. e. Under Section 92 of the Tax Code, if the net gift is P1,000 or less, it is exempt from the donor's tax. However, this was amended by R.A. 7499 by increasing the statutory exemption to P50,000.

f. The amount of tax imposed when the donee or beneficiary is a stranger was changed from the amount computed in accordance with the tax schedule provided under Sec. 92 or 20% of the net gifts whichever is higher, to 10% of the net gifts. g. A new paragraph (c) was added to Sec. 92 of the Tax Code which states that any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes shall be governed by the Election Code, as amended. It is desired that this Circular be given as wide a publicity as possible. cdtai (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-02-92 Revenue Memorandum Circular No. 28-92 June 2, 1992 REVENUE MEMORANDUM CIRCULAR NO. 28-92 Subject : Publishing the full text of Republic Act No. 7497, otherwise known as the "Finality of the Withholding Tax on Purely Compensation Income". To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7497: "REPUBLIC ACT NO. 7497 "AN ACT AMENDING PERTINENT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, RELATIVE TO THE FINAL WITHHOLDING TAX ON PURELY COMPENSATION INCOME "Sec. 1. Title. - This Act shall be known as the "Finality of the Withholding Tax on Purely Compensation Income." "Sec. 2. Declaration of Policy. - It is the policy of the State to further enhance the development of the tax system in our country thus simplifying compliance and administration of the withholding tax system on purely compensation income. "Sec. 3. Coverage. - Every employer making payment of compensation income shall deduct and withhold a tax in an amount equal to the tax due on the employee's compensation income for the entire year, in accordance with Section 21(a) of the National Internal Revenue Code, as amended. "Sec. 4. The last paragraph of paragraph (a) of Section 21 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "In the case of married individuals, the husband and wife, subject to the provision of Section 44(d) hereof, shall compute separately their individual income tax based on their respective total taxable income: Provided, That if any income cannot be definitely attributable to or identifiable as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of computing their respective taxable income. "Sec. 5. The first paragraph of item (1), paragraph (1) of Section 29 of the same Code, as amended, is hereby further amended to read as follows: "(1) Personal exemptions allowable to individuals. "(1) Basic personal exemption. - For the purpose of determining the tax provided in Section 21(a) of this Title, there shall be allowed a basic personal exemption as follows: "For single individual or married individual judicially

decreed as legally separated with no qualified dependents P 9,000 "For head of a family P 12,000 "For each married individual P18,000 "Provided, That, in case one of the spouses is deriving taxable income, only said spouse shall be allowed to avail of the aforesaid basic personal exemption for married individual. "Sec. 6. The first paragraph of item (2) (A), paragraph (1) of Section 29 of the same Code, as amended, is hereby further amended to read as follows: "(2) Additional exemptions "(A) Taxpayers with dependents. - A married individual or a head of a family shall be allowed an additional exemption of Five thousand pesos (P5,000) for such dependent: Provided, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents: Provided, further, That the additional exemption for dependents shall be claimed by only one of the spouses in the case of married individuals. "Sec. 7. A new subparagraph (C) is hereby added to Section 44(a)(2) of the National Internal Revenue Code, as amended, to read as follows: "(C) Individuals with respect to pure compensation income, as defined in Section 28(a) (1), derived from sources within the Philippines, the income tax on which has been withheld under the provisions of Section 72 of this Code: Provided, That an individual deriving compensation concurrently from two or more employers at any time during the taxable year shall file an income tax return; Provided, further, That an individual whose pure compensation income exceeds Sixty thousand pesos (P60,000) shall also file an income tax return. "Sec. 8. Paragraph (d) of Section 44 of the same Code, as amended, is hereby further amended to read as follows: "(d) Husband and wife. - Married individuals, whether citizens, resident or nonresident aliens who do not derive income purely from compensation, shall file a return for the taxable year to include the income of both spouses, but where it is impracticable for the spouses to file one return, each spouse may file a separate return of income but the returns so filed shall be consolidated by the Bureau for purposes of verification for the taxable year. "Sec. 9. Section 72(d)(2)(B) of the same Code, as amended, is hereby further amended to read as follows: "(B) Change of status. - In case of change of status of an employee as a result of which he would be entitled to a lesser or greater amount of exemption, the employee shall, within ten days from such change, file with the employer a new withholding exemption certificate reflecting the change. cda "Sec. 10. Item (1), paragraph (f) of Section 72 of the same Code, as amended, is hereby further amended to read as follows: "(1) The husband shall be deemed the head of the family and proper claimant of the additional exemption in respect to any dependent children, unless he explicitly waives his right in favor of his wife in the withholding exemption certificate; "Sec. 11. A new paragraph (h) is hereby added to Section 72 of the National Internal Revenue Code, as amended, to read as follows:

"(h) Year-end adjustment. - On or before the end of the calendar year but prior to the payment of the compensation for the last payroll period, the employer shall determine the tax due from each employee on taxable compensation income for the entire taxable year in accordance with Section 21(a). The difference between the tax due from the employee for the entire year and the sum of taxes withheld from January to November shall either be withheld from his salary in December of the current calendar year or refunded to the employee, not later than January 25 of the succeeding year. "Sec. 12. Section 73 of the same Code, as amended, is hereby further amended to read as follows: "Sec. 73. Liability for tax. - (a) Employer. - The employer shall be liable for the withholding and remittance of the correct amount of tax required to be deducted and withheld under this Chapter. If the employer fails to withhold and remit the correct amount of tax as required to be withheld under the provision of this Chapter, such tax shall be collected from the employer together with the penalties or additions to the tax otherwise applicable in respect of such failure to withhold and remit. "(b) Employee. - Where an employee fails or refuses to file the withholding exemption certificate or willfully supplies false or inaccurate information thereunder, the tax otherwise to be withheld by the employer shall be collected from him including penalties or additions to the tax from the due date of remittance until the date of payment. On the other hand, excess taxes withheld made by the employer due to: (a) failure or refusal to file the withholding exemption certificate; or (b) false and inaccurate information shall not be refunded to the employee but shall be forfeited in favor of the Government. "Sec. 13. A new section, Section 251-A, is hereby added in the National Internal Revenue Code, as amended, which shall read as follows: "Sec. 251-A. Failure of a withholding agent to refund excess withholding tax. - Any employer/ withholding agent who fails, or refuses to refund excess withholding tax shall, in addition to the penalties provided in this Title, be liable to a penalty equal to the total amount of refunds which was not refunded to the employee resulting from any excess of the amount withheld over the tax actually due on their return. "Sec. 14. The first paragraph of Section 254 of the same Code, as amended, is hereby further amended to read as follows: "Sec. 254. Failure to file return, supply correct and accurate information, pay tax, withhold and remit tax and refund excess taxes withheld on compensation. - Any person required under this Code or by regulations promulgated thereunder to pay any tax, make a return, keep any record, or supply correct and accurate information, who willfully fails to pay such tax, make such return, keep such record, or supply such correct and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation, at the time or times required by law or regulations shall, in addition to other penalties provided by law, upon conviction thereof, be fined of not less than Ten thousand pesos (P10,000) and imprisonment of not less than one (1) year but not more than ten (10) years. acd "Sec. 15. Rules and Regulations. - The Bureau of Internal Revenue shall issue and publish the implementing rules and regulations to implement the provisions of this Act. "Sec. 16. Reportorial Requirement. - The Bureau of Internal Revenue shall provide Congress with an annual report with respect to the implementation of the provisions of this Act.

"Sec. 17. Repealing Clause. - Any law, decree, order, rule and regulation, or part thereof, which is inconsistent with this Act is hereby repealed or modified accordingly. "Sec. 18. Effectivity Clause. - This Act shall take effect upon its approval. "Approved, xxx xxx xxx "Approved: May 15, 1992 (SGD.) CORAZON C. AQUINO President of the Philippines" SALIENT FEATURES 1) Codifying the administrative issuances imposing a final withholding tax on purely compensation income, Republic Act No. 7497 requires every employer making payment of compensation income to deduct and withhold a tax in an amount equal to the tax due on the employee's compensation income for the entire year. cdtai 2) The FWT system shall continue to adopt the year-end adjustment which is accomplished by annualizing the gross compensation income and computing the corresponding tax thereon. Any excess tax withheld shall be refunded to the employee by the employer and any deficiency shall be collected from the compensation in the last payroll period. 3) Husband and wife shall be treated as separate taxable units. Whereas before, they have the option to compute their income tax separately or jointly, under this Law, it is mandatory that they compute separately the tax due on their respective compensation incomes. cdtai 4) Further amending Section 29 of the National Internal Revenue Code, R.A. No. 7497 incorporated in its amendatory provisions the basic personal and additional exemptions allowable to individual taxpayers for income tax purposes, as previously introduced by R.A. No. 7167 with modification/revision. acd a) The basic personal exemptions are as follows: For single individual or married individual judicially decreed as legally separated with no qualified dependents P 9,000 For head of a family P 12,000 For each married individual P 18,000 Provided, That, in case only one of the spouses is deriving taxable income, only said spouse shall be allowed to avail of the aforesaid basic personal exemption of P18,000 for married individual. b) Additional exemptions - A married individual or a head of family shall be allowed an additional exemption of Five thousand pesos (P 5,000) for each dependent child. The total number of dependents for which additional exemptions may be claimed shall not exceed four (4) dependents. Said exemption shall be claimed by only one of the spouses in the case of married individuals. cdasia For purposes of this exemption, a dependent means a legitimate, recognized natural or legally adopted child chiefly dependent upon and living with the taxpayer if such dependent is not more than twenty-one (21) years of age, unmarried and not gainfully employed or if such dependent, regardless of age, is incapable of self-support because of mental or physical defect.

5) Individuals earning pure compensation income derived from sources within the Philippines, the income tax on which has already been withheld pursuant to Section 72 of the Tax Code, as implemented by Revenue Regulations No. 6-82, as amended, are no longer required to file the annual income tax return. The following individuals, however, are still required to file an income tax return: a) individuals deriving compensation concurrently from two or more employers at any time during the taxable year (even if pure compensation income for the year does not exceed Sixty thousand pesos (P60,000); casia b) individuals whether citizens, residents or non-resident aliens who do not derive income purely from compensation; and c) individuals whose pure compensation income for the taxable year exceeds Sixty thousand pesos (P60,000). In other words, an individual taxpayer whose compensation income for the taxable year has already been subjected to the withholding tax is still required to file the annual income tax return if his said compensation income exceeds P60,000.00. 6) Where both husband and wife receive compensation income, additional exemption for qualified dependent children shall be claimed by the husband unless he explicitly waives his right in favor of his wife in the withholding exemption certificate. cd 7) Specific penalties have been provided for failure of any person required under the Tax Code to refund excess taxes withheld on compensation. 8) The Law likewise reiterates that the employer shall be responsible for withholding and remitting the correct amount of tax on the compensation income of his employees. Failure of the employer to do so would make him liable to pay such tax together with the corresponding statutory penalties. However, the employee shall be liable to penalties for failure to declare true and accurate information necessary for correct withholding of his final income tax. cdt On the other hand, excess withholding tax made by the employer due to: (a) failure or refusal of the employee to file withholding exemption certificate or (b) false and inaccurate information reported by the employee shall not be refunded to the employee but shall be forfeited in favor of the Government. Failure or refusal of the employer to refund excess withholding tax shall likewise make him liable to a penalty equal to the amount of refund due the employee but which was not refunded to him in addition to other penalties applicable. It is desired that this Circular be given as wide a publicity as possible. cdasia JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-21-92 Revenue Memorandum Circular No. 29-92 May 21, 1992 REVENUE MEMORANDUM CIRCULAR NO. 29-92 Subject : Publishing the Provisions of Republic Act No. 7498 - An Act Granting Tax Amnesty to Persons Repatriating their Foreign Currencies and/or Securities to the Philippines. To : All Internal Revenue Officers and Others Concerned.

For the information and guidance of all concerned, is published hereunder is the full text of Republic Act No. 7498: cdt "REPUBLIC ACT NO. 7498 AN ACT GRANTING TAX AMNESTY TO PERSONS REPATRIATING THEIR FOREIGN CURRENCIES AND/OR SECURITIES TO THE PHILIPPINES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Sec. 1. Qualification. - Any person not falling under the exceptions provided in Section 2 of this Act may avail of the tax amnesty herein provided. Sec. 2. Exceptions. - The following taxpayers shall not be qualified to avail of the tax amnesty herein granted: (1) Those with income tax cases already filed in court as of the effectivity of this Act; (2) Those with criminal cases involving violations of the income tax law already filed in court as of the effectivity of this Act; (3) Those who have withholding tax liabilities under the National Internal Revenue Code, as amended, insofar as the said liabilities are concerned: (4) Those with pending cases involving unexplained or unlawfully acquired wealth before the Sandiganbayan; (5) Those liable under Title VII, Chapter III (Frauds, Illegal Exactions and Transactions) and Chapter IV (Malversation of Public Funds and Property) of the Revised Penal Code, as amended; (6) Those with pending cases involving unexplained or unlawfully acquired wealth falling under the jurisdiction of the Philippine Commission on Good Government. Sec. 3. Period of Availment. - A taxpayer shall avail of the tax amnesty herein granted within eight (8) months from the promulgation of the rules and regulations by the Secretary of Finance. acd Sec. 4. Amount of Amnesty Tax. - A taxpayer who wishes to avail of the tax amnesty shall pay an amnesty tax equivalent to ten percent (10%) of the amount of foreign currencies and/or securities repatriated to the Philippines. Sec. 5. Schedule of Payment. - The amnesty tax herein imposed shall be paid within two (2) months from the filing of the amnesty tax return. If the amnesty tax is not paid within the prescribed period, a surcharge equivalent to twenty-five percent (25%) of the unpaid amount shall be paid; otherwise, the application for tax amnesty shall be denied. Sec. 6. Conditions of Tax Amnesty. - A taxpayer who wishes to avail of the tax amnesty shall: (1) File the following documents with the Bureau of Internal Revenue within the period herein prescribed. (a) A duly notarized sworn statement declaring the amount of foreign exchange and/or securities repatriated and that the amount so declared does not include current earnings or income otherwise taxable under the National Internal Revenue Code, as amended, such declaration being supported by pertinent documents that may be required by the Central Bank or the Bureau of Internal Revenue; and (b) An amnesty tax; and (2) Pay the amnesty tax herein imposed within the prescribed period. cdasia Sec. 7. Immunities and Privileges. - Upon full compliance with the conditions of the tax amnesty, the taxpayer shall enjoy the following immunities and privileges:

(1) The taxpayer shall be relieved of any civil, criminal or administrative liabilities arising from or incident to the availment of the tax amnesty herein granted, which are actionable under the National Internal Revenue Code, the Revised Penal Code, the Antigraft and Corrupt Practices Act, the Revised Administrative Code, the Civil Service laws and regulations, laws and regulations on immigration and deportation, or any other applicable law; and (2) The taxpayer's tax amnesty declaration shall not be admissible in evidence in all proceedings before judicial, quasi-judicial or administrative bodies in which he is a defendant or respondent, and the same shall not be examined, inquired or looked into by any person, government official, bureau or office. Sec. 8. Deposit of Foreign Currencies. - Foreign currencies brought into this country pursuant to this Act may be deposited and maintained in any bank in the Philippines as a foreign currency and the Government or any of its agencies cannot compel the depositor to convert the same into some other currency. Sec. 9. Unlawful Divulgence of Amnesty Tax Declaration. - It shall be unlawful for any person having knowledge of such statement/payment to disclose any information relative hereto and violation hereof shall subject the offender to imprisonment of not more than five (5) years and/or a fine of not more than Five thousand pesos (P5,000). cd i Any officer or employee of the Bureau of Internal Revenue or any government entity who inquires, questions or attempts to inquire into the tax amnesty declaration filed by any taxpayer pursuant to this Act shall be guilty of grave misconduct for which he may summarily be dismissed from the service. Sec. 10. Rules and Regulations. - The Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue and the Central Bank Governor, shall promulgate the necessary rules and regulations to implement this Act. Sec. 11. Effectivity. - This Act shall take effect upon its approval. Approved, May 15, 1992. (SGD.) CORAZON C. AQUINO President of the Philippines" All internal revenue officers and others concerned are enjoined to give this circular as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-05-92 Revenue Memorandum Circular No. 30-92 June 5, 1992 REVENUE MEMORANDUM CIRCULAR NO. 30-92 Subject : Loss of revenue official receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of revenue official receipts (BIR Form No. 25.24), to wit: cdt Serial Number Quantity 0622416 L - 0622450 L thirty-five (35) sets

The abovementioned receipts which were reported as missing by Mr. Arnold D. Tolentino, Collection Agent of Floridablanca, Pampanga, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-02-92 Revenue Memorandum Circular No. 31-92 July 2, 1992 REVENUE MEMORANDUM CIRCULAR NO. 31-92 Subject : Revocation and withdrawal of Revenue Memorandum Circular No. 26-92 dated June 4, 1992 Re: Applicability of R.A. No. 7167: and Clarification on the computation of the second installment payable on or before July 15, 1992 of individual income tax for taxable year 1991. To : All Regional Directors, Revenue District Officers; and Others Concerned. On June 4, 1992, this Office issued RMC No. 26-92 stating inter alia that the BIR is filing a Motion for Reconsideration of the Supreme Court decision in the consolidated cases of Reynaldo V. Umali vs. Hon. Jesus P. Estanislao, Secretary of Finance, and Hon. Jose U. Ong, Commissioner of Internal Revenue, G.R. No. 104037 and Rene B. Gorospe, et. al. vs. Commissioner of Internal Revenue, G.R. No. 104069, promulgated on May 29, 1992 that the provisions of Republic Act No. 7167 increasing basic personal and additional exemptions allowable to individual taxpayers for income tax purposes, shall apply to compensation income earned or received during Calendar Year 1991; and that pending resolution of our Motion for Reconsideration, the basic personal and additional exemptions allowable to individual taxpayers for income tax purposes under Section 29 (1) of the National Internal Revenue Code before its amendment by R.A. No. 7167 shall still apply for purposes of the withholding of income tax on wages as well as in the computation of the second installment payable on or before July 15, 1992 of individual income tax for taxable year 1991. However, in deference to the position taken by the Office of the Solicitor General not to file a Motion for Reconsideration of the abovementioned decision, concurred in by no less than Her Excellency, the President of the Philippines, RMC No. 26-92 is hereby cancelled and considered of no further force and effect. cdasia Accordingly, the second installment of individual income tax for taxable year 1991 payable on or before July 15, 1992, shall be computed by the Revenue District Officer concerned pursuant to the aforementioned Supreme Court decision, applying the increased basic personal and additional exemptions under R.A. No. 7167. If after recomputation, an amount is still due, the corresponding Authority to Accept Payment (ATAP) should be prepared and payment thereof shall be made by the taxpayer in accordance with existing rules and regulations; otherwise, if refundable/creditable, the

same shall be processed in accordance with guidelines to be provided by the Office for this purpose. It is desired that this Circular be given as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-18-92 Revenue Memorandum Circular No. 32-92 June 18, 1992 REVENUE MEMORANDUM CIRCULAR NO. 32-92 Subject : Compliance with Memorandum Circular No. 3 To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Ombudsman Memorandum Circular No. 4, series of 1992 dated May 27, 1992. casia "In Memorandum Circular No. 3, responsibility for obtaining an Ombudsman clearance as required by Memorandum Circular No. 1 was given to the respective heads of department/offices/agencies/bureaus/regional offices or their duly authorized representatives, with the end in view of minimizing, if not totally eliminating the burden and rigors of personal application and follow-up by the retiring or resigning employee concerned. It has been observed, however, that despite the issuance of said circular, and the wide publicity made therefor, resigning or retiring employees continue to swarm this Office and personally apply for and follow-up the release of the required clearance. It is this regard that full compliance with the procedures and guidelines laid down under Memorandum Circular No. 3 is enjoined. Consequently, beginning June 16, 1992, no retiring or resigning employee shall be allowed to personally file and follow-up his application for clearance with this Office. Please extend widest dissemination of this Circular to all concerned. (Sgd.) Conrado M. Vasquez" Ombudsman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-15-92 Revenue Memorandum Circular No. 33-92 June 15, 1992 REVENUE MEMORANDUM CIRCULAR NO. 33-92 Subject : Loss of an Original Copy of Revenue Official Receipt (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of an original copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 0186000 L One (1) Copy (Original)

The abovementioned copy of revenue official receipt which was reported as missing by Mr. Benedicto R. Lim, Collection Officer of Mabalacat, Pampanga, and the other copies of the set are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdt EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-03-92 Revenue Memorandum Circular No. 34-92 July 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 34-92 Subject : Rules Implementing the Provisions of Republic Act No. 7430, Otherwise Known as "An Act Providing for Optimum Utilization of Personnel in Government Service Through A System of Attrition, Providing Penalties for Violation Thereof, and for other purposes. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 24, series of 1992 dated June 4, 1992. "Pursuant to its en banc Resolution No. 92-691 dated May 26, 1992, the Civil Service Commission has adopted and promulgated the attached Rules Implementing the Provisions of Republic Act No. 7430. The Rules was published in the Philippine Daily Inquirer on June 1, 1992 and will take effect fifteen (15) days thereafter. Heads of Departments and agencies are enjoined to strictly comply with the provisions of said Rules. (Sgd.) Samilo N. Barlongay" Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. acd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Rules Implementing the Provisions of Republic Act No. 7430 Part I POLICY AND APPLICATION Sec. 1. Title. - These Rules shall be referred to as the "Rules Implementing the Provisions of Republic Act No. 7430," otherwise known as "An Act Providing for Optimum Utilization of Personnel in Government Service through a System of Attrition, Providing Penalties for Violation Thereof, and for Other Purposes."

Sec. 2. Declaration of Policy. - It is the policy of the State to give highest priority to measures that will promote morale, efficiency, integrity, responsiveness and progressiveness in the civil service. Towards this end, optimum utilization of personnel shall be assured through the institution of a system of attrition in government. Sec. 3. Coverage. - These Rules shall apply to all employees of all branches, subdivisions, instrumentalities, and agencies of the Government, including governmentowned or controlled corporations and their subsidiaries, except those exempted under Section 3 of Republic Act No. 7430. Part II PERSONNEL ATTRITION PROGRAM Sec. 4. Attrition and Exemptions. - Upon the effectivity of these Rules, and for five years thereafter, no appointment shall be made to fill vacant positions in any government office resulting from resignation, retirement, dismissal, death or transfer to another agency of an officer or employee, except in the following instances: a) Where the position is head of a primary organic unit such as chief of division; b) Where the position is the lone position in the organizational unit and it corresponds to a particular expertise that is intrinsic to the desired basic capability of the unit concerned; c) Where the positions are basic positions for the initial operations of newly created or activated agencies or, in the case of other agencies, where the positions are vital and necessary for the continued and efficient operation of said agencies; d) Where the positions are difficult to fill considering the qualifications required therefor, as in the case of doctors, lawyers and other professionals; casia e) Where the positions are found in agencies declared to be understaffed; f) Positions in Congress or in the Judiciary; g) Appointments or designations extended by the President; h) Where the positions are found in local government units; i) Teaching personnel; and j) Where the replacements come from existing employees. Sec. 5. Interpretation of Exemptions. - In the implementation of the exemptions covered in Section 4 of these Rules, the following interpretations are hereby adopted: a) The term "primary organic unit" mentioned in Section 4(a) shall refer to the first organizational subdivision, but not lower than a division or equivalent unit, as appearing in the approved organizational chart and plantilla of personnel of an agency, office, bureau, service, department of a corporation, state college or university and regional unit and other equivalent agency or instrumentality. b) The "lone position" mentioned in Section 4(b), shall refer to a position appearing in the approved organizational chart or plantilla of personnel which requires a particular expertise and involves the performance of a particular responsible and substantive function. The absence of such position will adversely affect the desired basic capability of the unit. It includes such positions as lone accountant, lone dentist, and lone computer programmer. c) "Basic positions" mentioned in Section 4(c) shall refer only to those positions as appearing in the approved position allocation list which the newly created or activated agency has proposed to fill up during the initial stage of its operation with the concurrence of the Civil Service Commission.

"The initial stage of operation shall be six (6) months, counted from the date the agency received a copy of the approved position list. Positions which remain unfilled after six (6) months shall no longer be considered basic positions. "Newly-created agencies" as mentioned in Section 4(c) shall refer to agencies established pursuant to law after the effectivity of these Rules. "Newly activated agencies" shall refer to fully dormant or inactive agencies which have been operationalized after the effectivity of these Rules. d) Positions which are "vital and necessary" as mentioned in Section 4(c) shall refer to those positions the non-filling of which shall seriously disrupt or adversely affect the operations of said office or agency. e) Positions which are "difficult to fill" as mentioned in Section 4(d) shall refer to those positions which cannot be easily filled because high level of qualifications and expertise are required but candidates do not want to accept due to the following reasons, among others: 1) The compensation and other benefits provided for are neither attractive nor competitive with the private sector, or, 2) The place of assignment is not attractive because it is a high-risk area or for some other similar reasons. cdtai These are positions which normally exhibit high turnover of incumbents. f) An agency may be considered "understaffed" as mentioned in Section 4(e) when its present personnel complement can no longer achieve or sustain the efficient and effective delivery of services. g) "Teaching personnel" as mentioned in Section 4(i) shall refer to teachers, instructors, professors, lecturers and others involved in actual teaching work in schools, colleges and universities. h) "Existing employees" mentioned in Section 4(j) shall refer to all personnel in the career and non-career service who at the time of their appointment as "replacements" are still employed in the government except the following: 1) Those in Congress; 2) Those in Judiciary; 3) Those in local government units; 4) Those in the teaching force; and 5) Contractual personnel in local and foreign funded projects hired after the effectivity of these Rules. Sec. 6. Grant of Authorization. - The Civil Service Commission may grant authorization to fill up positions exempted under Section 4(a), (b), (c), (d), (e) and (j) of these Rules upon written request of the head of agency or office and submission of appropriate documents to establish the actual existence of the ground or grounds for the grant of exemption. For positions under Section 4(f), (g); (h) and (i) of these Rules prior authorization is no longer necessary. Sec. 7. Monitoring and Annual Reports. - The Civil Service Commission as the central personnel agency of the government shall monitor and render annual report to the President and the Congress on the extent of compliance with the law. The report shall include, among others, the following: a) Total number of positions authorized in the agency's annual budget; cda b) Total number of officers and employees at the end of the year;

c) Total number of officers and employees separated from the service during the year categorized as follows: 1) Those who resigned; 2) Those who retired; 3) Those who were dismissed from the service; 4) Those who died; and 5) Those who transferred to another agency. d) Total number of new personnel recruited during the year; and e) Total number of vacancies at the end of the year. Part III PERSONNEL EFFECTIVENESS AUDIT Sec. 8. Personnel Effectiveness Audit. - The Commission shall conduct personnel effectiveness audit of all government agencies to determine optimum utilization of personnel in each department, bureau, agency or corporation. Sec. 9. Contents of Audit Report. - The audit reports shall, among others, include information on whether the agency is overstaffed or understaffed and its minimum and maximum personnel requirements. acd Sec. 10. Agency Assistance and Compliance with Requirements. - All departments, bureaus, agencies and corporations shall extend full assistance to such audit, submit productivity reports and make available necessary documents and information pertaining to their optimum utilization of personnel. Sec. 11. Submission of Required Lists. - The administrative officer of the agency shall submit to the Civil Service Commission every fifth day of each month a list of employees who resigned, retired, died, transferred to another office or who were dismissed. Such list shall contain, among others, the following information: name, date of birth, position, salary grade and other vital information which may be required by the Commission. He shall also submit to the Commission at list of vacant positions within thirty days (30) after the effectivity of these Rules and every end of June and December thereafter. Part IV WORK STUDY ON OPTIMUM UTILIZATION OF PERSONNEL IN GOVERNMENT THROUGH A SYSTEM OF ATTRITION Sec. 12. Work Study. - The Commission shall also conduct and prepare a work study on optimum utilization of personnel in government through the system of attrition specified under Part II of these Rules. Sec. 13. Contents of Work Study. - Such study shall contain, among others, the evaluation and effectiveness of the program during the five-year period of its enforcement and the feasibility of extending the same for another period. Sec. 14. Submission of Report. - As required under Section 5 of Republic Act No. 7430, the Commission shall submit to the President and Congress of the Philippines a report on the results of its audit activities and on the work study together with its recommendations. Part V FINAL PROVISIONS

Sec. 15. Sanctions. - Any appointing authority who makes an appointment in violation of the provisions of Republic Act No. 7430 shall, upon conviction, be punished by imprisonment of not less than three (3) months but not exceeding six (6) months or by a fine of not less than Three thousand pesos (P3,000) but not exceeding Five thousand pesos (P5,000), or both such imprisonment and fine, at the discretion of the court. In addition, the appointing official shall be personally liable for the salary that would have accrued had the employment been lawful, and the disbursing official shall make payment to the employee of such amount from the salary of the appointing authority. cdt Furthermore, any violation of those Rules shall also be a ground for administrative disciplinary action. Sec. 16. Repealing Clause. - All existing Civil Service rules and regulations, circulars and memoranda or parts thereof inconsistent with these Rules are hereby repealed or modified accordingly. Sec. 17. Effectivity. - These Rules shall take effect fifteen (15) days after publication in a newspaper of general circulation. cdt APPROVED: May 26, 1992 (On Leave) Patricia A. Sto. Tomas Chairman (Sgd.) Samilo N. Barlongay Commissioner (Sgd.) Ramon P. Ereneta, Jr. Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-03-92 Revenue Memorandum Circular No. 35-92 July 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 35-92 Subject : Inclusions of the Positions of Administrative Services Aide and Liaison Aide under the Coverage of Resolution No. 435, s. 1980 To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 20, series of 1992 dated May 7, 1992. cda "In Resolution No. 435, s. 1980, the Commission adopted a system of granting eligibilities to persons occupying positions in the career service, fitness for which can be gauged not by the usual written tests, but through successful work performance over a period of time. In view thereof, the Commission, in its Resolution No. 92.647 dated May 7, 1992 included the positions of Administrative Services Aide and Liaison Aide under the coverage of Resolution No. 435, s. 1980 with the following schedule and eligibility: aisa dc POSITION SCHEDULE ELIGIBILITY Messenger

Administrative Services Aide II-A

Liaison Aide II-A Messenger Please be guided accordingly. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-03-92 Revenue Memorandum Circular No. 36-92 July 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 36-92 Subject : Mandatory Requirement for Assumption to Duty. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 25, series of 1992, dated June 16, 1992. "Pursuant to CSC Resolution No. 92-781 dated June 16, 1992, the Civil Service Commission hereby adopts the following policies on the mandatory requirement for assumption to duty of officials and employees in the civil service: 1. No official or employee shall require any person to render service without furnishing him a copy of his appointment issued and signed by the appointing authority. The appointee must acknowledge receipt of said appointment by signing on the face of the duplicate copy of the appointment. 2. All officers and employees are hereby enjoined not to assume the duties and responsibilities of any position without being furnished a copy of their appointment duly issued and signed by the appointing authority concerned. casia 3. The services rendered by any person who was required to assume the duties and responsibilities of any position without an appointment having been issued by the appointing authority shall not be recognized nor credited by the Commission. 4. Failure on the part of the appointing authorities to comply with the provision of the first paragraph hereof shall render them personally liable for the salaries that would accrue to the appointee pursuant to Section 65, Chapter 10, Subtitle A, Title I, Book V of E.O. 292. 5. Any person who is issued an appointment and is required to assume the duties of the position must be paid his salaries even before approval of his appointment by the proper Regional/Field Offices of the Commission effective upon assumption to duty. 6. Any violation hereof shall constitute a ground for administrative disciplinary action. acd This Circular shall take effect immediately. (Sgd.) Samilo N. Barlongay" Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-03-92 Revenue Memorandum Circular No. 37-92 July 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 37-92 Subject : Courtesy Resignation for CESO's To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 18, series of 1992 dated May 7, 1992. "In order to ensure stability and continuity in the operations of government and in the interest of the service, the Civil Service Commission pursuant to its Resolution No. 92646 dated May 7, 1992 hereby declares that: 1) An incumbent Career Executive Service Officer (CESO) with eligibility and appointment to a rank is considered a permanent employee of the government and is guaranteed security of tenure; cdasia 2) Career Executive Service Officers shall not be required to tender courtesy resignations to any new administration in the executive department or any agency of government. This is in pursuance to the doctrine laid down by the Supreme Court in the case of Ortiz vs. COMELEC, OR. No. 78957, June 28, 1988 which reads: "Resignation is defined as the act of giving up or the act of an officer by which he declines his office and renounces the further right to use it. . . . Verily, a courtesy resignation cannot properly be interpreted as resignation in the legal sense for it is not necessarily a reflection of a public officials' intention to surrender his position"; and 3) Career Executive Service Officers may only be separated from the service for cause and after due process or by voluntary resignation. cd (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-03-92 Revenue Memorandum Circular No. 38-92 July 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 38-92 Subject : Temporary Incumbents to CES Positions. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 21, series of 1992, dated May 7, 1992. "Pursuant to CSC Resolution No. 92-646-A dated May 7, 1992, the Civil Service Commission as central personnel agency of government, and in order to maintain stability and continuity in government operations, hereby declares: acd

1) An incumbent to any Career Executive Service position in government who has been in the service for at least ten years or who has taken the CES examination but whose evaluation has not been completed by the Career Executive Service Board and has been occupying his present position for at least one year as of June 30, 1992, shall be given a period of one year therefrom to qualify for permanent status; and 2) Within said one year period, the Career Executive Service Board shall see to it that all opportunities be given to incumbents to avail of the necessary processes for purposes of qualifying for permanent status. cdtai (Sgd.) Patricia A. Sto. Tomas " Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-01-92 Revenue Memorandum Circular No. 39-92 July 1, 1992 REVENUE MEMORANDUM CIRCULAR NO. 39-92 Subject : Guidelines to implement the "most favored nation clause" provided in Article 13, 2(b) (iii) of the Philippines-United States Tax Treaty. To : All internal revenue officials and others concerned. The undersigned's memorandum decision dated January 21, 1992 denied the claim of the IBM WORLD TRADE CORPORATION and INTERNATIONAL BUSINESS MACHINES CORPORATION for refund of alleged overpaid taxes on royalty income derived from the Philippines. As ruled, Article 13, 2 (b), (iii) of the Philippines-United States Tax Treaty, otherwise known as the "most favored nation" clause, shall not apply in the particular case. Pursuant to said clause, the tax imposable on royalties derived by a third State from sources within the Philippines shall be the lowest rate of Philippine tax that may be imposed on royalties of the same kind paid under similar circumstances (underscoring supplied). In correlation to this, Article 12, 2 (b) of the PhilippinesGermany Tax Treaty explicitly states that royalties arising in the Philippines and paid to a resident of Germany may also be taxed in the Philippines, but the tax so charged shall not exceed 10% of the gross amount of said royalties. Furthermore, Article 24 (b), (dd) and (c) (cc) of the same treaty provides for Germany to allow a matching credit of 20% for royalties arising in the Philippines. Accordingly, a resident of a third State (in the particular IBM case, the United States) is not entitled to the most "favored nation" tax rate of 10% on royalty income derived from the Philippines because the payment of such tax is not under similar circumstances since there is a matching credit in Germany (20% for royalties), while there is no such similar credit granted by the United States. casia In consonance therefore with the abovementioned ruling, hereunder are the guidelines in the treatment of cases relative to the application of the "most favored nation" tax rate on royalties paid to United States residents: 1. Rulings previously issued by the BIR allowing the availment of the benefits of the "most favored nation" clause on payments of royalties to recipients in the United States

are revoked effective January 21, 1992 pursuant to the IBM memorandum decision. It is to be noted that this revocation is not given retroactive application because of the provisions of Section 246 of the Tax Code which prohibits such retroactive application if such will be prejudicial to the interest of the taxpayer. But beginning January 21, 1992, the tax liabilities which accrue or become payable on royalty payments shall be determined at the correct tax rate (either 15% if royalties are paid by corporations registered with the Board of Investments and engaged in preferred areas of activities or 25%, for all other cases) and paid under the conditions as provided for in the following paragraphs. 2. Taxpayers who have relied on such rulings, but are not the recipients of such rulings directly providing for the "most favored nation" tax rate of 10% on their royalty payments, and accordingly have failed to withhold the correct taxes on royalties paid to recipients in the United States are deemed to be deficient in their tax payments beginning from such date that they have started paying the incorrect amount of taxes of 10%. These taxpayers cannot claim that they have a vested right to such "most favored nation" tax treatment which cannot be given retroactive application. As such, these taxpayers are given not later than October 30, 1992 to amend their withholding tax returns and pay the corresponding taxes, without the penalties. This policy of leniency on the imposition of penalties is being pursued because of the confusion arising from the aforementioned errors in interpretation. But after the lapse of the October 30 deadline, taxpayers who have not amended their returns will be assessed the additional amount of taxes with the corresponding penalties. The same conditions and procedures presented in this order shall apply to taxpayers whose rulings have been revoked effective January 21, 1992 pursuant to the preceding paragraph and who have not been able to pay the correct taxes thereafter. cd 3. The International Tax Affairs Division shall be responsible for monitoring compliance hereof and shall institute a verification program to identify taxpayers who have not paid the correct taxes on royalties paid to recipients in the United States. Taxpayers who will be paying before October 30, 1992 shall furnish a copy of the evidence of payment, including the withholding tax returns to the International Tax Affairs Division, not later than five (5) working days from date of payment. 4. Claims of taxpayers for tax credits/refunds bearing on this "most favored nation" issue and involving payments of royalties to United States residents and pending as of the date of this circular shall automatically be denied. cdasia (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-27-92 Revenue Memorandum Circular No. 40-92 July 27, 1992 REVENUE MEMORANDUM CIRCULAR NO. 40-92 Subject : Applicable foreign exchange conversion rate for the collection of withholding taxes from foreign currency denominated income payments, supplementing Revenue Memorandum Circular No. 77-89.

To : All Internal Revenue Officers and Others Concerned The following rules are hereby prescribed to govern the conversion of foreign currency denominated income payments to Philippines Peso for the purpose of collection of withholding taxes due thereon. aisa dc The foreign currency denominated income payment shall first be converted into Philippine Peso equivalence, using the applicable foreign exchange conversion rate prevailing at the time such income, which is subject to withholding, is payable or paid. This can either be one of the following: 1. The interbank reference rate at the time such income is payable or paid when this does not involve any foreign exchange transactions and consist merely of an accrual recording in the books of account; cdasia 2. The bank conversion rate (buying or selling rate, whichever is applicable) at time such income payment shall have been transacted in the authorized agent bank in the Philippines. In both instances, the foreign exchange conversion rate shall be the same rate used in recording the income payment (expense) in the books of account of the withholding agent. The withholding tax liability arising from such transactions shall then be settled in Philippine currency. cdt All previous revenue issuances are hereby amended or modified accordingly. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-92 Revenue Memorandum Circular No. 41-92 July 23, 1992 REVENUE MEMORANDUM CIRCULAR NO. 41-92 Subject : Clarification on the effectivity date of Republic Act Nos. 7496, 7497 and 7499. To : All Internal Revenue Officers and Others Concerned Republic Act No. 7496 which provides for a Simplified Net Income Taxation Scheme (SNITS) for the Self-Employed and Professionals engaged in the practice of their profession, amending further for this purpose, Sections 21 and 29 of the National Internal Revenue Code, as amended, and Republic Act No. 7497 otherwise known as the "Finality of the Withholding Tax on Purely Compensation Income" were approved on May 15, 1992; while Republic Act No. 7499, "An Act Restructuring the Estate and Donor's Taxes, amending for the purpose Sections 77, 79(a), 83(b) and 92(a) and (b) on Transfer Taxes of the National Internal Revenue Code, as amended," was approved on May 18, 1992. Republic Act Nos. 7496, 7497 and 7499 were published on Volume 88, No. 24 of the Official Gazette in its issue of July 12, 1992. cd Such being the case, they shall take effect after fifteen (15) days following said publication or on July 28, 1992 to be exact, pursuant to Article 2 of the New Civil Code and in line with the Supreme Court decision in the case of Taada, et. al., vs. Tuvera, 146 SCRA 446. cd i It is desired that this Circular be given as wide a publicity as possible.

(Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-22-92 Revenue Memorandum Circular No. 42-92 July 22, 1992 REVENUE MEMORANDUM CIRCULAR NO. 42-92 Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt, to wit: aisa dc ------------------------SERIAL NUMBER : QUANTITY ------------------------B 24904376 : One (1) Set ------------------------The above receipt which was reported missing to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-28-92 Revenue Memorandum Circular No. 43-92 July 28, 1992 REVENUE MEMORANDUM CIRCULAR NO. 43-92 Subject : Publishing the Approved Memorandum Reiterating that Meat and Bone Meal are Subject to VAT. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereinunder is the full text of the Memorandum dated June 26, 1992 reiterating that meat and bone meal are subject to VAT. cdasia "June 26, 1992 MEMORANDUM FOR: The Commissioner "This refers to the request to include meat and bone meal as VAT-exempt ingredients of animal feeds. The pertinent provision of Section 103 of the Tax Code is as follows: aisa dc (c) Sale or importation of fertilizers, pesticides and herbicides; chemicals for the formulation of pesticides; seeds, seedlings and fingerlings; fish, animal and poultry feeds/and soya beans and fish meals (underlining supplied).

"It is alleged that soya beans and fish meals are tax-exempt ingredients of animal feeds, so that meat and bone meals, being ingredients, should also be tax-exempt. I do not subscribe to such a view, dura lex sed lex. When the law is clear, no interpretation is needed (Ablan, Sr. vs. Madarang, G.R. No. L-32963, September 30, 1971). "VAT Ruling Nos. 021-90 dated January 20, 1990 and 244-90 dated December 28, 1990, limiting the tax-exempt ingredients only to fish meal and soya beans should be maintained. casia "Respectively submitted: (Sgd.) Reynoso B. Floreza Assistant Commissioner Legal Service "APPROVED: (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-03-92 Revenue Memorandum Circular No. 44-92 August 3, 1992 REVENUE MEMORANDUM CIRCULAR NO. 44-92 Subject : Loss of revenue official receipt (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of revenue official receipt (BIR Form No. 25-24), to wit: Serial Number Quantity 7048201 H one (1) set The abovementioned receipt which was reported as missing by Mrs. Elizabeth J. Roncales, Collection Agent of Revenue District Office No. 76, Malaybalay, Bukidnon, is hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-25-92 Revenue Memorandum Circular No. 45-92 August 25, 1992 REVENUE MEMORANDUM CIRCULAR NO. 45-92

Subject : Loss of One (1) Set of Confirmation Receipt (BIR Form CB-0203). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one (1) set of Confirmation Receipt; to wit: casia ------------------------SERIAL NUMBER : QUANTITY ------------------------24091478 : One (1) Set ------------------------The above receipt which was reported missing by the Accredited Bank to this Office had been cancelled and any official transactions involving the use of said form is therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cd i EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-02-92 Revenue Memorandum Circular No. 46-92 October 2, 1992 REVENUE MEMORANDUM CIRCULAR NO. 46-92 Subject : Recomputation of Income Tax for 1991 for purposes of the credit/refund of excess withholding tax. To : All Internal Revenue Officials and Others Concerned. For the information and guidance of Internal Revenue Officials and others concerned, quoted hereunder is the full text of the Memorandum of the Commissioner dated September 25, 1992 to the Chief, Disbursement Accounting Division. "September 25, 1992 "MEMORANDUM TO: The Chief, Disbursement Accounting Division. Subject : Revenue Regulations No. 3-92 Prescribing the Guidelines for the credit/refund of excess withholding tax on compensation income for 1991. It has come to the attention of this Office that some BIR employees who filed their income tax returns for 1991 did not declare the amount of Personnel Economic Relief Allowance (PERA) as part of compensation income for 1991 in view of the Memorandum Circular No. 145 of former President Corazon C. Aquino adopting the opinion dated 03 July 1991 of the Secretary of Justice that PERA is not taxable. casia In BIR Ruling dated March 2, 1992, which was circularized in Revenue Memorandum Circular No. 15-92 dated March 11, 1992, it was clarified that this Office has requested for a reconsideration of the said Opinion of the Secretary of Justice, and that pending

resolution of our request, and in pursuance to the said directive of the President, government offices agencies and instrumentalities including government-owned and controlled corporations should stop deducting or withholding any income tax on PERA for 1992; that the concerned employees may file in writing with the BIR, Attn.: Appellate Division their individual claims for refund of the withholding tax on PERA for 1991 or those already paid to them, within two (2) years after payment of the tax pursuant to Sec. 204 of the Tax Code, as amended; and that appropriate action on the claim for refund will be taken as soon as a reply to said request for reconsideration is received from the Office of the President. To date, no reply has yet been received on our request for reconsideration. Since for taxable year 1991, the PERA has been subjected to the withholding tax and the same was remitted to the BIR, PERA should therefore be declared as part of compensation income for 1991, and the tax withheld therefrom could be tax credited in the income tax return to be filed on or before April 15, 1992. In connection therefore with the guidelines setforth in Revenue Regulations No. 3-92, the recomputation of income tax for 1991 should be based on the total income per withholding tax statement which includes the PERA and which should have been declared in the income tax return filed for 1991. The increased person and additional exemptions under R.A. No. 7167 should be applied, and whatever excess amount should be refunded to the concerned employee. If the income tax return filed did not reflect the PERA, and therefore there is a discrepancy between the amount of compensation per withholding tax statement and the income tax return filed, the recomputation should be made on the basis of the withholding tax statement which shows PERA as part of gross compensation income of an employee. acd For strict compliance. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue All Revenue officials, and employees are required to give this circular as wide a publicity as possible. (Sgd.) EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-92 Revenue Memorandum Circular No. 47-92 October 15, 1992 REVENUE MEMORANDUM CIRCULAR NO. 47-92 Subject : Clarification on the effect of the Resolution of the Court of Appeals in the case of Commissioner of Internal Revenue vs. Hon. Andres B. Reyes, etc., and Josefina Leal, CA-G.R. SP No. 28824, promulgated on September 22, 1992 on the investigation and assessments by this Office of the lending investor's tax against pawnshops. To : All Internal Revenue Officers and Others Concerned. According to Revenue Memorandum Order No. 15-91 dated March 11, 1991, "the principal activity of pawnshops is lending money at interest and incidentally accepting a "pawn" of personal property delivered by the pawner to the pawnee as security for the

loan. Clearly, this makes pawnshop business akin to lending investor's business activity which is broad enough to encompass the business of lending money at interest by any person whether natural or juridical. Such being the case, pawnshops shall be subject to the 5% lending investor's tax based on their gross income pursuant to Section 116 of the Tax Code, as amended." Under RMO No. 15-91, all investigating units were directed to investigate and assess the lending investor's tax due from pawnshops within the statutory 3-year period. On May 27, 1991, the Commissioner of Internal Revenue issued Revenue Memorandum Circular No. 43-91 clarifying, inter alia RMO No. 15-91 that pawnshop owners or operators shall become liable to the lending investor's tax on their gross income beginning January 1, 1991 and that they are also subject to documentary stamp tax prescribed in Title VII of the Tax Code. cd i On March 18, 1992, Josefina Leal, as owner and operator of Josefina's Pawnshop located at San Mateo, Rizal, filed with the Regional Trial Court, 4th Judicial Region, San Mateo, Rizal, a petition for prohibition with preliminary injunction docketed as Civil Case No. 849-92SM, entitled "Josefina Leal, petitioner versus The Commissioner of Internal Revenue, respondent". On May 21, 1992, Josefina Leal's petition for preliminary injunction was granted by Judge Andres B. Reyes, Presiding Judge of the said Court and ordered the BIR to cease and desist from implementing RMO No. 15-91 pending final resolution of the said case. It is to be noted that the petition was filed with the Regional Trial Court, San Mateo, Rizal, by Ms. Josefina Leal in her individual capacity and not as a class suit. Hence, the writ of preliminary injunction issued in Civil Case No. 849-92SM ordering the Commissioner and his agents to cease and desist from implementation of RMO No. 1591 and RMC No. 43-91, is only in favor of Josefina Leal. On September 3, 1992, the Commissioner filed with the Court of Appeals a petition for certiorari and prohibition with Application for Temporary Restraining Order/Preliminary Injunction, docketed as CA-G.R. SP No. 28824, entitled "Commissioner of Internal Revenue, Petitioner vs. Hon. Andres B. Reyes, etc. and Josefina Leal, Respondents", on the ground that Regional Trial Courts cannot issue writs of injunction against administrative agencies whose decisions are reviewable by other courts such as, in this case, where it is the Court of Tax Appeals that has jurisdiction over the case. Consequently, the Judge of the Regional Trial Court of San Mateo, Rizal, has no authority to restrain the BIR from assessing and collecting the 5% lending investor's tax and documentary stamp tax from pawnshop operators. cdt In the Resolution of the Court of Appeals dated September 22, 1992, the respondent Judge Andres B. Reyes, Jr. is temporarily restrained from proceeding further in Civil Case No. 849-92 until further orders from the said Court of Appeals, to wit: "MEANWHILE, in order to maintain the status quo and so that the present petition may not be rendered moot and academic, the respondent judge is hereby temporarily restrained from proceeding further in Civil Case No. 849-92 until further orders from this Court. SO ORDERED." In view of the foregoing, the implementation of Revenue Memorandum Order No. 15-91 and Revenue Memorandum Circular No. 43-91 can be continued against other pawnshop owners/operators without violating the writ of preliminary injunction issued by the RTC,

San Mateo, Rizal, as aforesaid Judge Andres B. Reyes, Jr. is temporarily restrained by the Court of Appeals from proceeding further in Civil Case No. 849-92 SM until further orders from said Court. It is, therefore, reiterated that all investigating units shall investigate and assess the lending investor's tax due from pawnshops within the statutory 3-year period in accordance with this Circular as well as RMO No. 15-91 and RMC No. 43-91. cdt All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-29-92 Revenue Memorandum Circular No. 48-92 October 29, 1992 REVENUE MEMORANDUM CIRCULAR NO. 48-92 Subject : Prescribing Procedures and Sanctions to Ensure Speedy Disposition of Administration Cases To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Executive Order No. 26 dated October 7, 1992. "WHEREAS, the Constitution guarantees the speedy disposition of cases, including those brought before administrative and quasi-judicial bodies; "WHEREAS, Book VII of the Administrative Code of 1987 (Executive Order No. 292) prescribe the Administrative Procedure to be observed by all government agencies, including departments, bureaus, boards, offices, commissions, and similar bodies; WHEREAS, Section 14, Chapter 3, of said Administrative Procedure mandates that shall government agencies "shall decide each case within thirty (30) days following its submission" for resolution; WHEREAS, the same Administrative Procedure was prescribed in the interest of speedy and inexpensive disposition of cases; WHEREAS, it is necessary to issue regulations to government agencies to fully implement the said Administrative Procedure; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order all government agencies to strictly observe the following regulations in the disposition of cases: cdt 1. Period for Deciding Cases or Incidents 1.1. Unless a different period is fixed by special law, all contested cases or incidents shall be decided within thirty (30) days from the date of submission for resolution pursuant to Section 14, Chapter 3, Book VII of the Administrative Code of 1987. 1.2. Where the officer's action is only recommendatory to his immediate superior or head of office, he shall submit his recommendation within twenty (20) days from date of submission of the case or incident for resolution. The approving officer shall have ten (10) days from submission of the recommendation to decide the case or incident. 1.3. A case or incident is deemed submitted for resolution upon expiration of the period for filing the memorandum, position paper or last pleading required of the parties.

1.4. Every officer charged with the resolution of cases or incidents shall submit to his immediate superior, head of office, or officer exercising administrative supervision over him, within ten (10) days following the end of every month, a sworn Statement of Disposition of cases (Annex "A") declaring that all cases or incidents submitted to him for resolution have been decided within the prescribed period. 1.5. Only one motion for reconsideration shall be allowed, which shall be allowed, which shall be decided within fifteen (15) days from date of submission for resolution. No other pleading shall be allowed other than the motion for reconsideration and opposition thereto. 1.6. Cases and Incidents pending resolution upon the effectivity of this Executive Order shall be decided within thirty (30) days from effectivity of this Executive Order. 1.7. The salary of any officer who fails to submit the Statement of Disposition of cases within the prescribed period shall be, or cause to be, withheld by the head of office or immediate supervisor until the said officer complies with paragraph 1.4 above. This is without prejudice to the imposition of other appropriate penalties as may be provided by law, rules and regulations. cdtai 2. Abbreviation of Proceedings. All administrative agencies are hereby directed to adopt and include in their respective Rules of Procedure the following provisions: 2.1. Rules encouraging the parties and their counsels to enter into amicable settlement, compromise and arbitration in accordance with Section 10, Chapter 3, Book VII of the Administrative Code of 1987; 2.2. Rules adopting, unless otherwise provided by special laws and without prejudice to Section 12, Chapter 3, Book VII of the Administrative Code of 1987, the mandatory use of affidavits in lieu of direct testimonies and the preferred use of depositions whenever practicable and convenient; 2.3. Rules requiring the parties, unless otherwise provided by special laws, to submit in addition to the memorandum, position paper, or last pleading required of them, a draft of the decision they seek, stating clearly and distinctly the facts and the law upon which it is based. Following the termination of the hearing or trial, the officer, board or commission charged with resolving the case may, after considering and appreciating the applicable laws, rules and regulations and the evidence submitted, adopt, in whole or in part, either of the parties draft decisions, or reject both. This requirement shall likewise be applied to motions or applications for orders other than the final judgment; and 2.4. Rules avoiding postponements of hearings or trials and other dilatory tactics which the parties or their counsels might employ. Administrative agencies shall adopt the foregoing rules not later than forty-five (45) days from the effectivity of this Executive Order. 3. Applicability. In accordance with Section 2, Chapter 1, Book VII of the Administrative Code, these regulations shall, unless otherwise provided by special laws, apply to government agencies, including any department, bureau, board, office, commission, authority or officer of the National Government authorized by law or executive order to adjudicate cases. casia These regulations shall not apply to the Congress, the Judiciary, the Constitutional Commissions, military establishments, in all matters relating exclusively to Armed Forces personnel, the Board of Pardons and Parole, and state universities and colleges.

4. Effectivity. This Executive Order shall take effect twenty (20) days following the completion of its publication in at least two (2) newspapers of general circulation. DONE in the City of Manila, Philippines, this 7th day of October in the year of Our Lord, Nineteen Hundred and Ninety-Two." By the President: EDELMIRO A. AMANTE Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-13-92 Revenue Memorandum Circular No. 49-92 October 13, 1992 REVENUE MEMORANDUM CIRCULAR NO. 49-92 Subject : Publishing the Memorandum of Agreement made and entered into by and among DAR, BIR, LBP, LRA and GFI concerning the generation and registration of CLOA of GFI agrilands with unconsolidated titles transferred to DAR pursuant to Executive Order No. 407/448. To : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is quoted hereunder the Memorandum of Agreement (MDA), made and entered into by and among the DAR, BIR, LBP, LRA and GFI. "MEMORANDUM OF AGREEMENT "KNOWN ALL MEN BY THESE PRESENTS: "This MEMORANDUM OF AGREEMENT (MOA) made and entered into by and among: "The DEPARTMENT OF AGRARIAN REFORM (DAR), a government agency with principal office at Elliptical Road, Diliman, Quezon City, represented herein by the Secretary of Agrarian Reform BENJAMIN T. LEONG; "The BUREAU OF INTERNAL REVENUE (BIR), a government instrumentality with principal office at Agham Road, East Triangle, Diliman, Quezon City, represented herein by the Commissioner of Internal Revenue JOSE U. ONG; "The LAND BANK OF THE PHILIPPINES (LBP), a government financial institution with principal office at 319 Gil J. Puyat Avenue Extension, Makati, Metro Manila, represented herein by President DEOGRACIAS N. VISTAN; "The LAND REGISTRATION AUTHORITY (LRA), a government instrumentality with principal office at Banawe Street, corner Quezon Avenue, Quezon City, represented herein by Administrator TEODORO G. BONIFACIO; and cd i "The GOVERNMENT FINANCIAL INSTITUTIONS (GFI) as listed hereunder: "The PHILIPPINE NATIONAL BANK, with principal office at PNB Building, Escolta, Manila, represented herein by President EDGARDO V. ESPIRITU;

"The DEVELOPMENT BANK OF THE PHILIPPINES, with principal office at Gil J. Puyat Avenue Extension, Makati, Metro Manila, represented herein by its Chairman ROBERTO F. DE OCAMPO; "The AL AMANAH ISLAMIC BANK, with principal office at 8751 Paseo de Roxas, Makati, Metro Manila, represented herein by its Acting President, FAROUK A. CARPIZO; "The REPUBLIC PLANTERS BANK, with principal office Legaspi Towers 300, Roxas Boulevard corner Vito Cruz, Manila, represented herein by President FLORIDO P. CASUELA; "The GOVERNMENT SERVICE INSURANCE SYSTEM, with principal office at Arroceros, Manila, represented herein by its President and General Manager, DANTE G. SANTOS; and "The SOCIAL SECURITY SYSTEM, with principal office at East Avenue, Diliman, Quezon City, represented herein by Administrator RENATO C. VALENCIA. WITNESSETH "WHEREAS, under R.A. 6657 and other agrarian reform laws, agricultural lands shall be acquired by the government through the DAR for distribution to Agrarian Reform Beneficiaries (ARBs) under the Comprehensive Agrarian Reform Program (CARP); "WHEREAS, to accelerate the implementation of the CARP, the President issued Executive Order No. 407, as amended by E.O. 448, directing all government instrumentalities and agencies, including GFIs, to immediately transfer their agricultural lands to DAR; "WHEREAS, the Deeds of Transfer (D/T) executed pursuant to the CARP law and E.O. 407 is exempt from the payment of taxes and other fees incidental to registration. It does not, however, exempt taxes and other fees due on previous transactions, or instruments of foreclosure on properties whose titles are not yet consolidated in the name of the GFI concerned at the time said properties are transferred to DAR; "WHEREAS, the registration of the D/T involving unconsolidated titles is unnecessarily delayed due to the inability of the GFIs to settle and pay capital gains taxes and other incidental fees for lack of available funds; "WHEREAS, the GFIs have made presentations that the taxes and fees arising on previous transactions be charged as liens against the proceeds of the compensation of the transferred lands; aisa dc "NOW, THEREFORE, for and in consideration of the foregoing premises, the parties herein hereby stipulate, covenant and agree on the following terms and conditions, to wit: "I - That the following taxes and fees imposed in connection with the consolidation of titles of lands covered under this Memorandum of Agreement shall be charged as liens on the proceeds of the land; 1. Capital Gains Taxes, except where the foreclosure sale on the property covered was conducted on or prior to September 3, 1986, in which case, the capital gains tax shall be for the account of the debtor-mortgagor; 2. Documentary Stamp Taxes 3. Realty Taxes 4. Registration Fees 5. Transfer Fees

"Provided, that Deed of Reconveyance executed by DAR in favor of the GFI concerned in cases where the property or portion thereof is later found not suitable to agriculture, the registration of said Deed of Reconveyance shall be free from all charges, and, therefore, not subject to clearances of the taxes and fees heretofore mentioned in this Paragraph I. "II - The following shall be the respective responsibilities of the parties herein: "A. The GFIs shall: "1. Secure from the BIR District Revenue Officer concerned, a statement of accounts relative to documentary stamps and capital gains taxes arising from acquisition by the GFIs of lands through foreclosure proceedings or other modes of acquisition. If the previous owner of the real property is an individual, estate or trust, the BIR shall reckon its computation of the debtor-mortgagor's capital gains tax liability as of 30 days from the date of issuance of the certificate of sale or instrument of foreclosure. If the previous owner is a juridical person, the computation of the debtor-mortgagor's capital gains tax liability shall be reckoned from the 15th day of the fourth month next following the taxable year when the certificate of sale/instrument of foreclosure was executed. The documentary stamp tax shall be reckoned as of the execution of the certificate of sale/instrument of foreclosure. "2. Secure from the City or Municipal Treasurer concerned, a statement of realty tax payment or tax delinquencies for all agricultural lands acquired by the GFIs and transferred to DAR; "3. Execute and attach to the D/T affidavits of consolidation of ownership covering the foreclosed lands whose periods of redemption had already prescribed; and "4. Submit to DAR the statements of account issued by the BIR and the local governments together with their claims for compensation. cd "B. BIR shall: "1. Issue statements of account relative to the amount of documentary stamps and capital gains taxes arising from, and by reason of, the acquisition through foreclosure, of agricultural lands by the GFI concerned. "C. DAR shall: "1. Present to RDO for registration the D/T, attaching therewith Owner's Duplicate of Certificate, the affidavit of consolidation and Certificate of Land Ownership Award (CLOA); "2. Incorporate in the GFIs claim folder the following documents: "a. Statements of account from the BIR, the City or Municipal Treasurer, and the LRD; "b. Copy of the duly registered D/T; "c. Certified xerox of the CLOAs; and "d. Certified xerox of ROD's copy of the title bearing all annotations including the affidavit of consolidation, the D/T and CLOA. "D. LRA shall: "1. Accept and register the following documents, to wit: a. Affidavit of Consolidation; b. Deed of Transfer; c. Owner's Duplicate Certificate; and d. Certificate of Land Ownership Award.

"2. Transfer title of foreclosed lands directly to the beneficiaries without necessarily issuing new title in the name of the GFI concerned and the Republic. The affidavit of consolidation, Deed of Transfer and Certificates of Land Ownership Award shall be annotated at the back of the title of mortgagor. Titles already consolidated in the name of GFI may not be issued new title in the name of the Republic but may be issued CLOA directly in the name of farmer beneficiaries. cd "3. Issue to DAR through the Register of Deeds statements of account with respect to the amount of registration fees due; "4. Release to the DAR-PARO the registered TCT-CLOA for distribution to ARB concerned; and "5. Furnish DAR-PARO with certified xerox of ROD's copy of the title showing all annotations including the affidavit of consolidation, the D/T and the CLOA. "E. LBP shall: "1. Deduct from the proceeds of the land compensation claims of the GFIs all the collectible accounts due to BIR, the local government and the ROD as duly certified by the agencies concerned. In the event that the collectible accounts are more than the cash portion of the proceeds of the land compensation claims, the difference shall be taken from and paid out of the bond portion of the proceeds in the form of LBP Bonds payable at full face value; "2. Remit to the agencies concerned all the payments mentioned in the preceding paragraph; and "3. After all the tax obligations and fees are fully satisfied, pay the GFIs concerned the balance of the proceeds. "4. Remit to the proper agencies concerned all the payments under C-2 above within 30 days from the date of actual deduction. In the case of internal revenue taxes, LBP shall accomplish a monthly remittance form similar to the one used by the withholding agent in remitting the creditable withholding tax, or BIR Form Nos. 1743-A1 and 1743-B. "IN WITNESS WHEREOF, the parties herein have, by their duly authorized representatives, affixed their signatures this 28th day of August 1992 at Quezon City, Philippines. cd i "Department of Agrarian Reform By: (Sgd.) Benjamin T. Leong Secretary "Land Bank of the Philippines By: (Sgd.) Deogracias N. Vistan President "Philippine National Bank By: (Sgd.) Edgardo B. Espiritu

President "Philippine Amanah Bank By: (Sgd.) Farouk A. Carpizo President "Government Service Insurance System By: (Sgd.) Dante S. Santos President Bureau of Internal Revenue By: (Sgd.) Jose U. Ong Commissioner Land Registration Authority By: (Sgd.) Teodoro S. Bonifacio Administrator Development Bank of the Philippines By: (Sgd.) Roberto F. de Ocampo Chairman Republic Planters Bank By: (Sgd.) Florido P. Casuela President Social Security System By: (Sgd.) Renato C. Valencia President "Signed in the presence of:

"(Sgd.) Illegible (Sgd.) Illegible" All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. casia (Sgd.) Victor A. Deoferio, Jr. Commissioner of Internal Revenue (Officer-in-Charge) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-25-92 Revenue Memorandum Circular No. 50-92 November 25, 1992 REVENUE MEMORANDUM CIRCULAR NO. 50-92 Subject : Tax Treatment of Loyalty Cash Award To : All Internal Revenue Officers and Others Concerned In pursuance to the provisions of Section 7(E), Rule X of the Civil Service Rules implementing Book V of E.O. No. 292, payment of loyalty cash awards to officials and employees who have completed at least ten (10) years of continuous and satisfactory service in the government has been authorized. The term "gross compensation income" includes all income payments received as a result of an employer-employee relationship, such as salaries, wages, emoluments, honoraria, bonus and the like, fringe benefits (monetary and non-monetary), allowances for transportation, representation, entertainment fees including director's fees, taxable compensation and retirement pay and other income of similar nature including compensation paid in kind. For purposes of the withholding tax, the term "compensation" means all remunerations paid for services performed by an employee for his employer unless specifically excepted under Sections 27, 28(b) and 71 of the Tax Code. casia Undoubtedly, the above loyalty cash award is subject to income tax, it being an additional income on the part of the government officials and employees and consequently, in order to exempt the same from income tax, a legislation will be necessary. Since loyalty cash award is similar to a bonus, which means a sum of money over and above the usual current or stipulated wages/salaries of officials and employees who, under the aforementioned provision of the Civil Service Rules implementing E.O. No. 292, have completed at least ten (10) years of continuous and satisfactory service in the government, it is considered as remuneration for services performed by the officials/employees for the employer, hence taxable income under Section 21(a) in relation to Section 72, both of the Tax Code, subject to withholding tax under Section 2(2)(a) of Revenue Regulations No. 6-82 as amended by Revenue Regulations No. 12-86. Accordingly, loyalty cash award paid to officials and employees of the government in 1992 shall form part of total income to be included in the BIR Form W-2 for purposes of the computation of the year end adjustment. cdt It is desired that this Circular be given as wide a publicity as possible. JOSE U. ONG Commissioner of Internal Revenue

By: (Sgd.) Victor A. Deoferio, Jr. Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-22-92 Revenue Memorandum Circular No. 51-92 October 22, 1992 REVENUE MEMORANDUM CIRCULAR NO. 51-92 Subject : Apprehension of Jose Mariano Y. Cruz alias Leopoldo Castro posing as BIR Agent. To : All Regional Directors, Revenue District Officers and all employees of the BIR. Information is hereby given that on August 21, 1992, elements of the PNP of Valenzuela, Metro Manila, apprehended Jose Mariano Y. Cruz alias "Leopoldo Castro", 49 years old, married, a native of Surigao City and residing at Barangay Mayapa, Calamba, Laguna, while extorting money from businessman Domingo Zapata of Valenzuela, Metro Manila. Jose Mariano Y. Cruz has been posing as a BIR employee, using fake BIR I.D. No. 1216 in the name of Leopoldo Castro, purportedly signed by Commissioner Jose U. Ong. When apprehended, the following documents were seized from the impostor, to wit: 1. BIR I.D. No. 1216, in the name of Leopoldo Castro with TAN-13579636-D, duly signed by JOSE U. ONG, Commissioner. 2. Receipt with Nos. 005 dated August 13, 1992 in the amount of five hundred pesos, signed by LEOPOLDO CASTRO. cd 3. Authorization from Bureau of Internal Revenue, Region 3-B, signed by MANUEL P. SANTOS, dated August 12, 1992. 4. Certificate of inspection dated August 13, 1992. 5. Demand Letter in the amount of Two Thousand pesos, dated August 20, 1992, signed by POL CASTRO, BIR examiner. 6. Mission Order from BIR, dated August 18, 1992, signed by JOSE U. ONG, commissioner BIR. 7. Certification from KAWANIHAN NG RENTAS INTERNAS Revenue Region No. 3-B, Valenzuela, Metro Manila, dated August 21, 1992, signed by VIRGINIA L. AGUINALDO, Chief, Adm. Branch. 8. Several pieces of receipt with revenue stamp. cd i 9. Several authorization letter to POL CASTRO and M. SANDEL from Bureau of Internal Revenue Region 4-B, Quezon City, all dated August 18, 1992, all Nos. 002 RR, all duly signed by Manuel P. Santos, Chief, Assessment Branch. For personal identification, a picture of JOSE MARIANO Y. CRUZ alias LEOPOLDO CASTRO has been reproduced hereon. cd All officials and employees of the BIR are hereby enjoined to give this circular as much publicity as possible. (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner (Officer-in-Charge)

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-08-92 Revenue Memorandum Circular No. 52-92 December 8, 1992 REVENUE MEMORANDUM CIRCULAR NO. 52-92 Subject : Christmas Party To : All Revenue Officials and Employees and others concerned In a memorandum dated November 24, 1992, Secretary Ramon R. Del Rosario, Jr. of the Department of Finance has informed us that President Fidel V. Ramos enjoined all of us in government to hold our respective christmas parties only on December 23, 1992, in order to avoid any interruption in the workflow within our respective offices during the christmas holidays. cd Attached for the information and guidance of all concerned is a copy of said memorandum. aisa dc JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-19-92 Revenue Memorandum Circular No. 53-92 November 19, 1992 November 19, 1992 REVENUE MEMORANDUM CIRCULAR NO. 53-92 Subject : Rules and Regulations Governing the Grant of Step Increments to Officials in the Career Executive Service To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Career Executive Service Board Circular No. 10, series of 1992 dated July 1, 1992. "1.0 Purpose.

Pursuant to the provisions of the CES law and Memorandum Order No. 372 of the Office of the President dated 3 July 1991 and by virtue of the Career Executive Service Board's authority under Presidential Decree No. 1, as amended, the following rules and regulations are issued to govern the grant of Step Increments to officials in the Career Executive Service (CES). 2.0 Coverage.

These rules and regulations shall apply to all officials in the Career Executive Service whether they are Career Executive Service Officers (CESOs) or incumbents of Career Executive Service (CES) positions. Career Executive Service Officers (CESOs) are those officials in the CES who possess CES eligibility and have been appointed by the President to the various ranks in the CES.

Incumbents of CES positions are those officials appointed to CES positions but who have not been appointed by the President to ranks in the CES. aisa dc 3.0 Positions in the Career Executive Service (CES).

The Career Executive Service (CES) includes the positions of Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director (departmentwide and bureau-wide), Assistant Regional Director (department-wide and bureau-wide), Chief of Department Service and positions of equivalent category as may be identified by the Career Executive Service Board (CESB) as belonging to the Career Executive Service. 4.0 Step Increments.

Step Increments shall be granted to all deserving officials in the Career Executive Service (CES) on account of merit and length of service. 5.0 Step Increment Based on Merit.

Meritorious performance by an official in the Career Executive Service as determined by the results of the annual CES Performance Evaluation System (CESPES) administered by the Career Executive Service Board for a particular performance period shall entitle him to step increments based on merit in accordance with the following schedule: 5.1 An official who obtains a "Very Satisfactory" or "Slightly More Than Very Satisfactory" performance rating during the performance rating period immediately preceding shall be entitled to one (1) step increment in the salary grade of his rank in the case of a CESO, or in the salary grade of his position in the case of an incumbent of a CES position; PROVIDED, that a CESO who is assigned to a position with a salary grade higher than that of his CES rank shall, in addition to the step increment in the salary grade of his rank, be entitled to an increase in his "assignment allowance" corresponding to a one (1) step increment based on the salary grade of his position; PROVIDED FURTHER, that in case a CESO is reassigned to a position with a salary grade equal to or lower than that of his rank, or is promoted to a rank with a salary grade equal to that of the position he occupies, he shall carry the step increment/s to the salary grade of his rank; PROVIDED FINALLY, that in case a CESO is promoted to a rank with a salary grade higher than that of his position, he shall not carry the step increment but rather shall start at step 1 of the salary grade of the higher rank. 5.2 An official who obtains an "Almost Outstanding" or "Outstanding" performance rating during the performance rating period immediately preceding shall be entitled to a two (2) step increment in the salary grade of his rank in the case of a CESO, or in the salary grade of his position in the case of an incumbent of a CES position; PROVIDED, that a CESO who is assigned to a position with a salary grade higher than that of his CES rank shall, in addition to the step increments in the salary grade of his rank, be entitled to

an increase in his "assignment allowance" corresponding to a two-step increment based on the salary grade of his position; PROVIDED FURTHER, that in case a CESO is reassigned to a position with a salary grade equal to or lower than that of his rank, or is promoted to a rank with a salary grade equal to that of the position he occupies, he shall carry the step increments to salary grade of his rank; PROVIDED FINALLY, that in case a CESO is promoted to a rank with a salary grade higher than that of his position, he shall not carry the step increments but rather shall start at step 1 of the salary grade of the higher rank. The rating period immediately preceding referred to above shall mean the annual performance evaluation under the CES Performance Evaluation System (CESPES) covering the period from January to December of every year. casia 6.0 Step Increment Based on Length of Service.

A one (1) step increment based on length of service shall be granted to an official in the Career Executive Service for every three (3) years of continuous satisfactory service in a particular CES position or rank as the case may be: PROVIDED that in the case of a CESO who is awarded the one-step increment on the basis of continuous satisfactory service in a particular position, the following shall further apply: (a) If the rank of a CESO has a salary grade that is equal to that of the CES position to which he is assigned, he shall be allowed to enjoy the salary step increment computed on the basis of the salary grade of his rank. (b) If the rank of a CESO has a salary grade that is lower than that of the CES position to which he is assigned, he shall, in addition to the step increment in the salary grade of his rank, be entitled to an increase in his "assignment allowance" corresponding to a one (1) step increment based on the salary grade of his position. (c) If the rank of a CESO has a salary grade that is higher than that of the CES position to which he is assigned, he shall not be allowed to enjoy the salary step increment. A CESO who has rendered three years of continuous satisfactory service in both a particular position and a CES rank shall be entitled to only one one-step increment based on length of service. Satisfactory service shall likewise be determined by the results of the annual CES Performance Evaluation System (CESPES) administered by the Board. 7.0 Steps for CESO Rank I, Salary Grade 30.

As authorized under the CSC-DBM Joint Circular No. 1, s. 1990 dated 29 March 1990 issued pursuant to Section 13 of R.A. 6758, the succeeding step after the first step for

CESO Rank I, salary grade 30, shall be computed at one percent (1%) of the immediately preceding derived step of the salary grade allocation. 8.0 Restrictions/Limitations.

The following restrictions/limitations shall be observed in the grant of step increments, to wit: 8.1 The adjusted salary of an official after the grant of step increments shall not exceed the maximum step of the salary of his rank in the case of a CESO or of his position in the case of a CESO or of his position in the case of an incumbent of a CES position. 8.2 The total number of recipients of step increments based on merit in any one (1) calendar year shall not be more than ten percent (10%) of the total number of CES positions in the department or agency; Provided that the total number of recipients of two step increments shall not exceed three percent (3%) thereof. In the event the number of officials in the CES who may be entitled to merit increases shall exceed the ten percent (10%) and three percent (3%) limits set above, the department of agency concerned shall force-rank and decide who among the officials qualified to receive the step increments based on merit shall be entitled to it. acd 9.0 Transitory Provisions.

A CESO whose basic salary is computed on the basis of his position as provided for in CES Board Circular No. 9-A, series of 1991 shall have his step increment/s computed on the basis of the salary grade of his position. 10.0 Qualification(s) for Other Incentives and Awards.

As authorized under CSC-DBM Joint Circular No. 1, series of 1990 dated 29 March 1990, those granted step increments under these Rules may still qualify for other existing incentives and awards, provided they meet the criteria of said awards. 11.0 Incorporation in Basic Salary.

As authorized under CSC-DBM Joint Circular No. 1, series of 1990 dated 29 March 1990, step increments granted to officials in the Career Executive Service shall be treated as part of their basic salary. 12.0 Notification by the CESB.

The Board after having determined the CESPES results shall notify the head of the department or agency of the CESOs and CES incumbents in said department who may qualify for the grant of step increments.

13.0

Payment of Step Increments.

Payment of the Step increments as aforestated shall be made by the department or agency concerned chargeable against savings and/or the appropriation of said department or agency. 14.0 Submission of Reports.

A report on the Step Increments granted under these rules shall be submitted by the head of the department or agency to the Department of Budget and Management and the Career Executive Service Board. acd 15.0 Amendment.

The Career Executive Service Board may amend or modify these rules as may be found necessary. 16.0 Effectivity.

These rules and regulations shall take effect immediately. Done in the Municipality of Pasig, Metro Manila, this first day of July, nineteen hundred and ninety-two. (Sgd.) Patricia A. Sto. Tomas Chairman Career Executive Service Board Attested by: (Sgd.) Elmor D. Juridico" Executive Director, CESB All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-05-92 Revenue Memorandum Circular No. 54-92 November 5, 1992 REVENUE MEMORANDUM CIRCULAR NO. 54-92

Subject : Enjoining all Heads of Government Agencies and Instrumentalities to Notify in Advance the Department of Foreign Affairs of Official Foreign Travel of their Personnel. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Memorandum Circular No. 14 dated October 13, 1992. "WHEREAS, public officials and employees oftentimes undertake official missions in a foreign country without at least informing the Philippine Embassy or Consulate concerned of their presence in that country; WHEREAS, this practice is a potential cause of embarrassment to the Philippine Embassy or Consulate concerned and is not promotive of the idea of teamwork in the conduct of the country's foreign relations; WHEREAS, the Department of Foreign Affairs serves as the channel for matters involving foreign relations; ACCORDINGLY, all the heads of Departments of the Government and its agencies and instrumentalities are hereby enjoined to notify in advance the Department of Foreign Affairs of their personnel's official travel, trip, or mission abroad, unless the national interest and/or security consideration requires otherwise. This Circular shall not apply to official travel of (a) Members of Congress, (b) Justices and Judges of regular courts, (c) Members of the Constitutional Commissions, (d) their respective personnel, (e) those requiring full powers, and (f) Members of the Cabinet, their deputies and heads of financial institutions. This Circular shall take effect immediately. DONE in the City of Manila, this 13th day of October in the year of Our Lord, nineteen hundred and ninety-two. cdt By authority of the President: (Sgd.) Edelmiro A. Amante, Sr." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) Victor A. Deoferio, Jr. Officer-In-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

11-18-92 Revenue Memorandum Circular No. 55-92 November 18, 1992 REVENUE MEMORANDUM CIRCULAR NO. 55-92 Subject : Scholarship Program To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Memorandum Circular No. 16 dated October 16, 1992. "WHEREAS, Cabinet Resolution dated June 6, 1956, created the interagency Special Committee on Scholarships (SCS) to re-examine existing cabinet policies relating to foreign scholarships, fellowship training grants, and the like and to make recommendations on pending foreign scholarship and related matter; WHEREAS, Executive Order No. 129, s. 1968, as amended, provides rules and regulations governing official travel abroad connected with foreign scholarships, fellowship training grants, and the like, of all government officials and employees, including those of government-owned and controlled corporations, and emphasizes the requisite approval by SCS to such foreign travel; cdasia WHEREAS, Letter of Implementation No. 10, dated November 1, 1972, issued pursuant to Presidential Decree No. 1, directs the National Economic Development Authority (NEDA) to provide secretariat assistance to the SCS; WHEREAS, Letter of Implementation No. 35, dated December 11, 1975, directed that SCS be attached to the NEDA; WHEREAS, the Civil Service Commission issued Memorandum Circular No. 34, s. 1992, establishing the scholarship program for government and providing for its effective administration; WHEREAS, said Memorandum Circular runs counter to the spirit of earlier issuances, impinges on the functions of the SCS and NEDA, and duplicates existing scholarship programs inevitably depleting meager government resources; All departments, bureaus, and agencies of the national and local government, including government-owned and controlled corporations and state colleges and universities are therefore hereby instructed that all matters pertaining to local and foreign scholarships should continue to be administered and coordinated by the Special Committee on Scholarships of the National Economic Development Authority. cd i This Memorandum Circular shall take effect immediately. Manila

By authority of the President: (Sgd.) Edelmiro A. Amante, Sr." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) Victor A. Deoferio, Jr. Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-28-92 Revenue Memorandum Circular No. 56-92 October 28, 1992 REVENUE MEMORANDUM CIRCULAR NO. 56-92 Subject : Loss of Two (2) Sets of Confirmation Receipt (BIR Form CB-0203) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Confirmation Receipt, to wit: ------------------------SERIAL NUMBERS : ------------------------12917334 : 17022673 : ------------------------QUANTITY One (1) Set One (1) Set

The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-07-93 Revenue Memorandum Circular No. 1-93 January 7, 1993 REVENUE MEMORANDUM CIRCULAR NO. 1-93 Subject : Revoking Memorandum Circular No. 5 To : All Revenue Officials and Employees and others concerned.

For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Ombudsman Memorandum Circular No. 6, series of 1992, dated November 4, 1992. "Memorandum Circular No. 5 issued by the Overall Deputy Ombudsman on October 9, 1992, announcing that "anonymous denunciation letters shall not prejudice resigning and retiring government officers and employees in relation to Section 12 of R.A. 3019 otherwise known as the Anti-Graft and Corrupt Practices Act and Memorandum Circular Nos. 1, 3 and 4 of the Office of the Ombudsman", being inconsistent with Section 12, Article XI of the 1987 Constitution, Section 13 of RA 6770 and Section 12 of RA 3019 is hereby revoked and rendered of no effect. cdasia Memorandum Circular Nos. 1, 3 and 4 shall remain in full force and effect. However, in order not to unduly prejudice public officers and employees who are retiring or have already been separated from the service, it is hereby ordered that all complaints, whether anonymous or otherwise, filed against them should be given preferential and expeditious consideration with a view to dismissing the complaints should it be determined that they are without sufficient merit to warrant further proceedings. Manila, Philippines, November 4, 1992. cdasia (Sgd.) Conrado M. Vasquez" Ombudsman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-12-93 Revenue Memorandum Circular No. 2-93 January 12, 1993 January 12, 1993 REVENUE MEMORANDUM CIRCULAR NO. 2-93 Subject : Directing all Department Secretaries and Heads of Agencies of the National Government including Government-Owned or Controlled Corporations to Monitor Strict Compliance with Administrative Order No. 204, dated December 17, 1990. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum Circular No. 22 dated December 7, 1992. "Administrative Order No. 204 dated December 17, 1990 directs all department secretaries and heads of agencies of the National Government, including GovernmentOwned or Controlled Corporations, to require all third level officials in their respective Departments and Agencies to prepare and enter into a semi-annual/annual performance contract with them. Said contract shall serve as a basis for the periodic evaluation of the performance of third level officials. acd

It has been reported, however, that the percentage of compliance with the Order has been declining. In view thereof, and in order to ensure accountability and responsiveness in public service, all concerned officials are hereby directed to strictly observe compliance with the Performance Contract Requirement as enunciated in AO 204. Department Secretaries and heads of Agencies of the National Government, including GovernmentOwned or Controlled Corporations, shall monitor compliance with said contract and submit periodic reports thereon to the Office of the President and the Career Executive Service Board. cdtai This Memorandum Circular shall take effect immediately. By authority of the President: (Sgd.) Edelmiro A. Amante, Sr." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-01-93 Revenue Memorandum Circular No. 3-93 February 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 3-93 Subject : Publishing Executive Order No. 53 To : All Internal Revenue Officer and other concerned Presented hereunder is the full text of Executive Order No. 53 as follows: "Directing All Government Agencies Concerned to Provide the Bureau of Internal Revenue with the Necessary Information to Help Increase Tax Collections" WHEREAS, a various information are required to be submitted to different agencies and instrumentalities; WHEREAS, relevant and pertinent information submitted to the said government agencies and instrumentalities can be effectively utilized by the Bureau of Internal Revenue (BIR) in tax law enforcement to maximize compliance; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, do hereby order that: Sec. 1. The following agencies shall provide the following data to the Bureau of Internal Revenue on a regular basis, as provided for in the implementing revenue regulations: cdtai 1. Department of Trade and Industry: Production and sales of manufacturing companies per industry. 2. Department of Transportation and Communications: 2.1 Gross receipts of land, sea and air transport firms per company; and 2.2 Revenue of telecommunications/ telephone/telegraph/radio firms per company. 3. Central Bank of the Philippines:

Amount of interest income and other income (e.g. royalties, profits from foreign exchange transactions, rental of property) of banks and their branches per company. 4. All Departments, Agencies and Instrumentalities of the Government Including Government-owned and Controlled Corporations: Contracts entered into with private contractors. 5. Securities and Exchange Commission: Names and addresses of all active registered corporations and partnership, with their financial statements. Sec. 2. Local government units, government-owned and controlled corporations, and other agencies and instrumentalities of the government shall, without hesitation, immediately comply with a request of the BIR for information relevant to its mission of effectively implementing the revenue laws. cda Sec. 3. The Bureau of Internal Revenue shall utilize the data provided to them in evaluating tax compliance and to improve internal revenue tax collection efficiency. The Commissioner shall submit a quarterly report to the Secretary of Finance, President and Congress on the results of this measure. Sec. 4. The Secretary of the Budget and Management shall give preferential budgetary support to the tax administration function of the BIR and all appropriate programs designed to improve the effectiveness of tax collection. Sec. 5. The Department of Finance shall enter into a Memorandum of Agreement with the appropriate agency or instrumentality of the National Government and local government units for the purpose of formulating procedures designed to ensure full compliance by those concerned with the requirements of this Executive Order. casia Sec. 6. The Department of Finance, upon the recommendation of the Commissioner of Internal Revenue, shall promulgate the necessary revenue regulations to implement this Executive Order. The regulations shall provide for a phased implementation of this Executive Order. Sec. 7. This Executive Order shall take effect immediately." For the information of all concerned. cdt (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-01-93 Revenue Memorandum Circular No. 4-93 February 1, 1993 February 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 4-93 Subject : Publishing Executive Order No. 54 To : All Internal Revenue Officer and other concerned. Presented hereunder is the full text of Executive Order No. 54 as follows: "DIRECTING THE YEARLY PUBLICATION OF LISTS OF PERSONS WHO FILED INCOME TAX RETURNS AND PAID INCOME TAXES WHEREAS, Section 64 of the National Internal Revenue Code (NIRC) provides that "the Commissioner of Internal Revenue may in each year cause to be prepared and published

in any newspaper and otherwise make available a list containing the names and addresses of persons who have filed income tax returns with the amount of income declared and the income tax paid by each"; WHEREAS, such publication of persons who complied with the tax law will enhance voluntary compliance; cd i NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, do hereby order that: Sec. 1. The BIR shall require the publication of an annual list of the top 4,000 corporations, indicating their gross sales or receipts and total taxes paid in at least two newspapers of general circulation. Sec. 2. The BIR shall furnish annually to local government units information indicating the gross sales, business and income taxes paid by each person, corporate or otherwise, who is required to file an income tax return within the jurisdiction of the local government unit. The said information shall also be posted by the local government units in appropriate public places generally accessible to the public. Sec. 3. The BIR shall publish annually a list of the following government officials who have filed income tax returns, indicating in said list the amount of income declared and the income tax paid by each official; a. Executive Department - The President of the Philippines, Department Secretaries, Undersecretaries and Assistant Secretaries; cda b. Legislative Department - Senators and Congressmen; and c. All other appointive and elective government officials who may later deemed appropriate by the BIR to be included in such published list. cd i Sec. 4. The Secretary of the Department of Budget and Management shall give preferential budgetary support to the tax administration function of the BIR and all appropriate programs designed to improve the effectiveness of tax collection. Sec. 3. The Secretary of Finance, upon recommendation of the Commissioner of the Internal Revenue, shall promulgate the necessary regulations to implement this Executive Order. The regulations shall provide for the phased implementation of this Executive Order. Sec. 4. This Executive Order shall take effect immediately." For the information of all concerned. JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-01-93 Revenue Memorandum Circular No. 5-93 February 1, 1993 February 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 5-93 Subject : Publishing Executive Order No. 52 To : All Internal Revenue Officer and other concerned. Presented hereunder is the full text of Executive Order No. 52 as follows:

"REQUIRING THE INDICATION OF TAXPAYER IDENTIFICATION NUMBER (TIN) ON CERTAIN DOCUMENTS WHEREAS, the TIN is a vital information for tracing a person's taxable transactions under a computerized system of tax administration; cda WHEREAS, the Bureau of Internal Revenue (BIR) is now initiating a fully integrated computerization of the tax administration system; WHEREAS, it is necessary to develop the BIR's computerized data base to contain the necessary and relevant information pertinent to every taxpayer for storage and ready accessibility for correct determination of every taxpayer's tax liability; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, do hereby order that: Sec. 1. The BIR shall require that the TIN be indicated in the following documents: a. Sugar quedans, refined sugar release order or similar instruments to reflect the TIN of the owner or seller of the sugar. b. Domestic bills of landing to reflect the TINs of the shippers and consignees of commercial value shipment. casia c. Documents to be registered with the Registry of Deeds to reflect the TINs of persons who are parties to the real property transactions. d. Registration certificates to reflect the TINs of owners of transportation equipment by land, sea or air. e. Building construction permits to reflect the TINs of owners and contractors of buildings and civil works. f. Other documents which may hereafter be required under revenue regulations to be promulgated by the Secretary of Finance. Sec. 2. Any person who fails to comply with requirements of this Executive Order, including the parties involved in these transactions and the government functionary involved in monitoring or regulating these transactions, shall be subject to all the appropriate sanctions provided for in the National Internal Revenue Code and other pertinent, laws and regulations. Sec. 3. The Department of Finance shall enter into a Memorandum of Agreement with the appropriate agency or instrumentality of the National Government and local government units for the purpose of formulating procedures designed to ensure full compliance by those concerned with the requirements of this Executive Order. cdtai Sec. 4. The Secretary of the Department of Budget and Management shall give preferential budgetary support to the tax administration function of the BIR and all appropriate programs designed to improve the effectiveness of tax collection. Sec. 5. The Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue shall promulgate the revenue regulations for the implementation of this Executive Order. The regulations shall provide for a phased implementation of this Executive Order. Sec. 6. This Executive Order shall take effect immediately." For the information of all concerned. cda JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

10-07-93 Revenue Memorandum Circular No. 6-93 October 7, 1993 REVENUE MEMORANDUM CIRCULAR NO. 6-93 Subject : Missing Certificate Authority Registration (Taxable Real Property Transaction), BIR Form No. 1954. To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing Certificate Authorizing Registration (Taxable Real Property Transaction), BIR Form No. 1954, to wit: acd Serial Number Quantity 376820-A One (1) Copy (Duplicate) 376821-A One (1) Copy (Duplicate) 377249-A One (1) set 377250-A One (1) set 403232-A One (1) Copy (Duplicate) 403432-A One (1) Copy (Duplicate) 403418-A One (1) Copy (Duplicate) The abovementioned copies and/or sets which were reported as missing by Ms. Marilyn Lee, Revenue Clerk II, Revenue District Office No. 36, Trece Martirez City, Cavite, are hereby deemed cancelled and all official transaction, involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and other concerned are requested to promptly notify this Office in case the abovementioned copies and/or sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-07-93 Revenue Memorandum Circular No. 7-93 January 7, 1993 REVENUE MEMORANDUM CIRCULAR NO. 7-93 Subject : Loss of One Set of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one set of Revenue Official Receipts (BIR Form No. 25.24), to wit: cdt Serial Number Quantity 0106443-L One (1) Set The abovementioned set of revenue official receipts which was reported as missing by Mr. Isidro de la Cruz, Revenue Collection Agent, Lutayan, Sultan Kudarat is hereby deemed cancelled and all official transaction involving the use thereof are therefore invalidated. cdt

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned set of revenue official receipts is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-07-93 Revenue Memorandum Circular No. 8-93 January 7, 1993 REVENUE MEMORANDUM CIRCULAR NO. 8-93 Subject : Missing Original Copy of Revenue Official Receipt (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one original copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: aisa dc Serial Number Quantity 0106444-L One (1) Original Copy The abovementioned revenue official receipt which was reported as missing by Mrs. Rosalinda M. Bola, Revenue Collection Agent, Kalawag I, Isulan, Sultan Kudarat as well as the other copies of the said set of revenue official receipts are hereby deemed cancelled and all official transaction involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Officer in case the abovementioned original receipt is found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-28-93 Revenue Memorandum Circular No. 9-93 January 28, 1993 January 28, 1993 REVENUE MEMORANDUM CIRCULAR NO. 9-93 Subject : Guidelines and Operating Procedures in the Administration of the Scholarship for Government. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 44, d. 1992 dated November 17, 1992. casia

"The Civil Service Commission, under CSC Memorandum Circular No. 34, s. 1992 established the Scholarship Program for Government and provided for its administration. In order to ensure a uniform interpretation of the policy contained therein, the following guidelines and operating procedures are hereby prescribed for the guidance and information of all concerned. 1. Each department of agency shall prepare a list of their priority needs for organizational and manpower training, education and development at the beginning of each calendar year for submission to the Commission. These priority needs shall be properly ranked and classified into such specific areas as training management, manpower planning, animal husbandry, remote sensing, structural design, pipefitting, child and maternal care, school administration, judicial administration, and the like. 2. Under each priority need, the agency shall identify, select and rank the employees who have been determined to require further training and education, formal or otherwise, to assist in their career and personnel development pursuant to Section 31 of Executive Order No. 292. For this purpose, the agency's Personnel Development Committee (PDC) shall conduct the initial screening and selection of employees. Such selection/screening shall consider the alignment of the manpower skill and competency requirements supportive of the development goals and objectives of both the agency and the government. 3. Based on the recommendations of the PDC, the agency head of each central and regional office, bureau and service unit shall submit to the Civil Service Commission Regional Office (CSCRO) in their area, a list of their candidates in each of their priority needs for organizational and manpower training, education and training and development. cdtai 4. The CSCRO shall assess each candidate in the agency list through a review or validation of credentials/qualifications and the conduct of an interview. The names of those who pass the regional assessments shall be forwarded to the Officer for Human Resource Development of the Commission for inclusion in the National Scholarship Pool (NSP). Agency candidates who are included in the National Scholarship Pool shall be eligible for scholarship grant or program which matches their specific qualification. The list shall be valid for two years and may be updated not more than twice a year if there are good or valid reasons to do so. 5. In cases where the agency, on its own initiatives, has secured and arranged training and scholarship grants for its staff, whether institution-specific, program-specific, project-specific, or person-specific, the agency must award the scholarship to an employee whose name is already included in the list submitted to the CSCRO and in the National Scholarship Pool. These grants shall no longer be matched with other nominees in the National Scholarship Pool. A grantee in any of the aforementioned categories shall be issued an endorsement by the Commission only if his/her name appears in the National Scholarship Pool. 6. Allocation of scholarship or training grants shall generally be based on the highest priority need of agencies requiring assistance in the training, education and development of their employees as shown by the ranking of priorities. 7. If several agencies have equal ranking for similar or common priority needs, the awardee shall be selected based on the following:

a. Nominees must meet the donor requirements relative to education, experience, age, language proficiency, and others. b. Field personnel or, in their absence, those performing line functions shall be given preference/priority. c. The nominee shall not have enjoyed a scholarship/training grant in the immediate past two (2) years. 8. Employees attending training, education and other development programs in the form of study/scholarship grant will be considered on official time and credited as continuous service only in the following instances: a. The nominee-grantee is among the employees whose name appears in the agency list and finally included in the National Scholarship Pool after passing the assessment conducted by the CSC Regional office; b. The contract between the agency and grantee, which contains their respective obligations, has been approved by the Commission; 9. Only employees attending training, education and other development programs on official time shall enjoy the following privileges. a. Receive an appropriate official endorsement to the Department of Foreign Affairs (DFA) and the donor institution from the Civil Service Commission. b. Be entitled to an official passport and an exit clearance. c. Continue to receive their salary plus appropriate allowance such as clothing, predeparture expenses and other emoluments. d. Credit as continuous government service the period of time devoted to the program or grant. 10. The privileges mentioned in the preceding paragraph may be withdrawn by the Commission in case the grantee willfully violates any of the provisions of the scholarship contract. 11. Each scholarship contract shall contain at least the following obligations of the grantee: a. After completion of the local or foreign scholarship grant and/or foreign training grant, to render the compulsory service obligation equivalent to the period of scholarship/training as indicated below: Duration Service Obligation For every years 2 years or a fraction thereof, exceeding six (6) months. A fraction of a year 1 year not 1 year exceeding six (6) months, but not less than two (2) months. A fraction of a than 6 months two (2) months. b. Within sixty days from completion of the scholarship program, turnover or submit to the agency all materials and academic work, or copies thereof, received and prepared

in connection with the scholarship. Such materials shall form part of the agency's reference library. c. Within thirty (30) days upon return to duty, deliver a lecture or share the highlights and other vital information relative to the course attended with colleagues in the agency. d. Within sixty (60) days upon return to duty, submit a written report to the head of office and one's immediate supervisor which describes a plan to apply relevant aspects of the course/programme on the job, including a discussion with them on the support he/she needs for proper implementation of the plan. e. Within one hundred eighty days (180) upon return to duty, submit to the Commission a one-page report duly attested by the head of agency that the grantee has accomplished the preceding items. In case of item (a), that the grantee is in the process of rendering the service obligation. f. Repay the government all expenses incurred relative to the grant in the event of failure of the grantee to fulfill the terms and conditions of the contract. 12. Each scholarship contract shall likewise contain the following obligations of the agency: a. Grant temporary release to the employee/grantee from all official duties and responsibilities for the duration of the program; b. Shoulder the necessary expenses required by the grantee and pay all the benefits/remuneration due him or her for the duration of the program; c. Based on the grantee's completion report, facilitate the process of sharing and applying newly-acquired skills and expertise among colleagues or staff in the agency. Every opportunity shall be provided by the agency for the application or practice of skills, knowledge or behavior acquired from training. 13. All agencies shall submit to the CSCRO a year-end report on the status of its scholarship activities to be incorporated in the "Agency Report on the Implementation of HRD Programs". aisa dc 14. Effective January 1, 1993 only grantees whose names appear on the National Scholarship Pool shall be issued travel authority or endorsement by the Commission. cd i This Memorandum Circular shall take effect immediately. (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdtai (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-29-93 Revenue Memorandum Circular No. 10-93 January 29, 1993 REVENUE MEMORANDUM CIRCULAR NO. 10-93

Subject : Exclusion of the Accounts Analyst Positions from RA 1080 (CPA) Eligibility Requirement (Amending MC 25, s. 1989). To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 45, s. 1992 dated November 17, 1992. cd "Pursuant to CSC Resolution No. 92-1861 dated November 17, 1992, the Commission hereby promulgates the following policies: 1. Appointments to Accounts Analyst positions: Salary Grade Accounts Examiner I 8 Accounts Analyst 11 Accounts Examiner II 11 Financial Analyst I 11 and such allied positions other than Accountant positions shall no longer require in its qualification standards an RA 1080 (CPA) eligibility. cdtai 2. CSC MC No. 25, s. 1989 is hereby amended accordingly. (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-29-93 Revenue Memorandum Circular No. 11-93 January 29, 1993 January 29, 1993 REVENUE MEMORANDUM CIRCULAR NO. 11-93 Subject : Policies on Appointment to Accountant Positions in the Government To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 25, s. 1989 dated June 27, 1989. "Pursuant to CSC Resolution No. 89-436 dated June 27, 1989, and the pertinent provisions of Accountancy Law of 1976, the following policies on appointment to various Accountant position in the Government are hereby adopted: 1. General Policy 1.1 A civil service eligibility resulting from the board examination for CPA (RA 1080, as amended), shall be required for those who will be appointed for the first time to any second level position in the Accounting or Corporate Accounting Group.

1.2 Therefore, a non-CPA, who holds, in a permanent capacity, a second-level position falling in any of the groups mentioned in Item 1.1 hereof, may still be appointed/promoted permanent to any higher Accountant position, provided he possesses a relevant second level eligibility and is a holder of a BS in Commerce or BS in Business Administration degree, major in Accounting or any BS degree but has earned as many Accounting units as an Accounting major. However, his promotion to any of the following positions will not be allowed: 1.2.1 Highest Accountant position in the Department. For this purpose, the following agencies are considered as Departments: (a) Bureau of Internal Revenue (b) Bureau of Customs (c) Land Transportation Office (e) Supreme Court (f) Court of Appeals (g) Sandiganbayan (h) Ombudsman (i) Senate of the Philippines (j) House of Representatives (k) Securities and Exchange Commission (l) National Statistics Office (m) Such other offices where: (1) The head has the powers to appoint and (2) The volume of financial transactions is as large as, or comparable to, any of the offices above-mentioned. 1.2.2 Chief Corporate Accountant II or Chief Financial Analyst in government-owned or controlled corporations with original charters. 1.2.3 Chief Accountant or Chief of the Accounting Division in first-class provinces or highly-urbanized cities identified in National Budget Circular No. 385, dated November 12, 1986, namely: Manila, Quezon City, Kalookan City, Pasay City, Makati, Mandaluyong, San Juan, Pasig, Paraaque, Marikina, Las Pias, Muntinlupa, Pateros, Taguig, Malabon, Navotas, Valenzuela, Baguio City, Olongapo City, Bacolod City, Iloilo City, Cebu City, Zamboanga City, Butuan City, Cagayan de Oro City, Davao City, and Iligan City; those that may further be identified as such in subsequent National Budget Circulars, and other chartered cities. Incumbents of first level positions who were given second level items in the Accounting/Corporate Accounting Group in accordance with the reorganization undertaken pursuant to Proclamation No. 3, dated March 25, 1986, or from Presidential Executive Orders issued in relation to Article XVIII (Transitory Provisions), Section 16 of the 1987 Constitution, may be considered holders of Accountant positions for purposes of Item 1.2 hereof. Appointments issued pursuant to subsequent reorganizations whether by Executive Fiat or by Legislative enactment shall be subjected to the conditions of Item No. 1.1 hereof . 2. Appointment, for the first time, of a non-CPA to any second level position falling in the Accounting/Corporate Accounting Group may be allowed in local government units not falling in paragraph 1.2.3 hereof provided the appointee:

2.1 Is a holder of BS in Commerce or BS in Business Administration degree, Accounting major, or any BS degree but has earned as many Accounting units as an Accounting major; 2.2 Possesses a relevant second level eligibility; 2.3 May only be promoted up to Assistant Chief Accountant or Assistant Chief of Accounting Division. If the non-CPA identified herein transfers to a national government-owned or controlled corporation, or any of the highly urbanized cities, or first-class provinces, he shall be considered as entering the government service for the first time for which the conditions of Item 1.1 hereof will be applied. 3. In the implementation of the reorganization resulting from Proclamation No. 3, dated March 25, 1986, or from Presidential Executive Orders issued in relation to Article XVIII (Transitory Provision), Sec. 16 of the 1987 Constitution mentioned in the last paragraph of Item 1.2 hereof, those holding Accountant positions in a permanent capacity may still be appointed permanent, even to the highest Accountant position in the agency, provided that the appointee is the incumbent of a next lower position at the time of reorganization. All policies, rulings and issuances inconsistent herewith are deemed superseded or amended, accordingly. This Memorandum Circular shall take effect immediately. (Sgd.) PATRICIA A. STO. TOMAS Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-23-93 Revenue Memorandum Circular No. 12-93 October 23, 1993 October 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 12-93 Subject : Administrative Settlement of "Back-to-Back" Loans Tax Cases. To : All Internal Revenue Officers and others concerned. A. BACKGROUND A tax minimizing scheme had been discovered in the audit of certain taxpayers. Under the set-up, the taxpayer negotiates a loan in a bank, turns around and invests the proceeds thereof in treasury bills and other money market instruments not necessarily in the same lending bank. casia The apparent tax benefit to the borrower-investor lies in the deduction of the interest expense from gross income even as the income earned is subjected to final withholding tax - a 15% margin representing the difference between the 35% corporate income tax on the net income after deduction of interest expense and 20% final withholding tax on the interest earned.

On the ground that the interest expense is paid or accrued on non-business or non-trade indebtedness, it was entirely disallowed (Sec. 29(b), NIRC) giving rise to substantial assessments. The assessments had been contested and are awaiting resolution. Lately, however, the affected taxpayers have evinced a desire to settle amicably their tax liabilities, if allowed to be credited the taxes withheld on the interest income. Were it not for the fact that the tax on the interest income was collected thru final withholding tax method, only the difference between the non-deductible interest expense and the taxable interest income will be subjected to tax. B. ADMINISTRATIVE POLICY In order to facilitate the collection of deficiency income taxes due on these contested cases, and to encourage taxpayers similarly situated to come forward and settle their cases before audit and issuance of notice of assessments, the "offer to pay" may be accepted provided that 1. the offer to pay and actual payment is made not later than March 31, 1993; 2. the basic deficiency tax to be paid shall not be less than the difference between the tax on the disallowed interest expense and the tax withheld on the interest earned; and cd 3. the interest of 20% per annum shall be added to the deficiency income tax due from date the final income tax return is required to be filed up to the date of payment. No Offer or Settlement to pay deficiency income tax arising from back-to-back loan transactions shall be entertained after the lapse of the deadline herein established. C. IMPLEMENTING MECHANISM 1. The Offer to Pay or Settle must be accomplished in duplicate by the President or Authorized Officer of the taxpayer, stating therein a) Name and address b) Taxable year c) TIN d) Assessment notice number (if applicable) e) Amount of interest expense claimed f) Amount of interest earned g) Amount of final withholding tax on interest earned and filed with the Asst. Commissioner (Collection Service) or his authorized officer. The Offer shall be stamped "Received" on both copies, and checked as to its accuracy with the audit report and the certificate of withholding tax verified. It shall forthwith be forwarded to Deputy Commissioner Eufracio D. Santos for approval and issuance of Authority to Accept Payment (ATAP). aisa dc 2. After payment the taxpayer shall submit the "pink" copy of the ATAP to the issuing Officer to be attached to the docket together with the copy of the approved Offer. In the case of voluntary settlement prior to audit and formal assessment, the ATAP together with the approved copy of the Offer shall be filed for future reference. D. EFFECTIVITY These Circular shall take effect immediately upon approval, and all internal revenue officers are hereby enjoined to give it the widest publicity. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Approved: (Sgd.) Ramon del Rosario, Jr. Secretary of Finance Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-20-93 Revenue Memorandum Circular No. 13-93 January 20, 1993 REVENUE MEMORANDUM CIRCULAR NO. 13-93 Subject : Loss of two (2) sets of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Other Concerned. Notice is hereby given of the loss of two (2) sets of Revenue Official Receipts (BIR Form No. 25.24), to wit: cdt Serial Number Quantity 3206333-G One (1) set 3206385-G One (1) set The abovementioned revenue official receipts which were reported as missing by Atty. Leandro Briones, former Revenue Representative of Toronto, Canada are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets of revenue official receipts are found, taking necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-22-93 Revenue Memorandum Circular No. 14-93 February 22, 1993 February 22, 1993 REVENUE MEMORANDUM CIRCULAR NO. 14-93 Subject : 1993 National Tax Campaign To : All Revenue Directors, Revenue District Officers, Collection Agents and others concerned. To achieve the desired awareness level for all taxpayers to file their Income Tax Returns early and pay their correct taxes the following shall be given priority consideration in the 1993 Tax Campaign to ensure the P155 Billion Collection Target: aisa dc A. A.1 A.2 B. Income Tax Deadlines March 15, 1993 - for Government Employees April 15, 1993 - for all other taxpayers New Tax Measures

B.1 Priority Measures RA 7496 - Simplified Net Income Taxation System (SNITS) for Individuals RA 7497 - Final Tax on Compensation Income Below P60,000 and New Exemptions RA 7642 - Increased Penalties for Tax Evasion RA 7643 - Monthly VAT Payments B.2 Other Measures RA 7498 - Foreign Currency Amnesty Program RA 7499 - Amended Transfer Tax Law RA 7432 - Senior Citizens Act C. C.1 C.2 C.3 C.4 Special Projects for 1993 "Handang Maglingkod" "Operation Suyod" Surveillance Operation BIR Invoice Raffle Promo

D. Payment through Banks - non-requirement of stick-on label for returns of compensation income earners and nonresident Filipinos using BIR Form 1701A and/or 1701C E. BIR Forms to be used All BIR Forms have practically been revised to reflect changes brought about by legislative amendments. The use of such new forms are hereby encouraged, more specifically: cdtai E.1 E.2 E.3 E.4 Form 1701 (Sept. 1992) Form 1701A (Sept. 1992) Form 1701C (May 1992) Form 1702 (Sept. 1991)

F. 2nd Installment Returns Non-payment of 2nd installments on due date by individuals contributed to the yearly growth of delinquent accounts. Extra effort should therefore be exerted to collect such accounts through reminders and follow-ups. G. Support of Non-Governmental Organizations (NGOs) The cooperation and support of NGOs in our tax campaigns have been noteworthy. Continue such undertaking for the benefit of the taxpayers especially now that a handful of tax measures are in effect. Tax Forum and Dialogue maybe effectively undertaken through this effort. H. Multi-Media Support Through the years media has always been a partner of our national tax campaign strategies. Maximize cooperation with them to attain the widest reach for all our communication requirement. cd I. Tax Campaign Funds

Funds though limited have been allocated for the tax campaign. Coordinate with your Revenue Director and Chief, Fiscal Operation Branch (FOB) for details. aisa dc Strict Compliance of this Circular is hereby enjoined. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-19-93 Revenue Memorandum Circular No. 15-93 October 19, 1993 REVENUE MEMORANDUM CIRCULAR NO. 15-93 Subject : Loss of Thirty Three (33) sets of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of thirty three (33) sets of Revenue Official Receipts (BIR Form No. 25.24), to wit: casia Inclusive Serial Numbers Quantity 3530918-H to 3530950-H thirty-three (33) sets The abovementioned revenue official receipts which were reported as missing by Ms. Luna Lena O. Lanuza, Revenue Collection Officer, Manapla, Negros Occidental, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cd i Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. casia EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-21-93 Revenue Memorandum Circular No. 16-93 January 21, 1993 REVENUE MEMORANDUM CIRCULAR NO. 16-93 Subject : Missing four (4) sets of Letters of Authority (RR) (BIR From No. 19.65A) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing four (4) sets of Letters of Authority (RR) (BIR Form No. 19.65A), to wit: aisa dc Serial Number Quantity 0067751 One (1) set 0067752 One (1) set 0067754 One (1) set 0067755 One (1) set

The abovementioned letters of authority which were reported as missing by Ms. Margaret M. Babaran, Accountable Forms Officer, Revenue Region No. 2, Tuguegarao, Cagayan are hereby deemed cancelled and all transactions involving the use thereof are therefore invalidated. aisa dc Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets of letters of authority are found, taking necessary steps in the meantime to prevent improper or fraudulent disposition or use thereof. EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-04-93 Revenue Memorandum Circular No. 17-93 January 4, 1993 REVENUE MEMORANDUM CIRCULAR NO. 17-93 Subject : Publishing pertinent provisions of the "Rules and Regulations to Implement the Provisions of Republic Act No. 7471, The Philippine Overseas Shipping Development Act". To : All Internal Revenue Officers and others concerned Republic Act No. 7471, otherwise known as the Philippine Overseas Shipping Development Act, was approved by the President on May 5, 1992. The Act provided for tax incentives to Philippine Shipping Enterprises (PSE) engaged in Philippine overseas shipping. Such incentives include exemption from import duties and taxes on vessels and spare parts purchased by the PSE and exemption from income tax. Furthermore, local manufacturers or dealers who sell machinery, materials, etc. to a PSE shall be entitled to a supplier tax credit, as provided for in the Act. casia Presented herewith are pertinent provisions of the rules and regulations implementing this Act as approved by the Secretary of Finance, Governor of Central Bank and Administrator of the Maritime Industry Authority on November 17, 1992: "Pursuant to the provisions of Sec. 10 thereof, these Rules and Regulations to Implement the Provisions of Republic Act No. 7471, the Philippine Overseas Shipping Development Act, are hereby promulgated:" "Sec. 1.02 Definitions. - As used in Republic Act No. 7471 and these Rules and Regulations: xxx xxx xxx c. Philippine Overseas Shipping means the transport of goods and/or passengers by a Philippine - registered vessel beneficially/disponently owned and operated by a Philippine Shipping Enterprise, except when the ship is operated solely between ports in the Philippines. d. Philippine Shipping Enterprise means a citizen of the Philippines or an association or corporation organized under the laws of the Philippines at least sixty per cent (60%) of the capital of which is owned by citizens of the Philippines, and exclusively engaged in Philippine Overseas Shipping; xxx xxx xxx

e. Philippine registered vessel means a vessel registered in accordance with Philippine laws and regulations. Philippine registration can be categorized into two: (i) Permanent registration - This refers to the registration of a vessel owned by a Philippine Shipping Enterprises; (ii) Temporary registration - This refers to the registration of a vessel operated by a Philippine Shipping Enterprise as a disponent owner or demise owner as duly approved by the MARINA. "Sec. 2.01 Qualification of Applicants. - To avail of the incentives under the Act, as implemented by these Regulations, a Philippine Shipping Enterprise must comply with the accreditation/registration requirements specified under MARINA Memorandum Circular No. 33-A or 51 as an overseas shipping company and with other qualifications as the MARINA may deem necessary." "Sec. 4.03 Exemption from Import Duties and Taxes. - The following importations by a Philippine Shipping Enterprise, when recommended by the MARINA, shall be exempt from import duties and taxes: a. Vessels for registration under the Philippine flag; b. Spare Parts for the repair and/or overhaul of vessels, provided that such items are destined to either: (i) a Philippine-dry-docking or repair facility accredited by the MARINA and registered as a customs-bonded warehouse, which will undertake the necessary repairs and works on the vessel, or (ii) the vessel in which the items are to be installed; provided, that if such imported items are found in locations other than the two (2) mentioned in (i) and (ii) above, or in places not authorized by the BOC, the person or entity found in possession of any of these items shall be liable for the full duties and taxes due thereof, and the applicable surcharges and other penalties." "Sec. 4.04 Suppliers' Tax Credit. - Local manufacturers or dealers who sell machinery, equipment, materials and spare parts to a Philippine Shipping Enterprise shall be entitled to a tax credit for the full amount of the import duties and taxes that had been actually paid thereon, subject to the approval of the Secretary of Finance, upon the recommendation of the MARINA." cdtai "Sec. 4.05 Exemption from Income Tax. - A Philippine Shipping Enterprise shall be exempt from payment of income tax on income derived directly from Philippine Overseas Shipping up to 5 May 2002, Provided, that: a. The entire net income, after deducting not more than ten per cent (10%) thereof for distribution of profits or declaration of dividends, which would otherwise be taxable under the provision of Title II of the National Internal Revenue Code, is actually reinvested in accordance with these Regulations not later than 5 May 2005 for: (i) the construction, purchase or acquisition of Vessel and related equipment; and/or (ii) the improvement or modernization of its vessels and related equipment. b. The cumulative amount so reinvested shall not be distributed as profits or dividends until after 5 May 2012 or until the vessel or related equipment so acquired have been fully paid, whichever date comes earlier. c. Any amount not so reinvested, or withdrawn prior to the expiration of the period stipulated in paragraphs (a) and (b) hereof, respectively, shall be subject to the payment

of the corresponding income tax due thereon, including penalties, surcharges and interests, as provided for in the National Internal Revenue Code. d. The income derived from Philippine Overseas Shipping entitled to exemption from the payment of income tax hereunder is limited to income from the transport of goods and/or passengers overseas. It does not include income not directly related to transport of goods and passengers overseas. e. A Philippine Shipping Enterprise availing itself of this incentive shall submit to the BIR reports and other documents that shall be prescribed in revenue regulations that shall be issued for this purpose." "Sec. 5.05 Requirements for Exemption from Income Tax. - For exemption from the payment of income tax, the application, in lieu of the documents required to be submitted under Sec. 5.02(a.) - On the Vessel Concerned shall be supported by the following: a. A favorable indorsement from the MARINA recommending that the Philippine Shipping Enterprise be entitled to income-tax exemption, and issued a Certificate of Income-Tax Exemption; b. The documents required to be submitted in Section 5.02 (b.) of these Regulations - On the applicant. c. Other documents that may be required by the MARINA and the BIR to be prescribed in revenue regulations to be issued for this purpose." "Sec. 6.02 Application Favorably acted Upon. - Applications favorably acted upon by the MARINA shall be implemented as follows: xxx xxx xxx c. For Exemption from Import Duties and Taxes - shall be favorably recommended to the BOC through the DOF; d. For Suppliers' Tax Credit - shall be favorably recommended to the Sec. of Finance, through the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center created under Administrative Order No. 266; cda e. For Income Tax Exemption - shall be favorably recommended to the BIR for the issuance of a "Certificate of Income Tax Exemption" under R.A. No. 7471." "Sec. 7.01 Registration of Vessels. - All vessels owned and/or operated by a Philippine Shipping Enterprises and availing of the incentives under the Act and these Regulations, shall be registered under the Philippine Flag. Said Vessels can only be deleted from the Philippine Registry after the MARINA has determined that: a. No other Philippine Shipping Enterprise is interested in acquiring the vessel; or b. The vessel has to be scrapped." For the information of all concerned. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-11-93 Revenue Memorandum Circular No. 18-93 February 11, 1993 REVENUE MEMORANDUM CIRCULAR NO. 18-93 Subject : Annual Performance Evaluation of all Career Executive Service Officials (CESOs)

To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Undersecretary Juanita D. Amatong Memorandum dated January 20, 1993. "Pursuant to the provisions of the Career Executive Service law and in connection with the attached letter of CESB Chairman Patricia A. Sto. Tomas dated December 15, 1992, the yearly performance evaluation of all incumbents of CES positions including Career Executive Service Officers and CES eligibles in non-CES positions will be conducted by the CES Board within the month of January 1993. cdt All officials concerned are therefore requested to support the said activity of the CESB and actively participate therein by: 1. Accomplishing the rating forms that will be given to them and immediately return these forms to the CESB through the Department CESS Coordinator, Ms. Lourdes Z. Santiago, Director, Central Administration Office on or before February 18, 1993, and 2. Allowing their immediate subordinate to participate in the administration of the rating forms in a workshop to be held by the CESB in their respective offices for this purpose. aisa dc Your compliance is hereby enjoined. (Sgd.) JUANITA D. AMATONG" Undersecretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-11-93 Revenue Memorandum Circular No. 19-93 March 11, 1993 March 11, 1993 REVENUE MEMORANDUM CIRCULAR NO. 19-93 Subject : Operating of all Filing Centers on Saturdays before Deadlines throughout the country. To : All Revenue Directors; Revenue District Officers; Chief, Public Information and Assistance Division and others concerned All concerned are hereby instructed to open their offices and filing centers on the following Saturdays prior to deadlines to accommodate taxpayers throughout the country to accept No-Payment Return: cdasia March 13, 1992 March 20, 1993 March 27, 1993 April 3, 1993 The Public Information and Assistance Division shall provide assistance and support to all operating units. acd For strict compliance. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-01-93 Revenue Memorandum Circular No. 20-93 March 1, 1993 May 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 20-93 Subject : Approval of Lapsed or Ineffective Appointments for Purposes of Payment of Salaries for Actual Services Rendered and Related Matters. To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 2, s. 1993 dated January 26, 1993. "Pursuant to Section 10, Rule V of the Omnibus Rules Implementing Book V of Executive Order No. 292 and CSC Resolution No. 93-142 dated January 26, 1993, the Commission hereby adopts the following policies on appointments, to wit: 1. No appointment shall be issued and/or approved unless the vacant position has been published in accordance with RA 7041 and authority to fill if said position has been granted pursuant to RA 7430; aisa dc 2. All appointments must be submitted to the Commission within thirty (30) days from their date of their issuance otherwise they shall become ineffective. For this purpose, the date appearing on the face of the appointment (Upper right corner of CS Form 33) shall be considered the date of issuance; 3. An appointment which has become ineffective due to non-submission to the Commission within the thirty-day period shall be disapproved. However, the appointee shall be entitled to payment of salary from the government for a period not exceeding thirty days for actual services rendered except in the following instances: a. non-compliance with the publication requirement under RA 7041; b. no prior authority as required under RA 7430; 4. After the thirty day period, the salaries of the appointee for actual services rendered shall be the personal liability of the officer responsible for the delay in the submission of the appointment to the Commission. cd This Memorandum shall take effect on May 1, 1993. (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdasia (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-01-93 Revenue Memorandum Circular No. 21-93 March 1, 1993 March 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 21-93 Subject : Implementing Guidelines and Operating Procedures of the Local Scholarship Program

To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 5, s. 1993 dated February 4, 1993. aisa dc "The Civil Service Commission established the Scholarship Program for Government (SPG) under MC No. 34, s. 1992. In support of the program, Congress appropriated the amount of P10 Million as initial fund for scholarship grants to enable promising and deserving employees in government to pursue further education and specialize in fields of study which are supportive of national development goals. Hence, a service-wide Local Scholarship Program as component of SPG was established pursuant to CSC Resolution No. 93-299 dated February 4, 1993, and provided for its administration. This program aims to: a) provide educational opportunities particularly in graduate studies for the personal studies for the personal development and career advancement of government employees; b) enhance their knowledge and skills so they can contribute to the achievement of national development goals; and c) support the process of professionalizing the civil service workforce to make them more effective in the delivery of public services. cd i The guidelines implementing the Local Scholarship Program (LSP) is attached for the information and guidance of all concerned. All heads of departments/agencies are hereby enjoined to inform and encourage their personnel to avail of this scholarship opportunity. This Memorandum Circular shall take effect immediately. (Sgd.) Patricia A. Sto. Tomas" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. aisa dc (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. no date Revenue Memorandum Circular No. 22-93 No date supplied 1993 REVENUE MEMORANDUM CIRCULAR NO. 22-93 Subject : Extension of Deadline from 31 March 1993 to May 28, 1993 To : All Internal Revenue Officers and others concerned A. BACKGROUND In order to facilitate the collection of the deficiency income taxes due on contested "backto-back" loan taxes cases, and to encourage taxpayers similarly situated to come forward and settle their cases before audit and issuance of assessment, "offers to pay" may be accepted provided that the offer to pay and actual payment is made not later than March 31, 1993 under the Circular No. 12-93. cdtai Affected taxpayers, thru counsel, request for the extension of the deadline on the grounds that "deficiency tax to be paid could be considerable and it would be very difficult for our clients to raise that amount in a very short time considering that there could also be

1992 income taxes still to be paid by our clients on or before April 15, 1993 resulting in big cash flow requirements within a two-week period (March 31, 1993 to April 15, 1993); and from the time the circular was released "there is not much time to gather with accuracy pertinent information for the offer of compromise". B. EXTENSION Considering the reasons given by affected taxpayers, and in order to realize collection of significant revenue, the deadline for the offer to pay and actual payment is hereby extended from 31 March 1993 to May 28, 1993. aisa dc This Circular shall take effect immediately upon approval and all internal revenue officers are hereby enjoined to give it the widest publicity. (Sgd.) JOSE U. ONG Commissioner of Internal Revenue Approved: (Sgd.) Ramon del Rosario, Jr. Secretary of Finance Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-31-93 Revenue Memorandum Circular No. 23-93 March 31, 1993 REVENUE MEMORANDUM CIRCULAR NO. 23-93 Subject : Loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24), to wit: casia Inclusive Serial Numbers Quantity 1513051-L - 1513100-L One (1) pad The abovementioned revenue official receipts which were reported as missing by Ms. Rebecca Supsupin, Revenue Clerk of Revenue District No. 4, San Fernando, La Union, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cd EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-01-93 Revenue Memorandum Circular No. 24-93 April 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 24-93

Subject : Loss of one (1) set of Bank Confirmation Receipts (Form CB RC 82-02-03). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Bank Confirmation Receipts (Form CB RC 82-02-03), to wit: Inclusive Serial Number Quantity 24996606-B One (1) set The abovementioned Bank Confirmation Receipts were reported as missing by Mr. Vicente B. Delfin, Senior Manager of United Coconut Planters Bank, San Juan Branch, San Juan St., Bacolod City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai EUFRACIO D. SANTOS Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-21-93 Revenue Memorandum Circular No. 25-93 April 21, 1993 REVENUE MEMORANDUM CIRCULAR NO. 25-93 Subject : "Ang Serbisyo Sibil" Radio Program. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular NCR OM #97, s. 1993 dated April 14, 1993. cd "CSC-NCR will inaugurate its radio program "Ang Serbisyo Sibil" over DZRM at 1278 AM on April 21, 1993 from 1:30 to 2:00 P.M. The program is aimed at informing our clients and the public on the current issues related to Commission policies, decisions, programs and projects. In the inaugural broadcast, NC #42, s. 1991 will be discussed. Other topics to be discussed in the future episodes are indicated in the attached tentative schedule. casia You are all requested to listen to our program. Please request agencies to allow their employees to listen to the broadcast. Phoned-in questions will be entertained thru tel. no. 922-37-81. Your cooperation is appreciated. (Sgd.) OSCAR C. ANICETO" Director IV All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

04-14-93 Revenue Memorandum Circular No. 26-93 April 14, 1993 REVENUE MEMORANDUM CIRCULAR NO. 26-93 Subject : Declaring a Moral Recovery Program and Enjoining Active Participation of All Sectors in the Filipino Society. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Proclamation No. 62 dated September 30, 1992 of President Fidel V. Ramos. cdt "WHEREAS, there is a need for moral renewal in order to eradicate the social ills that have plagued us for the past several decades, such as graft and corruption, patronage politics, apathy, passivity, mendicancy, factionalism and lack of patriotism; WHEREAS, Article XIV, Section 3 (2) of the Constitution provides that "all educational institutions shall . . . inculcate patriotism and nationalism, foster love of humanity, respect for human rights, appreciation of the rule of national heroes in the historical development of the country, teach the rights and duties of citizenship, strengthen ethical and spiritual values, develop moral character and personal discipline, encourage critical and creative thinking, broaden scientific and technological knowledge and promote vocational efficiency"; WHEREAS, the Philippine Senate, on September 18, 1987 adopted the Shahanisponsored Resolution No. 10 directing a Senate Task Force to inquire into the strengths and weaknesses of the Filipino Character with a view to solve the social ills and strengthen the nation's moral fiber, thereby laying the groundwork for the national campaign for Moral Recovery; WHEREAS, the Senate Task Force, after comprehensive study, has established the need to develop in the Filipino - (1) a sense of patriotism and national pride, or "pagmamalaki sa bansa" - a genuine love, appreciation and commitment to the Philippines and things Filipino; (2) a sense of the common good or "kakayahang magmalasakit" - the ability to look beyond selfish interests, a sense of community living, a sense of justice and a sense of outrage at its violation; (3) a sense of integrity and accountability, or "katapatan at pananagutan" - an aversion towards graft and corruption in society and an avoidance of the practice in one's life; (4) the value and habits of discipline, hard work or "pagsisikap", self-dignity and self-reliance; and (5) the value and habits of self-reflection and analysis or "pagpapahalaga at pagsusuri sa sarili", the internalization of spiritual values, the emphasis on essence rather than on form; WHEREAS, moral recovery is an integral aspect in ensuring success in the government's economic development and people-empowerment programs and projects; WHEREAS, the Moral Recovery Program is conceived to be an important dimension of programs which this administration has already launched such as the KABISIG, the various poverty alleviation and countryside development programs, livelihood and basic services delivery, among others; cd WHEREAS, there is a need to prepare the youth to respond to the challenges of modernization and the 21st century; WHEREAS, there is existing mechanisms which can serve to promote and ensure a sustained Moral Recovery Program for national development and solidarity.

NOW THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the sovereign will of the Filipino people and the powers vested in me by the laws of the land, do hereby order: Sec. 1. Enjoining Active Participation in the Moral Recovery Program. Filipinos of all ages and from all sectors of our society are hereby enjoined to actively participate in the national campaign for Moral Recovery. The Moral Recovery Program will primarily aim to inculcate the following virtues for national development: pride in being Filipino; caring and sharing; integrity and accountability; self-reliance; good manners and right conduct which shall also cover the value and habits of courtesy, discipline and respect for authority and institutions; people empowerment; and, self-reflection and analysis. Sec. 2. Implementing Arm of the Moral Recovery Program. The KABISIG People's Movement National Operations Center is hereby tasked to serve as the implementing arm of the Executive Branch's Moral Recovery Program. Among others, it shall ensure the integration of moral values in the implementation of various KABISIG and other government programs and projects and shall coordinate with the Congress of the Philippines to ensure synchronized executive-legislative activities. cdasia All Constitutional Commissions, bodies and the judiciary are enjoined to actively promote and participate in these efforts in view of their crucial role in the promotion of social justice and respect for human rights. Sec. 3. The Creation of the Council of Advisers on Moral Recovery. A Council of Advisers on Moral Recovery shall be constituted to advise the President on all matters pertaining to moral recovery. This shall be composed of individuals who are living exemplars of Filipino values and who should be emulated by the people. The Council of Advisers shall be named by the President within thirty (30) days from the signing of this Proclamation. Sec. 4. Effectivity. This Proclamation shall take effect immediately. DONE, in the City of Manila, this 30th day of September, in the year of our Lord, Nineteen Hundred and Ninety-two. (Sgd.) FIDEL V. RAMOS By the President: EDELMIRO A. AMANTE, SR." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdt (Sgd.) VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-Charge) Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-21-93 Revenue Memorandum Circular No. 27-93 April 21, 1993 REVENUE MEMORANDUM CIRCULAR NO. 27-93 Subject : Fourth National Convention of Lawyers of the theme "The Legal Profession: A Reassessment" To : All Revenue Officials and Employees and others concerned

For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum Circular No. 29 dated February 9, 1993. casia "The Integrated Bar of the Philippines (IBP) is sponsoring the Fourth National Convention of Lawyers in Manila Hotel on June 13-15, 1993, on the theme, "The Legal Profession A Reassessment." This convention aims to renew/strengthen the role of lawyers and the legal profession in government and society. The participation in the convention by the government sector is hereby authorized. Heads of departments, bureaus and offices may send a reasonable number of their officials and employees who are members of the bar to attend the convention on official time provided there will be no disruption of normal office activities/services in their respective offices by reason thereof. cd i The participant shall submit to their respective agency heads a complete report on their attendance or participation in the convention. Likewise, the IBP is requested to submit to this Office and the CSC a general report and evaluation of the convention including a list by offices of participants from the government. (Sgd.) EDELMIRO A. AMANTE" Executive Secretary All revenue officials and employees are joined to give this circular as wide as publicity as possible. cdasia VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-04-93 Revenue Memorandum Circular No. 28-93 May 4, 1993 REVENUE MEMORANDUM CIRCULAR NO. 28-93 Subject : Loss of One (1) Booklet of Confirmation Receipts (BIR Form CB 82-02-03). To : ALL Internal Revenue Officers, Employees and others Concerned. Notice is hereby given of the loss of one (1) booklet of Confirmation Receipts, to wit: --------------------------Inclusive Serial Numbers : Quantity --------------------------392351 - 392400 : one (1) booklet --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-In-Charge

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-27-93 Revenue Memorandum Circular No. 29-93 May 27, 1993 REVENUE MEMORANDUM CIRCULAR NO. 29-93 Subject : Basis of Capital Gains Tax on Sales of Private Property in favor of the Government for road right-of-way purposes. To : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is the letter of Commissioner Jose U. Ong to Honorable Florello R. Estuar, Secretary of Public Works and Highways dated February 20, 1990: aisa dc "This has reference to your letter dated February 13, 1990, requesting for exemption from the application of the zonal valuation established by the BIR with respect to sales of private property in favor of the government for road right-of-way purposes. casia "Considering that the government is the buyer of the real property and since the tendency to undervalue the purchase price in contracts between two private parties is not present in this case, your request that the consideration appearing in the Deed of Sale, even though lower than the zonal valuation, be used as a basis for the computation of the 5% capital gains tax, is hereby approved as an exception to the policy of this Bureau, in relation to Section 21(e) of the Tax Code. "In this connection, it may be mentioned that the individual's income tax liability, if any, or gains from sales or other dispositions of real property to the government or any of its political subdivision or agencies or to government-owned or controlled corporations shall be determined either (a) under Section 21(a), applying the graduated income tax rates on taxable business and other income, or (b) under Section 21(e), imposing the 5% capital gains (final) tax rate on gross selling price." cdt All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. (Sgd.) Liwayway Vinzons-Chato Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-17-93 Revenue Memorandum Circular No. 30-93 June 17, 1993 REVENUE MEMORANDUM CIRCULAR NO. 30-93 Subject : Revenue Employees' Day with the Commissioner To : All Revenue Officials and Employees, and others concerned To allow the Commissioner of Internal Revenue more time to act on urgent matters required of her Office and at the same time address the needs of the employees, there is hereby designated an Employees' Day with the Commissioner every Thursday afternoon at 1:30 P.M. effective June 24, 1993. cdt The Day will give the Commissioner a chance to listen to employees problems, resolve issues affecting the employees' general welfare and perhaps elicit suggestions that can mutually benefit the employees and the Bureau as well.

All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. casia LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-12-93 Revenue Memorandum Circular No. 31-93 March 12, 1993 March 12, 1993 REVENUE MEMORANDUM CIRCULAR NO. 31-93 Subject : Mandatory Requirement for Assumption to Duty To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 25, s. 1992 dated June 16, 1992. cdasia "Pursuant to CSC Resolution No. 92-781 dated June 16, 1992, the Civil Service Commission hereby adopts the following policies on the mandatory requirement for assumption to duty of officials and employees in the civil services: 1. No official or employees shall require any person to render service without furnishing him a copy of his appointment issued and signed by the appointing authority. The appointee must acknowledge receipt of said appointment by signing on the face of the duplicate copy of the appointment. 2. All officers and employees are hereby enjoined not to assume the duties and responsibilities of any position without being furnished a copy of their appointment duly issued and signed by the appointing authority concerned. 3. The services rendered by any person who was required to assume the duties and responsibilities of any position without an appointment having been issued by the appointing authority shall not be recognized nor credited by the Commission. 4. Failure on the part of the appointing authorities to comply with the provisions of the first paragraph hereof shall render them personally liable for the salaries that would accrue to the appointee pursuant to Section 65, Chapter 10, Subtitle A, Title I, Book V of E.O. 292. aisa dc 5. Any person who is issued an appointment and is required to assume the duties of the position must be paid his salaries even before approval of his appointment by the proper Regional/Field Offices of the Commission effective upon assumption to duty. 6. Any violation hereof shall constitute a ground for administrative disciplinary action. This circular shall take effect immediately. (Sgd.) SAMILO N. BARLONGAY" Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd i VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

04-23-93 Revenue Memorandum Circular No. 32-93 April 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 32-93 Subject : Loss of one (1) set of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Official Receipts (BIR Form No. 25.24), to wit: cdt Inclusive Serial Number Quantity 1257400-L One (1) set The abovementioned set of revenue official receipts which was reported as missing by Mr. Romeo C. Caraan, Revenue Collection Officer of Mabini, Batangas, is hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-28-93 Revenue Memorandum Circular No. 33-93 May 28, 1993 May 28, 1993 REVENUE MEMORANDUM CIRCULAR NO. 33-93 Subject : Delegation of Authority to the Heads of Bureaus/Attached Agencies under the Department of Finance To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Department Finance Department Order No. 9-33 dated March 8, 1993. "In line with the government's policy of decentralization and administrative delegation of functions, the Heads of Bureaus/Attached Agencies under the DOF are hereby delegated the authority to act on the following for their respective Bureau/Agency. cdasia 1. 2. 3. 4. Permission to seek transfer. Dropping from the rolls and change of marital status. Acceptance of resignation up to Division Chiefs or equivalent. Permission to engage in business, practice a profession on pursue a vocation.

5.

Authority to render overtime services. cdt

This Order takes effect immediately and all administrative issuance inconsistent herewith are hereby revoked or modified accordingly. (Sgd.) RAMON R. DEL ROSARIO, JR." Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-08-93 Revenue Memorandum Circular No. 34-93 June 8, 1993 REVENUE MEMORANDUM CIRCULAR NO. 34-93 Subject : Loss of one booklet of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees, and Others Concerned. Notice is hereby given of the loss of one (1) booklet of revenue official receipts (BIR Form No. 25.24), to wit: cdtai Inclusive Serial Numbers Quantity 1096301-L One (1) booklet The above revenue official receipts were reported by Revenue Collection Agent Bienvenido C. Gorion of Barili, Cebu, as having been lost during the fire that razed the Municipal Building of Barili, Cebu where his Office was located. The abovementioned receipts are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENT'S OFFICES. aisa dc VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-17-93 Revenue Memorandum Circular No. 35-93 June 17, 1993

REVENUE MEMORANDUM CIRCULAR NO. 35-93 Subject : Publishing the provisions of Executive Order No. 90 -"Requiring the Owners of Taxable Imported Motor Vehicles with Year Models 1988 to 1992 to Obtain Clearances from the Bureau of Customs and Bureau of Internal Revenue as a Precondition to the Renewal of their Registration with the Land Transportation Office". To : All Internal Revenue Officers and Other Concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Executive Order No. 90: "Executive Order No. 90 REQUIRING THE OWNERS OF TAXABLE IMPORTED MOTOR VEHICLES WITH YEAR MODELS 1988 TO 1992 TO OBTAIN CLEARANCES FROM THE BUREAU OF CUSTOMS AND BUREAU OF INTERNAL REVENUE AS A PRECONDITION TO THE RENEWAL OF THEIR REGISTRATION WITH THE LAND TRANSPORTATION OFFICE "WHEREAS , save those exempted by law, imported motor vehicles are subject to the payment of excise tax, value added tax, and other taxes, duties and fees under the National Internal Revenue Code, as amended, and the Customs and Tariff Code, as amended; acd "WHEREAS , it has been established that an undetermined number of taxable imported motor vehicles have been registered with the Land Transportation Office notwithstanding the non-payment of the required taxes, duties and fees collectible thereon, resulting in substantial loss of revenues due the government; and "WHEREAS , there is a need for the Bureau of Customs, Bureau of Internal Revenue and the Land Transportation Office to pursue a joint plan of action to collect the unpaid taxes, duties and fees due on taxable imported motor vehicles. "NOW, THEREFORE, I, FIDEL V. RAMOS , President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: "Sec. 1. This Order applies to all taxable imported motor vehicles with year models 1988 to 1992. "Sec. 2. The Land Transportation Office shall not allow the renewal of the registration of any taxable imported motor vehicle covered by this Order, unless the appropriate clearances are issued by the Bureau of Customs and Bureau of Internal Revenue certifying that the required taxes, duties and fees thereon have been previously paid, or subsequently satisfied in accordance with this Order. "Sec. 3. The Bureau of Customs and the Bureau of Internal Revenue shall adopt a uniform compromise payment schedule which shall fix the compromise amounts to be paid by the registered owners of taxable imported motor vehicles subject to this Order, in lieu of the taxes, duties and fees collectible thereon under the aforementioned Codes, which schedule shall be promulgated through a Department Order to be issued by the Secretary of Finance. cdasia "Sec. 4. The requirements to obtain the appropriate clearances from the Bureau of Customs and the Bureau of Internal Revenue shall be a one-time requirement, such that the owner of a taxable imported motor vehicle which has already been cleared pursuant to

this Order shall no longer be required to obtain clearances for succeeding renewals of registration with the Land Transportation Office. "Sec. 5. The Department of Finance and/or the Land Transportation Office shall issue the appropriate rules and regulations to implement the provisions of this Order. "Sec. 6. This Order shall take effect fifteen (15) days after publication in a newspaper of general circulation. casia "DONE in the City of Manila, this 19th day of May in the year of Our Lord, Nineteen Hundred and Ninety-Three (SGD.) FIDEL V. RAMOS President of the Republic of the Philippines By the President: (SGD.) ANTONIO T. CARPIO Chief Presidential Legal Counsel" It is desired that this Circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-10-93 Revenue Memorandum Circular No. 36-93 June 10, 1993 June 10, 1993 REVENUE MEMORANDUM CIRCULAR NO. 36-93 Subject : A Turn-Over of Government Vehicles and Other Equipment by outgoing officials and employees prior to the effectivity of their transfer, resignation, retirement or separation from Office To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 34 dated February 19, 1993 of the Office of the President, Malacaang Palace, Manila. cd "Office of the President of the Philippines Malacaang MEMORANDUM CIRCULAR NO. 34 REQUIRING SETTLEMENT, SURRENDER, AND/OR TURNOVER OF GOVERNMENT VEHICLES AND OTHER EQUIPMENT OF OUTGOING OFFICIALS AND EMPLOYEES PRIOR TO THE EFFECTIVITY OF THEIR TRANSFER, RESIGNATION, RETIREMENT, OR SEPARATION FROM OFFICE

The attention of this Office has been invited by Department Secretaries to the growing incidence of non-turnover/non-surrender by outgoing government officials and employees of government property such as vehicles, communications equipment, and other government assets, thereby hampering smooth operations of affected agencies. Pursuant to existing rules and regulations, and in the interest of public service, all heads of departments, bureaus, offices, agencies, and instrumentalities of the government, including government-owned or controlled corporations, are hereby directed to require all outgoing government officials and employees in their respective offices to effect a physical turnover of all government assets in their custody, such as vehicles, communication facilities, and all other equipment prior to the effectivity of their transfer to other agencies, resignation, retirement, or separation from office. Otherwise, clearance from their accountabilities shall not be issued and these equipment shall be physically retrieved from them. casia All administrative and criminal sanctions within the existing laws, rules, and regulations shall be applied to any one (officials or employees) who by conclusion, design, or negligence, shall be found guilty of any violation hereof. Strict compliance herewith is enjoined. Manila, February 19, 1993 By authority of the President (Sgd) ANTONIO T. CARPIO Chief, Presidential Legal Counsel" All revenue officials and employees are enjoined to give this circular as wide as publicity as possible. cdtai LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-01-93 Revenue Memorandum Circular No. 37-93 July 1, 1993 July 1, 1993 REVENUE MEMORANDUM CIRCULAR NO. 37-93 Subject : Reclassification of Cigarette Subjects to Excise Tax To : All Internal Revenue Officers and Others Concerned In view of the issues raised on whether "HOPE", "MORE" and "CHAMPION" cigarettes which are locally manufactured are appropriately considered as locally manufactured cigarettes bearing a foreign brand, this Office is compelled to review the previous rulings on the matter. cdtai Section 142 (c)(1), National Internal Revenue Code, as amended by R.A. 6956, provides:

"On locally manufactured cigarettes bearing a foreign brand, fifty-five percent (55%) Provided, That this rate shall apply regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. Whenever it has to be determined whether or not a cigarette bears a foreign brand, the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern." Under the foregoing, the test for imposition of the 55% ad valorem tax on cigarettes is that the locally manufactured cigarettes bear a foreign brand regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. The brand must be originally owned by a foreign manufacturer or producer. If ownership of the cigarette brand is, however, not definitely determinable, ". . . the listing of brand manufactured in foreign countries appearing in the current World Tobacco Directory shall govern. . . ." "HOPE" is listed in the World Tobacco Director as being manufactured by (a) Japan Tobacco, Japan and (b) Fortune Tobacco, Philippines. "MORE" is listed in the said directory as being manufactured by: (a) Fills de Julia Reig. Andorra; (b) Rothmans, Australia; (c) RJR-Macdonald, Canada; (d) Rettig-Strenberg, Finland; (e) Karellas, Greece; (f) R.J. Reynolds, Malaysia; (g) Rothmans, New Zealand; (h) Fortune Tobacco, Philippines; (i) R.J. Reynolds, Puerto Rico; (j) R.J. Reynolds, Spain; (k) Tabacalera, Spain; (l) R.J. Reynolds, Switzerland; and (m) R.J. Reynolds, USA. "CHAMPION" is registered in the said directory as being manufactured by (a) Commonwealth, Bangladesh; (b) Sudan, Brazil; (c) Japan Tobacco, Japan; (d) Fortune Tobacco, Philippines; (e) Haggar, Sudan; and (f) Tabac Reunies, Switzerland. cd i Since there is no showing who among the abovelisted manufacturers of the cigarettes bearing the said brands are the real owner/s thereof, then it follows that the same shall be considered foreign brand for purposes of determining the ad valorem tax, pursuant to Section 142 of the National Internal Revenue Code. As held in BIR Ruling No. 410-88, dated August 24, 1988, "in case where it cannot be established or there is dearth of evidence as to whether a brand is foreign or not, resort of the World Tobacco Directory should be made." In view of the foregoing, the aforesaid brands of cigarettes, viz: "HOPE", "MORE" and "CHAMPION" being manufactured by Fortune Tobacco Corporation are hereby considered local manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax on cigarettes. Any ruling inconsistent herewith is revoked or modified accordingly. LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-24-93 Revenue Memorandum Circular No. 38-93 May 24, 1993 May 24, 1993 REVENUE MEMORANDUM CIRCULAR NO. 38-93 Subject : Strengthening Intra-Department Interaction/Dialogue and Empowering Government Workers by Institutionalizing Rank-and-File Representation in Department/Agency Management Committees

To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quote hereunder is the Memorandum From the President dated March 31, 1993. "Pursuant to the agreements during the Cabinet Workshop on Improving the Bureaucracy held on 31 March 1993, you are hereby directed to undertake the following activities: 1. Consult rank-and-file employees in the formulation of policies particularly those affecting them; 2. Invite at least one (1) representative from the rank-and-file employees to attend Management Committee meetings convened to discuss policy matters affecting them; and 3. Conduct dialogues frequently and general assembles at least twice a year within each Department and its attached agencies. For strict compliance. (Sgd.) FIDEL V. RAMOS" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. aisa dc LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-28-93 Revenue Memorandum Circular No. 39-93 May 28, 1993 May 28, 1993 REVENUE MEMORANDUM CIRCULAR NO. 39-93 Subject : Adoption of Measures to Intensify Human Resource Development in the Government To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum from the President dated March 31, 1993. "Pursuant to the agreements reached during the Cabinet Workshop on Improving the Bureaucracy conducted on 31 March 1993 and to effect measures to energize the government, the following are hereby directed: 1. For the Department of Budget and Management to make the necessary allocation of funds for human resource investment based on the submitted programs in the annual budget; 2. For all Department and attached agencies to coordinate with the Office of the Ombudsman to release retirees' clearance thirty (30) days before retirement; cda 3. For all Departments and attached agencies to undertake a job/skills enhancement program; and

4. For all Departments and attached agencies to undertake the identification/selection process to accelerate or enhance the training, job exposure and responsibility assumption, and career motivation of the "best and the brightest". Submit a status report to the Office of the President within sixty (60) days upon issuance of this directive. For strict compliance. (Sgd.) FIDEL V. RAMOS All revenue officials and employees are enjoined to give this circular as wide as publicity as possible. casia LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-06-93 Revenue Memorandum Circular No. 40-93 July 6, 1993 July 6, 1993 REVENUE MEMORANDUM CIRCULAR NO. 40-93 Subject : Advising of the President's Memorandum on Impostors and Poseurs and Directing the Adoption of Appropriate Preventive and Punitive Measures To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum Circular No. 49, dated May 21, 1993. cda "All departments, agencies, offices, government-owned and controlled corporations and local government units are hereby advised that the President has issued a Memorandum dated 20 May 1993 warning the general public against unscrupulous persons, influence peddlers, extortionists, impostors and poseurs engaged in peddling influence or attempting extortion by using his name, signature, picture or office as a means to gain favor or advantage or to carry out various illegal purposes. cd i Accordingly, all concerned are hereby directed to adopt such preventive and punitive measures as may be proper and necessary to discourage said reprehensible practices. This Memorandum Circular shall take effect immediately. ONE in the City of Manila, on this 21st day of May, in the year of Our Lord, Nineteen Hundred and Ninety-Three. By authority of the President: ANTONIO T. CARPIO" Chief, Presidential Legal Counsel All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdasia LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-06-93 Revenue Memorandum Circular No. 41-93 July 6, 1993 REVENUE MEMORANDUM CIRCULAR NO. 41-93 Subject : Directing the Installation of a Monitoring System to Identify Impostors and Poseurs To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum Circular No. 51, dated May 25, 1993. "It has come to the attention of the President that unscrupulous persons, influence peddlers, extortionists, impostors and poseurs have been engaging in peddling influence or attempting extortion by using his name, signature, picture or office to gain favors, advantage or to carry out various illegal purposes. The President condemns such activities and directs the punishment thereof. aisa dc In this regard, all heads of departments, bureaus, agencies, offices and instrumentalities of the national government including government-owned or controlled corporations and local government units are hereby directed to install an effective monitoring system in their respective offices to identify the presence of these acts and in the process, eliminate the same. It is further directed that notices be posted in conspicuous places of the office premises advising the general public to report the presence of such activities directly to the Office of the President (Attn: Senior Aide-de-Camp. Tel. No. 712-5421). A report on the implementation of this directive should be submitted to this Office within fifteen days from the date thereof, and quarterly thereafter. By authority of the President: EDELMIRO A. AMANTE, SR." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide as publicity as possible. cdasia LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-31-93 Revenue Memorandum Circular No. 42-93 July 31, 1993 July 31, 1993 REVENUE MEMORANDUM CIRCULAR NO. 42-93 Subject : Implementation of Personnel Policies on Performance Evaluation, Grievance Machinery, Employee Suggestions and Incentive Awards System, Career and Personnel Development Plan, and Merit Promotion Plan To : All Revenue Officials and Employees Pursuant to the provisions of Civil Service Commission Memorandum Circular No. 7, s. 1993, dated February 15, 1993, the Personnel Division is hereby directed to implement and pilot-test the personnel policies on Performance Evaluation, Grievance Machinery, Employee Suggestions and Incentive Awards System, Career and Personnel

Development Plan, and Merit Promotion Plan to all Regional offices of this Bureau. These policies have been approved by the Civil Service Commission. The Administrative Branches of the regions are hereby enjoined to coordinate closely with the Personnel Division for the success of the initial implementation program. cda Attached is the schedule of regional consultation. This Order takes effect immediately. cdtai LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-08-93 Revenue Memorandum Circular No. 43-93 July 8, 1993 REVENUE MEMORANDUM CIRCULAR NO. 43-93 Subject : Loss of three (3) pads of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given to the loss of the three (3) pads of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Number Quantity 5410701-H - 5410850-H Three (3) pads The abovementioned revenue officials receipts which were reported as lost while in the possession of Mr. Cirilo David, Jr., Revenue Collection Agent of Aurora and Magsaysay, Zamboanga del Sur, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cda RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-93 Revenue Memorandum Circular No. 44-93 July 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 44-93 Subject : Instruction of the President for increased and efficient tax collection To : All internal revenue officers and other concerned Circular hereunder is the memorandum of the President dated June 23, 1993 directing the Bureau to adopt measures and actions for increased and efficient tax collection: "MEMORANDUM

To

COMMISSIONER LIWAYWAY V. CHATO Bureau of Internal Revenue You are hereby directed to adopt the following measures and actions for increased and efficient tax collection: 1. In coordination with the Department of Finance and the Office of the President, undertake the study and preparation of proposed legislation on permanent fundamental policy guidelines for the continuing development of tax administration programs designed to enhance the efficiency of the Bureau of Internal Revenue; cdtai 2. In coordination with the Department of Finance and the Office of the President, undertake the study and preparation of proposed legislation on the creation or revival of a joint legislature-executive tax commission and the reversion of the National Tax Research Center as the technical staff of the proposed committee; 3. undertake the formulation and implementation of a Medium-Term Tax Administration Program and the creation of an audit team, in coordination with the Department of Finance, to monitor and assess compliance with the program; and 4. undertake the adoption and implementation of a career system program to enhance the professionalization of the Bureau, attract highly qualified personnel, and to form and maintain a corps of dedicated, competent and development-oriented career tax administrators and personnel that would restore the public's faith and confidence in the Bureau. acd For immediate and strict compliance. Signed: FIDEL V. RAMOS All concerned Assistant Commissioners and other internal revenue officers are hereby directed to institute the necessary actions to implement and disseminate this memorandum. cda LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-20-93 Revenue Memorandum Circular No. 45-93 July 20, 1993 REVENUE MEMORANDUM CIRCULAR NO. 45-93 Subject : Loss of one (1) Original Copy of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) original copy of Revenue Official Receipts (BIR Form No. 25.24), to wit: cd Serial Number Quantity 1155951-L Original Copy

The abovementioned revenue official receipt which was reported as missing by Ms. Merlina C. Mendoza, Revenue Collection Officer of Bambang, Nueva Vizcaya, and the other copies of the set of revenue official receipts bearing serial number 1155951-L are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts is found, taking necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. cd i THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdtai RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-06-93 Revenue Memorandum Circular No. 46-93 August 6, 1993 REVENUE MEMORANDUM CIRCULAR NO. 46-93 Subject : Features of Tax Administration Strategic Plan To : All internal revenue officers and others concerned In compliance with the directive of President Fidel V. Ramos dated June 23, 1993, directing the Bureau to adopt measures and actions of increased efficient tax collection, a "TAX ADMINISTRATION STRATEGIC PLAN (TASP)" has been prepared and presented to the President last July 29, 1993. acd The TASP articulates the Bureau's long term vision to transform tax administration by pursuing three (3) broad Objectives which will be supported with six (6) Strategies and implemented with twenty (20) Action Plans. The general features are as follows: MISSION Our Mission is to enforce the internal revenue laws with impartially, courtesy and consistency; collect the appropriate amount of taxes at the least cost to the Government and least inconvenience to the taxpayer; and serve the public honestly and efficiency in a manner that will elicit the highest level of confidence in the Bureau of Internal Revenue. cda OBJECTIVES Enhance voluntary compliance Reduce compliance burden on taxpayers Make the BIR management-and productivity-oriented STRATEGIES Streamline the Bureau of Internal Revenue Address the causes of non-compliance Improve the quality of revenue service Modernize the tax computer systems Develop a career revenue executive service and employee training program Instill moral, ethical and professional conduct among the personnel

ACTION PLANS Streamline the organization of the BIR Decentralize and devolve operational functions of certain offices in the National Office Initiate implementation of the compliance strategy Reduce burden of compliance requirements Pursue continuing taxpayer education and tax information program Publish official National Internal Revenue Code, revenue regulations, court decisions, administrative rulings and disseminate primers on new and existing tax laws Conduct seminars and dialogues with the private sector Take immediate action on contested assessments Strengthen the collection enforcement function Improve administration of the withholding tax system Develop and implement a rationalized selective audit program Establish a coordinated examination program Intensify tax fraud prosecution program Develop a taxpayer compliance measurement program Initiate a career revenue service executive development and employee training program Institutionalize the system of management performance audit Upgrade the salary level and develop financial incentives for employees Adhere strictly to the highest standards of professional and ethical conduct Improve the processing, quality, timeliness, usefulness and efficiency of information returns and financial reporting documents Modernize existing computer systems The complete text of the TASP will be distributed to the senior and middle management of the Bureau and a program to disseminate and implement this TASP will be instituted. cda LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-93 Revenue Memorandum Circular No. 47-93 July 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 47-93 Subject : Confidence Building with Commission on Audit To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum of the President dated June 01, 1993. cdt "It has become very apparent that most of the government agencies, if not all, are being faced with varying issues/concerns relative to the procedures of the Commission on Audit, thereby affecting the speedy process of implementation of various programs and projects. cd i In this regard, the Chairman of the Commission on Audit, Chairman Pascario Banaria has committed to accommodate regular, top-level meetings with all Cabinet officials and the

heads of their attached agencies to discuss the various issues/concerns of their departments and mutually agree upon solution thereto. Likewise, to enhance the relationship of the various government offices with the Commission on Audit, all Cabinet officials and heads of government offices concerned are hereby directed to conduct confidence building exercises with their respective Resident Auditors by regularly briefing them of their ongoing projects. These exercises will better improve the government's efforts towards the common good of the public. (Sgd) FIDEL V. RAMOS All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdasia LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-93 Revenue Memorandum Circular No. 48-93 July 23, 1993 July 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 48-93 Subject : Support to Ending Hidden Hunger Campaign To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum of the President dated June 1, 1993. "Pursuant to the Advocacy Meeting on Ending Hidden Hunger, you are hereby directed to give full support to the campaign on Ending Hidden Hunger along your respective areas of concern. aisa dc Submit regular monthly reports to the Department of Health on the action taken in this regard beginning next month. For strict compliance. (Sgd.) FIDEL V. RAMOS" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-93 Revenue Memorandum Circular No. 49-93 July 23, 1993 July 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 49-93 Subject : Amending Memorandum Circular No. 3 To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 7, series of 1993 of the Office of the Ombudsman dated May 3, 1993. casia

"Section 3 of Memorandum Circular No. 3 dated March 20, 1992 mandates all concerned to send requests for clearance to the channels referred to therein, at least forty-five (45) days prior to the earliest effectivity date of the retirement/resignation of the applicants covered by the request. Despite sufficient time provided, several retiring employees complained of delay in the release of their clearances, and consequently, their benefits. In order to have a speedier processing and release of Ombudsman clearances which are being unduly hampered by continuing power interruptions, the submission of requests for clearance shall now be made at least ninety (90) days prior to the earliest effectivity date of retirement/resignation of the applicants covered by a particular request. This circular shall take effect immediately. Manila, Philippines, May 3, 1993. cd (Sgd.) FIDEL V. RAMOS" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-23-93 Revenue Memorandum Circular No. 50-93 July 23, 1993 REVENUE MEMORANDUM CIRCULAR NO. 50-93 Subject : Pending Cases with the Office of the Ombudsman To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum of the President dated June 1, 1993. "There are several pending cases filed with the Office of the Ombudsman affecting the implementation of various government infrastructure projects. cdt In this regard, it was agreed that all Cabinet officials and the heads of agencies concerned or their duly designated representatives shall directly coordinate with the Ombudsman and meet regularly to discuss important pending cases affecting the implementation of their respective projects and come out with solutions to immediately address the same. (Sgd.) FIDEL V. RAMOS" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdtai LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-03-93 Revenue Memorandum Circular No. 51-93 August 3, 1993 REVENUE MEMORANDUM CIRCULAR NO. 51-93 Subject : Loss of One (1) Booklet of Confirmation Receipts (BIR Form CB 82-02-03) To : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the loss of one (1) booklet of Confirmation Receipts, to wit: casia --------------------------INCLUSIVE SERIAL NUMBERS : QUANTITY --------------------------392351 - 392400 : One (1) Booklet --------------------------The above receipts which were reported missing by the Accredited Bank to this Office have been cancelled and any official transactions involving the use of said forms are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc VICTOR A. DEOFERIO, JR. Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-06-93 Revenue Memorandum Circular No. 52-93 August 6, 1993 REVENUE MEMORANDUM CIRCULAR NO. 52-93 Subject : Loss of one (1) set of Official Receipts (General Form No. 13-A). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Official Receipts (General Form No. 13-A), to wit: cda Serial Number Quantity 4494590-R One (1) set The abovementioned official receipts which were reported as missing by Ms. Alicia dela Cruz, Revenue Collection Officer of Caloocan City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. casia RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-14-93 Revenue Memorandum Circular No. 53-93 September 14, 1993 September 14, 1993 REVENUE MEMORANDUM CIRCULAR NO. 53-93 Subject : Publishing Memorandum Circular No. 60

To : All Internal Revenue Officers and Others Concerned. Presented hereunder is the full text of Memorandum Circular No. 60 which was issued by the President of the Republic of the Philippines on July 8, 1993: "MEMORANDUM CIRCULAR NO. 60 ESTABLISHING A SYSTEM TO ENSURE SMOOTH FLOW OF TRANSACTIONS IN GOVERNMENT AND PROMPT RESPONSE TO PUBLIC REQUESTS. WHEREAS, it is the policy of the Government to promote and inculcate among government officials and employees norms of conduct expected of civil servants; cd i WHEREAS, Republic Act 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees, provides for the duties and responsibilities of public officials and employees to ensure prompt and responsive delivery of public services; WHEREAS, the rules implementing the said Code of Conduct and Ethical Standards promulgated by the Civil Service Commission provides for the institution of reforms in the systems and procedures in government, transparency on transactions and access to information and incentives and rewards system for officials and servants who have demonstrated exemplary service and conduct; WHEREAS, Executive Order No. 89, series of 1993, reiterates the policy of full public disclosure by directing all heads of executive departments and agencies, including government-owned and - controlled corporations, to implement a policy of accessibility and transparency; and, WHEREAS, strict adherence to these policies shall be enforced for the Government to best serve the interest of the people. aisa dc NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and the laws, do hereby order as follows: Sec. 1. In line with the efforts of the Government to establish an efficient, effective and responsive bureaucracy, there is hereby established a system to ensure smooth flow of transactions and prompt action on the problems, complaints, inquiries, requests for assistance from the public and other frontline services. Sec. 2. All heads of executive departments, bureaus, instrumentalities, offices and agencies of government, as well as government-owned and -controlled corporations, shall strictly observe the provision of RA 6713 requiring public officials and employees to respond to letters and routinary requests sent by the public within fifteen (15) days from receipt. cda Sec. 3. All heads of offices shall, within thirty (30) days, formulate rules and regulations that shall govern matters requiring administrative decisions in their respective agencies to ensure prompt, adequate and responsive action. The rules and regulations shall: (a) identify frontline services being delivered by the agency, the flowchart for each service and the prescribed length of time to process them; (b) establish a system of rewards in recognition of good performance as well as administrative sanctions to enhance compliance with the rules promulgated in the agency, consistent and in compliance with the Civil Service rules and regulations; (c) institute a system within the agency which shall enforce and monitor compliance with the rules and regulations and determine appropriate work standards and work targets, among others. The monitoring system shall provide for the keeping of

records/journal that shall indicate the date of receipt and the action taken on the matter. The journal shall be made available to anyone in line with the government policy of transparency; and, cdt (d) infuse the culture of courtesy in the office. Sec. 4. A senior official, with the rank of Undersecretary or its equivalent, shall be assigned to ensure strict compliance with the promulgated rules and regulations in every department or agency. Sec. 5. The Office of the President shall set up a counterpart team which shall assist the Departments/agencies in monitoring compliance with the promulgated rules and regulations. Sec. 6. All government agencies shall submit to the Office of the Executive Secretary, through the Presidential Management Staff, the following: (a) name of the Undersecretary assigned to monitor compliance in the agency; (b) promulgated rules and regulations on matters requiring administrative decision/action including the list of all frontline services with corresponding flowcharts and the prescribed length of time to process them; cd (c) monitoring system to be instituted in the agency to ensure compliance with the rules and regulations. Sec. 7. A quarterly monitoring report on compliance with the promulgated rules and regulations shall likewise be submitted to the Office of the Executive Secretary. Sec. 8. This Memorandum Circular shall take effect immediately. DONE in the City of Manila, this 8th day of July, in the year of Our Lord, Nineteen Hundred and Ninety-Three. (SGD.) FIDEL V. RAMOS By the President: (SGD.) TEOFISTO GUINGONA, JR. Executive Secretary" This Circular should be disseminated to all units of this Agency and be given the widest publicity possible. cd LIWAYWAY VINZONS-CHATO Commissioner By: RENE G. BAEZ Deputy Commissioner Officer-in-Charge Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-21-93 Revenue Memorandum Circular No. 54-93 September 21, 1993 REVENUE MEMORANDUM CIRCULAR NO. 54-93

Subject : Expanded withholding tax rate imposed on sales or transfers of real property by banks To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is the letter of former Commissioner Jose U. Ong to Mr. Charlie V. Gorayeb, President, Chamber of Real Estate and Builders' Association, Inc. (CREBA) dated June 29, 1990: cdasia "Due to the position taken by the HLURB, Commissioner that it has no legal basis to require or allow banks to register with it, the third requirement provided in Revenue Regulations No. 1-90; i.e., registration of the bank-seller of foreclosed real properties with the HUDCC or HLURB, shall not be required. In other words, in order that a bank may be entitled to the 2.5% creditable withholding tax on sales or transfers of real property on or after March 1, 1990, it only has to be 'habitually engaged in the real estate business;' i.e., it must have at least six (6) real estate transactions during the preceding taxable year, and it is registered with CREBA. "In view thereof, the presentation of the License To Sell and the Certificate of Registration from HLURB is hereby dispensed with insofar as banks who meet the above requirements are concerned." aisa dc All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-27-93 Revenue Memorandum Circular No. 55-93 September 27, 1993 REVENUE MEMORANDUM CIRCULAR NO. 55-93 Subject : EDP Proficiency Examination To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is a letter from the Director, National Computer Institute, National Computer Center dated August 10, 1993. "By virtue of CSC Resolution No. 90-083, the National Computer Center (NCC) and the Civil Service Commission (CSC) jointly undertake the Information Technology (IT) Certification Program whereby proficiency tests in programming, and systems analysis and design are conducted. Certificate of Proficiency is given by NCC to a successful examinee and is the basis of the CSC to grant appropriate technical eligibility. cdasia Employers, prospective programmers and systems analysts, as well as IT schools/training institutions benefit from this program in the following ways:

1. The proficiency test is a mechanism to evaluate competence of an individual to perform programming or systems analysis and design function particularly in the government. . The proficiency test can be used by an individual to measure his knowledge and skills for the purpose of continually improving his own technical abilities. 3. By knowing the nature and scope of the proficiency tests, IT training centers are encouraged to enrich their curricula to enable their students who are potential examinees to have a higher batting average that will increase the corps of IT eligibles. casia May we request that you encourage your staff/students to take the proficiency tests. Attached are copies of the announcement. We will appreciate your posting this announcement at strategic spots for better visibility. Thank you for your participation in this effort to develop highly competent IT practitioners. Very truly yours, (Sgd.) CYNTHIA A. TOPACIO" Director National Computer Institute All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdt LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-17-93 Revenue Memorandum Circular No. 56-93 September 17, 1993 REVENUE MEMORANDUM CIRCULAR NO. 56-93 Subject : Loss of one (1) set of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Revenue Official Receipts (BIR Form No. 25.24), to wit: cda Inclusive Serial Number 1477100-L One (1) set Quantity

The abovementioned revenue official receipts which were reported as missing by Ms. Juanita Palacol, Revenue Collection Officer of Pagsanjan, Laguna, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary

steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-04-93 Revenue Memorandum Circular No. 57-93 October 4, 1993 REVENUE MEMORANDUM CIRCULAR NO. 57-93 Subject : Loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Number Quantity

6474201-H to 6474250-H

One (1) pad

The abovementioned revenue official receipts which were reported as missing by Mrs. Gertrudes O. Flores, Administrative Officer of RDO-15, Tarlac, Tarlac, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdt RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-04-93 Revenue Memorandum Circular No. 58-93 October 4, 1993 REVENUE MEMORANDUM CIRCULAR NO. 58-93 Subject : Loss of Five (5) sets of Certificates Authorizing Registration (Taxable Real Property Transaction) (BIR Form No. 1954). To : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the loss of five (5) sets of Certificates Authorizing Registration (Taxable Real Property Transaction) (BIR Form No. 1954), to wit: Inclusive Serial Number Quantity

190628 to 190632 Five (5) sets The abovementioned accountable forms which were reported as missing by Mr. Abdulhakim Sauti, Revenue District Officer of RD No. 72, Jolo, Sulu, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned accountable forms are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdasia RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-26-93 Revenue Memorandum Circular No. 59-93 August 26, 1993 August 26, 1993 REVENUE MEMORANDUM CIRCULAR NO. 59-93 Subject : Executive Order No. 89 Re: Directing the Implementation of a Policy of Accessibility and Transparency in Government To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Department Order No. 46-93 dated July 27, 1993. "In compliance with Executive Order No. 89, on "Directing the Implementation of a Policy of Accessibility and Transparency in Government", you are hereby directed to post in conspicuous places within the premises of your respective offices the procedures for all public transactions or official business including the procedure by which an aggrieved party may seek administrative redress for any violation of the aforesaid procedures, in the form of flow charts, using clear and understandable language in Pilipino and the dialect predominantly spoken in the locality. cdasia This Order shall take effect immediately. (Sgd.) ERNEST C. LEUNG" Acting Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 08-30-93 Revenue Memorandum Circular No. 60-93 August 30, 1993 REVENUE MEMORANDUM CIRCULAR NO. 60-93 Subject : Taking a More Proactive Role in Communicating to the People the Medium-Term Philippine Development Plan, 1993-1998, or "Philippines 2000!!!" To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum of the President dated June 23, 1993. "1. This is to remind all members of the Cabinet and other heads of executive agencies and instrumentalities of government, including government-owned and controlled corporations and local government units, to be more proactive in communicating to the people and the international community the government's MediumTerm Philippine Development Plan, 1993-1998, otherwise known as "Philippines 2000!!!". cdasia 2. While I, and a few other Cabinet members and heads of agencies have always referred to the Plan in our speeches, I have noted that the rest have not really taken serious effort in promoting the Plan/"Philippines 2000!!!". I am therefore reminding all officials concerned about the provision in Administrative Order No. 22, dated 15 December 1992, promulgating the Communication and Advocacy Program (CAP) in support of the Plan, which directs all Cabinet members and heads of executive departments and agencies to refer to the Plan in all their major policy speeches and pronouncements. 3. In this connection, all line departments and agencies, as well as the local government units, shall henceforth reflect specific references to the Plan/"Philippines 2000!!!" by using its logo and slogan as adopted by the Presidential Task Force on the CAP (PTF-CAP) in their publications, announcements and advertisements (including billboards) on any major government program and project. cdasia This is to assure the people and our friends in the world community that we in government are united and determined to pursue the vision of development we have set for our country and people under the plan. 4. The Presidential Task Force on the CAP will monitor compliance and make periodic reports to me on this matter. For guidance and immediate compliance of all concerned. (SGD.) FIDEL V. RAMOS" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. casia LIWAYWAY VINZONS-CHATO

Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-04-93 Revenue Memorandum Circular No. 61-93 October 4, 1993 October 4, 1993 REVENUE MEMORANDUM CIRCULAR NO. 61-93 Subject : Requiring All Concerned to Observe Strictly Pronouncements and Guidelines on Foreign Travel To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the President Memorandum Circular No. 67 dated August 30, 1993. cd i "This Office has been receiving requests for travel abroad of government personnel without sufficient justification. It has also been noted that many of these requests, particularly those that involve government funding, are not accompanied by itemized statements of expenditures and, in the case of heads of departments and governmentowned or controlled corporations and local government units leaving for abroad, by the designation of the Acting Head/Officer-in-Charge of the office. Not infrequently, requests for travel authority are submitted barely a few days before, at times after, the scheduled date of departure. Finally, many offices have yet to substantially comply with the reportorial requirement for every foreign travel undertaken by their officials and employees. The foregoing defects/deficiencies not only indicate lack of commitment on the part of some government officials to the government's fiscal conservation program but also reflect their complacency in observing established rules, policies and procedures. Needless to state, non-compliance with the requirements results in unnecessary delays in the processing of requests for travel authorities, not to mention clogging of papers. cdtai To effectively conserve government resources, monitor expenses incurred for foreign travels, and facilitate the processing of requests for travel authorities, strict compliance by all concerned with the following requirements is hereby reiterated: 1. All foreign travel proposals should be carefully reviewed and evaluated so that only trips which are urgent and extremely necessary are forwarded to this Office for consideration. A certification to that effect shall, henceforth, form part of the travel proposal. The same criteria shall apply to foreign travels authorized by heads of offices pursuant to Executive Order No. 6 dated March 12, 1986, as amended. These heads of offices shall be held responsible/accountable for travel authorities issued by them that do not conform to existing policy pronouncements. 2. All travel proposals with government funding should be accompanied by an itemized statement of expenses to be incurred for the purpose. cdtai 3. All travel proposals shall, henceforth, be submitted to this office at least 15 days prior to departure. In extremely unavoidable cases, the reasons for the delay in the submission of the travel proposal should be indicated. 4. In the case of heads of departments, government-owned or controlled corporations, financial institutions and local government units traveling abroad, they

should include in the travel proposal the name of the official to be designated as Acting Head or Officer-in-Charge of the office, as the case may be, for the duration of the trip. 5. Every head of office or agency concerned should see to it that the requirement for every official or employee authorized to travel abroad to submit a report on his travel together with his recommendation/s for the benefit of the service, within thirty (30) days after his return is strictly complied with. Said reports should be complied and forwarded to this Office every month in the form prescribed for the purpose, together with a summary of the recommendation which, although feasible, cannot be implemented at the office or agency level without prior evaluation or approval by other appropriate office/s or by higher authorities, and those that are being or will be implemented at the office or agency level. cda In the case of participation in an international conference or convention in which the Philippines is represented by a delegation, a report of the delegation should be submitted to the President of the Philippines through the Secretary of Foreign Affairs not later than one month after the closing of the conference or convention. Any member of the delegation may also submit a supplementary report. Non-compliance with any of the requirements mentioned above shall constitute sufficient ground for non-processing of outright disapproval of requests to travel abroad. This Memorandum Circular shall take effect immediately. By authority of the President: (Sgd.) TEOFISTO T. GUINGONA, JR." Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cdt LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-28-93 Revenue Memorandum Circular No. 62-93 October 28, 1993 October 28, 1993 REVENUE MEMORANDUM CIRCULAR NO. 62-93 Subject : Streamlining of the Bureau of Internal Revenue To : All Internal Revenue Officers and Others Concerned. Presented hereunder is the full text of Executive Order No. 132 which was issued by the President of the Republic of the Philippines on October 26, 1993: "EXECUTIVE ORDER NO. 132 APPROVING THE STREAMLINING OF THE BUREAU OF INTERNAL REVENUE

WHEREAS, there is an urgent need for increased and efficient tax collection to support the economic development and growth of the Philippines; cd WHEREAS, to achieve this goal, it is imperative that the Bureau of Internal Revenue, the government office tasked with the administration and enforcement of Philippine tax laws, be strengthened in order to establish public confidence in, and obtain maximum voluntary compliance with, Philippine tax laws and their administration; WHEREAS, the streamlining of the organization and operations of the Bureau of Internal Revenue is necessary to decentralize its line functions, thereby strengthening its Regional and Revenue District Offices in the implementation and enforcement of tax laws; WHEREAS, under Section 20, Book III of Executive Order No. 292, (Revised Administrative Code), the President is empowered to exercise such other powers and functions vested in him which are provided for under the laws; WHEREAS, the President is empowered to approve changes in the reorganization under Section 63 of Executive Order No. 127 (Order reorganizing the Ministry of Finance) for the purpose of promoting efficiency and effectiveness in the delivery of public services; casia WHEREAS, under Section 48 of the General Provisions of Republic Act No. 7645 (General Appropriations Act for FY 1993), heads of departments, bureaus and agencies are directed to scale down, phase out or abolish activities no longer essential in the delivery of public services; and WHEREAS, under Section 62 of the General Provisions of Republic Act No. 7645, the President may direct changes in the organization and key positions in any department, bureau or agency. WHEREAS, as additional requirement for the fully integrated computerization of tax administration as recommended by the NEDA and approved by the President and the implementation of the 5-Year Bureau of Internal Revenue Computerization Program requires the direction, supervision and coordination of a Deputy Commissioner. NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: casia Sec. 1. Streamlining of Organization Structure. The organization structure of the Bureau of Internal Revenue shall define clearly the functions and responsibilities of the National Office and those of the Regional Offices, as follows: 1. The National Office shall develop and formulate broad national tax administration policies and programs, for efficient and effective implementation of internal revenue laws and regulations and establish the general direction, guidance and control of the entire operations of internal revenue service. For this purpose, the following organizational changes are adopted: 1.1 The existing functional groups in the Bureau are restructured to effect the functional reorientation of the Services and divisions under them. 1.1.1 The Legal Service, which shall be headed by an Assistant Commissioner who shall be assisted by a Revenue Head Executive Assistant, is placed directly under the Office of the Commissioner, together with the Legislative, Ruling and Research Division (being renamed as Law Division) and Appellate Division. The Prosecution Division and Litigation Division are merged into the Litigation and Prosecution Division and the Personnel Inquiry Division is transferred from the Inspection Service to the Legal Service. cda

1.1.2 The Intelligence and Investigation Office and the Inspection Service are abolished. An Intelligence and Investigation Service is hereby created to absorb the same functions of the abolished office and service. It shall be headed by an Assistant Commissioner who shall be assisted by a Revenue Head Executive Assistant. It is attached directly to the Office of the Commissioner together with the Tax Fraud Division. The Internal Security Division is transferred from the abolished Inspection Service to the Intelligence and Investigation Service. The Fiscal Control Division is abolished and its functions are transferred to the Performance Monitoring Service and decentralized to the Regional Offices. 1.2 The Assessment and Collection Group shall be renamed as the Operations Group and supervised by a Deputy Commissioner who shall be appointed by the President upon recommendation of the Secretary of Finance. This Group shall be composed of the following Services, each Service to be headed by an Assistant Commissioner who shall be assisted by a Revenue Head Executive Assistant. acd 1.2.1 Assessment Service - The existing National Audit Review Division and Tax Credit/Refund Division are abolished and their functions are transferred to the Regional Offices. The Assessment Performance Control Division is renamed Assessment Performance Audit Division and transferred to the Performance Monitoring Service. The Assessment Programs Division, Asset Valuation Division and Audit Data Bank Division are created under the Assessment Service. 1.2.2 Collection Service - The existing Collection Enforcement Division and Accounts Receivable/Billing Division are abolished and their functions are decentralized to the Revenue District Offices. The Collection Performance Evaluation Division is renamed Collection Performance Audit Division and transferred to the Performance Monitoring Service. The Withholding Tax Division is renamed Withholding Agents Monitoring Division under the Collection Service. The Revenue Accounting Division is transferred from the Financial Service to the Collection Service. The Collection Programs Division is created, and the Large Taxpayers Division is placed under the Collection Service. acd 1.2.3 The Performance Monitoring Service is created under the Operations Group which shall be headed by an Assistant Commissioner who shall be assisted by a Revenue Head Executive Assistant. The Regulatory Operations Monitoring Division is created under the Performance Monitoring Service. The Assessment Performance Audit Division and the Collection Performance Audit Division are included in this Service. 1.2.4 The Excise Tax Service and all the divisions under it and the Special Operations Service and all the divisions under it, except the International Tax Affairs Division which is transferred to the Planning and Research Service, are abolished and their functions are decentralized to the Revenue District Offices. 1.2.5 The Revenue Regional Offices and Revenue District Offices shall report to this Group. 1.3 The Information Systems Group is created which shall be headed and supervised by a Deputy Commissioner who shall be appointed by the President upon recommendation of the Secretary of Finance. This Group shall be composed of the following Services, each Service to be headed by an Assistant Commissioner who shall be assisted by a Revenue Head Executive Assistant.

1.3.1 The Information Systems Operations Service is created with the following divisions. Network and Systems Operations Division, Document Processing Division and Field Technical Support Division. aisa dc 1.3.2 The Information Systems Development Service is created with the following divisions: Systems Acquisition Division, Application Design and Development Division, Systems Programming and Database Management Division and Quality Assurance Division. 1.4 The Resource Management Group is created which shall be headed and supervised by a Deputy Commissioner who shall be appointed by the President upon recommendation of the Secretary of Finance. This Group shall be composed of the following Services, each to be headed by an Assistant Commissioner who shall be assisted by a Revenue Head Executive Assistant. 1.4.1 The Planning and Research Service - which is renamed as Management and Planning Service. The Planning and Research Division is renamed as the Planning Division. The Management Information and Data Control System Division and Public Information and Assistance Division are renamed Management Division and Public Information and Education Division, respectively. The Statistical Analysis Division is renamed Statistics Division and transferred to the Planning and Research Service from the Financial Service. 1.4.2 The Financial Service and the Administrative Service are merged into the Financial and Administrative Service together with the following: Budget Division, Disbursement Accounting Division which is renamed Accounting Division, Records Division and Accountable Forms Division. The Property Division is merged with the General Services Division. The Procurement Division is created under the Financial and Administrative Service. aisa dc 1.4.3 The Human Resource Development Service is created and shall have the following divisions: Personnel Division, Career Development Division which is renamed Training Division and Medical and Dental Division which are transferred to the Human Resource Development Service from the abolished Administrative Service. The Career Management Division is created under the Human Resource Development Service. 1.4.4 The Computer Information Systems Service and its four divisions are all abolished. 2. The Regional Offices shall directly execute the national policies and programs prescribed by the Central Office for the enforcement of the internal revenue laws of the Philippines. They shall have supervision and control over the Revenue District Offices and shall be responsible for directing and coordinating their operations within the region. 2.1 The Regional Offices shall be composed of the Office of the Regional Director, Finance Division, Administrative Division, Legal Division, Assessment Division, Collection Division and Special Investigation Division. 2.2 The Revenue District Offices shall implement programs, methods and procedures necessary for the efficient, effective and economical assessment and collection of internal revenue taxes in the revenue district in accordance with the policies, standards and guidelines prescribed by the Central Office and the Revenue Regional Office. cd i Sec. 2. Redeployment of Personnel. The redeployment of officials and other personnel on the basis of the streamlining embodied in this Executive Order shall not result in the

dislocation of existing personnel nor in the diminution of rank and compensation and shall take into account pertinent Civil Service Law and rules. The Bureau of Internal Revenue shall submit to the Department of Budget and Management the realigned staffing pattern that shall complement its streamlined organization structure. Sec. 3. Policy of Non-Extension of Services Beyond Compulsory Retirement Age. It shall be the policy of the Bureau of Internal Revenue not to allow any extension of service beyond the compulsory age of retirement in order not to disrupt the revenue service career system. Sec. 4. Transfer of Presidential Appointees. The Commissioner of Internal Revenue is hereby authorized to transfer and assign appointees of the President to positions or assignments of equivalent rank in the Bureau if the exigencies of the service so require. Sec. 5. Funding. Funds needed to carry out the provisions of this Executive Order shall be taken from funds available in the Bureau of Internal Revenue. cdtai Sec. 6. Implementing Authority. The Commissioner of Internal Revenue with the approval of the Secretary of Finance shall issue the rules and regulations and other issuances as may be necessary to ensure the effective implementation of the provisions of this Executive Order. Sec. 7. Effectivity. This Executive Order shall take effect immediately. Done in the City of Manila this 26th day of October in the Year of Our Lord, nineteen hundred and ninety three. (SGD.) FIDEL V. RAMOS By the President: (SGD.) TEOFISTO T. GUINGONA, JR. Executive Secretary" For the information of all concerned. cd LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-08-93 Revenue Memorandum Circular No. 63-93 November 8, 1993 REVENUE MEMORANDUM CIRCULAR NO. 63-93 Subject : Deferment of the Implementation of the Effectivity of Revenue Regulations No. 7-93 from 1993 to 1994 To : All Internal Revenue Officials and Others Concerned For the information and guidance of all concerned, quoted hereunder is the full text of the Unnumbered Memorandum dated November 16, 1993 of the Commissioner of Internal Revenue duly approved by the Undersecretary and Officer-in-Charge Romeo L. Bernardo of the Department of Finance. cdtai

"Revenue Regulations No. 7-93 require the filing and payment of the quarterly income tax returns, using BIR Form 1701Q, by self-employed and professionals. Said regulations were approved on March 9, 1993 and were published in the Manila Bulletin on April 20, 1993 thereby making it effective fifteen (15) days after publication, pursuant to Executive Order No. 200. However, the implementation of said regulations is hereby deferred due to time constraints in the procurement process of the tax forms (BIR Form 1701Q), to give ample time for the BIR to disseminate the new requirements and for the taxpayers to adequately prepare for complying with the quarterly filing. cd i The effective date of implementation of said regulations will therefore be in 1994 when the first quarterly return for 1994 will be filed not later than May 15, 1994. (Sgd.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue APPROVED: (Sgd.) ROMEO L. BERNARDO Undersecretary and Officer-in-Charge All revenue officials and employees are enjoined to give this circular as wide as publicity as possible. aisa dc LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-08-93 Revenue Memorandum Circular No. 64-93 November 8, 1993 REVENUE MEMORANDUM CIRCULAR NO. 64-93 Subject : Loss of one (1) pad of Payment Orders (CB Form RC 82-02-02) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Payment Orders (CB Form RC 82-0202), to wit: Inclusive Serial Number Quantity C-7927476 - C-7927500 One (1) pad The abovementioned Payment Orders (CB Form RC 82-02-02) which were reported as missing by Ms. Esperanza C. Ty, Assistant Revenue Officer, of Revenue District No. 60, Cebu City, are hereby cancelled and all official transactions involving the use thereof are therefore invalidated. cdasia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned payment orders are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. acd

RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-08-94 Revenue Memorandum Circular No. 1-94 January 8, 1994 REVENUE MEMORANDUM CIRCULAR NO. 1-94 Subject : Loss of thirty eight (38) sets of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of thirty eight (38) sets of Revenue Official Receipts (BIR Form No. 25.24), to wit: casia Serial Numbers Quantity 2438763-L to 2438800-L Thirty eight (38) sets The abovementioned revenue official receipts which were reported as missing by Mr. Romeo S. Zafra, Jr., Acting Revenue Collection Officer of Lake Sebu, South Cotabato are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets of revenue official receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-27-94 Revenue Memorandum Circular No. 2-94 December 27, 1994 REVENUE MEMORANDUM CIRCULAR NO. 2-94 Subject : Memorandum of Agreement between the Land Registration Authority (LRA) and the Bureau of Internal Revenue (BIR) relative to Registration of Instruments involving Real Properties or Real Rights therein or Any Chattel Mortgage, and Notice of Lien on Properties of Delinquent Taxpayers. To : All Internal Revenue Officials and Employees and Others Concerned. For the Information of all revenue officials and employees and others concerned, quoted hereunder is the Memorandum of Agreement executed by and between the LRA and the BIR, dated December 20, 1993: cd "MEMORANDUM OF AGREEMENT

KNOW ALL MEN BY THESE PRESENTS: This AGREEMENT made and entered into by and between: The BUREAU OF INTERNAL REVENUE (BIR), represented herein by the COMMISSIONER, LIWAYWAY VINZONS-CHATO, with principal office at the BIR Building, Diliman, Quezon City; and The LAND REGISTRATION AUTHORITY (LRA), represented herein by the ADMINISTRATOR, REYNALDO Y. MAULIT with principal office at LRA Building, Diliman, Quezon City; WITNESSETH: WHEREAS, Executive Order No. 53, series of 1993 directs all government agencies to provide the BIR with the necessary information to help increase tax collections; WHEREAS, the taxpayer identification number (TIN) is a vital information for tracing a person's taxable transactions under a computerized system of tax administration; WHEREAS, under Executive Order No. 52, series of 1993, the BIR shall require that the TIN of persons who are parties to the real property transactions be reflected in the documents to be registered with the Registry of Deeds; WHEREAS, under the last paragraph of Section 49 (a) (4) of the National Internal Revenue Code (NIRC), as amended by Executive Order No. 37, no registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner of Internal Revenue or his duly authorized representative has certified that such transfer has been reported and the capital gains tax herein imposed, if any, has been paid; aisa dc WHEREAS, under Section 88 of the NIRC, Registers of Deeds shall not register in the registry of property any documents transferring real property or real rights therein or any chattel mortgage, by way of gifts inter vivos or mortis causa, legacy or inheritance, unless a certification from the Commissioner that the tax fixed in Title III (Estate and Gift taxes) of the NIRC and actually due thereon had been paid; WHEREAS, Deeds of Assignment of real properties in exchange for shares of stock of a corporation pursuant to paragraphs (c) (2) and (6) (c) of Section 34 of the NIRC as amended and as amplified by Revenue Memorandum Order No. 26-92, shall not be registered with the Register of Deeds to effect transfer of Certificate of Title of real property to the transferee-corporation, except upon proper tax clearance/ruling issued by the BIR as to the deferment of recognition of gain or less on the part of the transferors; WHEREAS, the Certificate of Registration of document involving donation or transmission of estate of decedents, or the Certificate Authorizing Registration (CAR), in the case of deed of sale, exchange or other disposition of real property located in the Philippines, including pacto de retro sales and other forms of conditional sales, (i.e. judicial and extra-judicial foreclosure sales), by individual or corporation is required before such registration can be effected with the Register of Deeds pursuant to existing Revenue Regulations. WHEREAS, Deeds of Assignment/Transfer Exchange or other disposition of real property held by a Trustee shall not be registered by the Register of Deeds except upon proper tax clearance issued by the BIR; cdt WHEREAS, under Section 50(b) of the NIRC as implemented by Revenue Regulations No. 6-85, as amended by Revenue Regulations Nos. 12-89 and 1-90, sale, exchange or

other disposition of real property whether classified as ordinary or capital assets located in the Philippines by corporations and sale, exchange or other disposition of real property classified as ordinary assets located in the Philippines by individuals including estate or trust are subject to the creditable expanded withholding tax; WHEREAS, under Revenue Regulations No. 9-93 implementing Section 20 of Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992, a lien on the Certificate of Title to be issued covering raw land sold and/or lands donated qualified to be exempt from capital gains tax or donor's tax, as certified by the Housing and Land Use Regulatory Board (HLURB), shall be annotated by the Register of Deeds having jurisdiction over the property that the lands are to be used for socialized housing project. WHEREAS, in the collection enforcement of delinquent taxes, warrants of levy upon real property and interest in or rights to real property of delinquent taxpayer and written notice of tax lien are issued by the BIR pursuant to Sections 205 and 213 respectively of the NIRC and mailed or served upon the Register of Deeds of the province or city where properties of delinquent taxpayers are located and upon the taxpayer or in his absence from the Philippines, upon his agent; WHEREAS, under Section 220 of the NIRC, the amount of internal revenue tax due from any person, corporation, partnership, joint account (cuenta en participacion) association or insurance company who neglects or refuses to pay the same after demand, shall be a lien in favor of the Government of the Philippines from the time the assessment was made by the Commissioner until paid, with interest, penalties and costs that may accrue in addition thereto upon all property and rights to property belonging to the taxpayer; WHEREAS, the Land Registration Authority (LRA) as the principal agency charged with the functions of registering titles and deeds under the Torrens system in accordance with the provisions of Pres. Decree No. 1529 is tasked with the supervision and control over all Registers of Deeds and their personnel particularly for the purpose of instituting and maintaining an orderly system of registration; WHEREAS, as a result of increasing public demand for expeditious registration processes with the various registries and in order to accelerate the delivery of service to the public, the LRA proposes the creation of a pilot project on one-stop transaction with the BIR to help facilitate the registration of instruments involving real property and other transactions such as the transmission of estates and donations; cdt NOW, THEREFORE, in order to ensure the prompt assessment and collection of the correct internal revenue taxes as well as facilitate the registration of transactions involving real properties, the LRA and the BIR have mutually agreed to coordinate their efforts by adopting the following procedures: 1. The RDO in the District Office shall: a) Furnish the Register of Deeds, in advance, the serial numbers of all CARs accountable forms assigned to them. b) Furnish the Register of Deeds within their Region on a monthly basis, a summary list of information of CARs issued, the serial numbers; date issued, name of taxpayer/vendor, his/her TIN, amount of capital gains tax/creditable withholding tax, donor's/estate taxes and documentary stamp tax paid; Official Receipt and/or Batch Control Sheet (BCS) machine validation number in the return filed (Annex "A");

2. The Commissioner or his/her authorized representative shall file with the Register of Deeds notice of tax/levy issued on real properties of delinquent taxpayers; 3. The BIR shall furnish LRA with pertinent copies of Revenue Regulations, Revenue Memorandum Orders, and Revenue Memorandum Circulars and other revenue issuances relative to transfers affecting real properties; II. The Administrator of LRA through his duly authorized representatives particularly the Register of Deeds of different provinces and cities shall: cdtai 1. Register documents such as deed of settlement of estate, deed of donation, deed of sale, exchange or other disposition of real property, including pacto de retro sale and other conditional sales, (i.e. judicial and extra-judicial foreclosure sales) only upon presentation of the Certificate Authorizing Registration (CAR) or Certificate of Tax Clearance or Exemption issued by duly authorized revenue officials, regardless of the period/year such instruments were executed pursuant to pertinent BIR Rules and Regulations and the TIN and CAR Serial Number indicated therein. 2. Annotate at the back of the Transfer Certificate of Title to be issued to the transferee corporation of the properties involved in the exchange transaction under Section 34 (c)(2) and (6)(c) of the NIRC and in compliance with the condition stated in the pertinent BIR ruling, the following Memorandum: "The acquisition of the property described in this title is by virtue of a tax deferred transaction pursuant to Sec. 34(c)(2) and (6)(c) of the NIRC per Deed of Exchange/Assignment dated _______________, the historical cost or adjusted basis of which is determined in the amount of _______________" provided however, that the condition for the annotation thereof is specified in the deed of exchange or transfer or stipulated and agreed upon by the parties in a separate document. 3. Annotate at the back of the Transfer Certificate of Title to be issued covering new lands sold or lands donated in favor of the vendee/donee corporation or association, a lien that the lands are to be used exclusively for socialized housing project in accordance with Sec. 20 of R.A. 7279. 4. Assist the BIR in identifying the real properties of delinquent taxpayers for proper entry and annotation of the notice of tax lien and/or levy issued on the certificate of title. casia 5. Register the Notice of Tax Lien filed by the Commissioner or his/her authorized representative with the Office of the Register of Deeds of the province or city where the property is situated pursuant to the provision of Section 220 of the Tax Code by means of annotation in the certificate of title or in the registration book of unregistered lands specified in the notice of tax lien in favor of the Government pursuant to Section 113 of Presidential Decree 1529. 6. Provide the BIR with such other information of uncovered transactions relating to transfers of real properties effected through misrepresentation and use of fake/spurious documents. 7. Allow the BIR authorized officer to have an access the records of the Register of Deeds upon presentation of duly approved requests therefor by the Commissioner, Deputy Commissioner, Assistant Commissioner, Regional Director or Revenue District Officer.

8. Disseminate the revenue issuances, regulations, revenue memorandum orders pertinent to transfer of real property or rights therein to the Registers of Deeds for their information and guidance. III. The LRA and the BIR shall create an inter-agency committee to oversee and monitor the proper implementation of this Memorandum of Agreement within ninety (90) days upon signing of this Agreement. IV. The LRA and the BIR shall constitute a "one-stop-shop" initially as pilot project in the Registry of Deeds of Quezon City to assist and facilitate the registration of instruments involving sales, exchange or other disposition of real property, including foreclosure sales, transmissions of estate and donations. casia V. The provisions of the Memorandum of Agreement entered into by and between LRA and BIR on June 2, 1987 insofar as they are not inconsistent with this Memorandum of Agreement shall continue to have force and effect and be implemented. DONE in Quezon City, Philippines, this 20th day of December, 1993. (Sgd.) REYNALDO Y. MAULIT (Sgd.) LIWAYWAY VINZONS-CHATO Administrator Commissioner Land Registration Authority Bureau of Internal Revenue signed in the presence of: (Sgd.) RICARDO F. ARANDILLA (Sgd.) RENE G. BAEZ Deputy Administrator Deputy Commissioner Land Registration Authority Bureau of Internal Revenue All concerned are hereby enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-07-94 Revenue Memorandum Circular No. 3-94 January 7, 1994 REVENUE MEMORANDUM CIRCULAR NO. 3-94 Subject : Loss of twenty seven (27) sets of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of twenty seven (27) sets of Revenue Official Receipts (BIR Form No. 25.24), to wit: cdtai Serial Numbers Quantity Twenty seven (27) sets

2329624-L to 2329650-L

The abovementioned revenue official receipts which were reported as missing by Ms. Raquel R. Castor, Assistant Revenue Collector of Mabini, Batangas are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets of revenue official receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cdt RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-12-94 Revenue Memorandum Circular No. 4-94 January 12, 1994 REVENUE MEMORANDUM CIRCULAR NO. 4-94 Subject : Publishing the full text of Republic Act No. 7660 which is an act rationalizing further the structure and administration of the documentary stamp tax, amending for the purpose certain provisions of the National Internal Revenue Code, as amended, allocating funds for specific programs, and for other purposes. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7660: "REPUBLIC ACT NO. 7660 "AN ACT RATIONALIZING FURTHER THE STRUCTURE AND ADMINISTRATION OF THE DOCUMENTARY STAMP TAX, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, ALLOCATING FUNDS FOR SPECIFIC PROGRAMS, AND FOR OTHER PURPOSES "Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. "Sec. 1. Section 173 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: cda "Sec. 173. Stamp taxes upon documents, instruments, loan agreements, and papers. Upon documents, instruments, loan agreements, and papers, and upon acceptances, assignments, seals, and transfers of the obligation, right, or property incident thereto, there shall be levied, collected and paid for, and in respect of the transaction so had or accomplished, the corresponding documentary stamp taxes prescribed in the following sections of this Title, by the person making, signing, issuing, accepting, or transferring the same wherever the document is made, signed, issued, accepted, or transferred when the obligation or right arises from Philippine sources or the property is situated in the Philippines, and at the same time such act is done or transaction had: Provided, That whenever one party to the taxable document enjoys exemption from the tax herein

imposed, the other party thereto who is not exempt shall be the one directly liable for the tax." "Sec. 2. Section 174 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 174. Stamp tax on bonds, debentures, and certificates of indebtedness. - On all bonds, debentures, and certificates of indebtedness issued by any association, company, or corporation, there shall be collected a documentary stamp tax of one peso and fifty centavos (P1.50) on each two hundred pesos, or fractional part thereof, of the face value of such documents." cda "Sec. 3. Section 175 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 175. Stamp tax on original issue of certificates of stock. - On every original issue, whether on organization, reorganization or for any lawful purpose; of certificates of stock by any association, company, or corporations, there shall be collected a documentary stamp tax of Two pesos (P2.00) on each two hundred pesos, or fractional part thereof, of the par value of such certificates: Provided, That in the case of the original issue of stock without par value the amount of the documentary stamp tax herein prescribed shall be based upon the actual consideration received by the association, company, or corporation for the issuance of such stock, and in the case of stock dividends on the actual value represented by each share." "Sec. 4. Section 176 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: aisa dc "Sec. 176. Stamp tax on sales, agreements to sell, memoranda of sales, deliveries of transfer of due-bills, certificates of obligation, or shares or certificates of stock. - On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of due-bills, certificates of obligation, or shares or certificates of stock in any association, company, or corporation, or transfer of such securities by assignment in blank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such due-bills, certificates of obligation or stock, or to secure the future payment of money, or for the future transfer of any due-bill, certificates of obligation or stock, there shall be collected a documentary stamp tax of One peso (P1.00) on each two hundred pesos, or fractional part thereof, of the par value of such due-bill, certificates of obligation or stock: Provided, That only one tax shall be collected on each sale or transfer of stock or securities from one person to another, regardless of whether or not a certificate of stock or obligation is issued, endorsed, or delivered in pursuance of such sale or transfer: and Provided, further, That in the case of stock without par value the amount of the documentary stamp herein prescribed shall be equivalent to twenty-five per centum of the documentary stamp tax paid upon the original issue of said stock: Provided, furthermore, That the tax herein imposed shall be increased to One peso and fifty centavos (P1.50) beginning 1996." "Sec. 5. Section 178 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: acd "Sec. 178. Stamp tax on certificates of profits or interest in property or accumulations. - On all certificates of profits, or any certificate or memorandum showing interest in the property or accumulations of any association, company or corporation, and on all transfers of such certificates or memoranda, there shall be collected a documentary

stamp tax of Fifty centavos (P0.50) on each two hundred pesos, or fractional part thereof, of the face value of such certificate or memorandum." "Sec. 6. Section 179 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 179. Stamp tax on bank checks, drafts, certificates of deposit not bearing interest, and other instruments. - On each bank check, draft, or certificate of deposit not drawing interest, or order for the payment of any sum of money drawn upon or issued by any bank, trust company, or any person or persons, companies or corporations, at sight or on demand, there shall be collected a documentary stamp tax of One peso and twentyfive centavos (P1.25): Provided, That the tax herein imposed shall be increased to One peso and fifty centavos (P1.50) beginning 1996." cdtai "Sec. 7. Section 180 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 180. Stamp tax on all loan agreements, promissory notes, bills of exchange, drafts, instruments and securities issued by the government or any of its instrumentalities, certificates of deposit bearing interest and others not payable on sight or demand. - On all loan agreements signed abroad wherein the object of the contract is located or used in the Philippines; bill of exchange (between points within the Philippines), drafts, instruments and securities issued by the Government or any of its instrumentalities or certificates of deposits drawing interest, or orders for the payment of any sum of money otherwise than at sight or on demand, or on all promissory notes, whether, negotiable or non-negotiable, except bank notes issued for circulation, and on each renewal of any such note, there shall be collected a documentary stamp tax of Thirty centavos (P0.30) on each two hundred pesos, or fractional part thereof, of the face value of any such agreement, bill of exchange, draft, certificate of deposit, or note: Provided, That only one documentary stamp tax shall be imposed on either loan agreement, or promissory notes issued to secure such loan, whichever will yield a higher tax: Provided, however, That loan agreements or promissory notes the aggregate of which does not exceed Two hundred fifty thousand pesos (P250,000) executed by an individual for his purchase on installment for his personal use or that of his family and not for business, resale, barter or hire of a house, lot, motor vehicle, appliance or furniture shall be exempt from the payment of the documentary stamp tax provided under this section." "Sec. 8. Section 184 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: acd "Sec. 184. Stamp tax on policies of insurance upon property. - On all policies of insurance or other instruments by whatever name the same may be called, by which insurance shall be made or renewed upon property of any description, including rents or profits against peril by sea or on inland waters, or by fire or lightning, there shall be collected a documentary stamp tax of Fifty centavos (P0.50) on each four pesos, or fractional part thereof; of the amount of premium charged: Provided, however, That no documentary stamp tax shall be collected on reinsurance contracts or on any instrument by which cession or acceptance of insurance risks under any reinsurance agreement is effected or recorded." "Sec. 9. Section 185 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

"Sec. 185. Stamp tax on fidelity bonds and other insurance policies. - On all policies of insurance or bonds or obligations of the nature of indemnity for loss, damage, or liability made or renewed by any person, association, company or corporation transacting the business of accident, fidelity, employer's liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler, or other branch of insurance (except life, marine, inland, and fire insurance), and all bonds, undertakings, or any recognizances, conditioned for the performance of the duties of any office or position, for the doing or not doing of anything therein specified, and on all obligations guaranteeing the validity or legality of any bonds or other obligations issued by any province, city, municipality, or other public body or organization, and on all obligations guaranteeing the title to any real estate, or guaranteeing any mercantile credits, which may be made or renewed by any such person, company or corporation, there shall be collected a documentary stamp tax of Fifty centavos (P0.50) on each four pesos, or fractional part of the premium charge." aisa dc "Sec. 10. Section 186 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 186. Stamp tax on policies of annuities and pre-need plans. - On all policies of annuities, or other instruments by whatever name the same may be called, whereby an annuity may be made, transferred, or redeemed, there shall be collected a documentary stamp tax of One peso and fifty centavos (P1.50) on each two hundred pesos or fractional part thereof, of the capital of the annuity, or should this be unknown, then on each two hundred pesos, or fractional part thereof, of thirty-three and one-third times the annual income. On pre-need plans, the documentary stamp tax shall be at Fifty centavos (P0.50) on each Five hundred pesos (P500.00) or fractional part thereof, of the value or amount of the plan." "Sec. 11. Section 187 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: cdt "Sec. 187. Stamp tax on indemnity bonds. - On all bonds for indemnifying any person, firm or corporation who shall become bound or engaged as surety for the payment of any sum of money or for the due execution or performance of the duties of any office or position or to account for money received by virtue thereof, and on all other bonds of any description, except such as may be required in legal proceedings, or are otherwise provided for herein, there shall be collected a documentary stamp tax of Ten centavos (P0.10) on each four pesos or fractional part thereof of the premium charge: Provided, That the tax herein imposed shall be increased to Thirty centavos (P0.30) on each four pesos or fractional part thereof of the premium charged beginning 1996." "Sec. 12. Section 188 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 188. Stamp tax on certificates. - On each certificate or damage or otherwise, and on every other certificate of document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein; there shall be collected a documentary stamp tax of Ten pesos (P10.00): Provided, That the tax herein imposed shall be increased to Fifteen pesos (P15.00) beginning 1996." cdasia

"Sec. 13. Section 189 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 189. Stamp tax on warehouse receipts. - On each warehouse receipt for property held in storage in a public or private warehouse or yard for any other person other than the proprietor of such warehouse or yard, there shall be collected a documentary stamp tax of Ten pesos (P10.00): Provided, That no tax shall be collected on each warehouse receipt issued to any one person in any one calendar month covering property the value of which does not exceed two hundred pesos: Provided, further, That the tax herein imposed shall be increased to Fifteen pesos (P15.00) beginning 1996." "Sec. 14. Section 190 of the National Internal Revenue Code, as amended by Sec. 2 of Executive Order No. 194 series of 1987, is hereby further amended to read as follows: "Sec. 190. Stamp tax on jai-alai, horse race tickets, lotto, or other authorized number games. - On each jai-alai, horse race tickets, lotto, or other authorized number games, there shall be collected a documentary stamp tax of ten centavos (P0.10): Provided, That if the cost of the ticket exceeds One peso (P1.00), an additional tax of Ten centavos (P0.10) on every One peso (P1.00) or fractional part thereof shall be collected." casia "Sec. 15. Section 191 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 191. Stamp tax on bills of lading or receipts. - On each set of bills of lading or receipts (except charter party) for any goods, merchandise, or effects shipped from one port or place in the Philippines to another port or place in the Philippines (except on ferries across rivers), or to any foreign port, there shall be collected a documentary stamp tax of One peso (P1.00), if the value of such goods exceed One hundred pesos (P100.00), and does not exceed One thousand pesos (P1,000.00): ten pesos (P10.00) if the value exceeds One thousand pesos (P1,000): Provided, however, That freight tickets covering goods, merchandise or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers are hereby exempt." "Sec. 16. Section 192 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: cda "Sec. 192. Stamp tax on proxies. - On each proxy for voting at any election for officers of any company or association, or for any other purpose, except proxies issued affecting the affairs of associations or corporations organized for religious, charitable, or literary purposes, there shall be collected a documentary stamp tax of Ten pesos (P10.00): Provided, That the tax herein posed shall be increased to Fifteen pesos (P15.00) beginning 1996." "Sec. 17. Section 193 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 193. Stamp tax on powers of attorney.- On each power of attorney to perform any act whatsoever, except acts connected with the collection of claims due from or accruing to the Government of the Republic of the Philippines, or the government of any province, city or municipality, there shall be collected a documentary stamp tax of Five pesos (P5.00)." Sec. 18. Section 194 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 194. Stamp tax on leases and other hiring agreements. - On each lease, agreements, memorandum, or contract for hire, use or rent of any lands or tenements, or

portions thereof, there shall be collected a documentary stamp of Three pesos (P3.00) for the first Two thousand pesos (P2,000.00) or fractional part thereof, and an additional One peso (P1.00) for every One thousand pesos (P1,000.00) or fractional part thereof in excess of the first two thousand pesos (P2,000.00) for each year of the term of said contracts or agreement." aisa dc "Sec. 19. Section 195 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 195. Stamp tax on mortgages, pledges, and deeds of trust. - On every mortgage or pledge of lands, estate, or property, real or personal, heritable or movable, whatsoever, where the same shall be made as a security for the payment of any definite and certain sum of money lent at the time or previously due and owing or forborne to be paid being payable, and on any conveyance of land, estate, or property whatsoever, in trust or to be sold, or otherwise converted into money which shall be and intended only as security, either by express stipulation or otherwise, there shall be collected a documentary stamp tax at the following rates: "(a) When the amount secured does not exceed Five thousand pesos, Twenty pesos (P20.00); "(b) On each Five thousand pesos, or fractional part thereof in excess of Five thousand pesos, an additional tax of Ten pesos (P10.00). cd i "On any mortgage, pledge, or deed of trust, where the same shall be made as a security for the payment of a fluctuating account or future advances without fixed limit, the documentary stamp tax on such mortgage, pledge or deed of trust shall be computed on the amount actually loaned or given at the time of the execution of the mortgage, pledge, or deed of trust. However, if subsequent advances are made on such mortgage, pledge or deed of trust, additional documentary stamp tax shall be paid which shall be computed on the basis of the amount advanced or loaned at the rates specified above: Provided, however, That if the full amount of the loan or credit, granted under the mortgage, pledge or deed of trust is specified in such mortgage, pledge or deed of trust, the documentary stamp tax prescribed in this section shall be paid and computed on the full amount of the loan or credit granted." "Sec. 20. Section 196 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "Sec. 196. Stamp tax on deeds of sale and conveyance of real property. - On all conveyances, deeds, instruments, or writings, other than grants, patents, or original certificates of adjudication issued by the Government, whereby any lands, tenements or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers, there shall be collected a documentary stamp tax at the following rates: cdtai "(a) When the consideration, or value received or contracted to be paid for such realty, after making proper allowance of any encumbrance, does not exceed one thousand pesos, Fifteen pesos (P15.00). "(b) For each additional one thousand pesos, or fractional part thereof in excess of one thousand pesos of such consideration or value, Fifteen pesos (P15.00). "When it appears that the amount of the documentary stamp tax payable hereunder has been reduced by an incorrect statement, of the consideration in any conveyance, deed,

instrument, or writing subject to such tax the Commissioner, provincial or city treasurer, or other revenues officer shall from the assessment rolls or other reliable source of information assess the property of its true market value and collect the proper tax thereon." "Sec. 21. Section 197 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: cd "Sec. 197. Stamp tax on charter parties and similar instruments. - On every charter party, contract, or agreement for the charter of any ship, vessel, or steamer, or any letter or memorandum or other writing between the captain, master, or owner, or other person acting as agent of any ship, vessel, or steamer and any other person or persons for or relating to the charter of any such ship, vessel, or steamer, and on any renewal or transfer of such charter, contract, agreement, letter or memorandum, there shall be collected a documentary stamp tax at the following rates. "(a) If the registered gross tonnage of the ship, vessel, or steamer does not exceed one thousand tons, and the duration of the charter or contract does not exceed six months, Five hundred pesos (P500.00); and for each month or fraction of a month in excess of six months, an additional tax of Fifty pesos (P50.00) shall be paid. "(b) If the registered gross tonnage exceeds one thousand tons and does not exceed ten thousand tons, and the duration of charter or contract does not exceed six months. One thousand pesos (P1,000); and for each months or fraction of a month in excess of six months, an additional tax of One hundred pesos (P100.00) shall be paid. "(c) If the registered gross tonnage exceeds ten thousand tons and the duration of the charter or contract does not exceed six months; One thousand five hundred pesos (P1,500); and for each month or fraction of a month in excess of six months, an additional tax of One hundred fifty pesos (150.00) shall be paid." cdtai "Sec. 22. The incremental revenues from the increase in the documentary stamp taxes under this Act shall be set aside for the following purposes: (a) In 1994 and 1995, twenty-five percent (25%) thereof respectively, shall accrue to the Unified Home-Lending Program under Executive Order No. 90 particularly for masssocialized housing program to be allocated as follows: fifty percent (50%) for mass socialized housing; thirty percent (30%) for the community mortgage program; and twenty percent (20%) for land banking and development to be administered by the National Housing Authority: Provided, That not more than one percent (1%) of the respective allocations hereof shall be used for administrative expenses; (b) In 1996, twenty-five percent (25%) thereof to be utilized for the National Health Insurance Program that hereafter may be mandated by law; and (c) In 1994 and every year thereafter, twenty-five percent (25%) thereof shall accrue to a Special Education Fund to be administered by the Department of Education, Culture and Sports for the construction and repair of school facilities, training of teachers, and procurement or production of instruction materials and teaching aids; casia (d) In 1994 and every year thereafter, fifty percent (50%) thereof shall accrue to a Special Infrastructure Fund for the construction and repaid of roads, bridges, dams and irrigation, seaports, and hydroelectric and other indigenous power projects: Provided, however, that for the years 1994 and 1995, thirty percent (30%), and for the years 1996, 1997, and 1998, twenty percent (20%), of this fund shall be allocated for depressed provinces as declared by the President as the time of the effectivity of this Act: Provided,

further, That availments under this fund shall be determined by the President on the basis of equity. Provided, finally, That in paragraphs b, c, and d of this section not more than one percent (1%) of the allocated funds thereof shall be used for administrative expenses by the implementing agencies. "Sec. 23. The Secretary of Finance shall, upon the recommendation of the Commissioner of Internal Revenue, promulgate the necessary rules and regulations for the effective implementation of this Act. "Sec. 24. All laws, decrees, orders, rules and regulations or any part thereof, which are inconsistent with this Act, are hereby repealed or modified accordingly. casia "Sec. 25. If for any reason, any section or provision of this Act is declared to be unconstitutional, the other sections or provisions hereof which are not affected thereby shall continue to be in full force and effect. "Sec. 26. This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in at least two (2) national newspapers of general circulation whichever comes earlier. xxx xxx xxx "Approved: December 23, 1993 (SGD) FIDEL V. RAMOS President of the Philippines" Following Article 2 of the Civil Code of the Philippines and the doctrines enunciated in the cases of Taada, et. al. vs. Tuvera, et. al. (G.R. No. 63915, December 29, 1986, 46 SCRA 446) and Caltex (Phils.) Inc. vs. The Commissioner of Internal Revenue, (G.R. No. 97281, June 26, 1991), Republic Act 7660, which was published on December 29, 1993 in the Philippine Times Journal and Malaya newspapers shall take effect fifteen (15) days after its publication or on January 14, 1994. casia It is desired that this Circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-26-94 Revenue Memorandum Circular No. 5-94 January 26, 1994 REVENUE MEMORANDUM CIRCULAR NO. 5-94 Subject : Memorandum of Agreement between the Sugar Regulatory Administration (SRA) and the Bureau of Internal Revenue (BIR) to ensure the prompt assessment and collection of the correct internal revenue taxes from sugar mill companies, refineries, planters, traders and exporters. To : All Internal Revenue Officials and Employees and others concerned. For the information of all internal revenue officials and employees and others concerned, quoted hereunder is the Memorandum of Agreement by and between the Sugar

Regulatory Administration (SRA) and Bureau of Internal Revenue (BIR) dated September 23, 1993: MEMORANDUM OF AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Agreement, made and entered into by and between: The SUGAR REGULATORY ADMINISTRATION (SRA), represented herein by the Administrator, RODOLFO A. GAMBOA, with principal office at North Avenue, Diliman, Quezon City: casia and The BUREAU OF INTERNAL REVENUE (BIR), represented herein by the Commissioner, LIWAYWAY, VINZON-CHATO, with principal office at the BIR Building, Diliman, Quezon City. WITNESSETH: WHEREAS, Executive Order No. 53 directs all government agencies concerned to provide the BIR with the necessary information to help increase tax collections; WHEREAS, the taxpayer identification number (TIN) is a vital information for tracing a person's taxable transactions under a computerized system of tax administration; WHEREAS, Executive Order No. 52 requires that certain documents like sugar quedan permits, refined sugar release orders or similar instruments shall indicate the TIN of the owner and/or seller of the subject WHEREAS, the Sugar Regulatory Administration (SRA) was created with the objective, among others, of instituting an orderly system in sugarcane production for the stable, sufficient and balanced production of sugar for local consumption, exportation and strategic reserves; WHEREAS, the SRA has the power and function to institute, implement and regulate an orderly system of quedanning, disposition and withdrawals of various forms of sugar from warehouses; WHEREAS, under the provisions of the National Internal Revenue Code (NIRC), as amended, sugar mill companies, refineries, planters, traders and exporters of sugar are subject to value-added tax (VAT)/percentage tax on their gross receipts, and to income tax on their net taxable income; WHEREAS, the Bureau of Internal Revenue (BIR) has, in the course of selective audit conducted on some sugar mill companies, refineries, planters, traders and exporters, discovered that many of these taxpayers have failed to report their correct gross receipts/gross income for percentage and income tax purposes; WHEREAS, it is necessary to develop the BIR's computerized database to contain the necessary and relevant information pertinent to every taxpayer for storage and ready accessibility for correct determination of every taxpayer's tax liability; NOW, THEREFORE, in order to ensure the prompt assessment and collection of the correct internal revenue taxes from sugar mill companies, refineries, planters, traders and exporters, the SRA and the BIR have mutually agreed to coordinate their efforts, by adopting the following procedures: 1. The BIR, through the SRA, shall require the sugar mill companies and refineries to indicate the TIN of the owners and/or sellers of sugar on the quedan permits, refined sugar release orders or similar instruments in accordance with Section 1(a) of Executive Order No. 52;

2. The SRA shall provide the following date of the BIR in prescribed forms on or before the 30th day of each month; cdasia 2.1 List of sugar mill companies and refineries with the serial numbers of quedan permits issued and reported to SRA during each crop year for the processing and manufacture of raw and refined sugar; 2.2 Weekly reports by sugar mill companies and refineries required to be submitted in accordance with SRA Circular Letter No. 18, Series of 1987-1988, which includes, among others production reports of sugar centrals; 2.3 List of export clearance issued to exporters of sugar and/or molasses; 3. The BIR shall provide SRA with materials necessary for the proper transmittal of the information needed as prescribed in number 2 above; 4. The BIR shall develop a computerized system whereby the information/data gathered from the SRA can be effectively utilized by comparing against the reported gross receipts/gross income in the percentage/VAT returns and income tax returns filed, by sugar, mill companies, refineries, planters, traders and exporters to enhance the collection of correct internal revenue taxes and maximize tax compliance from/by them. 5. The SRA and the BIR shall create an inter-agency committee to oversee and monitor the proper implementation of this Memorandum of Agreement. cdt Done in Quezon City, Philippines, this September 23, 1993. (Sgd.) RODOLFO A. GAMBOA Administrator Commissioner Sugar Regulatory Administration Signed in the presence of: (Sgd.) CARMEN P. REYES (Sgd.) VICTOR A. DEOFERIO, JR. Assistant Administrator Deputy Commissioner Sugar Regulatory Administrator Bureau of Internal Revenue All concerned are hereby enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-02-94 Revenue Memorandum Circular No. 6-94 February 2, 1994 REVENUE MEMORANDUM CIRCULAR NO. 6-94 Subject : Publishing the full text of the President's Proclamation No. 319, which declares 1994 as the "National Tax Consciousness Year" To : All internal revenue officers and others concerned For the information and guidance of all concerned, quoted hereunder is the full text of Proclamation No. 319. (Sgd.) LIWAYWAY VINZONS-CHATO Bureau of Internal Revenue

"Whereas, the government has pursued bold and innovative measures to put our economic house in order resulting in expectations that a surge in the economy will take place in 1994; cdtai "Whereas, the government recognizes the private sector as a major partner in the country's economic development and is handing over to the private sector a respectable share of the burden towards the attainment of a newly-industrializing country-status by the year 2000; "Whereas, the government has to reply on the fiscal support that comes from the people so that this support can be translated into roads, bridges, schools, markets and other facilities that can sustain a massive agro-industrial development, create jobs and trigger an economic boom; "Whereas, the people should be aware that they are duty-bound to pay their taxes honestly and religiously just as they have as much right to expect benefits from the country's development; "Whereas, the cooperation and active participation of all sectors of society should be harnessed in reminding Filipinos of their moral responsibility to support our development efforts. "Now, therefore, I, Fidel V. Ramos, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby declare the year 1994 as National Tax Consciousness Year. casia "This Proclamation shall take effect immediately. FIDEL V. RAMOS President of the Philippines" Signed: January 21, 1994 in the City of Manila. It is desired that this Circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-94 Revenue Memorandum Circular No. 7-94 February 18, 1994 REVENUE MEMORANDUM CIRCULAR NO. 7-94 Subject : Value-Added Tax (VAT on Sale of Water. To : All internal revenue officers and others concerned. In BIR Ruling No. 017-88, dated February 1, 1988, it was held that sale of fresh water is exempted from the 10% VAT, pursuant to Section 103(b) of the National Internal Revenue Code, as amended by Executive Order No. 273, otherwise known as the VAT Law, the pertinent portion of which reads as follows: "In reply, please be informed that fresh water comes within the purview of agricultural food products; hence, the sale thereof in all stages of distribution is exempt from the

value-added tax pursuant to Section 103(b) of the Tax Code as amended by Executive Order No. 273." In view of the criticisms against the validity of the aforementioned BIR Ruling 017-88 and in light of the policy to strengthen and to improve enforcement of the national internal revenue tax laws, a re-study thereof is imperative. cd i Section 103(d), NIRC, provides: "Sale or importation in their original state of agricultural . . . food products . . ." shall be exempted from VAT. Water is not agricultural product. Rather, it is a mineral. Thus Definition of minerals. - "The term 'minerals' shall mean all naturally occurring inorganic substances (found in nature) whether in solid, liquid, gaseous, or any intermediate state." (Sec. 257(b), NIRC, as amended by Batas Pambansa Blg. 84). Definition of mineral products. - "The term 'mineral products' shall mean things produced and prepared in a marketable state by simple treatment such as washing or drying, but without undergoing any chemical change or process or manufacturing, by the lessee, concessionaire or owner of mineral lands." (ibid). Definition of agriculture. - "The cultivation of soil for food products or any other useful or valuable growths of the field or garden . . ." (Bouvier's Law Dictionary, p. 167) Definition of agricultural product. - "That which is the direct result of husbandry and the cultivation of the soil. . . ." (ibid) cdasia It is clear from the foregoing that the term agricultural product pertains to organic products through cultivation of the soil, whereas the term mineral product pertains to inorganic substances naturally occurring in nature. It follows that water, being a substance naturally occurring in nature, is mineral rather than agricultural product. Accordingly, water, may not legally be classified as agricultural food product within the purview of Section 103(b), NIRC. Hence, sale of water, whether in the form of bottled mineral water or water delivered/supplied to inter-island and ocean-going vessels by persons engaged in the business of supplying water to the aforesaid inter-island and ocean-going vessels, shall be subject to 10% VAT, pursuant to Section 100(a), NIRC. This Circular revokes VAT Ruling No. 017-88, dated February 1, 1988. LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-18-94 Revenue Memorandum Circular No. 8-94 February 18, 1994 February 18, 1994 REVENUE MEMORANDUM CIRCULAR NO. 8-94 Subject : Amendment to Section 1, Rule XVIII of the Omnibus Rules Implementing Book V of the 1987 Administrative Code To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 1, series 1994 dated January 6, 1994. acd

"Section 1 of Rule XVIII, Omnibus Rules Implementing Book V of the 1987 Administrative Code shall read as follows: "It shall be the duty of each head of department or agency to require all officers and employees under him to strictly observe the prescribed office hours. When the head of office, in the exercise of his discretion allows government officials and employees to leave the office during office hours and not for official business, but to attend socials/events/functions and/or wakes/interments, the same shall be reflected in their time cards and charged to their leave credits. cdasia This Memorandum Circular shall take effect immediately. PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 02-14-94 Revenue Memorandum Circular No. 9-94 February 14, 1994 REVENUE MEMORANDUM CIRCULAR NO. 9-94 Subject : Loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24), to wit: casia Inclusive Serial Numbers Quantity 2643951-L to 2649000-L One (1) pad The abovementioned revenue official receipts which were reported as missing by Mr. Arnulfo M. Diaz, Revenue Collection Officer of San Leonardo, Nueva Ecija, are deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. casia THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. RENE C. BAEZ Deputy Commissioner

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-13-94 Revenue Memorandum Circular No. 10-94 September 13, 1994 REVENUE MEMORANDUM CIRCULAR NO. 10-94 Subject : Prescribing Guidelines on the Performance of the National Anthem To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Executive Order No. 99 dated June 12, 1993. "WHEREAS, the musical arrangement and composition of the Philippine National Anthem as set by its author, Julian Felipe, was adopted under Commonwealth Act No. 382 approved by the First National Assembly on September 5, 1938, which was reiterated in Section 13, Book I of the Administrative Code of 1987; cdtai WHEREAS, Commonwealth Act No. 634, approved on June 10, 1941 by the Second National Assembly, amending Commonwealth Act No. 382, imposed a penalty of a fine of not less than twenty five nor more than one thousand pesos, or by imprisonment for not more than one year, for the first offense, and both fine and imprisonment for the second and additional offenses, for disrespect to the Philippine National Anthem by utterance in speech, writing or drawing, and any act or omission casting dishonor, ridicule, and contempt upon the Philippine National Anthem as well as its use in places of ill-repute or for purposes involving disrespect; WHEREAS, there is at present a proliferation of inappropriate renditions of the National Anthem with different tempos, melodies, harmonies, embellishments, or syllabication of specific words, and thus, there is a felt need to preserve the arrangement and composition of the Philippine National Anthem as set by its author, Julian Felipe, and to attain uniform performance thereof in the Philippines as a manifestation of national unity, cohesion, nationalism, patriotism, and pride of country and people; and cda WHEREAS, there is an imperative need to reinforce and expand upon the prescribed rules and guidelines on the performance of the Philippine National Anthem. NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: Sec. 1. The performance of the Philippine National Anthem, whether played or sung, shall be in accordance with the musical arrangement and composition of Julian Felipe, as adopted under Commonwealth Act No. 382, and reiterated in Section 13 of Book I of the Administrative Code of 1987, and as made available and distributed by the Department of Education, Culture and Sports. Sec. 2. Whenever the National Anthem is played at a public gathering, whether by a band or by singing or both, or reproduced through a sound system, the attending public shall be enjoined to sing the National Anthem with feeling and fervor. As a sign of respect, all persons shall be enjoined to stand at attention and face the Philippine flag, if there is one displayed, and at the first note, execute a salute by placing their right palms over their left chests. Those in military, scouting, citizens military training and security guard uniforms shall give the salute prescribed by their regulations. The salute shall be completed upon the last note of the National Anthem. The National Anthem shall not be played and sung for mere recreation, amusement or entertainment purposes. cdtai

Sec. 3. All officials and employees of the Government, and any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations and government institutions of learning are hereby directed to comply strictly with the rules prescribed herein for the performance of the Philippine National Anthem, during the opening or start of all state celebrations or gatherings and during other public acts of officials or semi-official character and formal ceremonies of civic nature. All heads of said offices are further directed to circularize this Executive Order within their respective areas of influence. Any official or employee who fails to perform his duties under this Executive Order shall be administratively dealt with in accordance with law. Sec. 4. The Department of Education, Culture and Sports shall ensure that the National Anthem, as adopted by law, shall be committed to memory by all elementary school pupils, public and private, and performed during the flag ceremony conducted in accordance with the rules and regulations issued by the Department. In addition, it shall make available the vocal, piano or band scores of the National Anthem, as adopted by law, to all private and public schools, as well as the general public and concerned entities. cdasia Sec. 5. The playing of the National Anthem for sign-on and sign-off purposes in radio and television broadcasting shall be the joint responsibility of the Office of the Press Secretary under the Office of the President and the Kagawaran ng mga Brodkasters sa Pilipinas, while that for cinema houses shall be the joint responsibility of the Motion Picture and Television Review and Classification Board and the Movie Producers and Distributors Association of the Philippines. Sec. 6. This Executive Order shall take effect immediately. All executive orders, rules and regulations or portions thereof inconsistent with this Order are hereby repealed or modified accordingly. DONE in the City of Manila, this 12th day of June in the year of Our Lord, Nineteen Hundred and Ninety-Three. cdtai (Signed) FIDEL V. RAMOS President By the President: (Signed) ANTONIO T. CARPIO" Chief Presidential Legal Counsel All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue 09-15-94 Revenue Memorandum Circular No. 11-94 September 15, 1994 REVENUE MEMORANDUM CIRCULAR NO. 11-94 Subject : Physical and Mental Fitness Program for Government Personnel

To

All Revenue Officials and Employees and others concerned

For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 38, s. 1992 dated September 30, 1992. "This Commission, pursuant to its mandate as the central personnel agency of the government, hereby authorizes for one hour each week, preferably from 4:00 o'clock p.m. up to 5:00 o'clock p.m., the conduct of the health awareness program and for twenty (20) minutes daily, preferably before or after 10:00 o'clock a.m. or 3:00 o'clock p.m., the conduct of the wellness or fitness program. Where public services will be unduly disrupted or prejudiced, the personnel complement may be divided into such number of groups as may be necessary which shall undertake such activities in the different times of the day and different days of the week. cdasia Cultural and athletic activities may still be conducted within the authority provided by the annual general appropriation acts and the limitations prescribed by presidential issuances and other pertinent rules and regulations. To achieve long-term health thru exercise and related physical fitness activities, all departments, bureaus and agencies of the national and local governments including government-owned and controlled corporations are hereby enjoined to implement this physical and mental fitness program which is supportive of the Program: Mens Sana in Corpore Sano (a sound mind in a sound body) of the Philippine Sports Commission. To assist in the undertaking, a list of possible fitness activities and their descriptions are attached together with relevant literature on the preservation of physical and mental health. The HRD/HRM or Personnel Offices are expected to take the lead in these activities. cdtai (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue MC NO. 38 S. 1992 MEMORANDUM CIRCULAR Subject : Physical and Mental Fitness Program for Government Personnel. To : All Heads of Departments, Bureaus and Agencies of the National and Local Governments, Including Government Owned and/or Controlled Corporations This Commission, pursuant to its mandate as the central personnel agency of the government, hereby authorizes for one hour each week, preferably from 4:00 o'clock p.m. up to 5:00 o'clock p.m., the conduct of the health awareness program and for twenty (20)

minutes daily, preferably before or after 10:00 o'clock a.m. or 3:00 o'clock p.m., the conduct of the wellness or fitness program. Where public services will be unduly disrupted or prejudiced, the personnel complement may be divided into such number of groups as may be necessary which shall undertake such activities in the different times of the day and different days of the week. aisa dc Cultural and athletic activities may still be conducted within the authority provided by the annual general appropriation acts and the limitations prescribed by presidential issuances and other pertinent rules and regulations. To achieve long-term health thru exercise and related physical fitness activities, all departments, bureaus and agencies of the national and local governments including government-owned and controlled corporations are hereby enjoined to implement this physical and mental fitness program which is supportive of the Program: Mens Sana in Corpore Sano (a sound mind in a sound body) of the Philippine Sports, Commission. To assist in the undertaking, a list of possible fitness activities and their descriptions are attached together with relevant literature on the preservation of physical and mental health. the HRD/HRM or Personnel Offices are expected to take the lead in these activities. casia PATRICIA A. STO. TOMAS Chairman September 30, 1992 EXAMPLES OF ACTIVITIES FOR A ONE-HOUR-A-WEEK RELAXATION OF THE BODY AND MIND 1. Physical Fitness Exercises - Warm up, stretching and conditioning exercises, with the accompaniment of calisthenics/aerobic music. Mechanics and related materials can be requested from PSC, DECS and DOH. 2. Short Distance Jogging - This can be done around and within the compound of the office. Lectures can be done before the actual activity. Resource speakers from the DECS and PSC can be tapped. cdasia 3. Parlor Games/Obstacle Races - This can be in the form of fun group races where everybody participates. 4. Simple Mass Jazz Dancing - This is in order to fully appreciate the benefits of stretching, such as to increase mental and physical relaxation, reduce muscular tension, and the like. 5. Actual Demonstration on CPR (Cardio-Pulmonary Resuscitation) - As government employees or public servants, we are obliged to give first aid services in any form of accidents, especially where the conduct of CPR is needed. Experts from the PNRC & DOH can be tapped. 6. Lecture-Demonstration on Fitness-related Topics, like: cd i

- Proper diet and nutrition of non-athletic individuals; On-site management of physical activity-related injuries; Bio-mechanics in sports and in physical fitness; and other varied and interesting topics. (Resource Speakers: Members of SMAP (Sports Medicine Association of the Philippines) 7. Lecture-Demonstration on Mind-Relaxation and Soul-Searching and Spiritual Upliftment Topics 8. Lecture-Demonstration on various Livelihood Projects 9. Film Showing on Victorious Performances of Filipino Athletes in Prestigious Tournaments - To develop a sense of nationalism and brotherhood that even a small developing country like ours can make it "big" in foreign lands through sports, and ultimately be proud of it. cda 10. Film-Showing on any wholesome movies, of very relevant values, like: - "Stand and Deliver" (a film that portrays how one can bring out the best of a person through right conditioning of the mind) - and others. Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-94 Revenue Memorandum Circular No. 12-94 October 15, 1994 REVENUE MEMORANDUM CIRCULAR NO. 12-94 Subject : Policy on Entrepreneurial Activities of Government Employees To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 32, s. 1993 dated August 26, 1993. "Section 2 of R.A. 6713 provides that "It is the policy of the State to promote a high standard of ethics in public service. Public officials and employees shall at all times discharge their duties with utmost responsibility, integrity, competence and loyalty, act with patriotism and justice, lead modest lives, and uphold public interest over personal interest." cdasia The issue of whether entrepreneurial activities of some government employees can be allowed arises in the light of abovestated provision of R.A. 6713. Such activities appear to have been triggered by the urgent need of government employees to augment their income and to cope up with the rising cost of living. Working as real estate or insurance agents, direct selling of commodities and merchandise, operating retail stores, managing a farm, and contracting out specialized services are some activities from which some employees derive extra income and sustain their living standards. Cognizant of the reasons behind these economic ventures, entrepreneurship may be allowed subject, however, to the following conditions: casia 1. That government employees shall strictly observe Section 7, paragraphs (a), (b) and (c) of R.A. 6713 which declares as unlawful the following acts and transactions of any public official and employee:

(a) Financial and material interest. - Public officials and employees shall not, directly or indirectly have any financial or material interest in any transaction requiring the approval of their office. (b) Outside employment and other activities related thereto. - Public officials and employees during their incumbency shall not: (1) Own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law; cd (2) Engage in the private practice of their own profession unless authorized by the Constitution or law, provided that such practice will not conflict or tend to conflict with their official functions; or (3) Recommend any person to any position in a private enterprise which has a regular or pending official transaction with the office. 2. That the conduct of business or economic ventures shall not conflict or tend to conflict with the official functions of the public official or employee; 3. That the conduct of business or economic ventures shall not be done during office hours nor within the required forty hour work a week period; and cdt 4. That the public official or employee shall not in any manner use government resources, facilities, equipment and supplies in the conduct of his or her business or economic ventures. In view thereof, the Commission hereby enjoins all concerned to observe the abovementioned conditions and the provisions provided for under R.A. 6713, and other existing Civil Service laws, rules, regulations relative to entrepreneurial activities. Please be guided accordingly. (Sgd.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. acd LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue M.C. No. 32, 1993 MEMORANDUM CIRCULAR Subject : Policy on Entrepreneurial Activities of Government Employees To : All Heads of Departments, Bureaus and Agencies of the National and Local Governments, State Colleges and Universities, Government-Owned or Controlled Corporations Section 2 of R.A. 6713 provides that "It is the policy of the State to promote a high standard of ethics in public service. Public officials and employees shall at all times discharge their duties with utmost responsibility, integrity, competence and loyalty, act

with patriotism and justice, lead modest lives, and uphold public interest over personal interest." casia The issue is whether entrepreneurial activities of some government employees can be allowed in the light of abovestated provision of R.A. 6713. Such activities appear to have been triggered by the urgent need of government employees to augment their income and to cope up with the rising cost of living. Working on real estate or insurance agents, direct selling of commodities and merchandise, operating retail stores, managing a farm, and contracting out specialized services are some activities from which some employees derive extra income and sustain their living standards. Cognizant of the reasons behind these economic ventures, entrepreneurship may be allowed subject, however, to the following conditions: 1. That government employees shall strictly observe Section 7, paragraphs (a), (b) and (c) of R.A. 6713 which declares as unlawful the following acts and transactions of any public official and employee: cdt xxx xxx xxx (a) Financial and material interest. - Public officials and employees shall not, directly or indirectly have any financial or material interest in any transaction requiring the approval of their office. (b) Outside employment and other activities related thereto. - Public officials and employees during their incumbency shall not: (1) Own, control, manage or accept employment as officer employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law; cd (2) Engage in the private practice of their own profession unless authorized by the Constitution or law, provided that such practice will not conflict or tend to conflict with their official functions; or (3) Recommend any person to any position in a private enterprise which has a regular or pending official transaction with their office. 2. That the conduct of business of economic ventures shall not conflict or tend to conflict with the official functions of the public official or employee; 3. That the conduct of business or economic ventures shall not be done during office hours nor within the required forty hour work a week period; and 4. That the public official or employee shall not in any manner use government resources, facilities, equipment and supplies in the conduct of his or her business or economic ventures. cdtai In view thereof, the Commission hereby enjoins all concerned to observe the abovementioned conditions and the provisions provided for under RA 6713, and other existing Civil Service laws, rules, regulations relative to entrepreneurial activities. Please be guided accordingly. PATRICIA A. STO. TOMAS Chairman August 26, 1993

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-94 Revenue Memorandum Circular No. 13-94 October 15, 1994 REVENUE MEMORANDUM CIRCULAR NO. 13-94 Subject : Interpretation of LSP Provisions on Essential and Lawful Expenses To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 31, s. 1993 dated August 17, 1993. "One of the obligations of the agency head as stated in Memorandum Circular No. 5, s. 1993 is "shoulder other essential and lawful expenses not included in the grant subject to availability of funds." This is in support of the Local Scholarship Program sponsored by the Civil Service Commission. acd The Commission hereby clarifies such provision to be in the form of the following: 1. Cost of transportation from the scholar's official station to the place of school in case the scholar is enrolled in another province or region; 2. Relocation allowance for those scholars studying outside their province or region. Such allowances may be given to grantees under the Local Scholarship Program subject to availability of funds and the usual accounting and auditing rules and regulations. For the information and guidance of all concerned. (Sgd) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd i LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue MC No. 31, s. 1993 MEMORANDUM CIRCULAR Subject To : : Interpretation of LSP Provision on Essential and Lawful Expenses All Heads of Departments and Agencies of the National and Local Governments Including Government-Owned and Controlled Corporations

One of the obligations of the agency head as stated in Memorandum Circular No. 5, s. 1993 is "shoulder other essential and lawful expenses not included in the grant subject to

availability of funds." This is in support of the Local Scholarship Program sponsored by the Civil Service Commission. aisa dc The Commission hereby clarifies such provision to be in the form of the following: 1. Cost of transportation from the scholar's official station to the place of school in case the scholar is enrolled in another province or region; 2. Relocation allowance for those scholars studying outside their province or region. Such allowances may be given to grantees under the Local Scholarship Program subject to availability of funds and the usual accounting and auditing rules and regulations. casia For the information and guidance of all concerned. PATRICIA A. STO. TOMAS Chairman

MC No. 37, s. 1993 MEMORANDUM CIRCULAR Subject : Revision of Appointment Form (CS Form 33) and Personal Data Sheet (CS Form 212) To : All Heads of Department, Bureaus and Agencies of the National and Local Government, including Government Owned and/or Controlled Corporations and State Universities and Colleges The attached revised Appointment Form and Personal Data Sheet have been approved by the Civil Service Commission to be used by all agencies or offices of the government effective January 1, 1994. The date of signing indicated below the signature of the head of the agency or the appointing authority on the appointment form shall be the date of issuance of the appointment, which shall be the reckoning date of the thirty-day mandatory period of submission of the appointment to the CSC. An appointment should not be made effective earlier than the date of signing by the head of the agency or appointing authority. The certification regarding the requirements for the appointment, the evaluation of the Personnel Selection Board, and the information regarding publication of the position, shall be accomplished at the back of the appointment form to avoid submission of separate certifications for these requirements. As a supporting document required in processing appointments, the revised Personal Data Sheet (CS form 212) should be properly accomplished and duly filled by the appointee who is held responsible for all his answers to the items contained therein. Agencies may start using the new forms even prior to January 1, 1994.

However, effective January 1, 1994, appointments issued using the old form shall be disapproved, without prejudice to resubmission on the new prescribed form within 15 days from disapproval. PATRICIA A. STO. TOMAS Chairman September 10, 1993.

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-15-93 Revenue Memorandum Circular No. 14-94 October 15, 1993 REVENUE MEMORANDUM CIRCULAR NO. 14-94 Subject : Revision of Appointment Form (CS Form 33) and Personal Data Sheet (CS Form 212) To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 37, s. 1993 dated September 10, 1993. acd "The attached revised Appointment Form and Personal Data Sheet have been approved by the Civil Service Commission to be used by all agencies or offices of the government effective January 1, 1994. The date of signing indicated below the signature of the head of the agency or the appointing authority on the appointment form shall be the date of issuance of the appointment, which shall be the reckoning date of the thirty-day mandatory period of submission of the appointment to the CSC. An appointment should not be made effective earlier than the date of signing by the head of the agency or appointing authority. The certification regarding the requirements for the appointment, the evaluation of the Personnel Selection Board, and the information regarding publication of the position, shall be accomplished at the back of the appointment form to avoid submission of separate certifications for these requirements. aisa dc As a supporting document required in processing appointments, the revised Personal Data Sheet (CS Form 212) should be properly accomplished and duly filled by the appointee who is held responsible for all his answers to the items contained therein. Agencies may start using the new forms even prior to January 1, 1994. However, effective January 1, 1994, appointments issued using the old form shall be disapproved, without prejudice to resubmission on the new prescribed form within 15 days from disapproval. cdasia (Sgd.) PATRICIA A. STO. TOMAS"

Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-08-94 Revenue Memorandum Circular No. 15-94 December 8, 1994 December 8, 1994 REVENUE MEMORANDUM CIRCULAR NO. 15-94 Subject : Use of Philippine Official Passports in Attending International Meetings To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum of the President dated November 8, 1993. "It is the policy of the government that only citizens of the Philippines shall be members of the official Philippine delegation to International meetings and conferences. In conferences held outside the Philippines, official participants who are members of the Philippine delegation are required to use Philippine official or diplomatic passports, subject to pertinent rules and regulations. cdtai However, if for some reason, a participant in an international meeting is unable to secure an official or diplomatic passport, the leader of the Philippine delegation concerned shall inform the Department of Foreign Affairs, c/o Diplomatic and Official Passports Division of his/her complete name, address, passport number, date of issue, date of validity, and the name and venue of the international meeting he/she is attending. Please be guided accordingly. (Sgd.) FIDEL V. RAMOS" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cd i LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue November 8, 1993 MEMORANDUM Subject : Use of Philippine Official Passports in Attending International Meetings To : All Heads of Departments, Bureaus and Offices Including Government Owned or Controlled Corporations It is the policy of the government that only citizens of the Philippines shall be members of the official Philippine delegation to international meetings and conferences. In

conferences held outside the Philippines, official participants who are members of the Philippine delegation are required to use Philippine official or diplomatic passports, subject to pertinent rules and regulations. cda However, if for some reason, a participant in an international meeting is unable to secure an official or diplomatic passport, the leader of the Philippine delegation concerned shall inform the Department of Foreign Affairs, c/o Diplomatic and Official Passports Division of his/her complete name, address, passport number, date of issue, date of validity, and the name and venue of the international meeting he/she is attending. Please be guided accordingly. Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-18-94 Revenue Memorandum Circular No. 16-94 November 18, 1994 November 18, 1994 REVENUE MEMORANDUM CIRCULAR NO. 16-94 Subject : Sabbatical Leave Program in the Career Executive Service (CES) To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Career Executive Service Board Circular No. 11, series of 1993 dated August 16, 1993. "Pursuant to the provisions of Career Executive Service (CES) law and CES Board Resolution No. 93-101 adopting a sabbatical leave program in the CES, the following implementation guidelines on the sabbatical leave are hereby issued for the guidance of all concerned: casia Sec. 1. Definition of Sabbatical Leave. Sabbatical leave in the Career Executive Service refers to an official's leave from work of not more than six (6) months with pay to pursue any of the activities identified in Section 3 below. It is granted to Career Executive Service Officers (CESOs) and CES eligibles who are incumbents of CES positions for seven (7) years of very satisfactory service in a CES position and every seven (7) years of very satisfactory performance thereafter. Sec. 2. Purpose of Sabbatical Leave. The Sabbatical Leave aims to provide CESOs and CES eligibles with the opportunity to further their professional development and growth. It shall also serve as a venue for creativity and demonstration of the officials' executive excellence where their personal expertise is utilized for public service outside of their department/agency. It is granted as a reward to an official for his very satisfactory performance and as an encouragement for future high performance by him. Sec. 3. Forms. Sabbatical leave may take any of the following forms: a) Sabbatical for Personal Growth, i.e., attendance in training programs, pursuit of advance studies, or other forms of professional advancement; casia b) Sabbatical for Social Service, i.e., involvement in a countryside development project of an accredited Non-Governmental Organization or of a Local Government Unit (LGU), teaching in a state university or college or rendering assistance to an LGU where his expertise is required; and, c) Sabbatical for Research and Book Writing.

Sec. 4. Implementation. The implementation of the sabbatical leave program shall be the responsibility of the department/agency. The Department Secretary or Head of agency shall recommend for approval by the Career Executive Service Board applications for sabbatical leave which he finds meritorious after evaluation by the department/agency Sabbatical Leave Screening Committee; provided, that when the exigency of the service requires or where the implementation of department/agency projects and activities dictate, the Secretary or Head of agency may recommend deferment or postponement of the sabbatical leave to some later date but not more than one year from the start of the official's entitlement to it. cda In evaluating applications for sabbatical leave, the Secretary or Head of agency and the Sabbatical Leave Screening Committee shall be guided by the following: a) Coverage. Sabbatical leave shall be enjoyed only by CESO or a CES eligible who is an incumbent of a CES position and who has served the CES for seven (7) years with very satisfactory performance. b) Frequency of Leave. A Sabbatical leave may be enjoyed by a CESO or a CES eligible once every seven (7) years of service in a CES position except when the official concerned is in his last five (5) years of service prior to compulsory retirement. c) Duration. A sabbatical leave shall be for a period of not more than six (6) months. In the event that the purpose of the leave shall be accomplished within a period of less than six (6) months, the unutilized portion of the leave shall be forfeited and shall not be added to the official's vacation or sick leave. d) Sabbatical Leave Application. An official intending to go on sabbatical leave shall submit his application to the Department/Agency Sabbatical Leave Screening Committee six (6) months before the proposed leave. The application shall be accompanied by two (2) copies of the official's sabbatical leave plan. cdtai e) Sabbatical Leave Plan. An official going on sabbatical leave shall prepare and submit, together with his application, a sabbatical leave plan detailing the purpose and nature of the sabbatical leave, the expected outputs, the action plan of implementation including time frame, duration and post sabbatical activities like information sharing for project replicability. The plan must also identify the organization or institution with whose projects or activities the official intends to spend his sabbatical leave. An acceptance by the organization or institution of the official's participation in its project through his sabbatical shall accompany the application. f) Processing of Sabbatical Leave Application. The department/agency shall evaluate and process the sabbatical leave application of its official within a month from receipt and shall thereafter inform him whether the application is endorsed to the Board for approval, deferment or disapproval. In case of a disapproval or deferment of the sabbatical leave application, the official concerned shall be informed of the reasons in writing. g) Endorsement To and Action By the Board. Applications for sabbatical leave favorably acted upon by the department/agency shall be endorsed to the Board for final action within forty-five (45) days from its receipt by the department/agency. The Board shall, within thirty (30) days from receipt of such endorsement, act on the sabbatical leave application. cdasia h) Appeal on the Department/Agency Action. An official whose application for sabbatical leave is denied by the department/agency may appeal his case to the Board.

i) Monitoring of Sabbatical Leave. The department/agency shall monitor its official's sabbatical leave to ensure that the purpose of the leave is accomplished. Sec. 5. Sabbatical Leave Screening Committee. The department/agency shall have a Sabbatical Leave Screening Committee to be headed by an Undersecretary of an equivalent rank official. The committee shall as its main task the evaluation of the sabbatical leave application and the viability of the objectives and activities set out in the official's sabbatical leave plan to ensure that the purpose for which the program has been set up is met. The committee shall recommend to the Secretary or Head of agency the appropriate action to take on the application. Sec. 6. Payment of Salary and Other Benefits. An official on sabbatical leave shall be entitled to the payment of his salary and other benefits such as bonuses, 13th month pay, clothing allowance, etc. during the period of leave. Where the activities performed under the sabbatical leave allow for payment of allowances, the official shall be entitled to the same in addition to his salary, provided, that the allowances shall not exceed fifty percent (50%) of his monthly salary. cdasia Sec. 7. Obligation of the Official Going on Sabbatical Leave. a) An official on sabbatical leave shall ensure the completion of his sabbatical leave plan during its approved duration. b) If for any valid reason, the official is unable to continue with his plan implementation, the official shall immediately inform the Department Secretary or Agency Head and the Board about the matter so that appropriate remedial action may be undertaken. c) At the end of the sabbatical leave, the official shall report back for work immediately. Within a month of his return, he shall submit a report on his sabbatical leave and undertake the necessary post sabbatical activities identified in his plan. A copy of the report shall be furnished the CES Board. d) An official on sabbatical leave shall not engage in any form of employment. Sec. 8. Actions on Non-Completion of the Sabbatical Leave Plan. An official who fails to complete and/or accomplish the objectives of his sabbatical leave plan for no valid reason shall refund all salaries and benefits he has received by reason of the sabbatical leave and shall be disqualified from participation in and/or enjoyment of future sabbatical leaves. acd Sec. 9. Limitations on the Number of Officials Going on Sabbatical Leave. The officials going on sabbatical leave at any one time shall not exceed ten percent (10%) of all CESOs and CES eligibles occupying CES positions in the department/agency. Sec. 10. Grants. Where available, grants may be availed of by an official going on sabbatical leave in support of his sabbatical leave plan implementation. The grant may be from foreign sources or from the official's department/agency. Department/Agency grants shall have the endorsement of the Sabbatical Leave Screening Committee and approval of the Department Secretary or Agency Head. Sec. 11. Effectivity. This circular shall take effect immediately. Done in Quezon City, Philippines, this 16th day of August, Nineteen Hundred and Ninety Three. cdt (Sgd.) PATRICIA A. STO. TOMAS

Chairman Attested by: ELMOR D. JURIDICO" Executive Director All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Circular No. 11 Series of 1993 Subject : Sabbatical Leave Program in the Career Executive Service (CES) For : All Heads of Departments and Agencies of the National Government including Government-Owned or Controlled Corporations with Original Charters and all Officials in the Career Executive Service Pursuant to the provisions of Career Executive Service (CES) law and CES Board Resolution No. 93-101 adopting a sabbatical leave programs in the CES, the following implementation guidelines on the sabbatical leave are hereby issued for the guidance of all concerned: Sec. 1. Definition of Sabbatical Leave. Sabbatical leave in the Career Executive Service refers to an official's leave from work of not more than six (6) months with pay to pursue any of the activities identified in Section 3 below. It is granted to Career Executive Service Officers (CESOs) and CES eligibles who are incumbents of CES positions for seven (7) years of very satisfactory service in a CES position and every seven (7) years of very satisfactory performance thereafter. acd Sec. 2. Purpose of Sabbatical Leave. The Sabbatical Leave aims to provide CESOs and CES eligibles with the opportunity to further their professional development and growth. It shall also serve as a venue for creativity and demonstration of the officials' executive excellence where their personal expertise is utilized for public service outside of their department/agency. It is granted as a reward to an official for his very satisfactory performance and as an encouragement for future high performance by him. Sec. 3. Forms. Sabbatical leave may take any of the following forms: a) Sabbatical for Personal Growth, i.e., attendance in training programs, pursuit of advance studies, or other forms of professional advancement; b) Sabbatical for Social Service, i.e., involvement in a countryside development project of an accredited Non-Governmental Organization or of a Local Government Unit (LGU), teaching in a state university or college or rendering assistance to an LGU where his expertise is required; and, c) Sabbatical for Research and Book Writing. cdasia Sec. 4. Implementation. The implementation of the sabbatical leave program shall be the responsibility of the department/agency. The Department Secretary or Head of agency

shall recommend for approval by the Career Executive Service Board applications for sabbatical leave which he finds meritorious after evaluation by the department/agency Sabbatical Leave Screening Committee; provided, that when the exigency of the service requires or where the implementation of department/agency projects and activities dictate, the Secretary or Head of agency may recommend deferment or postponement of the sabbatical leave to some later date but not more than one year from the start of the official's entitlement to it. In evaluating applications for sabbatical leave, the Secretary or Head of agency and the Sabbatical Leave Screening Committee shall be guided by the following: a) Coverage. Sabbatical leave shall be enjoyed only by a CESO or a CES eligible who is an incumbent of a CES position and who has served the CES for seven (7) years with very satisfactory performance. acd b) Frequency of Leave. A sabbatical leave may be enjoyed by a CESO or a CES eligible once every seven (7) years of service in a CES position except when the official concerned is in his last five (5) years of service prior to compulsory retirement. c) Duration. A sabbatical leave shall be for a period of not more than six (6) months. In the event that the purpose of the leave shall be accomplished within a period of less than six (6) months, the unutilized portion of the leave shall be forfeited and shall not be added to the official's vacation or sick leave. d) Sabbatical Leave Application. An official intending to go on sabbatical leave shall submit his application to the Department/Agency Sabbatical Leave Screening Committee six (6) months before the proposed leave. The application shall be accompanied by two (2) copies of the official's sabbatical leave plan. e) Sabbatical Leave Plan. An official going on sabbatical leave shall prepare and submit, together with his application, a sabbatical leave plan detailing the purpose and nature of the sabbatical leave, the expected outputs, the action plan of implementation including time frame, duration and post sabbatical activities like information sharing for project replicability. The plan must also identify the organization or institution with whose projects or activities the official intends to spend his sabbatical leave. An acceptance by the organization or institution of the official's participation in its project through his sabbatical shall accompany the application. casia f) Processing of Sabbatical Leave Application. The department/agency shall evaluate and process the sabbatical leave application of its official within a month from receipt and shall thereafter inform him whether the application is endorsed to the Board for approval, deferment or disapproval. In case of a disapproval or deferment of the sabbatical leave application, the official concerned shall be informed of the reasons in writing. g) Endorsement To and Action by the Board. Applications for sabbatical leave favorably acted upon by the department/agency shall be endorsed to the Board for final action within forty-five (45) days from its receipt by the department/agency. The Board shall, within thirty (30) days from receipt of such endorsement, act on the sabbatical leave application. h) Appeal on the Department/Agency Action. An official whose application for sabbatical leave is denied by the department/agency may appeal his case to the Board. i) Monitoring of Sabbatical Leave. The department/agency shall monitor its official's sabbatical leave to ensure that the purpose of the leave is accomplished. casia

Sec. 5. Sabbatical Leave Screening Committee. The department/agency shall have a Sabbatical Leave Screening Committee to be headed by an Undersecretary or an equivalent rank official. The committee shall have as its main task the evaluation of the sabbatical leave application and the viability of the objectives and activities set out in the official's sabbatical leave plan to ensure that the purpose for which the program has been set up is met. The committee shall recommend to the Secretary or Head of agency the appropriate action to take on the application. Sec. 6. Payment of Salary and Other Benefits. An official on sabbatical leave shall be entitled to the payment of his salary and other benefits such as bonuses, 13th month pay, clothing allowance, etc. during the period of leave. Where the activities performed under the sabbatical leave allow for payment of allowances, the official shall be entitled to the same in addition to his salary, provided, that the allowances shall not exceed fifty percent (50%) of his monthly salary. Sec. 7. Obligations of the Official Going on Sabbatical Leave a) An official on sabbatical leave shall ensure the completion of his sabbatical leave plan during its approved duration. b) If for any valid reason, the official is unable to continue with his plan implementation, the official shall immediately inform the Department Secretary or Agency Head and the Board about the matter so that appropriate remedial action may be undertaken. acd c) At the end of the sabbatical leave, the official shall report back for work immediately. Within a month of his return, he shall submit a report on his sabbatical leave and undertake the necessary post sabbatical activities identified in his plan. A copy of the report shall be furnished the CES Board. d) An official on sabbatical leave shall not engage in any form of employment. Sec. 8. Actions on Non-Completion of the Sabbatical Leave Plan. An official who fails to complete and/or accomplish the objectives of his sabbatical leave plan for no valid reason shall refund all salaries and benefits he has received by reason of the sabbatical leave and shall be disqualified from participation in and/or enjoyment of future sabbatical leaves. Sec. 9. Limitations on the Number of Officials Going on Sabbatical Leave. The officials going on sabbatical leave at any one time shall not exceed ten percent (10%) of all CESOs and CES eligibles occupying CES positions in the department/agency. Sec. 10. Grants. Where available, grants may be availed of by an official going on sabbatical leave in support of his sabbatical leave plan implementation. The grant may be from foreign sources or from the official's department/agency. Department/agency grants shall have the endorsement of the Sabbatical Leave Screening Committee and approval of the Department Secretary or Agency Head. Sec. 11. Effectivity. This Circular shall take effect immediately. Done in Quezon City, Philippines, this 16th day of August, Nineteen Hundred and Ninety Three. PATRICIA A. STO. TOMAS Chairman Attested by: ELMOR D. JURIDICO

Executive Director August 16, 1993 Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-08-94 Revenue Memorandum Circular No. 17-94 March 8, 1994 March 8, 1994 REVENUE MEMORANDUM CIRCULAR NO. 17-94 Subject : Appointment to primarily confidential positions To : All Revenue Officials and Employees and other concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 35, s. 1993 dated September 7, 1993. cdt "In CSC Resolution No. 93-1857 dated May 20, 1993, the Commission ruled that persons aged 65 years old and above may still be appointed to primarily confidential positions but shall not be entitled to additional retirement benefits. To properly implement the abovestated policy, the following guidelines are hereby adopted: cd i 1. A person who has not yet retired but already in the career service who is appointed to a co-terminous position prior to reaching the age of 65 years may continue in said position and be entitled to retirement benefits for services under the said coterminous position. 2. A person aged 65 years old and above, who has previously retired from government service, or who is joining the government service for the first time, or who is being reemployed may be appointed to a primarily confidential position but his services shall no longer give rise to retirement benefits. The status of such and appointment shall be co-terminous-temporary. This Circular hereby amends Item No. 01 of CSC MC No. 37, s. 1992 insofar as appointment to primarily confidential position is concerned. This MC shall take effect immediately after its publication in a newspaper of general circulation. (Sgd) PATRICIA A. STO. TOMAS" Chairman All officials and employees are enjoined to give this circular as wide a publicity as possible. cd LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-08-94 Revenue Memorandum Circular No. 18-94 March 8, 1994 March 8, 1994

REVENUE MEMORANDUM CIRCULAR NO. 18-94 Subject : Policy on accreditation of actual services rendered by a government official and employee whose appointment has been disapproved To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 26, s. 1993 dated June 22, 1993. "Pursuant to CSC Resolution No. 93-2223 dated June 22, 1993, the Commission hereby adopts the following guidelines in the accreditation of actual services rendered by government official/employee whose appointment has been disapproved. casia WHEREFORE, foregoing premises considered, the Commission resolves to adopt the following guidelines in the accreditation of government service wit: 1. Actual services rendered by government officials/employee whose appointment has been disapproved as appearing in the records of the Commission and for which compensation or salaries have been paid on the basis of quantum meruit and on the principle of being an de facto officer up to May 01, 1993 shall be accredited as government service. 2. Affected government personnel shall submit to the Regional/Field Office of the Civil Service Commission, not later than December 31, 1993, the necessary documents to prove such services in order that their government services can be reflected in their respective service cards. Said request should be properly indorsed by the head of agency. After the lapse of the said date, requests to accredit actual services rendered shall be disapproved by the Commissions. cd i 3. In support thereof, the following should be submitted: 1. Certification from the agency head that the employee has rendered actual service for the period subject of the request and for which payment of salaries was made; and 2. Daily Time Record or Payroll duly certified by the Personnel Officer/Administrative Officer. cdasia The Directors of Regional and Field Offices of the Commission are hereby authorized to confirm actual services rendered as government service. This Memorandum Circular shall take effect immediately. (Sgd) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. acd LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-17-94 Revenue Memorandum Circular No. 19-94 March 17, 1994 REVENUE MEMORANDUM CIRCULAR NO. 19-94

Subject To :

: President's directive on actions on allegations and complaints All Internal Revenue Officers and others concerned

For the information of all concerned, quoted hereunder is a directive from President Fidel V. Ramos, relative to the comments dated February 14, 1994 on another agency memorandum: "It is the duty of each agency so maligned to clarify to the complainant, to the President, and to the media without delay, all allegations or complaints addressed to their respective offices." In this connection, the Deputy Commissioners, Assistant Commissioners, Regional Directors and Revenue District Officers are principally responsible for implementing this directive within their area of responsibility, and where appropriate, duly advising the Commissioner of any matters or actions of this nature. cd i LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-15-94 Revenue Memorandum Circular No. 20-94 March 15, 1994 REVENUE MEMORANDUM CIRCULAR NO. 20-94 Subject : Dissemination of Department Order No. 51-90 of the Secretary of Finance To : All Regional Directors, Revenue District Officers and all Others Concerned. In view of the numerous inquiries on whether or not the Economic Intelligence and Investigation Bureau (EIIB) is empowered to exercise functions primarily conferred on the Bureau of Internal Revenue by the National Internal Revenue Code as amended, this Office is compelled to publish Department Order No. 51-90 dated October 10, 1990 of the Secretary of Finance, thus: cdasia "DEPARTMENT ORDER NO. 51-90 October 10, 1990 "Subject : Economic Intelligence and Investigation Bureau (EIIB) coordination with the Bureau of Internal Revenue (BIR) in the investigation of tax evasion cases.

"Under Section 26(a) of Executive Order No. 127 and Section 17(1) of the Administrative Code of 1987, the Economic Intelligence and Investigation Bureau is vested with the authority to investigate, among others, tax evasion and/or tax fraud cases involving the application of the provisions of the National Internal Revenue Code; on the other hand, the Bureau of Internal Revenue is the primary agency of the Government that is charged with the function of enforcing the provisions of the National Internal Revenue

Code and in the discharge of its function, it conducts the investigation of tax evasion/tax fraud cases. cd i "In the interest of an orderly tax administration and in order to avoid duplication in the investigation of tax evasion cases and obviate possible conflict that may arise between the Economic Intelligence and Investigation Bureau and the Bureau of Internal Revenue which are both under the Department of Finance, it is hereby ordered that the investigation of tax evasion cases by the Economic Intelligence and Investigation Bureau by virtue of its authority pursuant to the aforementioned laws, shall be conducted jointly with the Bureau of Internal Revenue after appropriate representation is made to the Commissioner of Internal Revenue. cd "This Order shall take effect immediately and all previous orders in conflict herewith are hereby revoked. "(SGD.) JESUS P. ESTANISLAO Secretary" The prominent feature of the above-quoted issuance is that EIIB may only investigate tax evasion cases if this is conducted jointly with the Bureau of Internal Revenue, the primary agency charged with the function of enforcing the provisions of the National Internal Revenue Code, after appropriate representations are made with the Commissioner of Internal Revenue. Furthermore, under Section 26(a) of Executive Order No. 127 and Section 17(1) of the Administrative Code of 1987, EIIB's authority to investigate is limited to tax evasion or tax fraud cases, and does not extend to the enforcement of other provisions of the Tax Code such as those relative to the issuance of invoices/receipts. All concerned are hereby enjoined to give this Circular as wide a publicity as possible. cd LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 03-30-94 Revenue Memorandum Circular No. 21-94 March 30, 1994 REVENUE MEMORANDUM CIRCULAR NO. 21-94 Subject : Publishing Revenue Regulations No. 2-94 Implementing the Tax Incentives Provisions under Sections 4 and 5(a) of Republic Act No. 7432, otherwise known as an "Act To Minimize the Contribution of Senior Citizens to Nation Building, Grant Benefits and Special Privileges and For Other Purposes". To : All Internal Revenue Officers and Other Concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Revenue Regulations No. 2-94. cdasia "August 23, 1993 "REVENUE REGULATIONS NO. 2-94 Subject : Republic Act No. 7432 otherwise known as an Act to Maximize the Contribution of Senior Citizens to Nation Building, Grant

Benefits and Special Privileges and for Other Purposes. To All Internal Revenue Officers and Others Concerned. Sec. 1. SCOPE . - Pursuant to Section 245 of the National Internal Revenue Code (NIRC) as amended, in relation to Section 10 of Republic Act No. 7432, these regulations are hereby promulgated to (1) implement the provisions of Sections 4 and 5(a) of the said Act granting tax exemption and other privileges to senior citizens, and (2) prescribe the guidelines for the availment thereof. cdt Sec. 2. DEFINITIONS . - For purposes of these regulations: a. Act - refers to Republic Act No. 7432. b. Senior citizen - means any resident citizen of the Philippines at least sixty (60) years old, including those who have retired from both government offices and private enterprises, and has an income of not more than sixty thousand pesos (P60,000.00) per annum subject to review by the National Economic and Development Authority (NEDA) every three (3) years. aisa dc The term "qualified senior citizen" shall refer to a resident Filipino citizen who meets the statutory requirements of Section 2 of the Act and Section 2(b) of these regulations. c. Resident citizen - refers to a Filipino citizen with permanent/legal residence in the Philippines, and shall include those who, having migrated to a foreign country, have returned to the Philippines with a definite intention to reside therein, and whose immigrant visa has been surrendered to the foreign government. d. Dependent - a qualified senior citizen whether or not related to a benefactor with whom he lives and who takes care of him/her. aisa dc e. Head of the Family - an unmarried or legally separated man or woman, with one or both parents, or with one or more brothers or sisters, or with one or more legitimate, recognized natural or legally adopted children, living with and dependent upon him/her for their chief support, where such brothers or sisters or children are not more than twenty-one (21) years of age, unmarried and not gainfully employed or where such children, brothers or sisters, regardless of age are incapable of self-support because of mental or physical defect. The term 'head of family' includes an unmarried or legally separated man or woman who is the benefactor of a qualified senior citizen as defined in Section 2 of the Act and these regulations. f. Benefactor - any person whether or not related to the senior citizen who takes care of the latter as a dependent. cd i g. OSCA - refers to the Office for Senior Citizens Affairs. h. Income/Annual Taxable Income of a resident Senior Citizen shall refer to the annual gross compensation, business and other income received during each taxable year from all sources as defined in Section 28 of the NIRC, which shall not exceed the poverty level of P60,000 or such amount as may thereafter be determined by the NEDA. However, income derived by a qualified senior citizen from the following sources: 1. Interest income from Philippine currency bank deposits, yield and other monetary benefit from deposit substitutes, trust fund and similar arrangements; royalties, prizes and winnings (Sec. 21(c), NIRC); :

2. Capital gains from sales or shares of stock (Sec. 21(d), NIRC); and 3. Capital gains from sales of real property (Sec. 21(e), NIRC). shall not be included in the determination of his 'income/annual taxable income' which should not exceed the poverty level of P60,000 or such amount as may thereafter be determined by the NEDA for a certain taxable year inasmuch as income from such sources shall be subject to the corresponding income tax rates prescribed under Section 21(c), (d) and (e) of the NIRC as amended. cd i 1. Tax Credit - refers to the amount representing the 20% discount granted to a qualified senior citizen by all establishments relative to their utilization of transportation services, hotels and similar lodging establishments, restaurants, drugstores, recreation centers, theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement, which discount shall be deducted by the said establishments from their gross income for income tax purposes and from their gross sales for value-added tax or other percentage tax purposes. Sec. 3. INCOME TAX BENEFIT AND PRIVILEGES FOR THE SENIOR CITIZENS . - Senior citizens qualified as such by the Commissioner of Internal Revenue or his duly authorized representative who, for purposes of these regulations, is the Regional Director of the Revenue Region having jurisdiction of the city or municipality where they are permanent residents shall be entitled to the following tax benefit and privileges: a. Exemption from the payment of individual income tax provided that their annual taxable income does not exceed the poverty level of P60,000.00 or such amount as may be determined by the NEDA for a certain taxable year. b. A 20% discount from all establishments relative to utilization of transportation services, hotels and similar lodging establishments, restaurants and recreation centers, and on purchases of medicine anywhere in the country. cda c. A minimum of twenty percent (20%) discount on admission fees charged by theaters, cinema houses and concert halls, circuses, carnivals and other similar places of culture, leisure, and amusement. Sec. 4. RECORDING/BOOKKEEPING REQUIREMENT FOR PRIVATE ESTABLISHMENTS . - Private establishments, i.e., transport services, hotels and similar lodging establishments, restaurants, recreation centers, drugstores, theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement, giving 20% discounts to qualified senior citizens are required to keep separate and accurate record of sales made to senior citizens, which shall include the name, identification number, gross sales/receipts, discounts, dates of transactions and invoice number for every transaction. casia The amount of 20% discount shall be deducted from the gross income for income tax purposes and from gross sales of the business enterprise concerned for purposes of the VAT and other percentage taxes. Sec. 5. AVAILMENT OF INCOME TAX EXEMPTION . - A senior citizen who shall avail of the exemption from income tax is required to submit the following documents to the Revenue District Officer (RDO) of the place where he is a permanent resident, who shall make the necessary verification and report for purposes of the income tax exemption to be issued by the Commissioner of Internal Revenue or his duly authorized representative:

A. Certified true copy of his Birth Certificate/Baptismal Certificate or in the absence thereof, a certification from the National Statistics and Census Bureau or an affidavit by two (2) disinterested credible persons who know personally the senior citizen. cdasia B. If he has a benefactor as defined in Section 2 (f) of these Regulations, Certification as to the name, address, occupation, Office or business address (office/business) and TIN of his benefactor; C. If employed, a copy of his withholding tax statement (BIR Form W-2) for the preceding taxable year; c.1. A senior citizen who derives taxable (fixed) compensation income from only one employer in an amount not exceeding P60,000 per annum shall be exempt from income tax and consequently from the withholding tax prescribed under Section 72 Chapter 10, Title II of the National Internal Code, as amended. D. If self-employed, (i.e., practice of profession, or in business as single proprietorship) a copy of his income tax return (ITR) for the preceding taxable year together with the annual license or permit issued by the city or municipality where he has his principal place of business, supported by a copy of his declaration of sales or income. d.1. A senior citizen who derives taxable compensation income from two (2) or more employers, or who receives mixed income from employment and from business shall still file an income tax return. cd i The RDO concerned shall transmit his verification report/recommendation to the said Regional Director, as duly authorized representative of the Commissioner, for issuance of the certificate of income tax exemption to the senior citizen. For purposes of applying for the OSCA ID Card, the duly stamped income tax return and or the BIR Certification shall be honored. Sec. 6. TAXABILITY OF SENIOR CITIZENS TO OTHER INTERNAL REVENUE TAXES . a. A senior citizen whose annual taxable income exceeds the poverty level of P60,000 or such amount as may thereafter be determined by the NEDA for a certain taxable year shall be liable to the individual income tax in the full amount thereof on his taxable income net of allowable deductions. cd b. Regardless of the amount of taxable income, a senior citizen who derives income from self-employment, business and practice of profession shall be subject to other internal revenue taxes which include but are not limited to the value added tax, caterer's tax, documentary stamp tax, overseas communications tax, excise taxes, and other percentage taxes. He shall, therefore, file the corresponding business tax returns in accordance with existing laws, rules and regulations. c. He shall be subject to the 20% final withholding tax on interest income from Philippine Currency bank deposit, yield and other monetary benefit from deposit substitutes, trust fund and similar arrangements; royalties, prizes (except prizes amounting to P3,000 or less which shall be subject to income tax at the rates prescribed under Section 21, paragraph (a) or (f), NIRC) as the case may be, and winnings (except Philippine Charity Sweepstakes winnings). aisa dc d. Capital gains from sales of shares of stock [Sec. 21(d), NIRC]. e. Capital gains from sales of real property [Sec. 21(e), NIRC]. Sec. 7. BASIC PERSONAL EXEMPTION ONLY FOR BENEFACTOR. -

A qualified senior citizen living with and taken cared of by a benefactor whether related to him or not, shall be treated as a dependent and his benefactor shall be entitled to the basic personal exemption of P12,000 as head of the family, as defined in Section 2(e) of these regulations. For purposes of claiming personal exemption as head of family with dependent senior citizen, the identification card number issued by the OSCA shall be indicated in the ITR to be filed by the benefactor. The senior citizen shall indicate in a certification to be submitted to the RDO and the OSCA his benefactor who will be granted the exclusive right to claim him as dependent for income tax purposes. Caring for a dependent senior citizen shall not, however, entitle the benefactor to claim the additional exemption allowable to a married individual or head of family with qualified dependent children under Sec. 29 (1) (2) of the NIRC, as amended. cdt Sec. 8. REPEALING CLAUSE. - All existing rules, regulations and other issuances or portions thereof inconsistent with the provisions of these regulations are hereby modified, repealed or revoked accordingly. Sec. 9. EFFECTIVITY . - These regulations shall take effect fifteen (15) days after publication in the Official Gazette or newspaper of general circulation whichever comes first and shall apply to income earned beginning January 1, 1992. (SGD) ERNEST LEUNG Acting Secretary of Finance RECOMMENDED BY: (SGD) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. cda LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-18-94 Revenue Memorandum Circular No. 22-94 April 18, 1994 REVENUE MEMORANDUM CIRCULAR NO. 22-94 Subject : Missing quadruplicate copy of Revenue Official Receipt (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 3406900-L One copy (quadruplicate) The abovementioned copy which was reported as missing by Mr. Percival T. Salazar, Assistant Regional Director of Revenue Region No. 9, San Pablo City, and the other

copies of the set bearing the abovementioned serial number have been cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENT'S OFFICES. cdasia RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 04-18-94 Revenue Memorandum Circular No. 23-94 April 18, 1994 REVENUE MEMORANDUM CIRCULAR NO. 23-94 Subject : Missing quadruplicate copy of Action on Application for Compromise Settlement/Abatement of Penalties (BIR Form No. 189) To : All Internal Revenue Officers, Employees and Others Concerned. Serial Number Quantity 05536 Quadruplicate copy The above copy which was reported as missing by Mr. Bernardo M. Sison of Revenue District No. 59, Lipa City, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. cd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cda RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-02-94 Revenue Memorandum Circular No. 24-94 May 2, 1994 REVENUE MEMORANDUM CIRCULAR NO. 24-94 Subject : Missing five (5) original copies of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing five (5) original copies of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Numbers Quantity 3656201-M Original copy

3656401-M 3656601-M 3656651-M 3656751-M

Original copy Original copy Original copy Original copy

The abovementioned revenue official receipts which were reported as missing by Mr. Percival T. Salazar, Assistant Regional Director of Revenue Region No. 9, San Pablo City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. cdtai Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENT'S OFFICES. cdt RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 05-02-94 Revenue Memorandum Circular No. 25-94 May 2, 1994 REVENUE MEMORANDUM CIRCULAR NO. 25-94 Subject : Missing Certificate Authorizing Registration (BIR Form No. 1954A) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing Certificate Authorizing Registration (BIR Form No. 1954A), to wit: Serial Numbers Quantity 496128-A One (1) Copy (Duplicate) 497602-A One (1) Copy (Quadruplicate) 499590-A No Original Copy The abovementioned copies which were reported as missing by Mr. Percival T. Salazar, Assistant Regional Director of Revenue Region No. 9, San Pablo City, and the other copies of the sets bearing the abovementioned serial numbers have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. cdtai RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

06-24-94 Revenue Memorandum Circular No. 26-94 June 24, 1994 REVENUE MEMORANDUM CIRCULAR NO. 26-94 Subject : Clarification on the Conduct of Ocular Inspection for Registration Purpopses prescribed under Revenue Memorandum Order No. 41-94. To : All Regional Directors, Revenue District Officers and Others Concerned. There have been reports reaching this Office that contrary to my previous announcements, ocular inspection is still being conducted by the Revenue District Offices on the business premises, place of production, and storage places/premises where inventory of goods for sale is kept as part of evaluating the application for registration. aisa dc In order to insure a smooth and simplified registration processes and thus avoid the least inconvenience to the registrants, all such ocular inspections should be stopped immediately. For taxpayers re-registering their business, no ocular inspection shall be conducted before and after registration. For taxpayers becoming liable to VAT for the first time and those just commencing business, the ocular inspection should be conducted after the issuance of the Certificate of Registration (BIR No. 1556). All concerned are hereby enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. cd LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 06-30-94 Revenue Memorandum Circular No. 27-94 June 30, 1994 REVENUE MEMORANDUM CIRCULAR NO. 27-94 Subject : Temporary Restraining Order on the Implementation of the Expanded VAT Law under RA 7716. To : All Internal Revenue Officers and Others Concerned. Quoted hereunder is the Temporary Restraining Order dated June 30, 1994, promulgated by the Supreme Court in the cases of Arturo M. Tolentino vs. the Secretary of Finance and the Commissioner of Internal Revenue, G.R. No. 115455, et al.: "WHEREAS, the Supreme Court on June 30, 1994 adopted a resolution in the aboveentitled cases, to wit: cda "G.R. No. 115455 (Arturo M. Tolentino vs. The Secretary of Finance, et al.); G.R. No. 115425 (Juan T. David vs. Hon. Teofisto Guingona, Jr., as Executive Secretary, et al.); G.R. No. 115543 (Raul T. Roco vs. The Secretary of the Department of Finance, et al.); G.R. No. 115544 (Philippine Press Institute, Inc., et al vs. Hon. Liwayway V. Chato, in her capacity as Commissioner of Internal Revenue, et al.); G.R. No. 115754 (Chamber of Real Estate and Builders' Associations, Inc. (CREBA) vs. Commissioner of Internal Revenue); and G.R. No. 115781 (Kilosbayan, Inc., et al. vs. the Executive Secretary, et al.). - The Court Resolved to (1) CONSOLIDATE all the above-entitled cases; and (2) SET these cases for HEARING on Thursday, July 7, 1994, at 11:00 A.M. aisa dc

"The Court, by a vote of 11 to 4, further Resolved to ISSUE a TEMPORARY RESTRAINING ORDER, effective immediately and continuing until further orders from this Court, ordering all the respondents to CEASE and DESIST from enforcing and/or implementing R.A. No. 7716, otherwise known as the "Expanded Value Added Tax Law. NOW, THEREFORE, effective immediately and continuing until further orders from this Court, You, respondents Executive Secretary TEOFISTO GUINGONA, JR., Secretary of Finance ROBERTO F. DE OCAMPO, Commissioner of Internal Revenue LIWAYWAY V. CHATO, and Commissioner of Customs GUILLERMO L. PARAYNO, Jr., or your agents, representatives and/or any person or persons acting in your place or stead, are hereby ORDERED to CEASE and DESIST from enforcing and/or implementing R.A. No. 7716, otherwise known as the "Expanded Value Added Tax Law." cdasia GIVEN by the Honorable ANDRES R. NARVASA, Chief Justice of the Supreme Court of the Philippines, this 30th day of June, 1994." In view of the foregoing, all concerned are enjoined to immediately comply with the following: 1. Stop implementation of the registration requirement for businesses newly covered by the Expanded VAT Law as prescribed under RMO 41-94 and other related revenue issuances. 2. Stop collection of the P1,000.00 annual registration fees prescribed by the expanded VAT Law. acd 3. All VAT and non-VAT persons shall be governed by the provisions of the National Internal Revenue Code prior to its amendment by Republic Act No. 7716 (e.g., operators of restaurants, refreshment parlors and other eating places including caterers shall continue paying the caterer's tax prescribed under Section 114 of the NIRC prior to its amendment by RA 7716; sale of copra which is exempted from VAT under Section 103 of the NIRC, as amended by RA 7716, shall be subject to 10% VAT pursuant to Section 103 of the old NIRC; sale of real property which became taxable under RA 7716 shall continue to be VAT exempt pursuant to the provisions of Sections 99 and 100 of the old NIRC; etcetera). 4. All sales invoices heretofore registered with the BIR as non-VAT sales invoices which have been superimposed with rubber stamp marking for issuance as VAT sales invoices pursuant to Revenue Regulations No. 10-94 shall be reverted to and considered remaining as non-VAT sales invoices. 5. All other amendments of the NIRC made by RA 7716 shall be considered ineffective until the Supreme Court has declared otherwise. In the meanwhile, pending decision of the Court, claims for refund of the P1,000.00 annual registration fee made under RA 7716 shall not be given due course. acd LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-29-94 Revenue Memorandum Circular No. 28-94 January 29, 1994 REVENUE MEMORANDUM CIRCULAR NO. 28-94

Subject : Creditable Withholding Tax on Income Payments by Top 5,000 Corporations To : All Internal Revenue Officers and others Concerned. For the information and guidance of all revenue officials, employees and others concerned, Section 1(n) of Revenue Regulations No. 6085, as amended by Revenue Regulations No. 12-94, prescribes withholding of a creditable income tax on income payments made by any of the top 5,000 corporations, as follows: "(n) Income payments by top 5,000 corporations. - Income payments made by any of the top five thousand (5,000) corporations, as determined by the Commissioner of Internal Revenue, to their local suppliers of goods - one percent (1%) 1. The term "goods" pertains to tangible personal property. It does not include intangible personal property as well as real property. 2. The term "local suppliers of goods" pertains to a supplier from whom any of the top 5,000 corporations, as determined by the Commissioner, regularly makes its purchases of goods. As a general rule, this term does not include a casual purchase of goods, i.e. not from regular suppliers and oftentimes involving single purchases, unless the amount of purchase, at any one time, involves P100,000 or more, in which case, such purchase of goods shall be subject to the withholding tax. cd 3. A corporation shall not be considered a withholding agent for purposes of Section 1(n) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, unless such corporation has been determined and duly notified in writing by the Commissioner that it has been selected as one of the top 5,000 corporations. 4. Any corporation which has been duly classified and notified as a large taxpayer by the Large Taxpayers Division of the BIR shall be considered one of the top 5,000 corporations provided, however, that its authority as a withholding agent shall be effective only upon receipt of written notice from the Commissioner that it has been classified as one of the top 5,000 corporations for purposes of these regulations. 5. The withholding agent shall remit the herein taxes withheld and file the required withholding tax return within the tenth (10th) day of the following month through duly accredited agent banks in places covered by the New Payment Control System (NPCS) or the Collection Agent or duly authorized treasurer of the municipality where the aforesaid withholding agent's legal residence or principal place of business is located. 6. The withholding agent shall submit on a semestral basis a list of its regular suppliers of goods to the Revenue District Office having jurisdiction over the withholding agent's principal place of business. Deadline for submission of the list shall be not later than June 30 and December 31 of each year hereafter. cdasia 7. It shall be the duty of the withholding agent to issue to the payee, whether individual or corporate, a withholding tax statement, using the prescribed BIR form therefor, showing the income payments made and the amount of taxes withheld therefrom. In general, the aforesaid withholding tax statement shall be issued to the aforementioned payee within fifteen (15) days following the close of the taxable quarter employed by the payee in filing his/its quarterly income tax return, which taxes withheld may be used as a credit against any income tax liability of the payee to the Government. cd i

All internal revenue officials and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 07-26-94 Revenue Memorandum Circular No. 29-94 July 26, 1994 REVENUE MEMORANDUM CIRCULAR NO. 29-94 Subject : Missing original copy of Authority to Accept Payment (BIR Form No. 2319A) To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing original copy of Authority to Accept Payment (BIR Form No. 2319A), to wit: Serial Number Quantity 1050898 one copy (original) The above-mentioned copy which was reported as missing by Mr. Eduardo T. Bajador, Revenue District Officer, Revenue District No. 78, Binalbagan, Negros Occidental and the other copies of the set bearing the above-mentioned serial number have been cancelled and all official transactions involving the use thereof are therefore invalidated. cda Internal revenue officers, employees and others concerned are requested to promptly notify this office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-21-94 Revenue Memorandum Circular No. 30-94 September 21, 1994 REVENUE MEMORANDUM CIRCULAR NO. 30-94 Subject : Loss of duplicate copies of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of duplicate copies of Revenue Official Receipts (BIR Form No. 25.25), to wit: Serial Number Quantity 4595780-M 4596051-M 4597051-M One copy (duplicate) One copy (duplicate) One copy (duplicate)

The above copies which were reported as lost and the other copies of the sets bearing the abovementioned serial numbers, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. acd Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. aisa dc RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-21-94 Revenue Memorandum Circular No. 31-94 September 21, 1994 REVENUE MEMORANDUM CIRCULAR NO. 31-94 Subject : Loss of original, triplicate and quadruplicate copies of Certificate Authorizing Registration (BIR Form No. 1954) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of original, triplicate and quadruplicate copies of Certificate Authorizing Registration (BIR Form No. 1954), to wit: Serial Number Quantity 782755-B One copy (triplicate) 783755-B One copy (triplicate) 784269-B One copy (triplicate) 784759-B One copy (original) 785269-B One copy (triplicate) 785759-B One copy (original) 786042-B One copy (quadruplicate) 786653-B One copy (triplicate) 786742-B One copy (triplicate) The above copies which were reported as lost and the other copies of the sets bearing the abovementioned serial numbers, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. aisa dc RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-06-94 Revenue Memorandum Circular No. 32-94 September 6, 1994

REVENUE MEMORANDUM CIRCULAR NO. 32-94 Subject : Management Aptitude Test Batterry (MATB) To : All Revenue Officials For the information and guidance of all revenue officials, quoted hereunder is a letter from the Executive Director, Career Executive Service Officer dated August 29, 1994. "We are pleased to inform you that another Management Aptitude Test Battery (MATB) will be given on 4 December, 1994; for those who are interested to acquire a CES eligibility. The examination will be opened not only to incumbents of CES positions but also to other occupants (with salary grade 24). Like before, we will appreciate it if you can announce this in your Agency so that all those interested may apply. We are attaching a number of application forms for this purpose. The deadline for the filing of application is 31 October 1994. Thank you for your continuing support to the CES. Very truly yours, ELNOR D. JURIDICO" Executive Director All revenue officials are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 09-20-94 Revenue Memorandum Circular No. 33-94 September 20, 1994 REVENUE MEMORANDUM CIRCULAR NO. 33-94 Subject : Observance of the Moral Guidance Week To : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 28, s. 1994 dated September 1, 1994. "Presidential Proclamation No. 472 dated October 2, 1989 declared the second week of October as the Moral Guidance Week for Public Servants. In this connection, all agencies are requested to participate and support the observance of this endeavor by conducting activities which will strengthen the values of our public servants. cdasia The theme of this year's observance which shall be from October 9-15, 1994 is Pagbabagong Moral at Espiritual: Haligi ng Kaunlaran. Heads of agencies shall see to it that this Memorandum Circular is complied with. Your cooperation is hereby enjoined. cdasia (Sgd.) PATRICIA A. STO. TOMAS" Chairman

All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue By: RENE G. BAEZ Deputy Commissioner for Resource Management Group MC No. 28, s. 1994 MEMORANDUM CIRCULAR Subject To : : Observance of the Moral Guidance Week

All heads of departments, bureaus, agencies of the National and Local Governments including government owned and controlled corporations and state universities and colleges Presidential Proclamation No. 472 dated October 2, 1989 declared the second week of October as the Moral Guidance Week for Public Servants. In this connection, all agencies are requested to participate and support the observance of this endeavor by conducting activities which will strengthen the values of our public servants. cdasia The theme of this year's observance which shall be from October 9-15, 1994 is Pagbabagong Moral at Espiritual: Haligi ng Kaunlaran. Heads of agencies shall see to it that this Memorandum Circular is complied with. Your cooperation is hereby enjoined. cdt PATRICIA A. STO. TOMAS Chairman September 1, 1994 September 13, 1994 Commissioner Liwayway Vinzons-Chato Bureau of Internal Revenue Quezon City Dear Commissioner Chato: We are pleased to furnish you a copy of CSC Memorandum Circular No. 28, s. 1994 regarding the observance of the Moral guidance Week. Very truly yours, ATTY. DANTE G. HUERTA

Director II Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-10-94 Revenue Memorandum Circular No. 34-94 November 10, 1994 REVENUE MEMORANDUM CIRCULAR NO. 34-94 Subject : Missing triplicate copy of Certificate Authorizing RegistrationTaxable (BIR Form No. 1954) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing Certificate Authorizing Registration-Taxable (BIR Form No. 1954), to wit: Serial Number Quantity 683239-B One (1) copy (triplicate) The above copy which was reported as missing by Mr. Leonardo Macaraig of Revenue District No. 59, Lipa City, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. acd RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 11-10-94 Revenue Memorandum Circular No. 35-94 November 10, 1994 REVENUE MEMORANDUM CIRCULAR NO. 35-94 Subject : Missing copies of Revenue Official Receipts (BIR Form No. 25.24) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing copies of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Number Quantity 4260306 One (1) copy (RCC copy) 4260447 One (1) copy (RCC copy) 4260483 One (1) copy (Taxpayer's copy) The abovementioned revenue official receipts were reported as missing by Ms. Lolita B. Rivera, Revenue Collection Officer of Tumauini, Isabela and the other copies bearing said serial numbers are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. casia

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. aisa dc RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-14-94 Revenue Memorandum Circular No. 36-94 December 14, 1994 REVENUE MEMORANDUM CIRCULAR NO. 36-94 Subject : Publishing the full text of Republic Act No. 7833 - an Act excluding the benefits mandated pursuant to Republic Act No. 6686 and Presidential Decree No. 851, as amended, and other benefits from the computation of gross compensation income for purposes of determining taxable compensation income, amending for the purpose Section 28 (b) (8) of the National Internal Revenue Code, as amended. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7833: "REPUBLIC ACT NO. 7833 "AN ACT TO EXCLUDE THE BENEFITS MANDATED PURSUANT TO REPUBLIC ACT NO. 6686 AND PRESIDENTIAL DECREE NO. 851, AS AMENDED, AND OTHER BENEFITS FROM THE COMPUTATION OF GROSS COMPENSATION INCOME FOR PURPOSES OF DETERMINING TAXABLE COMPENSATION INCOME, AMENDING FOR THE PURPOSE SECTION 28 (b)(8) OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. "Sec. 1. A new sub-paragraph to be known as sub-paragraph (F) is hereby inserted at the end of Section 28 (b) (8) of the National Internal Revenue Code, as amended, which shall read as follows: "(F) 13th month pay and other benefits. cdasia "(i) Benefits received by officials and employees of the national and local governments pursuant to Republic Act No. 6686. "(ii) Benefits received by employees pursuant to Presidential Decree No. 851, as amended by Memorandum Order No. 28, dated August 13, 1986; "(iii) Benefits received by officials and employees not covered by Presidential Decree No. 851, as amended; and "(iv) Other benefits such as productivity incentives and Christmas bonus in an amount not exceeding Twelve Thousand Pesos (P12,000) which shall be integrated in the 13th month pay solely for purposes of this Act. "Provided, however, That the exclusion shall only apply to the first Thirty Thousand Pesos (P30,000). "Sec. 2. The exclusion herein provided shall cover benefits paid or accrued beginning January 1, 1994. cdasia

"For purposes of reimbursing the officials or employees who may have received the benefits covered by this Act before its effectivity, the withholding agents are hereby authorized not to deduct the withholding taxes in the immediately succeeding payroll periods corresponding to the amount previously withheld from the benefits. "Sec. 3. The Secretary of Finance shall, upon the recommendation of the Commissioner of Internal Revenue, promulgate the necessary rules and regulations for the effective implementation of the provision of this Act. "Sec. 4. All laws, decrees, orders, rules and regulations and other issuances inconsistent with this Act are hereby repealed or amended accordingly. "Sec. 5. This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in any two (2) newspapers of general circulation, whichever comes earlier. "APPROVED. (Sgd.) (Sgd.) EDGARDO J. ANGARA JOSE DE VENECIA, JR. President of the Senate Speaker of the House of Representatives "This Act which originated in the House of Representatives was finally passed by the House of Representatives and the Senate on December 6, 1994. cdasia EDGARDO E. TUMANGAN CAMILO L. SABIO Secretary of the Senate Secretary General House of Representatives "APPROVED. "December 8, 1994 (Sgd.) FIDEL V. RAMOS President of the Philippines" SALIENT FEATURES 1. Before the amendment of Section 28 (b) (8) of the National Internal Revenue Code (NIRC) by R.A. No. 7833, the following benefits received by officials and employees of both public (national and local) and private offices, viz: (F) 13th month pay and other benefits. cd a. Annual Christmas bonus equivalent to one (1) month basic salary and additional cash gift of One Thousand Pesos (P1,000.00) received by National and Local Government officials and employees starting CY 1988 in accordance with R.A. No. 6686; b. Benefits received by employees pursuant to P.D. No. 851 , as amended by Presidential Memorandum Order No. 28 dated August 13, 1986 requiring all employers to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year; c. Benefits received by officials and employees not covered by P.D. No. 851, as amended; and

d. Other benefits such as productivity incentives and Christmas bonus in an amount not exceeding Twelve Thousand Pesos (P12,000.00) which shall be integrated in the 13th month pay solely for purposes of R.A. No. 7833. were taxable compensation income under Section 21(a) in relation to Section 72, both of the NIRC, as amended, subject to withholding tax under Revenue Regulations No. 6-82, as amended by Revenue Regulations No. 4-93. 2. Under sub-paragraph (F) of Section 28 (b) (8) of the NIRC, as amended by R.A. No. 7833, the 13th month pay and other benefits aforestated, received by officials and employees of the National Government, Local Government Units and agencies, including government-owned and controlled corporations, as well as by officials and employees of private corporations and entities, are exempt from income tax, and consequently from the withholding tax on wages. Provided, that the exclusions/exemptions from gross compensation income shall cover the 13th month pay and "other benefits" in the aggregate amount not exceeding P30,000 received by the officials and employees paid or accrued beginning January 1, 1994. The aforesaid "other benefits " as contemplated under Section 1 (F) (iv) of R.A. No. 7833 shall not exceed P12,000, which amount shall be integrated in the 13th month pay. Accordingly, benefits in excess of P30,000.00 shall be taxable and subject to the withholding tax only insofar as the amount in excess of P30,000.00. Illustration: During CY 1994, Mr. "X", an employee of a private corporation, received the following 13th month pay and other benefits from his employer, such as: 13th month pay P15,000.00 Christmas bonus 10,000.00 Other benefits: Gift in kind 2,000.00 Additional cash gift 1,000.00 Mid-year productivity incentive bonus 5,000.00 ---TOTAL P33,000.00 ======== Under the amendment introduced by R.A. No. 7833 to Section 28(b)(8) of the NIRC, wherein sub-paragraph (F) has been inserted at the end thereof, the computation of the amount of the benefits which shall be excluded/exempted from the taxable compensation income and/or those subject to withholding tax on wages, if any, shall be as follows: I. Computation of whether the full amount of subject "other benefits", as contemplated under Section 1 (F) (iv) of RA 7833, is exempt from withholding tax on wages.

Christmas bonus P10,000 Plus: Other benefits: Gift in kind P 2,000 Additional cash gift 1,000

Mid-year productivity incentive bonus 5,000 8,000 ----TOTAL P18,000 Less: P12,000 maximum exemption for "other benefits" as contemplated under Sec. 1(F)(iv) of RA 7833 (12,000) --TAXABLE "OTHER BENEFITS" SUBJECT TO WITHHOLDING TAX ON WAGES P 6,000 ====== II. Computation of total benefits excluded/exempted from withholding tax on wages when the "other benefits" are integrated in the 13th month pay.

13th month pay P15,000 Plus: Maximum allowable exemption/ exclusion of P12,000 for "other benefits" as contemplated under Sec. 1 (F) (iv) of RA 7833 (please refer to Computation No. I above) 12,000 --TOTAL EXCLUSIONS/EXEMPTION FROM TAXABLE COMPENSATION INCOME P27,000 ====== 3. For purposes of reimbursing the officials and employees of the income taxes withheld and already remitted to the BIR, the following guidelines shall be followed: a. Employers who have already given the 13th month pay and other benefits to their employees, and had withheld and remitted the tax due thereon prior to the approval of R.A. No. 7833 (December 8, 1994) shall, in annualizing and computing the annual income and the tax due from their employees, exclude the 13th month pay and other benefits. Any excess in the tax withheld shall be refunded by the employer to the respective employees or credited against the tax required to be withheld from the compensation of the employees beginning January, 1995. The employer shall then be allowed to credit and deduct from its subsequent remittances of taxes withheld on compensation income of their employees for the succeeding months; b. Taxes withheld on the 13th month pay and other benefits given last November, which should otherwise be remitted by the employer-withholding agent on December 12, 1994, shall no longer be remitted to the BIR. Said withheld amount should be refunded to the employees concerned; and c. The exemption/exclusion provided for under R.A. No. 7833 shall cover the 13th month pay and "other benefits" in the aggregate amount not exceeding P30,000 received

by the officials and employees paid or accrued beginning January 1, 1994, provided, however, that the aforesaid "other benefits" as contemplated under Sec. 1 (F) (iv) of R.A. No. 7833 shall not exceed P12,000 which amount shall be integrated in the 13th month pay. It is desired that this Circular be given as wide a publicity as possible. aisa dc LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 10-19-94 Revenue Memorandum Circular No. 37-94 October 19, 1994 REVENUE MEMORANDUM CIRCULAR NO. 37-94 Subject : Issuance of New Denomination of Serially Numbered Documentary Strip Stamps Designed and Printed by the Central Bank of the Philippines. To : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, announcement is hereby made that starting November 1, 1994, the Accountable Forms Division of this Bureau will issue the new denominations of documentary strip stamps designed and printed by the Central Bank Security Printing. cd i Hereunder is the general description of the serially numbered strip stamps: Size: 23 mm x 43 mm Design: Border inscribed with letters "Rentas Internas" vanishing spherical lines as background and the seal of the Philippines at the center with price inscriptions at both sides. Color Scheme by Denomination: Denomination Color Scheme P0.05 Light Orange 0.10 Light Blue Green This Circular shall be given the widest publicity possible. cdt LIWAYWAY VINZONS-CHATO Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 12-15-94 Revenue Memorandum Circular No. 38-94 December 15, 1994 REVENUE MEMORANDUM CIRCULAR NO. 38-94 Subject : Missing one (1) set of Official Receipt (Accountable Form 51) To : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing Official Receipt (Accountable Form 51), to wit:

Serial Number Quantity 6387700-B One (1) set The abovementioned Official Receipt (Accountable Form 51) which was reported as missing by Ms. Nilda B. Mijares, Revenue Officer I, and Ms. Melba B. Megullas, Administrative Officer I of RDO No. 74, Iloilo City, is hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. casia Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. cda RENE G. BAEZ Deputy Commissioner Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c. 01-18-95 Revenue Memorandum Circular No. 01-95 January 18, 1995 REVENUE MEMORANDUM CIRCULAR NO. 01-95 SUBJECT : Second Year Implementation Of The New Salary Schedule In The Government TO : All internal revenue officers and others concerned. For the information and guidance of all concerned, quoted hereunder is Executive Order No. 218 dated January 1, 1995 of President Fidel V. Ramos: "WHEREAS, the government has adopted the new Salary Schedule contained in Joint Senate-House of Representatives Resolution No. 1, series of 1994: "WHEREAS, the new salary schedule was initially implemented in 1994 in accordance with Executive Order No. 164 and National Compensation Circular NO. 72: "WHEREAS, the amount of P15.1 billion is appropriated in the CY 1995 General Appropriations Act to cover, among others, the adjustment in basic salary of government personnel as authorized by said Joint Resolution in an amount of not less than one thousand pesos (P1,000.00) per month for the second year implementation of the new Salary Schedule: NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, R.A. No. 6758, P.D. No. 985 and P.D. No. 1597, do hereby order and direct: SECTION 1. New Salary Schedule. The Department of Budget and Management is hereby directed to implement a second interim Salary Schedule effective January 1, 1995 reflecting an increase of one thousand pesos (P1,000,00) over the basic monthly salaries of government personnel as of December 31, 1994. Heads of all national government departments and agencies including government owned and/or controlled corporations and local government units shall not grant compensation adjustment in excess of the amount herein authorized. SECTION 2. Coverage. This Order shall cover all officials and employees of the national government, government-owned and controlled corporations including

government financial institutions, and local government units, whose basic salaries conform to the new Salary Schedule prescribed under Executive Order No. 164. Officials and employees whose basic pay are higher than those prescribed under the new Salary Schedule are not entitled to the salary increase authorized herein. SECTION 3. Continuation of Personnel Economic Relief Allowance and Additional Compensation. Personnel Economic Relief Allowance and the additional compensation authorized under Administrative Order No. 53 shall continue to be paid as allowances and not integrated into basic pay. SECTION 4. Funding Source. The funding sources for the amounts necessary to implement the revised compensation and position classification system shall be as follows: a. For national government entities, the amount shall be charged against the appropriations set aside for the purpose in the 1995 General Appropriations Act and from savings generated from the different departments, bureaus, offices, and agencies. Thereafter, such amounts as are needed shall be included in the annual General Appropriations Act. b. For government-owned and/or controlled corporations (GOCCs), the amount shall come from their respective corporate funds. c. For local government units (LGUs), the amount shall be charged against their respective local funds. GOCCs and LGUs which do not have adequate or sufficient funds to pay the salary increase prescribed herein shall only partially implement the established rates: PROVIDED, That any partial implementation shall be uniform and proportionate for all positions in each corporate entity or local government unit. SECTION 5. Applicability to Certain Constitutional Officials. Pursuant to Section 6 of Article VII and Section 10 of Article VI of the Constitution, the compensation adjustment prescribed herein for the President, Vice-President, and Members of the House of Representatives shall take effect only after the expiration of the respective term of the present incumbents, and with respect to Senators, only after the expiration of the term of all the incumbents Senators. SECTION 6. Implementing Guidelines. The Department of Budget and Management shall prepare and issue the necessary guidelines for the implementation of this Executive Order. SECTION 7. Effectivity. This Executive Order shall take effect January 1, 1995. DONE in the City of Manila, this 1st day of January in the year of our Lord, Nineteen Hundred and Ninety Five. (SGD.) FIDEL V. RAMOS President By the President: (SGD.) TEOFISTO T. GUINGONA, JR. Executive Secretary All internal revenue officers and others concerned are requested to give this circular a wide publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner

C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-26-95 Revenue Memorandum Circular No. 02-95 January 26, 1995 REVENUE MEMORANDUM CIRCULAR NO. 02-95 SUBJECT : Missing one (1) original copy of Letter of Authority (BIR Form No. 19.65) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of one (1) original copy of Letter of Authority (BIR Form No. 19.65), to wit: Serial Number Quality 63381 One (1) copy (original) The abovementioned copy which was reported as missing by Mr. Leonardo Q. Sacamos, Revenue District Officer of Revenue District No. 103, Butuan City, and the other copies of the set bearing the abovementioned serial number have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and other concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-01-95 Revenue Memorandum Circular No. 03-95 February 1, 1995 REVENUE MEMORANDUM CIRCULAR NO. 03-95 SUBJECT : Loss of one (1) set of Certificate Authorizing Registration-Taxable (BIR Form No. 1954) and one (1) set of Certificate Authorizing Registration-Exempt (BIR Form No. 1954-A) TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Certificate Authorizing RegistrationTaxable (BIR Form No. 1954 ) and one (1) set of Certificate Authorizing RegistrationExempt (BIR Form No. 1954-A), to wit: Kind of Accountable Form Serial Number Quantity CAR-Taxable 627122 One (1) set CAR-Exempt 362258 One (1) set The abovementioned sets which were reported as missing by Mr. Leonardo Macaraig of Revenue District No. 59, Lipa City are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof.

RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-24-95 Revenue Memorandum Circular No. 04-95 January 24, 1995 REVENUE MEMORANDUM CIRCULAR NO. 04-95 SUBJECT : GRANT OF PRODUCTIVITY INCENTIVE BENEFIT (PIB) FOR CY 1994 AND YEARS THEREAFTER. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Budget and Management National Compensation Circular No. 73 dated December 27, 1994. "1.0 PURPOSE/OBJECTIVE This circular is being issued to prescribe the rules and regulations on the grant of PIB for CY 1994 and years thereafter authorized under Administrative Order No. 161, dated December 6, 1994. 2.0 COVERAGE 2.1 The benefits herein authorized shall apply to all appointive officials and employees of the national government, local government units and government-owned and/or controlled corporations and government, financial institutions, including casual, temporary and full-time contractual personnel whose employment is in the nature of regular personnel. 2.1.1 For this purpose, casual, temporary and full-time contractual personnel shall refer only to those whose positions have been approved by the Department of Budget and Management and whose hiring have been approved by the Civil Service Commission. 2.2 Officials and employees of government sequestered beforeclosed corporations that are covered, the national labor laws being implemented by the Department of Labor and Employment shall not be entitled to the benefits prescribed in this Circular. 3.0 BASIS AND AMOUNT OF AWARD 3.1 The incentive pay shall be based on individual personnel productivity and performance as evaluated and determined by the heads of the respective offices/agencies in accordance with the policies and standards set by the Civil Service Commission. 3.2 To be entitled to the PIB, officials/employees shall have at least a satisfactory performance rating for the two (2) semesters immediately preceding the year in which the incentive pay shall be released, and shall have contributed to the productivity of their office/agency as determined by the respective heads of agency. 3.3 The amount of incentive that will be paid deserving officials/employees pursuant to this Circular may vary for each official/employee within an agency depending on their individual performance appraisal. 4.0 COST OF INCENTIVE The total cost of the incentive pay that will be utilized for the purpose by any government agency, including government-owned and/or controlled corporations, government financial institutions and local government units, in any one year shall in no case exceed

the average of P2,000 per occupied/filled position referred to in Item 2.1 above (Illustrative Example in ANNEX "A"). 5.0 FUNDING SOURCE 5.1 For the National Government agencies, funding shall be from the Incentive Fund that will be provided in the annual General Appropriations Act. 5.2 In the case of government-owned and/or controlled corporations, including government financial institutions, local government units and project personnel, funding shall be sourced from their respective corporate, local and project funds. 5.2.1 For this purpose, government-owned and/or controlled corporations and government financial institutions, and local government units are hereby authorized to appropriate annually an amount to cover these benefits. 6.0 RELEASE OF FUNDS TO NATIONAL GOVERNMENT OFFICE/AGENCY The Department of Budget and Management shall release the funds from the Incentive Fund direct to the government office/agency involved. For the PIB for CY 1994, to be paid in 1995, agencies of the national government are required to submit, immediately after its payment, an accounting of the actual amount used for this purpose. For the subsequent years, offices/agencies of the national government shall submit a list of officials and employees entitled to the benefit under this Circular within the first quarter of the calendar year immediately following the two semesters during which the benefit was earned, as basis for the release of funds. 7.0 PROHIBITION FROM ESTABLISHING/AUTHORIZING A SEPARATE PRODUCTIVITY AND PERFORMANCE INCENTIVE AWARD 7.1 Heads of departments, agencies, governing boards, commissions, offices including government-owned and/or controlled corporations and government financial institutions, and local government units, are hereby prohibited from establishing and authorizing a separate productivity and performance incentive award of any form. 7.2 Strict compliance by all concerned with the provisions of this Circular is enjoined. Any found violating any of the mandates in this Circular, including all officials/employees and the COA Auditor-In-Charge of such government office/agency found to have taken part thereof, shall be accordingly and severely dealt with in accordance with the applicable provisions of existing penal laws. 8.0 Cases not covered under this Circular shall be referred to the Department of Budget and Management for proper study and recommendation of the Office of the President. 9.0 The grant of benefit under said Circular shall take effect on January 1, 1995 based on the performance evaluation of officials and employees for CY 1994. (SGD.) EMILIA T. BONDOCIN" Acting Secretary All revenue officials and employees are enjoined to give this circular LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c.

03-07-95 Revenue Memorandum Circular No. 05-95 March 7, 1995 REVENUE MEMORANDUM CIRCULAR NO. 05-95 SUBJECT : Clarification on the Deadline for Filing of BIR Form No. 1701-B Correcting the Information Contained in the 1995 BIR Tax Calendar. TO : All Internal Revenue Officers and Others Concerned. Pursuant to Revenue Regulations No. 17-77 dated December 9, 1977, the deadline for the filing of BIR Form No. 1701-B (Certificate of Income Payment not Subject to Withholding Tax) for use as information return on aggregate payments of P1,800 or more shall be on or before the 1st day of March following the calendar year when the said payments were made with the Revenue District Office where the main/principal office of the payor is located. This Circular corrects the information contained in the 1995 BIR Tax Calendar, which erroneously indicated that the deadline for the filing of BIR Form No. 1701-B was last January 31, 1995. All internal revenue officers are directed not to impose any penalties on taxpayers who are filing the BIR Form No. 1701-B after January 31, 1995 but not later than March 31, 1995. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-20-95 Revenue Memorandum Circular No. 06-95 February 20, 1995 REVENUE MEMORANDUM CIRCULAR NO. 06-95 SUBJECT : Missing one (1) original copy of Certificate Authorizing Registration (BIR Form No. 1954A) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing original copy of Certificate Authorizing Registration (BIR Form No. 1954A), to wit: Serial Number Quantity 526989-A One (1) copy (original) The above copy which was reported as missing by Mr. Rene P. Gramatica, Mr. Fermin P. de la Pea, Assistant Revenue District Officer and Mr. Arsenio N. Jiro, Revenue District Officer of Revenue District No. 79, Dumaguete City, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. RENE G. BAEZ

Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-09-95 Revenue Memorandum Circular No. 07-95 February 9, 1995 REVENUE MEMORANDUM CIRCULAR NO. 07-95 TO : All Revenue Officials, Employees and Others Concerned. SUBJECT : Clarifications on some provisions of Revenue Memorandum Order No. 3-95 dated January 11, 1995. For the information and guidance of all revenue officials and employees, the following clarifications on some provisions of Revenue Memorandum Order No. 3-95 are hereby adopted, to wit: 1. The statement "any BIR official" in paragraph C, no. 2 of RMO 3-95 shall mean any official from the position of Assistant Revenue District Officer/Assistant Division Chief to the Commissioner. Lower level employees shall provide information to cause the apprehension and confiscation. 2. The manner of apprehension and confiscation of the use of unauthorized duplicated BIR ID shall be as follows: a) National Office The apprehending official shall invite the employee using the unauthorized ID to the Internal Security Division; if the latter refuses, the apprehending official shall forward the confiscated ID to the Internal Security Division with a brief statement of facts surrounding the confiscation. b) Regional Office The apprehending official shall invite the erring employee to the Special Investigation Division; if the employee refuses, the apprehending official shall submit the confiscated ID to the Special Investigation Division with a brief statement of facts surrounding the confiscation. The report shall be submitted to the Internal Security Division thru the Assistant Commissioner, Intelligence and Investigation Service within five (5) days of receipt of the report. c) District Office The Revenue District Officer shall submit directly to the Internal Security Division, thru Assistant Commissioner, Intelligence and Investigation Service, the confiscated ID card with a brief statement of facts surrounding the confiscation within five (5) days. 3. Inasmuch as the new BIR ID card shall eventually be used for attendance purposes, the Internal Security Division and the Special Investigation Division shall assign an Officer of the Day to ensure the strict and proper compliance of the order. The Revenue District Officer shall likewise assigned an Officer of the Day for the same purpose. All revenue officials and employees are enjoined to give Revenue Memorandum Order No. 3-95 and this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue

C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-09-95 Revenue Memorandum Circular No. 08-95 March 9, 1995 REVENUE MEMORANDUM CIRCULAR NO. 08-95 SUBJECT : Missing three (3) triplicate copies of Certificate Authorizing Registration (BIR Form No. 1954) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing three (3) triplicate copies of Certificate Authorizing Registration (BIR Form No. 1954), to wit: Serial Numbers Quantity 825198 One (1) copy (triplicate) 825268 One (1) copy (triplicate) 825316 One (1) copy (triplicate) The above copies which were reported as missing by Ms. Rosario R. Gutierrez, Assistant Chief of the Administrative Division Revenue Region No. 1 Baguio City, and the other copies of the sets bearing the abovementioned serial numbers, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and other concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-28-95 Revenue Memorandum Circular No. 09-95 February 28, 1995 REVENUE MEMORANDUM CIRCULAR NO. 9-95 SUBJECT : Publishing the full text of Proclamation No. 541 declaring the year 1995 as "Service to Taxpayers' Year" TO : All Internal Revenue Officers and others concerned For the information and guidance of all concerned, quoted hereunder is Proclamation No. 541 of the President dated February 28, 1995: "PROCLAMATION NO. 541" "DECLARING THE YEAR 1995 AS "SERVICE TO TAXPAYERS' YEAR WHEREAS, the country has experienced unprecedented economic growth in 1994 as a result of various initiatives taken by the government; WHEREAS, there is a need to sustain the pace of economic recovery in 1995 through bold and innovative measures that would require harnessing the support and cooperation of all sectors of society;

WHEREAS, the government has to rely on the fiscal support that comes from the people to finance major infrastructure and development projects that can sustain massive agroindustrial development, create jobs and accelerate economic growth; WHEREAS, the Bureau of Internal Revenue (BIR) has succeeded in 1994 in generating the revenues needed to finance the government's major infrastructure and other development projects; WHEREAS, there is need for the BIR to further strengthen its ties with the people in 1995 through innovative and direct services, among them an intensified education and information campaign, that would make tax payment less burdensome and encourage the people to fulfill their duties as taxpayers; WHEREAS, the cooperation and active participation of all sectors of society should be harnessed in order to sustain economic growth up to the year 2000; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby declare the year 1995 as "Service Taxpayers Year". IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 28th day of February, in the year of our Lord, nineteen hundred and ninety five. "(SGD) FIDEL V. RAMOS President of the Philippines By the President: (SGD.) TEOFISTO T. GUINGONA, JR. Executive Secretary In line with this proclamation, RMO No. 6-95 extended the working hours and days of particular BIR offices to ensure better service to taxpayers. It is therefore desired that this Circular be observed and given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-17-95 Revenue Memorandum Circular No. 10-95 February 17, 1995 REVENUE MEMORANDUM CIRCULAR NO. 10-95 SUBJECT : Publishing the full text of the Memorandum Agreement between Non-Government Organization (NGOs) and the Bureau of Internal Revenue to ensure their support and assistance in the taxpayer service and information activities of BIR. TO : All Internal Revenue Officials and Employees and others concerned. For the information of all internal revenue officials and employees and others concerned, quoted hereunder is the Memorandum of Agreement by and between the Non-

Government Organizations (NGOs) and Bureau of Internal Revenue (BIR), dated February 17, 1995: "MEMORANDUM AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This AGREEMENT, made and entered by and between: The Bureau of Internal Revenue, with principal office at BIR Bldg., BIR Road, Diliman, Quezon City, represented herein by its Commissioner, LIWAYWAY VINZONSCHATO, hereinafter referred to as the BIR, The Integrated Bar of the Philippines, with principal office at IBP National Headquarters, Doa Julia Vargas Avenue, Pasig, Metro Manila, represented herein by its National Executive Director, JOSE AGUILA GRAPILON, hereinafter referred to as the IBP; The Philippine Chamber of Commerce and Industry, with principal office at East Wing, Secretariat Bldg., PICC CCP Complex, Roxas Blvd., Pasay City, represented herein by its President, JOSE LUIS U. YULO, JR., hereinafter referred to as TMAP; The Philippine Institute of Certified Public Accountants, with principal office at 700 Shaw Blvd., Mandaluyong, Metro Manila, represented herein by its President, VOLTAIRE P. ARZADON, hereinafter referred to as PICPA; The Federation of Filipino Chinese-Chamber of Commerce and Industry, Inc. with principal office at 6th Flr., Federation Center Bldg., Muelle de Binondo St., Binondo, Manila, represented herein by its President, JIMMY TANG, hereinafter referred to as FFCCCII; The Bankers Association of the Philippines, with principal office at 11th Flr., Sagittarius Bldg., De La Costa St., Salcedo Village, Makati, Metro Manila, represented herein by its President, RAFAEL B. BUENAVENTURA, herein after referred to as BAP; The Philippine Retailers Association, with principal office at the 2nd Floor. Collins Bldg., 167 EDSA Mandaluyong City, represented herein by its President, MANUEL M. SIGGAOAT, hereinafter referred to as PRA; The Makati Business Club, with principal office at 2nd Flr., Princess Bldg., Esteban St., Legaspi Village, Makati, Metro Manila, represented herein by its Executive Director, GUILLERMO M. LUZ, hereinafter referred to as MBC; The Kapisanan ng mga Broadcasters sa Pilipinas, with principal office at 6th Flr. LTA Bldg., 118 Peria St., Legaspi Village, Makati, Metro Manila, represented hereinafter by its President, MALOLI ESPINOSA MANALASTAS, hereinafter referred to as the KBP; The Metro Manila theater Association, with principal office at Pasong Tamo St., Makati, represented herein by ANTONIO L. CABANGON CHUA, hereinafter referred to as the MMTA; The Advertising Foundation, with principal office at Assumption College, Makati, Metro Manila represented herein by its Chairman, ANTONIO SAMSON, hereinafter referred to as the AD Foundation. WITNESSETH, that: WHEREAS, all the parties enumerated above support Memorandum Circular No. 111 issued by Malacaang invigorating the Bureaucracy by enhancing public service in all government agencies; WHEREAS, to implement Memorandum Circular No. 111, the BIR is launching its 1995 Tax Campaign Program with the objective of delivering fast, efficient and courteous service and enhancing the dissemination of information to the taxpaying public;

WHEREAS, the BIR recognizes the importance of the assistance of the associations enumerated above in the implementation of this program; WHEREAS, all the associations enumerated above support this objective of the BIR of enhancing service and information dissemination to taxpayers; WHEREAS, all these parties have a nation-wide membership and/or office network that can effectively coordinate and assist in the activities of the BIR throughout the Philippines; NOW, THEREFORE, for and in consideration of the above premises, all the associations enumerated above hereby commit to: 1. utilize available resources necessary in the pursuit of the objectives of the campaign; 2. help the BIR in the implementation of strategies for the tax campaign activities; 3. sponsor the procurement of tax information materials, placement of radio, television and newspaper tax advertisements; 4. assist in the dissemination of tax reminders through the insertion of messages in the statements of accounts, communication documents, packaging materials and a office premises; and 5. continuously remind members about the need for honest and prompt tax compliance. IN WITNESS WHEREOF , the parties have hereunto affixed their signature this 17th day of February 1995, at Quezon City. BUREAU OF INTERNAL INTEGRATED BAR OF THE REVENUE PHILIPPINES By: By: (SGD) LIWAYWAY VINZONS CHATO (SGD) JOSE AGUILA GRAPILON Commissioner National Executive Director PHILIPPINE CHAMBER OF COMMERCE AND INDUSTRY By: By: TAX MANAGEMENT ASSOCIATION OF THE PHILIPPINES

(SGD) JOSE LUIS U. YULO JR. (SGD) FRANCISCO DE GUZMAN President President PHIL. INSTITUTE OF FEDERATION OF FILIPINO-CHINESE CERTIFIED PUBLICCHAMBER OF COMMERCE & ACCOUNTANT INDUSTRY INC. By: By: (SGD) VOLTAIRE P. ARZADON (SGD) JIMMY TANG President President BANKERS ASSOCIATION OF PHILIPPINE RETAILERS THE PHILIPPINES ASSOCIATION

By:

By: (SGD) MANUEL M. SIGGAOAT

(SGD) RAFAEL B. BUENAVENTURA President President

MAKATI BUSINESS CLUB KAPISANAN NG MGA BROADCASTER SA PILIPINAS By: By: (SGD) GUILLERMO M. LUZ (SGD) MALOLI ESPINOSA Executive Director MANALASTAS President METRO MANILA THEATER ASSOCIATION By: By: ADVERTISING FOUNDATION

(SGD) ANTONIO CABANGON CHUA Representative President

(SGD) ANTONIO SAMSON

All concerned are hereby enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-22-95 Revenue Memorandum Circular No. 11-95 March 22, 1995 REVENUE MEMORANDUM CIRCULAR NO. 11-95 SUBJECT : AMENDMENT NO. 3 TO SECTION 6(9), RULE III (ADDITIONAL REQUIREMENTS IN SPECIFIC CASES) OF THE OMNIBUS RULES GUIDELINES ON APPOINTMENTS AND OTHER PERSONNEL ACTIONS, CSC MEMORANDUM CIRCULAR NO. 38, SERIES OF 1993 TO : All Revenue Officials and Employees and others Concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 37, s. 1994 dated December 29, 1994 "Pursuant to Resolution No. 94-7153 dated December 29, 1994, Section 6(9), Rule III (Additional Requirement in Specific Cases) of the Omnibus Rules Guidelines on Appointments and Other Personnel Actions, CSC Memorandum Circular No. 38, Series of 1993 is hereby amended to read as follows: 6. L G U Appointments "Appointments in local government units for submission to the CSC Office must be accompanied, in addition to the common requirements, by the following documents:

(a) Certification by the proper appointing authority that such appointment is issued in accordance with the limitations provided for under Section 325, RA 7160. This Memorandum Circular shall take effect immediately. (SGD.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are joined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-24-95 Revenue Memorandum Circular No. 12-95 March 24, 1995 REVENUE MEMORANDUM CIRCULAR NO. 12-95 SUBJECT : AMENDMENT NO. 1 OF SECTION 3, RULE XVI (LEAVE OF ABSENCE) OF THE OMNIBUS RULES IMPLEMENTING BOOK V OF E.O. 292 AND OTHER PERTINENT CIVIL SERVICE LAWS (EMPLOYEES RENDERING SERVICES ON PART-TIME BASIS). TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 36, s. 1994. "Pursuant to CSC Resolution No. 94-7044 dated December 28, 1994, Section 3, Rule XVI (Leave of Absence) of the Omnibus Rules Implementing Book V of E.O. 292 is hereby amended to read as follows: "Employees rendering services on part-time basis are entitled to vacation and sick leave benefits proportionate to the number of work hours rendered. A part-time employee who renders four (4) hours of work five (5) days a week or a total of 20 hours a week is entitled to 7.5 days vacation leave and 7.5 days sick leave annually with full pay. However, the leave benefits herein provided maybe availed of only after the employee has rendered at least six (6) months service in the aggregate without a single absence of more than one week and/or several absences from one to three days, the total of which should not exceed 15 days. This Memorandum Circular shall take effect immediately. (SGD.) PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 CD Technologies Asia I n c.

12-12-94 Revenue Memorandum Circular No. 13-95 December 12, 1994 REVENUE MEMORANDUM CIRCULAR NO. 13-95 SUBJECT : CONTINUING AUTHORITY TO FILL UP ALL VACANT POSITIONS FOR A PERIOD OF TWELVE (12) MONTHS PURSUANT TO RA 7480, FOR AGENCIES WHICH GIVE UP FIVE PERCENT (5%) OF TOTAL REGULAR PLANTILLA POSITIONS TO : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 35, s. 1994 dated November 24, 1994. "Pursuant to CSC Resolution No. 94-6475 dated November 24, 1994, the Civil Service Commission hereby adopts and promulgates the following: Agencies are hereby given the option to apply for continuing authority to fill up all vacant regular plantilla positions during a twelve (12) month period by giving up five percent (5%) of the regular plantilla items or positions (career and non-career). The option may be availed of by submitting to the Commission the following documents: 1. A written request to be given continuing authority to fill up all its positions that are or may become vacant during a (12) month period, by giving up for abolition five (5%) of its total authorized regular plantilla items/positions. 2. A copy of the complete plantilla of authorized regular positions. 3. A list of positions containing titles and item numbers representing ninety-five (95%) of its total authorized regular plantilla positions which it would like to fill up without requesting prior authorization. 4. A list of positions containing titles and item numbers constituting five percent (5%) of the regular authorized plantilla positions which it is giving up for abolition. 5. A written authority granted by the Agency to DBM to abolish the positions in the list which constitutes at least five (5%) of the total regular authorized plantilla positions. The Commission resolution granting the continuing authority shall be furnished to the CSC Regional/Field Provincial Offices concerned to be used in the processing and evaluation of appointments issued by the agency. This Memorandum Circular shall take effect immediately. PATRICIA A. STO. TOMAS" Chairman All revenue officials and employees are enjoined to give this circular as wide as publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c.

04-05-95 Revenue Memorandum Circular No. 14-95 April 5, 1995 REVENUE MEMORANDUM CIRCULAR NO. 14-95 SUBJECT : CIVIL SERVICE COMMISSION "LINGKOD BAYAN" AND "DANGAL NG BAYAN" AWARDS TO : All Revenue Officials and Employees and other concerned For the information and guidance of all revenue officials and employees, quoted hereunder is a letter from the Commissioner, Civil Service Commission dated March 20, 1995. "On the forthcoming 95th Anniversary of the Philippine Civil Service Commission in September of this year, His Excellency, President Fidel V. Ramos will once again confer honor awards on outstanding public servants. There are two (2) major categories of awards. These are the "Lingkod Bayan" award for highly exceptional work performance and the "Dangal ng Bayan" award for exemplary ethical behavior. Please join us in this year's Search for Outstanding Public Officials and Employees. There may be officials and employees in that Department deserving of these awards. Your nomination will give them the chance to be recognized for their valuable contributions and exemplary behavior. Enclosed are flyers containing the rules and regulations of the Search and nomination forms that you may accomplish or distribute. We shall appreciate your usual support and cooperation in this endeavor. Thank you. Very truly yours, (Sgd.) THELMA P. GAMINDE" Commissioner All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 04-27-95 Revenue Memorandum Circular No. 15-95 April 27, 1995 REVENUE MEMORANDUM CIRCULAR NO. 15-95 SUBJECT : Missing one (1) set of Revenue Official Receipt (BIR Form No. 25.24) TO : All Internal Revenue Officers, Employees and Other Concerned Notice is hereby given of the loss of one (1) set of Revenue Official Receipt (BIR Form No. 25.24), wit: Serial Number Quantity 4503255-M One (1) set

The abovementioned revenue official receipt which was reported as missing by Mr. Renato V. Brazil, Revenue Collection Officer of Hinatuan, Surigao del Sur, is hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and other concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. LIWAYWAY VINZONS-CHATO Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 04-05-95 Revenue Memorandum Circular No. 16-95 April 5, 1995 REVENUE MEMORANDUM CIRCULAR NO. 16-95 SUBJECT : Missing one (1) quintuplicate copy of Certificate Authorizing Registration (BIR Form No. 1954-B) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing quintuplicate copy of Certificate Authorizing Registration (BIR Form No. 1954-B), to wit: Serial Number Quantity 33005 One (1) copy (quintuplicate) The above copy which was reported as missing by Mr. Felicitas F. Mangoba, Revenue Officer II of Revenue Region No. 19, Davao City, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and other concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-05-95 Revenue Memorandum Circular No. 18-95 June 5, 1995 REVENUE MEMORANDUM CIRCULAR NO. 18-95 SUBJECT : TEMPORARY RESTRAINING ORDER ISSUED BY THE SUPREME COURT AGAINST THE COMMISSION ON AUDIT (COA) TO CEASE AND DESIST FROM ENFORCING COA RESOLUTION NO. 95-208 DATED MARCH 28, 1995.

TO

All Internal Revenue Officers and Others Concerned.

For the information and guidance of all concerned, quoted hereunder is the Temporary Restraining Order issued by the Supreme Court on May 30, 1995 in G.R. No. 119934 entitled "The Bureau of Internal Revenue vs. The Commission on Audit". "TO: Hon. Celso D. Gangan (x) Chairman Hon. Rogelio B. Espiritu (x) Hon. Sofronio B. Ursal Commissioners Commission on Audit COA Building, Commonwealth Avenue Quezon City GREETINGS: WHEREAS, the Supreme Court on May 30, 1995, adopted a resolution in the above entitled case, to wit: "G.R. No. 119934 (The Bureau of Internal Revenue vs. Commission on Audit). Acting on the special civil action for certiorari and prohibition with preliminary injunction and temporary restraining order, the Court Resolved, without giving due course to the petition, to require the respondent to COMMENT thereon, within ten (10) days from notice. Acting further on the urgent ex-parte motion to resolve the application for temporary restraining order, filed by counsel for petitioner, dated May 29, 1995, the Court Resolved to ISSUE a TEMPORARY RESTRAINING ORDER, effective immediately and continuing until further orders from this Court, ordering the respondent Commission on Audit to CEASE and DESIST from enforcing the questioned COA Resolution No. 95208,, dated March 28, 1995, asserting the power, authority and duty of the Commission on Audit to examine, audit and settle all accounts pertaining to the revenues and receipts of government agencies and subdivisions." NOW, THEREFORE, effective immediately and continuing until further orders from this Court, You, Respondent Commission on Audit, your representatives, agents or any person or persons acting in your place or stead are hereby ORDERED to CEASE and DESIST from enforcing your questioned COA Resolution No. 95-208, dated March 28, 1995, asserting the power, authority and duty of the Commission on Audit to examine, audit and settle all accounts pertaining to the revenues and receipts of government agencies and subdivisions. GIVEN by the Honorable ANDRES R. NARVASA, Chief Justice of the Supreme Court of the Philippines, this 30th day of May 1995. LUZVIMINDA D. PUNO Clerk of Court By: (Sgd.) MA. LUISA D. VILLARAMA Assistant Clerk of Court"

All internal revenue officers and others concerned are hereby enjoyed to give this Circular a wide publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-01-95 Revenue Memorandum Circular No. 19-95 June 1, 1995 REVENUE MEMORANDUM CIRCULAR NO. 19-95 SUBJECT : Publishing the full text of the Memorandum of Agreement between the Bureau of Local Government Finance (BLGF) and the Bureau of Internal Revenue (BIR) to ensure their support and assistance in the taxpayer service and information activities of BIR. TO : All Internal Revenue Officials and Employees and Others Concerned. For the information of all internal revenue officials and employees and others concerned, quoted hereunder his the Memorandum of Agreement by and between the Bureau of Local Government Finance (BLGF) and the Bureau of Internal Revenue (BIR), dated May 25, 1995 : "MEMORANDUM OF AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Memorandum of Agreement made and entered into this 25th day of May, 1995, at Quezon City, Philippines by and between: The BUREAU OF INTERNAL REVENUE with principal office at BIR National Office Building, Diliman, Quezon City represented by its Commissioner LIWAYWAY VINZONS-CHATO, hereinafter referred to as the BIR; and The BUREAU OF LOCAL GOVERNMENT FINANCE with principal office at the Palacio del Gobernador, 7th Floor, Intramuros, Manila represented by its Executive Director LORINDA M. CARLOS, hereinafter referred to as the BLGF. WITNESSETH, that: WHEREAS, Executive Order No. 53, series of 1993, directs all government agencies concerned to provide the Bureau of Internal Revenue (BIR) with the necessary information to help increase tax collections; WHEREAS, Executive Order No. 52, series of 1993, requires the indication of Taxpayer Identification Numbers (TINs) on certain documents; WHEREAS, under Section 2 of Executive Order No. 53 series of 1993, the local government-owned and controlled corporations, and other agencies and instrumentalities of the government shall immediately comply with requests of the BIR for information relevant to its mission of effectively implementing existing revenue laws; WHEREAS, the BLGF is the principal agency that exercises administrative and/or technical supervision over local treasury and assessment operations of the local government units in accordance with Section 43 of Executive Order No. 127, as amended; Section 201, 470 and 471 of R.A. 7160 (The Local Government Code of 1991); and Articles 287 and 291 of the Implementing Rules and Regulations of the Code;

WHEREAS, certain records, documents, data and information vital to the BIR's program of augmenting the revenue base and of increasing tax collection are filed and maintained by the local treasury and assessment offices; WHEREAS, the BIR is adopting an intensified tax information and education campaign to improve tax collection efficiency; WHEREAS, under Revenue Memorandum Order No. 12-95, the BIR is undertaking Tax Mapping Operations with the objective of updating its datafiles, increasing the taxable base and ferreting our tax evaders; NOW, THEREFORE, for and in consideration of the foregoing premises, the BIR and BLGF hereby mutually agree to undertake/adopt the following measures: 1. BLGF shall require the Assessment Offices of local government units to provide the BIR, thru its respective Revenue District Offices, the following: a. Assessment Roll of Taxable Real Properties for the tax year, b. Monthly Updates of Real Property Assessment; c. Copies of Tax Maps with corresponding Tax Map Control Rolls (TMRC); and d. Such other property records as may be requested by BIR. All costs incurred by the Provincial/City/Municipal Assessor in the reproduction of tax maps with the corresponding Tax Map Control Rolls (TMCR) shall be shouldered by the BIR. 2. BLGF shall require the Treasury Offices of local government units to provide the BIR, thru its respective Revenue District Offices the following: a. Quarterly listings of Business Tax Filers; b. Monthly listings of newly-opened businesses; c. Monthly listings of professional tax filers; d. Monthly listings of Community Tax Payments made by corporations and other juridical entities; e. Monthly listings of Franchise Tax filers; f. Monthly listings of Amusement Tax filers; and g. Such other data as may be requested by BIR. 3. BLGF shall comply with the requirements of Executive Order No. 52, series of 1993, requiring the indication of TINs on permits and licenses issued by their local treasury and assessment offices; 4. BLGF shall ensure that local treasury/assessment offices shall assist the BIR in its regional, district and field offices in the conduct of tax information and education campaign and in the dissemination of materials and messages through the distribution of primers, flyers and tax leaflets in all transactions dealing with taxpayers; 5. BIR shall furnish the BLGF with the following records, provided that the same are not prohibited under Section 269 of the National Internal Revenue Code, as amended, regarding unlawful divulgence of trade secrets : a. Quarterly lists of income tax filers; b. Quarterly lists of capital gains tax filers; c. Schedules of approved zonal values; d. Lists of banks filing their quarterly gross receipts tax returns under Section 119 of the NIRC; and e. Such other data as maybe requested by the BLGF.

6. BIR shall utilize the data provided by the BLGF in its program augment the revenue base and increase tax collection efficiency, especially for the "BIR's Tax Mapping Operations", and that BLGF shall likewise furnish local treasury and assessment offices with the data provided by the BIR for purposes of LGU revenue generation programs and the overall efforts to improve local tax administration; 7. BIR shall require all taxpayers to indicate their Community Tax Certificate Number in their Annual Income Tax Returns; 8. BIR and BLGF shall organize an Inter-Agency Task Force to effect, implement, and monitor the provisions of this Memorandum of Agreement within thirty (30) days upon approval hereof. This Memorandum of Agreement shall take effect upon approval by the Secretary of Finance and shall remain in force until mutually abrogated by the parties concerned. In WITNESS WHEREOF, the parties have hereunto affix their signature this 25th day of May, 1995 at Manila, Philippines. BUREAU OF INTERNAL REVENUE FINANCE By: By: BUREAU OF LOCAL GOVERNMENT

(SGD) LIWAYWAY VINZONS-CHATO (SGD) LORINDA M. CARLOS Commissioner Executive Director Signed in the presence of: (SGD) BEETHOVEN L. RUALO (SGD) ANGELINA M. MAGSINO Deputy Commissioner for Operations Deputy Director APPROVED : (SGD) ROBERTO F. DE OCAMPO Secretary of finance" All concerned are hereby enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Inter Revenue MEMORANDUM OF AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Memorandum of Agreement made and entered into this 25th day of May, 1995, at the City of Manila, Philippines by and between: The BUREAU OF INTERNAL REVENUE with principal office at the BIR National Office Building, Diliman, Quezon City represented by its Commissioner LIWAYWAY VINZONS-CHATO, hereinafter referred to as the BIR; and

The BUREAU OF LOCAL GOVERNMENT FINANCE with principal office at the Palacio del Gobernador, 7th Floor, Intramuros, Manila represented by its Executive Director LORINDA M. CARLOS hereinafter referred to as the BLGF. WITNESSETH, that; WHEREAS, Executive Order No. 53, series of 1993, directs all government agencies concerned to provide the Bureau of Internal Revenue (BIR) with the necessary information to help increase tax collections; WHEREAS, Executive Order No. 52, series of 1993, requires the indication of Taxpayer Identification Numbers (TINs) on certain WHEREAS, under Section 2 of Executive Order No. 53, series of 1993, the local government units, government-owned and controlled corporations, and other agencies and instrumentalities of the government shall immediately comply with requests of the BIR for information relevant to its mission of effectively implementing existing revenue laws; WHEREAS, the BLGF is the principal agency that exercises administrative and/or technical supervision over local treasury and assessment operations of the local government units in accordance with Section 43 of Executive Order No. 127, as amended; Section 201, 470 and 471 of R.A. 7160 (The Local Government Code of 1991); and Article 287 and 291 of the Implementing Rules and Regulations of the Code; WHEREAS, certain records, documents, data and information vital to the BIR's program of augmenting the revenue base and of increasing tax collections are filed and maintained by the local treasury and assessment offices; WHEREAS, the BIR is adopting an intensified tax information and education campaign to improve tax collection efficiently; WHEREAS, under Revenue Memorandum Order No. 12-95, the BIR is undertaking Tax Mapping Operations with the objective of updating its datafiles, increasing the taxable base and ferreting out tax evaders; NOW, THEREFORE, for and in consideration of the foregoing premises, the BIR and BLGF hereby mutually agree to undertake/adopt the following measures; 1. BLGF shall require the Assessment Offices of local government units to provide the BIR, thru its respective Revenue District Offices, the following: a. Assessment Roll of Taxable Real Properties for the tax year; b. Monthly Updates of Real Property Assessments; c. Copies of Tax Maps with corresponding Tax Map Control Rolls (TMRC); and d. Such other property records as may be requested by BIR. All costs incurred by the Provincial/City/Municipal Assessor in the reproduction of tax maps with the corresponding Tax Map Control Rolls (TMCR) shall be shouldered by the BIR. 2. BLGF shall require the Treasury Offices of local government units to provide the BIR, thru its respective Revenue District Offices the following: a. Quarterly listings of Business Tax Filers; b. Monthly listings of newly-opened businesses; c. Monthly listings of professional tax filers; d. Monthly listings of Community Tax Payments made by corporations and other juridical entities; e. Monthly listings of Franchise Tax filers;

f. Monthly listings of Amusement Tax filers; and g. Such other data as may be requested by BIR. 3. BLGF shall comply with the requirements of Executive Order No. 52, series of 1993, requiring the indication of TINs on permits and licenses issued by the local treasury and assessment offices; 4. BLGF shall ensure that local treasury/assessment offices shall assist the BIR in its regional, district and field offices in the conduct of tax information and education campaigns and in the dissemination of materials and messages through the distribution of primers, flyers and tax leaflets in all transactions dealing with taxpayers; 5. BIR shall furnish the BLGF with the following records, provided that the same are not prohibited under Section 269 of the National Internal Revenue Code, as amended, regarding unlawful divulgence of trade secrets; a. Quarterly lists of income tax filers; b. Quarterly lists of capital gains tax filers; c. Schedules of approved zonal values; d. Lists of banks filing their quarterly gross receipts tax returns under Section 119 of the NIRC; and e. Such other data as may be requested by the BLGF. 6. BIR shall utilize the data provided by the BLGF in its program to augment the revenue base and increase tax collection efficiency, especially for the "BIR's Tax Mapping Operations", and that BLGF shall likewise furnish local treasury and assessment offices with the data provided by the BIR for purposes of LGU revenue generation programs and the overall efforts to improve local tax administration. 7. BIR shall require all taxpayers to indicate their Community Tax Certificate Number in their Annual Income Tax Returns; 8. BIR and BLGF shall organize an Inter-Agency Task Force to effect, implement, and monitor the provisions of this Memorandum of Agreement within thirty (30) days upon approval hereof. This Memorandum of Agreement shall take effect upon approval by the Secretary of Finance and shall remain in force until mutually abrogated by the parties concerned. In WITNESS WHEREOF, the parties have hereunto affix their signature this 25th day of May, 1995 at Manila, Philippines. BUREAU OF INTERNAL REVENUE BUREAU OF LOCAL GOVERNMENT FINANCE By: By: LIWAYWAY VINZONS-CHATO LORINDA M. CARLOS Commissioner Executive Director Signed in the presence of: BEETHOVEN L. RUALO ANGELINA M. MAGSINO Deputy Commissioner for Operations Deputy Director APPROVED:

ROBERTO F. DE OCAMPO Secretary of Finance C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-01-95 Revenue Memorandum Circular No. 20-95 June 1, 1995 REVENUE MEMORANDUM CIRCULAR NO. 20-95 SUBJECT : Publishing the full text of the Department Order No. 34-95 dated May 25, 1995 creating an Inter-Agency Task Force to implement the Memorandum of Agreement between Bureau of Internal Revenue (BIR) and Bureau of Local Government Finance (BLGF). TO : All Internal Revenue Officials and Employees and Others Concerned. For the information of all internal revenue officials and employees and others concerned, quoted hereunder is the Department Order No. 34-95 dated May 25, 1995, creating an Inter-Agency Task Force to implement the Memorandum of Agreement between BIR and BLGF: "DEPARTMENT ORDER NO. 34-95 May 25, 1995 TO : The Commissioner, Bureau of Internal Revenue; The Executive Director, Bureau of Local Government Finance; and Others Concerned. SUBJECT : Creating an Inter-Agency Task Force to Implement the Memorandum of Agreement between the Bureau of Internal Revenue and the Bureau of Local Government Finance adopting certain measures to improve both national and local tax collections. For the proper implementation of the Memorandum of Agreement entered into by and between the Bureau of Internal Revenue (BIR) and Bureau of Local Government Finance (BLGF) to enhance the Tax Mapping Operations of BIR and increase national and local tax collections, in Inter-Agency Task Force is hereby organized to effect, implement and monitor the provisions of the Memorandum of Agreement, to be composed of the following: BEETHOVEN L. RUALO Chairman Deputy Commissioner for Operations, BIR LORINDA M. CARLOS Executive Director, BLGF Co-Chairman Member

BENEDICTA D. BALADAD Technical Assistant, BIR NESTOR S. VALEROS Revenue District Officer

Member

Valenzuela, RDO# 24 JOSE S. CHICANO Revenue District Officer Taguig, RDO# 44 Member

BEATRIZ LOURDES C. ILAO Office Director, BLGF NORBERTO G. MALVAR Division Chief, BLGF EDUARDO DEL ROSARIO Division Chief, BLGF

Member

Member Member

Accordingly, the Inter-Agency Task Force shall meet at least once a month to determine progress of activities and assess the impact on National and Local Revenue Goals of this joint undertaking. The Commissioner of Internal Revenue and the Executive Director of Bureau of Local Government Finance are hereby instructed to disseminate the contents of this Department order to all revenue District Officers and Regional Directors of the BIR and the BLGF Regional Directors and Provincial City and Municipal Treasurers and Assessors, respectively, for their information, guidance and compliance. This order shall take effect immediately. (SGD.) ROBERTO F. DE OCAMPO Secretary All concerned are hereby enjoined to give this circular as wide a LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue May 25, 1995 DEPARTMENT ORDER NO. 20-95 SUBJECT : Creating an Inter-Agency Task Force to Implement the Memorandum of Agreement between the Bureau of Internal Revenue and the Bureau of Local Government Finance adopting certain measures to improve both national and local tax collections. TO : The Commissioner, Bureau of Internal Revenue; The Executive Director, Bureau of Local Government Finance; and Others Concerned. For the proper implementation of the Memorandum of Agreement entered into by and between the Bureau of Internal Revenue (BIR) and Bureau of Local Government Finance (BLGF) to enhance the Tax Mapping Operations of BIR and increase national and local tax collections, an Inter-Agency Task Force is hereby organized to effect, implement and monitor the provisions of the Memorandum of Agreement, to be composed of the following:

BEETHOVEN L. RUALO Chairman Deputy Commissioner for Operations, BIR LORINDA M. CARLOS Executive Director, BLGF Co-Chairman Member Member

BENEDICTA D. BALABAD Technical Assistant, BIR NESTOR S. VALEROSO Revenue District Officer Valenzuela, RDO # 24 JOSE S. CHICHANO Revenue District Officer Taguig, RDO # 44

Member

BEATRIZ LOURDES C. ILAO Office Director, BLGF NORBERTO G. MALVAR Division Chief, BLGF EDUARDO DEL ROSARIO Division Chief, BLGF

Member

Member Member

Accordingly, the Inter-Agency Task Force shall meet at least once a month to determine progress of activities and assess the impact on National and Local Revenue Goals of this joint undertaking. The Commissioner of Internal Revenue and the Executive Director of Bureau of Local Government Finance are hereby instructed to disseminate the contents of this Department Order to all Revenue District Officers and Regional Directors of the BIR and the BLGF Regional Directors and Provincial, City and Municipal Treasurers and Assessors, respectively, for their information, guidance and compliance. This Order shall take effect immediately. ROBERTO F. DE OCAMPO Secretary Copyright 1996 CD Technologies Asia 06-21-95 Revenue Memorandum Circular No. 21-95 June 21, 1995 REVENUE MEMORANDUM CIRCULAR NO. 21-95 I n c.

SUBJECT TO :

: 91ST ANNIVERSARY CELEBRATIONS All Revenue Officials and Employees

The Bureau will be celebrating it's 91st Anniversary on Tuesday, August 1, 1995. The theme for the year's celebration is 'BIR's Commitment for Progress: Transformation of Tax Administration". This focuses on the Bureau's efforts to realize the mission that has been commitment in the Tax Administration Strategic Plan as well as to meet the objectives of the major change initiatives that are presently being pursued. In this occasion, the Steering Committee pursuant to Revenue Special Order No. 162-95 has finalized the schedule indicated hereunder: July 1-31 Open House of all BIR offices

July 7 (Friday) Deadline for submission of nominations from the regional offices for the Appreciation Awards to BIR supporters Deadline for submission of entries to the 1995 BIR Essay Writing Contest July 10-14 Field visits for judging of the "Model Office" Awards

July 19 (Wednesday) Elimination phase for the Cultural presentation compensation Luzon 1 Luzon 2 Visayas Mindanao July 28 (Friday) Awards program Sports competition winners Outstanding RDO performance award Model office awards Appreciation awards to BIR supporters Final phase of the Cultural presentation competitions July 31 (Monday) Launching of 1995 Student's Poster/Slogan Contest Awarding of winners of 1995 BIR Essay Writing Contest August 1 (Tuesday) Program with the President Change Initiative/Milestone Briefing Reception Opening of Exhibit Anniversary Mass

Release of employee welfare benefits Release of newspaper supplement/PRJ anniversary issue/Fact sheet Simultaneous regional/district office anniversary celebrations

All revenue officials and employees of the Bureau are enjoined to participate in these activities. For all information of all concerned, the Steering Committee will be regularly issuing additional guidelines and details on these activities in the weeks to come. RENE G. BAEZ Acting Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-22-95 Revenue Memorandum Circular No. 22-95 June 22, 1995 REVENUE MEMORANDUM CIRCULAR NO. 22-95 SUBJECT : 1995 BIR Essay Writing Contest TO : All Revenue Officials and Personnel In connection with the 91st Anniversary celebration and with the Bureau's thrust to communicate the mission of the Tax Administration Strategic Plan and the major change initiatives of the Bureau, the 1995 BIR Essay Writing Contest is being held. The theme for the contest is "BIR's Commitment for Progress: Transformation of Tax Administration" The contest rules are as follows: (1) The contest is open to all revenue personnel in the national, regional and district offices; (2) Permanent and temporary/casual personnel of the Bureau are qualified to join the contest; (3) Participating employees can submit only one essay for the contest; (4) The essay should be written only in English; (5) The essay should be at least five (5) pages but should not exceed ten (10) pages in length with each page bearing the initials of the writer; (6) The essay to be submitted must be typewritten and double spaced with top, bottom, side margins of one (1) inch for each page; (7) Each essay should be accompanied by an entry from (see Annex A) properly accomplished by the participant and noted by the immediate superior of said participant; (8) The essay together with the entry form should be received by the Contest Secretariat (Chief, Planning Division, Room No. 810, BIR National Office) on or before July 7, 1995; (9) The participants should be ready to be validated by the Board of Judges to ensure originality and authorship of the entries submitted; (10) The Board of Judges, comprised of selected individuals outside this Bureau, will select the winning entry not later than one week before the awards program;

(11) The winning entry shall become the property of the Bureau of Internal Revenue; (12) The winning participant will be notified by the Contest Secretariat and will be invited to accept the prize during the awards program; (13) The award program is scheduled on July 31, 1995 in the BIR National Office; (14) The prizes to be awarded are as follows: First Prize Second Prize Third Prize P10,000.00 7,500.00 5,000.00

Consolation prizes of P2,000.00 each for a number of entries. (15) Certificates of recognition will also be awarded to all participants. For the information of all concerned. RENE G. BAEZ Acting Commissioner ANNEX "A" 1995 BIR ESSAY WRITING CONTEST ENTRY FORM Name of participant ___________________________________ Residence address ___________________________________ Office Address ___________________________________ Residence phone number ___________________________________ Office phone number ___________________________________ Item/Position ___________________________________ Year Entered the BIR ___________________________________ Age ___________________________________ I attest to the veracity of the above indicated information and that I personally wrote the original manuscript of the accompanying essay. ______________________________________________ Signature over printed name of participant I attest that I personally know the participant to be an employee in my office. _______________________________________________ Signature over printed name of immediate superior Date _____________________ C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-23-95 Revenue Memorandum Circular No. 23-95 June 23, 1995 REVENUE MEMORANDUM CIRCULAR NO. 23-95 SUBJECT : CULTURAL PRESENTATION AND COMPETITION TO : All Revenue Officials and Personnel On the occasion of our 91st Anniversary celebration, each regional office and each group in the national office will be required to present a group number during the cultural

presentation and competition that will be held for this purpose. This activity is intended to foster camaraderie among our staff as well as to focus our attention on our anniversary theme. The rules and guidelines of his cultural presentation and competition are as follows: 1. Participation is mandatory for all concerned offices (a totals of 22 groups coming from the 19 regional offices and the 3 national office groups); 2. Presentation should focus on the anniversary theme "BIR's Commitment for Progress: Transformation of Tax Administration"; 3. Number of participant for a particular group should not be less than ten (10) persons; 4. The participants should be officially in the plantilla of the office which they are representing; 5. The presentation should not exceed 15 minutes for each group; 6. The presentation should be a combination of song and skit, which should relate together to focus on the anniversary theme. Inclusion of dance portion is optional: 7. Expenditures for this cultural presentation and competition can be sourced from the budget for "other services" (Budget object No. 24); 8. There will be 2 phases in the competition namely: A. Elimination phase for the following groupings in the indicated venues: Groupings Competing Regions/Offices Venue Luzon I Regions 1, 2. 3. 4 Pangasinan Luzon II Regions 5,6,7,8,9,10 Quezon City National Office groups Visayas Regions 11,12,13,14 Cebu Mindanao Regions 15,16,17,18,18 Davao This is scheduled on July 19, 1995, and one winner each will be selected for Luzon I, Visayas and Mindanao, and two winners will be selected for Luzon II, or a total of 5 winners. B. Final phase which is scheduled on July 28, 1995 in Quezon City where the five winners in the elimination phase will be competing with each other. 9. Criteria for judging for the two phases are as follows: 9.1. 9.2. 9.3. 9.4. Thematic interpretation 30% (Relevance to the anniversary theme) Audience Impact 25%

Creativity 25% (timing, technique of presentation Production value (setting, costume, props) T O T A L 100% 20%

10. A Board of Judges will be constituted for the two phases. The composition would be as follows: 10.1. For the elimination phase: Representative from: Office of the Regional Director of the Department of Education, Culture and Sports for the regions of the selected venues; Deputy Commissioners and Regional Directors concerned; 2 National Office representatives. 10.2. For the final phase, the Board of Judges will still be identified. 11. Prizes in the form of plaques and monetary and/or non-monetary items will be given. Certificates of participation will be given to all participants. The Steering Committee created pursuant to Revenue Special Order No. 162-95 will be coordinating with the Regional Directors of Revenue Region No. 1, 13 and 19 for the preparation of venues for the elimination phase. All Deputy Commissioners and Regional Directors are required to submit the information form prescribed in Annex A to the Steering Committee (c/o Assistant Commissioner, Management and Planning Service, Room 503, BIR National Office) not later than July 7, 1995. RENE G. BAEZ Acting Commissioner ANNEX A CULTURAL PRESENTATION COMPETITION INFORMATION FORM 1. Revenue Region / National Office ____________________ 2. Name of Participants Office Assigned to 3. Title of presentation ________________________________________________ Name over signature of Deputy Commissioner Regional Director C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-16-95 Revenue Memorandum Circular No. 24-95 June 16, 1995 REVENUE MEMORANDUM CIRCULAR NO. 24-95 SUBJECT : POLICY TO PROFESSIONALIZE THE CIVIL SERVICE (CSC MC 42, S. 1991) TO : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is a letter from the Commissioner, Civil Service Commission dated June 6, 1995.

"This refers to your letter dated March 30, 1995 requesting for exemption from the masteral degree requirement under CSC Memorandum Circular No. 42, s. 1991, particularly for the position of Chief Revenue Officer IV (SG-24). It is represented that the Revised Staffing Pattern of that Bureau was only approved by the Department of Budget and Management on December 16, 1994; that the Bureau is in the midst of establishing a Career Revenue Service which provides for ranks and corresponding benefit; and that conferment of ranks shall entail vigorous career education and training which approximates the requirement for a masteral degree. Please be informed that your request cannot be granted because the current policy of the Commission is not to allow any exception to the said rule. However, appointments to division chief positions of those who do not have the required education may be allowed under temporary status. As agreed upon during our meeting, you may issue appointments to the positions of Chief Revenue Officer IV under temporary status subject to the condition that the appointment shall not exceed twelve (12) months, but the appointee may be replaced sooner if a qualified eligible who is willing to accept the appointment becomes actually available. Very truly yours, (Sgd) RAMON P. EREMETA, JR. Commissioner All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. RENE G. BAEZ Acting Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-23-95 Revenue Memorandum Circular No. 25-95 June 23, 1995 REVENUE MEMORANDUM CIRCULAR NO. 25-95 SUBJECT : MODEL OFFICE AWARD TO : All Revenue Officials and Personnel All BIR offices in the national, regional and district levels are directed to improve the physical appearance and arrangement of their offices and facilities within the available resources and without the need for extravagant expenditures to meet the following objectives: 1) improve the work environment/area for the BIR staff, 2) encourage the public to visit our offices and familiarize themselves with the BIR's projects/activities and; 3) compete for the "Model Office" Award on the occasion of the 91st anniversary celebration The competition for the "Model Office" Award will have the following criteria: a) Cleanliness and orderliness (Neatness, organization, and 25%

arrangement of office environment) b) Accessibility to taxpayers and/or visitors 25% (ample space to walk thru, clear identification/labelling of sections/units, organized and systematic layouting of working areas) c) Availability of public information and guidelines (exhibits, flowcharts, 25% posters, primers) d) Attitudes of personnel 25% (courtesy, cheerfulness, helpfulness and approachability) TOTAL 100% ==== Roving teams composed of the National and/or Regional officials will visit all BIR offices during the period from July 10 to 14, 1995 to select the "Model Office" awardee. There will be one winner selected for each of the nineteen (19) revenue regions and three (3) winners from the National office. The twenty two (22) "Model Office" awardees will be given prizes in the form of Plaques of Recognition and office equipment for the use of the office. Winners will be announced on July 28, 1995. RENE G. BAEZ Acting Commissioner Bureau of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 07-05-95 Revenue Memorandum Circular No. 26-95 July 5, 1995 REVENUE MEMORANDUM CIRCULAR NO. 26-95 SUBJECT : Publishing the full text of Republic Act No. 7919, an Act Granting Legal Residence Status to Certain Aliens Through a Social Integration Program in the Philippines under certain Conditions, Otherwise Known as "The Alien Social Integration Act of 1995." TO : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is the full text of Republic Act No. 7919. "REPUBLIC ACT NO. 7919 "AN ACT GRANTING LEGAL RESIDENCE STATUS TO CERTAIN ALIENS THROUGH A SOCIAL INTEGRATION PROGRAM IN THE PHILIPPINES UNDER CERTAIN CONDITIONS. "SECTION 1. Title. - This Act shall be known as The Alien Social Integration Act of 1995."

"SEC. 2. Declaration of Policy. The state shall control and regulate the admission and integration of aliens into its territory and body politic. Towards this end, aliens with unlawful residence status shall be integrated into the mainstream of Philippine society subject to national security and interest, and in deference to internationally recognized human rights. "SEC. 3. Coverage. Upon effectivity of this Act, all aliens whose stay in the Philippines is otherwise illegal under existing laws, and who have entered the country prior to June 30, 1992, including those who availed in good faith of the benefits of Executive Order No. 324 whose applications have been approved before or after November 21, 1988, are hereby granted legal residence status upon compliance with the provisions of this Act, and shall not be prosecuted for crimes defined under Commonwealth Act No. 613, otherwise known as the Immigration Act of 1940, which are inherent to illegal residence such as the absence of valid travel documents or visa: Provided, That in no case shall alien refugees in the Philippines be qualified to apply under this Act. "The bar to prosecution shall apply only to such crimes or felonies committed due to acts necessary or essential to maintain a false or fraudulent or illegal residence, such as falsification of marriage, birth or baptismal certificates or travel documents, visas or alien certificates of registration. "SEC. 4. Integration Requirements and Fees. The social integration of aliens established under Section 3 shall be effective and its benefits enjoyed by illegal residents upon completion of all the following acts: "4.1. Filing of registration forms with the following agencies: (1) the Civil Registrar of his place of residence; (2) the Bureau of Internal Revenue (BIR); (3) the Bureau of Immigration; (4) the National Bureau of Investigation (NBI); and (5) the commercial or universal bank to which the alien pays the integration fee as hereafter provided. "In lieu thereof, the filing of registration forms may be done in five (5) sets with a commercial or universal bank certified by the BIR as authorized collectors for income tax. "4.2. The registration forms shall contain the applicant's full name and one alias by which he may be known; proof of his identity, good moral character and financial capacity through affidavits from two (2) Filipino citizens of good reputations in his/her place of residence; history of stay in the Philippines, residential address for the immediate past five (5) years; four (4) passport size pictures and a complete fingerprints card for each of the agencies mentioned in 4.1, including his/her most recent dental records which shall be submitted to the NBI. "4.3. Payments of the integration fees to any duly licensed commercial or universal bank accredited by the BIR as authorized to retrieve income tax payments in the following amounts; "4.3.1. One hundred thousand pesos (P100,000) upon filing of the registration forms with the bank plus Fifty thousand pesos (P50,000) per year over a three year period from the payment of the first installment. The subsequent three (3) installment payments should be paid within twelve (12) months from the date of the first payment by whose who availed of the benefits of Executive Order No. 324 whose applications were approved before or after November 20, 1988 shall be credited to their favor.

"In lieu of the above installment payments, the applicant may immediately pay Two hundred thousand pesos (P200,000). "4.3.2. A single payment of Fifty thousand pesos (P50,000) for the spouse and Twentyfive thousand pesos (P25,000) for eight legitimate child below eighteen (18) years of age. "4.3.3. Children born after June 30, 1992 of parents who received the benefits of this Act shall upon proper registration with the Bureau of Immigration become legal residents. "4.4. Submission of a medical certificate stating that the applicant is not a user of prohibited drugs or otherwise a drug addict and that he is not affiliated with Acquired Immune Deficiency Syndrome (AIDS). "Sec. 5. Official Receipt. The commercial or universal bank shall issue an official receipt acknowledging receipt of the integration fee, upon payment by the applicant of a processing fee of One thousand pesos (P1,000). In the event registration was effected under paragraph 2 of subsection 4.1, the bank shall furnish copies of the registration documents to the following agencies; (1) the civil register of the applicant's place of residence (2) the BIR; and (3) the NBI. Thereafter, the bank shall issue a certification to this effect in favor of the applicant. "SEC. 6. Duties of the Bureau of Immigration. Upon presentation by the applicant of the official receipt from the bank, together with a certification from the bank or the agency concerned, as the case may be, that the Civil Registrar, BIR and NBI received copies of the registration forms defined in Section 4.2 hereof, the Bureau of Immigration shall immediately issue an Alien Certificate of Registration (ACR) to the applicant. The legal residence granted under this Act shall commence from the date of Bureau of Immigration issues the ACR. "The Bureau of Immigration shall publish, at the applicant's cost, the names, ages, addresses, and a photograph of each of the applicants in a national newspaper of general circulation at the end of each calendar month during the effectivity of the application period, as hereinafter provided in Section 8. The banks authorized under this Act to collect the fees herein required shall collect a publication fee of Five thousand pesos (P5,000) from the applicant. "SEC. 7. Ministerial Duty of the Civil Registrar, the BIR and the NBI. The Civil Registrar, the BIR and the NBI shall have the ministerial duty to accept the registration forms required under Section 4. Each of these agencies may charge no more than One hundred pesos (P100.00) for the filing of the registration forms. Upon payment of the filing fee, the agency concerned shall issue a certification that the alien has filed with said office by himself/herself or through the bank, all the forms required under Section 4. "SEC. 8. Application Period. The benefits extended by Section 3 can be availed of from June 1, 1995 to December 31, 1996. "SEC. 9. Administrative Confirmation. The procedure herein provided may be availed of by any alien who may want a confirmation or affirmation of his stay in the Philippines. "SEC. 10. Eligibility for Citizenship. Aliens granted legal residence under this Act shall be eligible to apply for naturalization after five (5) years from the approval of his/her application. "SEC. 11. Compliance Report and Oversight Functions. The Bureau of Immigration shall submit to the chair of the committees on justice of each chamber of Congress, copy furnished the Senate President and the Speaker of the House of

Representatives, a written report on the developments in the implementation of this Act on November 30, 1995, May 31, 1996, November 30, 1996, and May 31, 1997 for purposes of oversight functions. "SEC. 12. Perjury. The registration forms, together with the proof required therein, shall be supported by affidavits of two (2) Filipino citizens of good reputation in the applicant's place of residence. "All applications shall be under oath or affirmation, which oath or affirmation shall be required for their registration. Applicants who violate their oath or affirmation by knowingly making untruthful statements on any material matter in their applications shall be liable for perjury under the Revised Penal Code. "In addition to the penalty imposed on perjury, the subsequent conviction of the applicant shall revoke the legal residence granted him/her and shall subject the applicant to deportation proceedings. "SEC. 13. Appropriation. There is hereby appropriated, out of the payments received under Section 4 hereof, an amount of Five million pesos (P5,000,000) to cover administrative and other expenses to be incurred in the implementation to this Act. "SEC. 14. Privacy Clause. Information submitted by an alien applicant pursuant to this Act, shall be used only for the purpose of determining the veracity of the factual statements by the applicant or for enforcing the penalties prescribed by this Act. "SEC. 15. Rule-making Powers. The provisions of this Act are self-executory and shall not be dependent on the issuance of any rules or regulations. The Secretary of Justice is hereby authorized, however, to promulgate only such rules and regulations as may be needed to efficiently and administratively implement the provisions of this Act. "SEC. 16. Separability Clause. If any provision of this Act is declared invalid or unconstitutional, the provisions not affected thereby shall continue to be in full force and effect. "SEC. 17. Repealing Clause. All laws, decrees or rules inconsistent with the provisions of this Act are hereby repealed or modified accordingly. "SEC. 18. Effectivity Clause. This Act shall take effect fifteen (15) days after the completion of its publication in at least two (2) national newspapers of general circulation. "Approved. (Sgd.) (Sgd.) EDUARDO J. ANGARA President of the Senate of Representatives JOSE DE VENECIA, JR. Speaker of the House

"This Act which originated in the House of Representatives was finally passed by the House of Representatives and the Senate on February 21, 1995. (Sgd.) (Sgd.) EDUARDO E. TUMANGAN CAMILIO L. SABIO Secretary of the Senate Secretary General House of Representative

Approved: February 24, 1995 (Sgd.) FIDEL V. RAMOS President of the Philippines" ------------------------------------------------------------------------------------------SALIENT FEATURES: Pursuant to Section 7 of Republic Act No. 7919, otherwise known as "The Alien Social Integration Act of 1995", and the Rules and Regulations Implementing the said Act promulgated by the Department of Justice, the following administrative procedures, insofar as the BIR is concerned, are hereby further promulgated to ensure the efficient implementation of the provisions of the said Act: 1. The BIR, through the Revenue District Office where the alien who is applying for legal residence status or confirmation/affirmation of his stay under the said Act is residing, the Civil Registrar and the NBI, shall have the ministerial duty to do the following: (a) Accept the registration forms to be filed by the applicant, with the following information: (i) The applicant's full name and one alias by which he may be known; (ii) Proof of his identity, such as, passport or other travel document of the applicant, national or state identification card from his country of origin, or similar documents to establish his identity, together with the marriage certificate or similar document, in the case of the spouse, and the birth certificate, baptismal certificate or other evidence of birth, in the case of a dependent; (iii) Affidavits (under oath or affirmation) of two (2) Filipino citizens of good reputation in the place of residence of the applicant attesting to the latter's good moral character; (iv) Proof of financial capacity, such as, income tax returns for the immediately preceding taxable year, wage records, bank statements or evidence of other assets, affidavit of support completed by a responsible person in the Philippines, or other evidence to establish that the applicant's is not likely to become a public charge; (v) History of stay in the Philippines; (vi) Residential address for the immediate past five (5) years; (vii) Passport size picture; and (viii) Complete fingerprint card. b. Receive the payment of One hundred pesos (P100) filing fee in the form of money order or cashier's check for the filing of the registration forms; and c. Issue a certificate that the alien has filed by himself/herself or through the bank, all the forms as above-stated, upon receipt of the filing fee. 2. In the event that registration was already affected, the BIR shall be furnished copies of the registration documents filed with a commercial or universal bank certified by the BIR as an authorized collector for income tax, which has the duty to issue an official receipt acknowledging receipt of the integration fee in the amount of One Hundred thousand pesos (P100,000) upon filing of the registration forms. The said bank is likewise authorized to receive the subsequent three installment payments of Fifty

Thousand Pesos (P50,000) per year over a three-year period from the payment of the first installment. 3. The benefits extended to aliens who have signified their intention to be part of Philippine society consistent with national security and interest and in recognition of their human rights under the provisions of RA No. 7919 can only be availed of from June 1, 1995 to December 31, 1996. It is desired that this Circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 07-04-95 Revenue Memorandum Circular No. 27-95 July 4, 1995 REVENUE MEMORANDUM CIRCULAR NO. 27-95 SUBJECT : GUIDELINES ON THE "GAWAD KALINGA", THE EMPLOYEE-FRIENDLY EMPLOYER (GOVERNMENT ENTITY) AWARD TO : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is a memorandum from the Assistant Secretary, Department of Finance dated June 22, 1995. "THE GAWAD KALINGA: The "Gawad Kalinga" or the Employee-Friendly Employer (Government Entity) Award is a recognition given to employers who have demonstrated concern for the welfare of rank-and-file employees thereby promoting their morale and enhancing their productivity. WHO MAY BE NOMINATED: Agencies of the national government including bureaus and attached agencies, government-owned and controlled corporations with original charters, local government units, states and universities may be nominated. WHO MAY NOMINATED: Only employee unions or associations accredited by the Civil Service Commissions (CSC) are qualified to nominate the agency to which said union or association belongs. In the absence of an accredited union, the registered union/s can make the nomination. NOMINATED PERIOD: The Search for the Employee-Friendly Employer (Government Entity) Award begins on June 21, 1995 and ends on August 31, 1995. Nominations filed by mail should be postmarked not later than August 31, 1995. NOMINATION AND SELECTION CRITERIA: A. Responsiveness to the Needs of Employees The Nominees must have: a) provided its employees with working conditions conducive to the promotion of their health, safety and welfare;

b) installed mechanisms for the immediate recognition of employees' meritorious accomplishments; and c) initiated policies/programs which rebound or will rebound to the promotion of the interest of the employees. The above programs must: 1. not depend or large-scale infusions of money drawn from official funds; 2. be relevant to the present needs of the employees; 3. promote, protect and preserve the employees' welfare and interests; and 4. be able to sustain operations over a long period of time to attain organizational effectiveness and efficiency. B. Employee Empowerment The nominee must have recognized employees' rights and promoted public sector unionism. 1. Have encouraged and allowed formation of independent associations/unions; 2. Have allowed participation of union officers/members in the formulation of agency policies; 3. Have provided support to union activities; and 4. Have allowed the development of Collective Negotiation Agreement (CNA). C. Employee Perception of the Agency The agency nominated must be generally perceived by its employees to be promoting their welfare and morale. D. Public Perception of the Agency The agency nominated must be perceived by the general public to be performing its job properly and efficiently. The above criteria must have been met by the nominees within the period of July 1, 1991 to June 30, 1994 (for new nominees); and from July 1, 1994 to June 30, 1995 (for previous winners). NOMINATION REQUIREMENTS: Nominations must be accompanied by eight (8) copies of the following: 1. Description of functions and services rendered by the agency; 2. Original or certified xerox copy of the implemented policy/program indicating the date of the project/program's commencement and/or completion; and 3. Copies of documents such as clippings, citations, collective negotiation agreement, publications or pictures relevant to the program. The nomination forms can be secured from any member of the Convenors Group or from any of its Regional/Field Offices. NOMINATION AND SELECTION PROCEDURES: 1. Nominations may be filed directly with the Gawad Kalinga Convenors Group c/o Ms. Gloria Agato of the TARCEA, Tariff Commission, 5th Floor, Philippine Heart Center Bldg., East Avenue, Quezon City. 2. All nominations shall be submitted by the Convenors Group to the Selection Committee. 3. The Selection Committee shall evaluate all nominations in accordance with the prescribed guidelines. 4. On the basis of the evaluation results, the Selection Committee shall make its decision which shall be final and unappealable.

THE SELECTION COMMITTEE: The Selection Committee shall be composed of one representative from each of the following: 1) Accredited government employee associations (Permanent Representatives) and one (1) Ad-Hoc representative from each of the following sectoral categories: a) National Agencies b) Government Owned and/or Controlled Corporations with original charters. c) Local Government Units d) State Colleges and Universities 2) Personnel Officers Association of the Philippines (POAP) 3) Personnel Management Association of the Philippines (PMAP) 4) Non-Government Organization CONFERMENT OF AWARD A Scroll of Recognition shall be conferred on the awardee by the employee of the agency represented by the president and secretary of the accredited association. In case there is no accredited employee association in the agency, the president and secretary of the registered employee association shall represent the employees. If there are two or more registered associations in the agency, the respective presidents shall represent the employee in the agency. AWARDING CEREMONY: The Awarding Ceremony shall be held in December 1995 at the Malacaang Palace. Please contact any of the following members of the Convenors Group for more details: ESPERANZA S. OCAMPO-981260/9230383 CRESENCIANO D. GATCHALIAN (Phil. Medicare EA & PGEA) (PUPFAEAI & NFFASUC) JORGE V. LUCERO-532409LUS M. MUZARES-992641 loc 209 (MANTEP & PSLINK) 961573 (KMBuStat & COURAGE) 968012 GLORIA M. AGATO-998419 ELMER T. DUQUE-9211777 (TARCEA & PSCRPI) 9231301 Loc 3508 PTV-4 EA 92117310 9215081 DAVID G. NAVAL, JR.-8433223 (LBPEA & KAMAGFI) All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-02-95 Revenue Memorandum Circular No. 28-95 August 2, 1995

REVENUE MEMORANDUM CIRCULAR NO. 28-95 SUBJECT : List of Awardees and Winners of the 91st Anniversary Celebration Hereunder are the awardees and winners of the different competitions and programs on the occasion of the 91st BIR Anniversary Celebration: 1. Per RMC 25-95 dated June 30, 1995, the following Revenue District Offices (RDOs) have been selected as the 1995 Model Office Awardees: Region 1 RDO No. 4 Calasiao, Pangasinan Region 2 RDO No. 10 Bontoc, Mt. Province Region 3 RDO No. 14 Bayombong, Nueva Viscaya Region 4 RDO No. 18 Subic Bay Free Port Region 5 RDO No. 27 Caloocan Region 6 RDO No. 31 Sta. Cruz, Manila Region 7 RDO No. 43 Pasig Region 8 RDO No. 53 Las Pias, Muntinlupa Region 9 RDO No. 55 San Pablo City Region 10 RDO No. 64 Daet, Camarines Norte Region 11 RDO No. 72 Roxas City Region 12 RDO No. 77 Bacolod City Region 13 RDO No. 83 Talisay, Cebu Region 14 RDO No. 88 Tacloban City Region 15 RDO No. 91 Dipolog City Region 16 RDO No. 97 Gingoog Region 17 RDO No. 105 Surigao City Region 18 RDO No. 109 Tacurong Region 19 RDO No. 113 Davao City National Off. Operations Group Assessment Programs Division National Off. Resource Mgt. Group Personnel Division National Off. Info. Systems, Legal, IIS Group Internal Security Division 2. Per RMC 23-95 dated June 23, 1995, the following have been judged as the winners of the Cultural Presentation and Competition (Final Phase): First Region 4 San Fernando, Pampanga Second Region 13 Cebu City Third Region 16 Cagayan de Oro City Fourth National Off. Information Systems Group Fifth National Off. Operations Group 3. Per RMC 22-95 dated June 22, 1995, the following have been judged as the winners of the 1995 BIR Essay Writing Contest: First Atty. Eliseo Lachica (Int'l Tax Affairs Division-ITAD) Second Ms. Beth Bisquera (ITAD) Third Mr. Fernando Matias (Zamboanga City) Consolation Prizes:

 Mr. Julio Goloran (Butuan City) Mr. Christian Esplana (Info. Systems Operations Service) 4. Per decision of MANCOM, the following organizations are given the 1995 Appreciation Award to BIR Supporters. United States Agency for International Development (USAID) Philippine Chamber of Commerce and Industry (PCCI) Federation of Filipino-Chinese Chamber of Commerce and Industry (FFCCCI) Bankers Association of the Philippines (BAP) Tax Management Association of the Philippines (TMAP) 5. Lastly, ten (10) RDOs have been selected as Outstanding Revenue District Officers on the basis of its overall performance as an organization for the first semester of 1995. The overall performance have been based on the following performance measures/indicators submitted by the Assistant Commissioners: IIS Performance relative to apprehensions of violators for non-issuance of sales invoice and unauthorized use of cash register machines and other bookkeeping laws and regulations Legal Attainment of key events and performance measures for the legal enforcement program prescribed in RMO 65-94 Ass. Results of audit activities relative to completeness and correctness of reports ISOS Attainment of key events and performance measures for the TIN Issuance Program and Return Processing Program prescribed in RMO 65-94 FAS Submission of Budget Proposals Coll. Attainment of key events and performance measures for Accounts Receivable Management Program prescribed in RMO 65-94 PMS Results of management audit conducted MPS Attainment of key events and performance measures for the Taxpayer Service and Information Program prescribed in RMO 65-94 All Services Compliance to reporting requirements Based on these factors, the following have been selected as the Outstanding RDO Awardees: RDO No. 104 RDO No. 78 RDO No. 110 RDO No. 106 RDO No. 14 Bayugan, Agusan del Sur Binalbagan, Negros Occidental General Santos City Tandag, Surigao del Sur Bayombong, Nueva Ecija

RDO No. 108 RDO No. 32 RDO No. 98 RDO No. 83 RDO No. 31

Kidapawan, Northern Cotabato Quiapo-Sampaloc-San Miguel Cagayan de Oro City Talisay, Cebu Sta. Cruz

For the information of all concerned LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-21-95 Revenue Memorandum Circular No. 29-95 August 21, 1995 REVENUE MEMORANDUM CIRCULAR NO. 29-95 SUBJECT : Missing one (1) original copy of Revenue Official Receipt (BIR Form No. 25.24) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing original copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 4753407-M One (1) original copy The above copy which is the Revenue Computer Center's copy was reported as missing by Ms. Dahlia B. Paz of Revenue District Office No. 13, Solana, Tuguegarao, Cagayan. The duplicate copy (Taxpayer's copy) and triplicate (Auditor's copy) of the set bearing the abovementioned serial number were marked cancelled by the Auditor and all official transactions involving the use thereof are therefore invalidated. Internal revenues officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENT'S OFFICES. RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-29-95 Revenue Memorandum Circular No. 30-95 August 29, 1995 REVENUE MEMORANDUM CIRCULAR NO. 30-95 SUBJECT : 95TH ANNIVERSARY CELEBRATION OF THE PHILIPPINE CIVIL SERVICE TO : All Revenue Officials and Employees and others concerned

For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 16, s. 1995 dated August 9, 1995. "The Philippine Civil Service will celebrate its 95th anniversary from September 13-19, 1995 with the theme MAGALANG, MAHUSAY, MABILIS NA SERBISYO, HANDOG SA PUBLIKO. The celebration will be capped with the annual conferment of the Lingkod Bayan and Dangal ng Bayan awards by President FIDEL V. RAMOS. All government agencies and instrumentalities at all levels are enjoined to participate in the celebration, including regional/provincial and field offices. The Civil Service Commission has drawn up the following activities which should be undertaken in all government offices. Announcement of the Celebration The announcement on the week-long, government-wide celebration, including the detailed schedule of activities shall be made by the Head or a ranking official of a particular office on Monday, 11 September. Anniversary Posters and Banners/Streamers The CSC will shortly be distributing the 95th Anniversary posters to all government offices. The distribution will be done through CSC Regional and Field Offices. Officers are enjoined to prominently display such posters and are further encouraged to keep them on display beyond the Civil Service Week. In addition, agencies and offices shall individually prepare banner and streamers announcing the celebration following the design and specifications to be prescribed by the CSC through its Regional and Field Offices. For the month undertaking of these activities, CSC Regional, Provincial and Field Directors shall coordinate with the offices under their jurisdiction. All government officials and employees are enjoined to actively support and participate in the week-long celebration. (Sgd) RAMON P. ERENETA, JR. Acting Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 CD Technologies Asia I n c.

03-14-95 Revenue Memorandum Circular No. 31-95 March 14, 1995 REVENUE MEMORANDUM CIRCULAR NO. 31-95 SUBJECT : MANAGEMENT APTITUDE TEST BATTERY (MATB) TO : All Revenue Officials For the information and guidance of all revenue officials, quoted hereunder is a letter from the Executive Director, Career Executive Service Office dated February 27, 1995.

"We are pleased to inform you that we will be conducting another Management Aptitude Test Battery (MATB) exclusive for incumbents of CES positions on 28 May 1995. With the issuance of CSC MC 21, incumbents of CES positions now include holders of managerial positions with salary grade 25 and above in the national government offices and government-owned and controlled corporations (GOCC's). Once again, may we request you to announce the schedule of conduct and our requirements for the examination to the CES incumbents in your agency. Attach are copies of the announcement and application forms for this purpose. The deadline for the filing of application is 28 April 1995. Thank you for your continuing support for the CES. Very truly yours, (Sgd.) ELMOR D. JURIDICO" Executive Director All revenue officials are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commisioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-29-95 Revenue Memorandum Circular No. 32-95 August 29, 1995 REVENUE MEMORANDUM CIRCULAR NO. 32-95 SUBJECT : Amendment of Item No. 6 (b) of Part II of the Omnibus Guidelines on Appointment and Other Personnel Actions contained in CSC Memorandum Circular No. 38, Series of 1993. TO : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 15, s. 1995 dated June 28, 1995. "Pursuant to Resolution No. 95-4569 dated July 27, 1995, Item No. G (b) of Part III of the Omnibus Guidelines on Appointments and other Personnel Actions contained in CSC Memorandum Circular No. 38, s. 1993 is hereby amended to read as follows; "6. LGU Appointments Appointment in the local government units for submission to the CSC Office must be accompanied, in addition to the common requirements, by the following documents: a. Certification by the local chief that such appointment is issued in accordance with the limitations provided for under Section 235 of RA 7160; and b. Certification from the Municipal/City/ Provincial Accountant that funds are available. This Memorandum shall take effect immediately. (Sgd) CORAZON ALMA G. DE LEON" Chairman

All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue M.C. No. 16, s. 1995 MEMORANDUM CIRCULAR TO : ALL HEADS OF DEPARTMENT, BUREAUS, OFFICES AND AGENCIES OF THE NATIONAL AND LOCAL GOVERNMENTS, INCLUDING GOVERNMENT OWNED AND/OR CONTROLLED CORPORATIONS AND STATE COLLEGES. SUBJECT : Amendment of Item No. 6 (b) of Part II of the Omnibus Guidelines on Appointment and Other Personnel Actions contained in CSC Memorandum Circular No. 38, series of 1993. Pursuant to Resolution No. 95-4569 dated July 27'95 Item No. 6 (b) of Part III of the Omnibus Guidelines on Appointments and other Personnel Actions contained in CSC Memorandum Circular No. 38, s. 1993 is hereby amended to read as follows: "6. LGU Appointments Appointment in the local government units for submission to the CSC Office must be accompanied, in addition to the common requirements, by the following documents: a. Certification by the local chief that such appointment is issued in accordance with the limitations provided for under Section 235 of RA 7160; and b. Certification from the Municipal /City/Provincial Accountant that funds are available. This Memorandum shall take effect immediately. CORAZON ALMA G. DE LEON Chairman C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-20-95 Revenue Memorandum Circular No. 33-95 September 20, 1995 REVENUE MEMORANDUM CIRCULAR NO. 33-95 SUBJECT : Memorandum Circular No. 124 dated July 10, 1995 entitled: "Authorizing All Government Departments, Agencies and Offices, Including Government - Owned and Controlled Corporations to Purchase and Use the Centennial Logo, as Specified in the Philippine Centennial Logo Manual, on all Government Stationery, Vehicles and Other installations to Maximize Public Awareness", Office of the President. TO : All internal revenue officers and others concerned. For the information and guidance of all concerned, quoted hereunder is Memorandum Circular No. 124 dated July 10, 1995 of President Fidel V. Ramos: MEMORANDUM CIRCULAR NO. 124 AUTHORIZING ALL GOVERNMENT DEPARTMENT, AGENCIES AND OFFICES, INCLUDING GOVERNMENT -OWNED AND CONTROLLED CORPORATIONS TO

PURCHASE AND USE THE CENTENNIAL LOGO, AS SPECIFIED IN THE PHILIPPINE CENTENNIAL LOGO MANUAL, ON ALL GOVERNMENT STATIONERY, VEHICLES AND OTHER INSTALLATIONS TO MAXIMIZE PUBLIC AWARENESS. The National Centennial Commission launched the Centennial logo for corporate use on May 26, 1995. In order to maximize public awareness of the forthcoming Centennial of Philippine Independence, all government departments, agencies and offices, including governmentowned and controlled corporations, are hereby authorized to purchase and use the Centennial logo on all government stationery, vehicles and other installations. The logo should be in accordance with the design specified in the Philippine Centennial Logo Manual. DONE in the City of Manila, this 10th day of July in the year of Our Lord, nineteen hundred and Ninety-Five." (Sgd.) FIDEL V. RAMOS President By the President: (Sgd.) RUBEN D. TORRES Executive Secretary All internal revenue officers and others concerned are requested to give this circular a wide publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-04-95 Revenue Memorandum Circular No. 34-95 October 4, 1995 REVENUE MEMORANDUM CIRCULAR NO. 34-95 SUBJECT : Lost of revenue official receipts (BIR Form No. 25.24. TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Numbers Quantity 2681451 - 2681500 one (1) pad 2682992 one (1) set 2682991 three (3) copies (duplicate, triplicate and quadruplicate) The abovementioned revenue official receipts which were reported as missing by the Finance Officer, Philippine Consulate General, Los Angeles, California, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES HERE AND ABROAD. RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-28-95 Revenue Memorandum Circular No. 35-95 September 28, 1995 REVENUE MEMORANDUM CIRCULAR NO. 35-95 SUBJECT : MANAGEMENT APTITUDE TEST BATTERY (MATB). TO : All Revenue Officials. For the information and guidance of all revenue officials, quoted hereunder is a letter from the Executive Director, Career Executive Service Board dated September 20, 1995. "We are pleased to inform you that we will be conducting another Management Aptitute Test Battery (MATB) on 3 December 1995. Said examination is open to incumbents of CES positions, division chiefs in the national government and GOCCs and managers in the private sector. Once again, may we request you to announce in your agency the schedule of the MATB and the requirements for those interested to take the examination. Attach are copies of the announcement and application forms. The deadline for the filing of application is 31 October 1995. Thank you for your continuing support for the CES. Very truly yours, (Sgd.) ELMOR D. JURIDICO Executive Director All revenue officials are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of internal Revenue September 20, 1995 MS. ESTELITA V. DATU Chief, Personnel Division Bureau of Internal Revenue BIR Road Diliman, Quezon City Dear Ms. Datu: We are pleased to inform you that we will be conducting another Management Aptitude Test Battery (MATB) on 3 December 1995. Said examination is open to incumbents of

CES positions, division chiefs in the national government an GOCCs and managers in the private sector. Once again, may we request you to announce in your agency the schedule of the MATB and the requirements for those interested to take the examination. Attach are copies of the announcement and application forms. The deadline for the filing of application is 31 October 1995. Thank you for your continuing support for the CES. Very truly yours, ELMOR D. JURIDICO Executive Director ANNOUNCEMENT The CAREER EXECUTIVE SERVICE BOARD announces the holding of the MANAGEMENT APTITUDE TEST BATTERY (MATB) the first step in the four-stage CES ELIGIBILITY EXAMINATION to establish a register of CES eligibles from which official who shall be appointed to ranks and assigned to positions in the Career Executive Service will be drawn, provided the other requirements are met. When : December 3, 1995 Where : Manila, Cebu and Davao Who May Apply 1. Incumbents of Career Executive Service positions; 2. Incumbents of division chief positions (with salary grade 24) in any national government office including government owned and controlled corporations (GOCCs and private sector managers. The division chief/private sector manager applicant must not be more than 55 years old and must have three (3) years managerial experience; How 1. Application forms may be obtained personally or by postal service from the Career Executive Service Board, 139 Panay Avenue, Quezon City or from any of the Civil Service Commission Regional Offices. 2. Applicant must file the application form directly with the Career Executive Service Board accompanied by the following: a. copy of appointment paper to present position and service record authenticated by the office personnel office/certificate of employment for private sector applicant; b. a certification from the head office/agency that the applicant has no pending administrative or criminal case against him; c. two (2) photographs, size 2" x 2", taken not more than six (6) months before the filing of application; and, d. an admission fee of Three Hundred Pesos (P300.00) in cash or in postal money order payable to the Career Executive Service Board. Personal checks will not be accepted.

Where to File Application Accomplished application form shall be filed directly with the Career Executive Service Board, 139 Panay Avenue, Quezon City, Tel. No. 924-4275 - 77; 924-3116 - 17. Deadline for application is on October 31, 1995. C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-12-95 Revenue Memorandum Circular No. 36-95 October 12, 1995 REVENUE MEMORANDUM CIRCULAR NO. 36-95 SUBJECT : GUIDELINES/PROCEDURES ON THE FILING OF STATEMENTS OF ASSETS, LIABILITIES AND NETWORTH AND DISCLOSURES OF BUSINESS INTERESTS AND FINANCIAL CONNECTIONS WITH THE OFFICE OF THE OMBUDSMAN REQUIRED UNDER SECTION 8, REPUBLIC ACT NO. 6713. TO : All Revenue Officials and Employees and other concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Ombudsman Memorandum Circular No. 95-13 dated June 15, 1995. "I. PURPOSE Pursuant to the provisions of Rule VIII of the Rules Implementing the Code of Conduct and Ethical Standards for Public Official and Employees (RA 6713), this Memorandum Circular is hereby issued to prescribe the manner/procedure of filing of statements of assets, liabilities and networth and disclosures of business interests and financial connections before the Area/Sectoral Offices of the Office of the Ombudsman. II COVERAGE The Memorandum Circular shall apply to the following officials and employees: (1) Regional Officials and Employees of Departments, etc; (2) PNP Regional Officials and Employees; (3) Provincial elective and appointive officials and employees, e.g. Provincial Governor, members of the Sangguniang Panlalawigan, Provincial Treasurer and other low ranking employees in the province; (4) Municipal & City elective and appointive officials and employees, e.g. Mayors, SB members and barangay officials; (5) Regional Officials & Employees of Government-Owned & controlled corporations and subsidiaries in the region e.g. DBP, LBP, PCIC, PNB, etc; (6) Regional Officials & Employees of State Colleges & Universities, e.g. VicePresident, Deans, Professors, etc; (7) Officers of AFP below the rank of Colonel and Naval Captain. (see attachment "A") III. RESPONSIBILITY The head of the office/agency regional or local government unit concerned shall ensure full compliance with the guidelines herein set forth.

The chief of the personnel division or in his absence the chief of the administrative division or the person designated by the head of the agency, shall be tasked to receive and consolidate the statement and disclosure and the submission of reports required herein. IV. PROCEDURE A. Submission of Statement of Assets, Liabilities and Networth and Disclosure of Business Interests and Financial Connections All public officials and employees concerned shall file their respective statements and disclosures with their respective chief of the personnel division or in his absence the chief of the administrative division or the person designated by the head of the agency, to be subsequently submitted to the respective area or sectoral offices of the Office of the Ombudsman as specified in Attachment "A" on this Circular. In case of married persons (except those legally separated or those with regime of complete separation of property) who are both working in government, they shall jointly file the statement required herein and that copies thereof must be filed in both agencies where they are employed. The officials and employees shall file the same: 1. Within thirty (30) days after assumption of office, statements of which must be reckoned as of his first day of service; 2. On or before April 30 of every year thereafter, statements of which must be reckoned as of the end of the preceding year; and 3. Within thirty (30) days after separation from the service, statements of which must be reckoned as of his last day of office. The required statement and disclosure shall be reflected on the revised form (see Attachment "B") and shall be prepared in triplicate, the original copy to be submitted to the office of the Ombudsman or its respective area/sectoral offices (Luzon, Visayas. Mindanao and Armed Forces), another copy to the attached to the official/employee's 201 file, and the last copy to be retained by the filer. B. Submission of Summary Report The administrative/personnel division shall consolidate all the statements/disclosure of the agency's officials and employees in a summary report (see attachment "C") to be certified by the head of the agency. The summary report shall contain the following information: 1. Name of official/employee 2. Position 3. Date when said official/employee filed his/her Statement of Assets and Liabilities The Summary Report, together with the statements and disclosures, shall be submitted/mailed on or before 31 May of every year to: 1st Copy OFFICE OF THE DEPUTY OMBUDSMAN for LUZON Old MWSS Building 176 Arroceros St., Manila OFFICE OF THE DEPUTY OMBUDSMAN for VISAYAS Palace of Justice, Cebu City

OFFICE OF THE DEPUTY OMBUDSMAN for MINDANAO Bangoy-Monteverde Sts., Davao City OFFICE OF THE DEPUTY OMBUDSMAN AFP 2nd Fl., Malacanang Annex Bldg. 1610 J.P. Laurel St., San Miguel, Manila 2nd Copy OFFICE FILE (Personnel Division)

As regards the filing of statement of assets and liabilities by public officials or employees who have first assumed office or have been separated from the service, the administrative/personnel division shall likewise consolidate all the statements/disclosures of the said officials and employees in a summary report (see attachment "C") to be certified by the head of the agency. The said summary report, together with the statements of assets and liabilities, shall be submitted fifteen days (15) upon receipt of Statement of Assets and Liabilities. C. Submission of a verified report of those who failed to file their statements and disclosures The administrative/personnel division shall likewise prepare a report indicating therein the list of officials and employees who failed to submit their respective statements of assets and liabilities, networth and disclosures of business interests and financial connections. The said report shall be under oath and shall be submitted in the same manner as prescribed in IV.B of this circular. (see attachment "D"). D. Monitoring of compliance with the guidelines setforth herein The Office of the Ombudsman shall create a task force assigned to maintain a computerized database of all public officials and employees required to file their statement of assets and liabilities and to monitor full compliance therewith. V. PENALTY CLAUSE The head of agency and/or the chief of the administrative/personnel division, who failed to perform their duties as defined herein shall constitute obstruction defined and penalized under Section 36 of Republic Act No. 6770, otherwise known as the Ombudsman Act of 1989 and/or neglect of duty under Section 46, Chapter 7, Subtitle A, Title I, Book V of the Executive Order No. 292, otherwise known as the Administrative Code of 1987. VI. EFFECTIVITY This Memorandum Circular shall take effect after fifteen (15) days following the completion of its publication in a newspaper of general circulation. Manila, Philippines, June 15, 1995. (Sgd) FRANCISCO A. VILLA Acting Ombudsman

All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-24-95 Revenue Memorandum Circular No. 37-95 October 24, 1995 REVENUE MEMORANDUM CIRCULAR NO. 37-95 SUBJECT : MASTERAL DEGREE REQUIREMENT FOR APPOINTMENT TO DIVISION CHIEF OR EQUIVALENT RANK POSITIONS. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 29, s. 1995 dated October 9, 1995. "Pursuant to CSC Resolution no. 95-6057 dated October 6, 1995, the Commission adopts the following policies on the masteral degree requirement for appointment to Division Chief Positions in the government: A. The education requirement for appointment to positions which meet all of the following criteria shall be a masteral degree: 1. Career position; 2. Salary Grade 24; and 3. The highest positions in the division/department or in the hierarchy as reflected in the Index of Occupational Services (IOS) carrying a Salary Grade of 24; Example: Economist I Economist II Economist III Economist IV Economist V SG-11 SG-15 SG-18 SG-22 SG-24

Economist V with salary grade 24 being the highest position in the hierarchy shall require masteral degree. B. In highly specialized occupational group, the highest positions in a hierarchy with Salary Grade higher than 24, but not classified as Career Executive Service (CES) positions such as Medical Specialist VII, Attorney VI, Dentist VII and Veterinarian VII, a special degree rather than a masteral degree shall be required. In this connection, the degree of Doctor of Medicine, Bachelor of Laws, Doctor of Dental Medicine/Dental Surgery, and Doctor of Veterinary Medicine shall be considered the appropriate educational attainment for appointment to said position. C. Appointees to positions which meet any of the following criteria shall not be required to have a masteral degree; 1. Non-career positions such as: casual, contractual, confidential or coterminous;

2. Positions with Salary Grade allocation lower than 24; 3. Staff positions with SG 24 or above, such as Executive Assistant VI, Conciliator and others. 4. Other positions under the Career Executive Service (CES) with salary grade 25 and above. This Memorandum Circular takes effect immediately. (Sgd) CORAZON ALMA DE LEON" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 11-06-95 Revenue Memorandum Circular No. 38-95 November 6, 1995 REVENUE MEMORANDUM CIRCULAR NO. 38-95 SUBJECT : Missing one (1) original copy of Certificate Authorizing Registration (BIR Form No. 1954). TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one original copy of Certificate Authorizing Registration (BIR Form No. 1954), to wit: Serial Number Quantity 491155-A one (1) original copy The above copy which was reported as missing by Mr. Joseph P. Reolalas of Revenue District Office No. 16, Cabarroguis, Quirino, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. RENE G. BAEZ Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 12-01-95 Revenue Memorandum Circular No. 39-95 December 1, 1995 REVENUE MEMORANDUM CIRCULAR NO. 39-95 SUBJECT : Unified Procedures Registration of Taxpayers Under Revenue Memorandum Order No. 41-94. TO : Revenue Officers and Others Concerned.

Hereunder are some of the basic questions and answers regarding the registration of taxpayers as required under Revenue Memorandum Order No. 41-95. Q-1 : Who are required to register? A-1 : a. VAT taxpayers; b. Non-VAT taxpayers; c. Withholding agents; d. Taxpayers subject to excise tax. Q-2: What are to be registered by the abovementioned taxpayers? A-2: a. Head Office; b. Branches; c. Storage places; d. Production places; Q-3 : Are taxpayers previously registered as VAT, Non-VAT, Excise taxpayers, Withholding Agents, or storage keepers still required to re-register? A-3: Yes. All taxpayers previously registered, except those already registered under Republic Act (RA) 7716 in 1994, are required to register anew. However, it there is a change in status from VAT to Non-Vat or vice versa, there is still a need to re-register. Q-4 : For taxpayers register anew, is there a need to file an Application for Cancellation of their previous registration? A-4 : No. The previous registration is automatically cancelled upon re-registration Q-5 : How about non-resident aliens and non-resident foreign corporations receiving income from sources within the Philippines, are they also required to register? A-5 : No. The tax due from them shall be remitted/paid to the BIR by the payor who shall constitute as the withholding agent of the tax. Q-6 : If the taxpayer is engaged in a Vatable activity, but the gross sales or receipts from business or practice of profession is P500,000 or below, is he required to register? A-6 : Yes, he is required to register as a Non-VAT taxpayer. However, if his gross sales or receipts is more than P 100,000 but does not exceed P500,000, he has the option to register as a VAT taxpayer. In the case of marginal income earners with gross sales or receipts of P100,000 and below, they have no other option but to register as Non-VAT. Q-7 : Are taxpayers required to register their business annually? A-7 : No. Taxpayers are required to register only once before commencing their business. However, they are required to pay the registration fee annually. Q-8 : Are there instances where a taxpayer is required to register more than once? A-8 : Yes. Registered taxpayers are required to register again in the following instances: a. establishment of new branch/storage place/place of production; b. engaging in different business activity, i.e. a VAT taxpayer engaging in a Non-VAT activity or vise versa; c. major changes in business structure; and d. transferring a business from one RDO to another. Q-9 : When is the taxpayer required to apply for registration and pay the registration fee? A-9 : New taxpayers shall apply for registration and pay the registration fee before commencing their business.

Thereafter, taxpayers should pay the annual registration fee not later than January 31, every year. Q-10 : Are taxpayers required to pay the registration fee in full? A-10 : Yes. The payment of P1,000 annual fee shall be made yearly on or before January 31. However, at the option of the taxpayer payment may be made on a quarterly basis in the amount of P250.00 payable on or before the 20th day of the first month of the calendar quarter. Q-11 : Where should a taxpayer register? A-11 : All taxpayers are required to register with the RDO having jurisdiction over the head office, branch office, place of production or storage place where inventory of goods for sale or use in business are kept. For VAT registration purposes, the head office and its branches wherever located are required to register with the RDO having jurisdiction over the head office. However, payment of registration fee should be at the RDO where the branch is located. Q-12 : Is there any particular form prescribed for application for registration? A-12 : Yes. BIR Form 1556-A (Application for Registration) is prescribed. Q-13 : What information or documents are required for registration? A-13 : A) For taxpayers commencing a business, the following documents are required to be submit together with the duly accomplished Application for Registration (BIR Form No. 1556-A): 1. Sketch of location; 2. Photocopy of Mayor's Permit and/or Municipal License; 3. Photocopy of TIN card or Application for TIN. B) For branch offices: 1. Photocopy of BIR Certificate of Registration or Application for Registration of the Head Office duly received by the RDO where the Head Office is located; 2. Duly accomplished Application for Registration. C) For taxpayers previously registered but did not register under RA 7716: 1. Duly accomplished Application for Registration; 2. Documentary proof evidencing prior registration. D) For taxpayers transferring place of business from one RDO to another 1. Duly accomplished Application for Registration; 2. Photocopy of Annual Registration Fee Return; 3. Photocopy of Certificate of Registration (BIR Form No. 1556); 4. Duly accomplished Application for Cancellation stamped "received" by the RDO where he is previously registered. Q-14 : Are branches, storage places and places of production also required to pay the Annual Registration Fee of P1,000? A-14 : Each branch is required to pay the Annual Registration Fee of P1,000. However, storage and production places are liable to the annual registration fee only when sales operation are conducted thereat. Q-15 : Is there any particular form prescribed for payment? A-15 : Yes. BIR Form No. 1558 (Annual Registration Fee Return) is prescribed. Q-16 : Who are required to register without paying the registration fee of P1,000? A-16 : The following taxpayers are exempt from the payment of the registration fee but they are required to register:

1. Non-stock, non-profit corporations, organizations, associations, not engaged in trade or business; 2. Government agencies and instrumentalities, government offices not engaged in propriety activities; 3. Storage places/place or production/extension offices where no selling operations are conducted thereat; 4. Taxpayers enjoying exemptions under R.A. 6810 (Kalakalan 20); 5. Persons engaged in either VAT or Non-VAT taxable business, whose gross sales or receipts did not exceed P100,000 for the immediately preceding 12-month period; and 6. Persons who will be engaging in business for the first time whose expected gross sales or receipts for any 12-month period will not exceed P100,000. Q-17 : How much annual registration fee shall be paid by taxpayers engaged in different lines of business which are all subject to VAT? A-17 : Only P1,000 annual registration fee shall be paid provided all these activities are conducted in one establishment or place of business. Q-18 : Is a taxpayer engaged in both VAT and Non-VAT activities required to pay P1,000 for each activity? A-18 : No. A taxpayer engaged in both VAT and Non-VAT activities should pay a Registration Fee of P1,000 only provided that both activities are conducted in one establishment or place of business. Q-19 : Are taxpayers "becoming liable to VAT" required to register and pay the annual registration fee of P1,000? A-19 : Taxpayers whose gross receipts or sales in any 12-month period exceeded P500,000 shall be register as VAT taxpayer but shall no longer be required to pay the annual registration fee of P1,000 provided this has already been paid for the year. Q-20 : Are taxpayers transferring business address within the year either within the same district or to another district required to pay another registration fee of P1,000? A-20 : No. Since the annual registration fee is payable annually, they are no longer required to pay the registration fee to the new district office provided the P1,000 was already paid. Q-21 : Where will be taxpayer pay the registration fee? A-21 : The registration fee shall be paid to any accredited bank or, in the absence of any accredited bank, to an authorized Collection Officer/Municipal Treasurer in the Revenue District Office where the Head Office, branch, storage/production place is located. Q-22 : For those taxpayers required to register anew, may they go directly to any accredited bank and pay the registration fee? A-22 : No. The taxpayers must first secure BIR Forms No. 1556-A and 1558 from the RDO where the business is located. After accomplishing both forms, the taxpayers shall then present BIR Form No. 1558 to any accredited bank for payment of registration fee. Q-23 : For taxpayers having multiple branch offices, storage places, places of production within the same RDO, how many Application for Registration and Annual Registration Fee Return shall be accomplished? A-23 : The taxpayer shall accomplish separate application forms for registration and Annual Registration Fee Return for the head office, each of its branches, and each storage place/place of production, even if located within the same district.

Q-24 : How many Application for Registration shall be filed and how much registration fee shall be paid by husband and wife under the following circumstances: 1. engaged as lessor of conjugal real property 2. engaged in separate lines of business activities A-24 : For case 1, only one Application for Registration is required and only P1,000 registration fee shall be paid. For case 2, two separate Application for Registration shall be filed and two separate payment of P 1,000 each is required. Q-25 : In the case of lessor of real properties located in different places, are they required to register separately each unit being leased? A-25 : No. Only one Application for Registration is required is required and payment of only P1,000 is due, provided the lessor does not maintain an office within the premises of the leased properties. Q-26 : In the case of taxpayers registered as VAT or Non -VAT and thereafter qualified as withholding agent, is there a need to file a new Application for Registration as withholding agent? Are they required to pay an additional P1,000 registration fee? A-26 : Yes. The taxpayer is required to file a new Application for Registration as withholding agent. However, the taxpayer is no longer required to pay an additional P1,000 registration fee. Q-27 : Under the above situation, is there a need to update the previous Certificate of Registration? A-27 : Yes. The previous certificate shall be surrendered to the RDO for cancellation and a new Certificate of Registration shall be issued indicating therein all the registered activities, including that as a withholding agent. Q-28 : When shall a taxpayer "becoming liable to VAT" required to register? A-28 : A taxpayer becoming liable to VAT is required to register within thirty (30) days after the end of the month when the sales or receipts in any 12-month period exceeded P500,000. Q-29 : After complying with all the requirements for registration what document will be issued to the taxpayer? A-29 : Certificate of Registration (BIR Form No. 1556) Q-30 : When will the Certificate of Registration be issued to the taxpayer? A-30 : The Certificate of Registration (BIR Form 1556) will be issued not later than five (5) working days from filing of application and submission of all documentary requirements and upon presentation of duly validated Annual Registration Fee Return or Official Receipt. Q-31 : Is there a need for an ocular inspection of the place of business? A-31 : For taxpayers, who are re-registering their business, no ocular inspection shall be conducted before and after registration; For taxpayers to be covered by VAT for the first time and those just commencing business, the ocular inspection shall be conducted after the issuance of the Certificate of Registration. Q-32 : Who will issue the Certificate of Registration? A-32 : The RDO there the head office, branch, storage/production place is located shall issue the Certificate of Registration.

Q-33 : How many Certificate of Registration (BIR Form 1556) shall be issued by the Revenue District Office? A-33 : For every Application for Registration there shall be a corresponding Certificate of Registration to be issued for the head office and each branch, each storage place or each place of production being registered. Q-34 : How are the registered activities reflected in the Certificate of Registration? A-34 : The RDO issuing the Certificate of Registration shall reflect the registered activities in the Certificate by checking the box(es) corresponding to the approved registered activities, and cross-out the boxes not applicable. For example, if the registration is for VAT only, the RDO shall check the box for VAT and cross-out all the other boxes. Q-35 : Why is there a need to cross-out in the Certificate of Registration the activities which have not been applied for registration by the taxpayer? A-35 : To preclude the taxpayer from making undue alterations in his Certificate of Registration. Q-36 : What will the taxpayer do with the Certificate of Registration and the Annual Registration Fee Return? A-36 : The original copy of Certificate of Registration and the duly validated Annual Registration Fee Return are required to be displayed in any conspicuous place in the head office, branch office, storage place or place of production. Q-37 : What are the instances where a taxpayer can apply for cancellation of his registration? A-37 : A taxpayer can apply for cancellation of his registration in the following instances: a. due to closure/cessation or termination of business; b. transfer of place of business from one RDO to another; c. change of registration from VAT to Non-VAT or vice-versa; and d. change in organizational structure. Q-38 : Is there a particular form prescribed for Application for Cancellation of Registration? A-38 : Yes. BIR Form No. 1557 (Application for Cancellation) is prescribed. Q-39 : Is there also a need to apply to cancellation if it is for minor change only? A-39 : No. In case of changes such as typographical errors, change of business name, change of address within the same RDO, there is no need to file an Application for Cancellation. The taxpayer has only to notify the RDO in writing. Q-40 : Where shall the Application for Cancellation of Registration be filed? A-40 : It shall be filed with the RDO who issued the Certificate of Registration. For VAT taxpayer, he shall further notify the RDO where the Home Office is registered. Q-41 : If a taxpayer is in doubt of his status as VAT or Non-VAT, what is he supposed to do? A-41 : Go to the RDO who has jurisdiction over his place of business and seek assistance. Q-42 : Assume that Z.E.N. CORPORATION is engaged in VAT activities holding its main office in Quiapo. It maintains branch offices in the following locations: Branch 1 (B-1) Cebu Branch 2 (B-2) Davao

In addition, it also qualifies as a withholding agent. Payment of VAT and withholding taxes is centralized with the main office. What, where to registered and pay, how much registration fee and who will issue the Certificate of Registration? A-42 : Who will issue What to Where to How Much Where to pay the Certificate of Register Register Registration Fee Registration Fee Registration For Main Office VAT & W/A QuiapoP1,000.00 (main office and branches) For Branches Branch 1 Branch where Cebu 1,000.00 Cebu Cebu no filing return is required 2 -do- Davao P1,000.00 Davao Davao Q-43 : Given the same facts as in Q-43, but payment of withholding tax is decentralized, that is, payment of VAT will be at Quiapo but payment of Withholding Tax by B-1 and B-2 will be at Cebu and Davao respectively. What, where to registered and pay, how much registration fee and who will issue the Certification of Registration? Who will issue What to Where to How Much Where to pay the Certificate of Register Register Registration Fee Registration Fee Registration For Main Office VAT (main office & branches) and W/A (main office only For Branches: Branch 1 Branch 2 W/A (Branch) Cebu 1,000.00 W/A (Branch) Davao P1,000.00 Cebu Cebu Davao Davao QuiapoP1,000.00 QuiapoQuiapo QuiapoQuiapo

Q-44 : Given the same facts as in Q-43, the head office maintains its storage place (S-1) within its premises. It opens Branch #3 in Sampaloc, which is within the jurisdiction of Quiapo District. A-44 : 1) For storage place (S-1) located within the premises of the Head Office, no registration is needed. 2) For Branch #3, located within the same district as the Head Office, it is required to register in RDO Quiapo and pay the annual registration fee of P1,000 thereat. Q-45 : Given the same facts as in Q-43, the taxpayer maintains another storage (S-2) place in Binondo. What, where to register and how much registration fee shall be paid? A-45 : S-2 is required to register in RDO Binondo. It shall pay the P1,000 Annual Registration Fee provided business activities are conducted thereat. Q-46 : Assume that T.E.S. CORPORATION is engaged in both VAT and Non-VAT activities conducted in one establishment or place of business. How many application for registration shall be filed and how much registration fee shall be paid? A-46 : The taxpayer shall file only one application for registration for VAT and NonVAT activities and shall pay P1,000 registration fee. Q-47 : Assume that C.O.Y. CORPORATION has a Main Office in Makati engaged in activities subject to VAT and a branch office in Quezon City engaged in activities subject to Non-VAT. How many application for registration shall be filed and how much registration fee shall be paid? A-47 : The Head Office shall register in Makati as a VAT taxpayer and pay the Annual Registration Fee of P1,000. The branch office in Quezon City shall register as a NonVAT taxpayer with the Revenue District Office where the branch is located and pay the Annual Registration Fee of P1,000. Q-48 : Assume that H and W, husband and wife, are separately engaged in the following businesses: HUSBAND Trucking P 400,000.00 Trading 150,000.00 Barbershop 100,000.00 ____________ P 650,000.00 Jeepney Operator 124,000.00 ____________ P 774,000.00 ========== WIFE Pharmaceutical P 100,000.00 Parlor 50,000.00 Restaurant 100,000.00 ____________ P 250,000.00 ==========

All these businesses are conducted in only one establishment. H and W have separate TIN and the businesses were separately registered in the name of H or W with the Department of Trade and Industry. How do H and W register their businesses? How much registration fee will be paid by them? A-48 : H shall file one application for Registration covering all his lines of business and pay the P1,000 registration fee. His trucking, trading and barbershop business will be registered as VAT while that of jeepney operator will be registered as Non-VAT. W shall also file a separate application for registration covering all lines of business under her name and pay the P1,000 registration fee. Since the aggregate gross receipts on all the lines of business did not exceed P500,000, W's registration will be Non-VAT. Q-49 : Assume that the only business of H and W is leasing out a building which is a conjugal property? How do H and W register their business? How much registration fee will be paid by them? A-49 : Only one application for registration shall be filed, either in the name of H or W, and only P1,000 registration fee shall be paid. All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Copyright 1996 CD Technologies Asia I n c.

11-00-95 Revenue Memorandum Circular No. 40-95 November 1995 REVENUE MEMORANDUM CIRCULAR NO. 40-95 SUBJECT : Missing two (2) sets of Certificate Authorizing Registration (BIR Form No. 1954). TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing two (2) sets of Certificate Authorizing Registration (BIR Form No. 1954), to wit: Serial Number Quantity 667999 668000 two (2) sets The abovementioned Certificate Authorizing Registration (BIR Form No. 1954) which were reported as missing by Ms. Arlene C. De Lima, Acting Head Administrative Section, Revenue District Office No. 111, Koronadal, South Cotabato, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. LIWAYWAY VINZONS-CHATO Commissioner

C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 11-28-95 Revenue Memorandum Circular No. 41-95 November 28, 1995 REVENUE MEMORANDUM CIRCULAR NO. 41-95 SUBJECT : Loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25-24). TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) pad of Revenue Official Receipts (BIR Form No. 25.24), to wit: Inclusive Serial Number Quantity 5475401 5475450 One (1) pad The abovementioned revenue official receipts which were reported as missing by Ms. Zenaida Mara-at Obaob, Administrative Officer of Revenue District Office No. 92, Pagadian City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper of fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. LIWAYWAY VINZONS-CHATO Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 11-28-95 Revenue Memorandum Circular No. 42-95 November 28, 1995 REVENUE MEMORANDUM CIRCULAR NO. 42-95 SUBJECT : Loss of Revenue Official Receipts (BIR Form No. 25.24). To : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Number Quantity 7463124 7463750 12 pads & 27 sets 7927801 7927857 1 pad & 7 sets 7928834 7928990 3 pads & 7 sets 8399393 8400113 14 pads & 21 sets The abovementioned revenue official receipts which were reported as missing by Mr. Felipe V. Roque, former Revenue Representative of Honolulu, Hawaii, U.S.A., are

hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES HERE AND ABROAD. LIWAYWAY VINZONS-CHATO Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 12-05-95 Revenue Memorandum Circular No. 43-95 December 5, 1995 REVENUE MEMORANDUM CIRCULAR NO. 43-95 SUBJECT : Payment of Hazard Duty Pay. TO : All Internal Revenue officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is the Joint Civil Service Commission and the Department of Budget and Management Circular Letter No. 1, s. 1995 which was issued by the Secretary of the Department of Budget and Management on October 5, 1995: APPROVING THE PAYMENT OF HAZARD DUTY PAY All heads of agencies are reminded of the authority granted under Section 38 of the General Appropriations Act for 1995 on the payment of Hazard Duty Pay. National Compensation Circular (NCC) No. 76 issued by the Department of Budget and Management (DBM) provides the guidelines on the grant of the same. NCC 76 likewise delegates the approval of the grant of heads of agencies, in accordance with the rules prescribed therein without need for approval by DBM. All government agencies are enjoined to pay the benefit to all government employees covered by the NCC, especially those whose areas are affected by the flow of lahar and other natural calamities as determined by the Philippine Institute of Volcanology and Seismology and the head of the agency concerned. (SGD.) CORAZON ALMA G. DE LEON Chairman Secretary LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue JOINT CIVIL SERVICE COMMISSION and (SGD.) SALVADOR M. ENRIQUEZ JR.

DEPARTMENT OF BUDGET AND MANAGEMENT CIRCULAR LETTER NO. 1. S. 1995 TO : HEADS OF DEPARTMENTS, BUREAUS, OFFICES, AND AGENCIES OF THE NATIONAL GOVERNMENT, INCLUDING STATE UNIVERSITIES AND COLLEGES; GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS AND FINANCIAL INSTITUTIONS; AND ALL OTHERS CONCERNED. Subject : Payment of hazard Duty Pay. All heads of agencies are reminded of the authority granted under Section 38 of the General Appropriations Act for 1995 on the payment of Hazard Duty Pay. National Compensation Circular (NCC) No. 76 issued by the Department of Budget and Management (DBM) provides the guidelines on the grant of the same. NCC 76 likewise delegates the approval of the grant to heads of agencies, in accordance with the rules prescribed therein without need for approval by DBM. All government agencies are enjoined to pay the benefit to all government employees covered by the NCC, especially those whose work areas are affected by the flow of lahar and other natural calamities as determined by the Philippine Institute of Volcanology and Seismology and the head of the agency concerned. CORAZON ALMA G. DE LEON Chairman Secretary October 5, 1995 C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 12-11-95 Revenue Memorandum Circular No. 45-95 December 11, 1995 REVENUE MEMORANDUM CIRCULAR NO. 45-95 SUBJECT : Tax Exemption of Interest Income and/or Yield from the Philippine currency bank deposits and deposit substitutes of Non-stock, Non-profit Private Educational Institutions. TO : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, published hereunder is the full text of Department Order No. 149-95 issued by the Secretary of Finance, The Honorable Roberto F. de Ocampo dated November 24, 1995 exempting from the 20% final withholding tax, the interest income from Philippine currency bank deposits and yield from deposit substitute instruments used actually, directly, and exclusively for educational purposes pursuant to Section 4(3), Article XIV of the 1987 Philippine Constitution: "DEPARTMENT ORDER NO. 149-95F November 24, 1995 SALVADOR M. ENRIQUEZ, JR.

SUBJECT : AMENDING DEPARTMENT ORDER NO. 137-87 AS AMENDED BY DEPARTMENT ORDER NO. 92-88 IMPLEMENTING SECTION 4(3), ARTICLE XIV OF THE NEW CONSTITUTION. SECTION 1. Section 2 (2.1) of Department Order No. 137-87 as amended by Department Order No. 92-88 is hereby amended to read as follows: "2.1 NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTIONS ARE EXEMPT FROM TAXES ON ALL THEIR REVENUES AND ASSETS USED ACTUALLY, DIRECTLY AND EXCLUSIVELY FOR EDUCATIONAL PURPOSES. They shall, however, be subject to internal revenue taxes on income from trade, business or other activity the conduct of which is not related to the exercise or performance by such educational institution of its educational purpose or function. "2.1.1 To ensure that the exempt interest income from Philippine currency deposits and yield from deposit substitute instruments are used actually, directly, and exclusively for educational purposes, the said educational institutions shall, on annual basis submit to the Revenue District Officer, together with the annual information return and duly audited financial statement, the following: a) Certification from their depositary banks as to the amount of interest income earned from passive investments not subject to the 20% final withholding tax imposed by Section 24(e) of the Tax Code, as amended; b) Certification of actual utilization of the said income; and c) Board Resolution by the school administration on proposed projects. (i.e. constitution and/or improvement of school buildings and facilities; acquisition of equipment, books and the like) to be funded out of money deposited in banks or placed in money markets. The RDO shall conduct an audit of the annual information return filed to determine compliance with the conditions set forth in the Certificate of Exemption and the liabilities, if any. SECTION 2. Repealing Clause. All orders, circulars, rules and regulations inconsistent herewith are hereby revoked or modified accordingly. SECTION 3. Effectivity - This Order shall take effect immediately. (SGD.) ROBERTO F. DE OCAMPO Secretary It is desired that this Circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-03-96 Revenue Memorandum Circular No. 1-96 January 3, 1996 REVENUE MEMORANDUM CIRCULAR NO. 1-96 SUBJECT : Clarification on the provision of the third paragraph of Section 142(d) of the National Internal Revenue Code (NIRC), as amended, by Republic Act No.

7654 that "The twenty percent (20%) mark-up and the minimum taxes provided in this Section shall be automatically increased in 1996 by ten percent (10%)". TO : All Internal Revenue Officers and Others Concerned. Constructive manufacturer's or importer's wholesale price or the tax base used in computing the excise tax for cigars and cigarettes is defined as the price, including the amount of excise tax imposed under Section 142, Chapter 4, Title VI, and the amount of the value added tax imposed under Title VI, both of the NIRC, at which locally manufactured or imported cigars and cigarettes are offered for sale to the wholesalers or distributors as fixed by the manufacturer or importer and registered with the Bureau of Internal Revenue plus a mark-up of twenty percent (20%) of such price. Pursuant to Section 2(2.1) of Revenue Regulations No. 1-94 implementing Sec. 142 of the NIRC as amended by R.A. No. 7654, the twenty percent (20%) mark-up and the minimum taxes prescribed in the said Sec. 142 shall be increased automatically in 1996 by ten percent (10%). Under Section 3 of Revenue Regulations No. 1-94, the respective minimum taxes on cigars and cigarettes are as follows: (a) Cigars There shall be levied, assessed and collected on cigars a tax of ten percent (10%) of the constructive manufacturer's or importer's wholesale price or the actual manufacturer's or importer's wholesale price, whichever is higher. (b) Cigarettes packed by hand There shall be levied, assessed and collected on cigarettes packed by hand a tax of fifteen percent (15%) of the constructive manufacturer's wholesale price or the actual manufacturer's wholesale price, whichever is higher. (c) Cigarettes packed by machine There shall be levied, assessed, collected on cigarettes packed by machine a tax at the rates prescribed below based on the constructive manufacturer's wholesale price or the actual manufacturer's wholesale price, whichever is higher. (1) On locally manufactured cigarettes which are currently classified and taxed at fifty five percent (55%) or the exportation of which is not authorized by contract or otherwise, fifty five percent (55%) provided that the minimum tax shall not be less than Five pesos (P5.00) per pack. (2) On other locally manufactured cigarettes, forty five percent (45%) provided that the minimum tax shall not be less than Three pesos (P3.00) per pack. Accordingly, effective January 01, 1996, the twenty percent (20%) mark-up and the minimum taxes for cigars and cigarettes shall be automatically increased by ten percent (10%) as illustrated below: 1. Mark-up 20% x 10% = 2% 20% + 2% = 22% ==== 2. On locally manufactured cigarettes which are currently classified and taxed at fifty-five percent (55%) or the exportation of which is not authorized by contract or otherwise the minimum tax shall be P5.50 per pack P5.00 x 10% = P0.50 P5.00 + P0.50 = P5.50

3. pack. P3.00 x 10% = P3.00 + 0.30 =

==== For other locally manufactured cigarettes, the minimum tax shall be P3.30 per

P0.30 P3.30 ===== 4. For imported cigarettes currently taxed at 55% of the constructive importer's wholesale price or the actual importer's wholesale price where there is no minimum floor tax, the tax shall be based on constructive wholesale price or actual importer's wholesale price + 22% mark-up x 55% rate of AD VALOREM TAX, whichever is higher. Computation of constructive wholesale price/pack: Prior Jan. 1, 1996 Jan. 1, 1996 Wholesale price per BIR registration P10.00/pack P10.00/pack Add: 20% mark-up/22% 2.00 2.20 Constructive Wholesale Price P12.00/pack P12.20/pack Tax due thereon (55%) P6.60 P6.71 ===== ===== Prior Jan. 1, 1996 Jan. 1, 1996 Total number of packs in one case 500 500 Multiplied by applicable tax per packP5.00 P5.00 Excise (Specific) Tax due thereon P2,500.00 P2,750.00 ======= ======== On imported cigarettes. The ad valorem tax shall be computed based on the constructive importer's wholesale price or the actual importer's wholesale price, whichever is higher. No floor tax is considered in the computation of excise tax pertaining to imported cigarettes. ILLUSTRATION: "Y CORPORATION", a domestic corporation, is a duly BIR-registered importer of "ABC CIGARETTES". Its BIR-registered wholesale price for the said imported brand of cigarettes is at P25.00 per pack. Compute the ad valorem tax due if Y CORPORATION imported 20 cases of "ABC CIGARETTES", each case containing fifty (50) cartons of ten (10) packs per carton. At the time of importation, Y CORPORATION'S actual wholesale price is P29.00 per pack. COMPUTATIONS: Computation of constructive wholesale price: Prior Jan. 1, 1996 Jan. 1, 1996 Wholesale price per BIR-registration P25.00/pack Add: 20% mark-up/22% 5.00 5.50 25.00/pack

 CONSTRUCTIVE WHOLESALE PRICE P30.00/pack P30.50/pack =========== ========== In this case, the constructive wholesale price of P30.50 per pack shall be taken because it is higher in amount compared with the actual wholesale price of only P29.00 per pack. Actual wholesale price P11.00 Tax due thereon (55%) P6.05 Floor tax per pack P5.00 P5.50 ====== ===== In this case, since applying the tax rate on the manufacturer's constructive wholesale price of P12.20 per pack results in a higher tax take the determination of the ad valorem tax for one case of cigars/cigarettes to be removed from factory premises shall be based on the constructive wholesale price. Computation of the Ad Valorem Tax: Prior Jan. 1, 1996 Jan. 1, 1996 50 cartons multiplied by 10 packs per carton 500 packs 500 packs 500 packs multiplied by P12/pack 6,000.00 P12.20/pack 6,100.00 Tax due thereon (P6,000.00 multiplied by 55%) 3,300.00 ======= (P6,100.00 multiplied by 55%) P3,355.00 ======== Compute the amount of excise tax due on one (1) case of "YYY Cigarettes" containing fifty (50) cartons of ten (10) packs per carton. These are locally manufactured cigarettes packed by machine and taxable at the rate of 55%. The minimum tax shall not be less than P5.00 per pack. The registered wholesale price per pack is P7.50 but the actual manufacturer's wholesale price is P8.50 per pack. COMPUTATION Take the higher amount as tax base which is P9.00 (P7.50 + 20% thereof constructive manufacturer's wholesale price). Computation of Excise Tax Due: Prior Jan. 1, 1996 Jan. 1, 1996 Constructive Price per pack P7.50 + 20% thereof P9.00 P7.50 + 22% thereof P9.15 Times Tax Rate 55% 55% Excise Tax Due Per Pack P4.95 P5.033 Floor Tax Per Pack P5.00 P5.50 Note: Apply the higher tax in the computation of excise tax due Computation of the Ad Valorem tax: Prior Jan. 1, 1996 Jan. 1, 1996

20 cases multiplied by 50 cartons/case 1,000 cartons 1,000 cartons 1,000 cartons multiplied by 10 packs/carton 10,000 packs 10,000 packs 10,000 packs multiplied by P30/pack P300,000.00 P30.50/pack P305,000.00 Tax due thereon (P300,000 multiplied by 55%) 165,000.00 (P305,000 multiplied by 55%) P167,750.00 It is enjoined that this circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-04-96 Revenue Memorandum Circular No. 2-96 January 4, 1996 REVENUE MEMORANDUM CIRCULAR NO. 2-96 SUBJECT : Publishing pertinent portions of Republic Act No. 7660 authorizing the increase in the imposition of documentary stamp tax on certain documents beginning January 01, 1996. TO : All Internal Revenue Officers and Others Concerned. For the proper collection of documentary stamp taxes on certain documents, quoted hereunder are portions of Republic Act No. 7660: "REPUBLIC ACT NO. 7660" xxx xxx xxx SEC. 4. Section 176 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 176. Stamp Tax on sales, agreements to sell, memoranda of sales, deliveries or transfer of due bills, certificates of obligations, or shares of certificate of stocks. On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of due bills, certificates of obligation, or shares or certificates of stocks in any associations, company or corporation, or transfer of such securities by assignment in blank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such due bills, certificates of obligation, or stock, or to secure the future payment of money, or for the future transfer of any due bill, certificates of obligation or stock, there shall be collected a documentary stamp tax of One peso (P1.00) on each two hundred pesos, or fractional part thereof, of the par value of such due bill, certificates of obligation or stock: Provided, That only one tax shall be collected on each sale or transfer of stock or securities from one person to another, regardless of whether or not a certificate of stock or obligation is issued, endorsed, or delivered in pursuance of such sale or transfer; and Provided, further, That in the case of stock without par value the amount of the documentary stamp herein prescribed shall be equivalent to twenty five per centum of the documentary stamp tax paid upon the original issue of said stock: PROVIDED, FURTHERMORE, THAT THE

TAX HEREIN IMPOSED SHALL BE INCREASED TO ONE PESO AND FIFTY CENTAVOS (P1.50) BEGINNING 1996." xxx xxx xxx SEC. 6. Section 179 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 179. Stamp tax on bank checks, drafts, certificates of deposits not bearing interest and other instruments. On each bank check, draft or certificate of deposit not drawing interest, or order for the payment of any sum of money drawn upon issued by any bank, trust company, or any person or persons, companies or corporations, at sight or on demand, there shall be collected a documentary stamp tax of One peso and twenty five centavos (P1.25); PROVIDED, THAT THE TAX HEREIN IMPOSED SHALL BE INCREASED TO ONE PESO AND FIFTY CENTAVOS (P1.50) BEGINNING 1996." xxx xxx xxx SEC. 11. Section 187 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 187 Stamp tax on indemnity bonds. On all bonds for indemnifying any person, firm or corporation who shall become bound or engaged as surety for the payment of any sum of money or for the due execution of performance of the duties of any office or position or to account for money received by virtue thereof, and on all other bonds of any description, except such as may be required in legal proceedings, or are otherwise provided herein, there shall be collected a documentary stamp tax of Ten centavos (P0.10) on each four pesos, or fractional part thereof of the premium charged: PROVIDED, THAT THE TAX HEREIN IMPOSED SHALL BE INCREASED TO THIRTY CENTAVOS (P0.30) ON EACH FOUR PESOS OR FRACTIONAL PART THEREOF OF THE PREMIUM CHARGED BEGINNING 1996." SEC. 12. Section 188 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 188. Stamp tax on certificates. On each certificate of damage or otherwise, and on every other certificate or document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of Ten pesos (P10.00): PROVIDED, THAT THE TAX HEREIN IMPOSED SHALL BE INCREASED TO FIFTEEN PESOS (P15.00) BEGINNING 1996." xxx xxx xxx SEC. 13. Section 189 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 189. Stamp tax on warehouse receipts. On each warehouse receipt for property held in storage in a public private warehouse or yard for any other person other than the proprietor of such warehouse or yard, there shall be collected a documentary stamp tax of Ten pesos (P10.00): Provided, That no tax shall be collected on each warehouse receipt issued to any one person in any one calendar month covering property the value of which does not exceed two hundred pesos: PROVIDED, FURTHER, THAT THE TAX HEREIN IMPOSED SHALL BE INCREASED TO FIFTEEN PESOS (P15.00) BEGINNING 1996."

SEC. 16. Section 192 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "SEC. 192. Stamp tax on proxies. On each proxy for voting at any election for officers of any company or association, or for any other purpose, except proxies issued affecting the affairs of associations or corporations organized for religious, charitable, or literary purposes, there shall be collected a documentary stamps tax of ten peso (P10.00): PROVIDED, THAT THE TAX HEREIN IMPOSED SHALL BE INCREASED TO FIFTEEN PESOS (P15.00) BEGINNING 1996." For easy reference, tabulated hereunder are the documentary stamp tax rates before 1996 and the rates beginning January 1, 1996: Feature of the changes: Prior Beginning Documents enumerated under: January 1, 1996 January 1, 1996 Section 176 XXX P1.00 P1.50 Section 179 XXX 1.25 1.50 Section 187 XXX 0.10 0.30 Section 188 XXX 10.00 15.00 Section 189 XXX 10.00 15.00 Section 192 XXX 10.00 15.00 You are hereby directed to strictly implement the foregoing provisions of the Tax Code effective January 01, 1996. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 3-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 3-96 SUBJECT : Clarification of Issues Affecting the Sale, Exchange, Transfer or Lease of Real Properties, under Republic Act No. 7716, Otherwise Known as the "Expanded VAT Law." TO : All Internal Revenue Officers and Others Concerned. Q-1. What real estate transactions are subject to VAT starting January 1,1996? A-1 Real estate transactions which are subject to VAT starting January 1, 1996 include the following: a. Sale, barter or exchange of real property held primarily for sale to customers or for lease, in the ordinary course of trade or business, when the gross annual and/or receipts exceed P500,000.00; b. Lease of real property in the ordinary course of trade or business, whether for commercial or residential use, when the gross annual receipts exceed P500,00.00 and provided that, in the case of residential use, the monthly rental exceeds P3,950.00/unit (as adjusted under Republic Act No. 7644, otherwise known as the Rent Control Law);

c. Security deposits in lease contracts, when the same is applied to rental (at the time of the application); d. Advance payment received in the month/quarter by the lessor, when the same is in fact a pre-paid rental, regardless of the accounting method used; e. Real property dividends distributed by real estate dealers/lessors to its stockholders and declared out of the retained earnings. The VAT should be computed based on the fair market value or zonal value thereof, whichever is higher, at the time of distribution. Q-2 What real estate transaction are exempt from VAT? A-2 Real estate transaction which are not subject to VAT include the following: a. Sale of real property not primarily held for sale to customers or held for lease in the ordinary course of trade of business; b. Sale of real property utilized for socialized housing under RA 7279, except when sold by a real estate dealer to a person other than the intended or qualified beneficiaries; c. Sale of real property utilized for low-cost housing under BP 220 or PD 957, except when sold by a real estate dealer to a person other than the intended or qualified beneficiaries; d. Transfer of real property to a trustee if the property is to be held merely in trust for the trustor; e. Transfer of real property to a corporation in exchange for its shares of stock under Section 34 (c) (2) and (6) (c) of the Tax Code; f. Advance payment by the lessee in a lease contract, when the same is actually a loan to the lessor from the lessee; g. Security deposits for lease arrangements to insure the faithful performance of certain obligations of the lessee to the lessor; h. Lease of residential units, boarding houses, dormitories, rooms and bed spaces offered for rent by their owners at a monthly rental not exceeding P3,950.00/unit as adjusted under Republic Act No. 7644, (Rent Control Law); The term "unit" shall mean an apartment unit in the case of apartments; house in the case of residential houses; per person in the case of dormitories, boarding houses and bed spaces; and per room in the case of rooms for rent. i. Sale or lease of real property primarily held for sale to customers or for lease in the ordinary course of trade or business when the gross annual sales and/or receipts do not exceed P500,000.00. Q-3 What residential units are referred to in A-2 (h)? A-3 The term "residential units" shall refer to apartments, houses and/or lands on which another's dwelling is located, used for residential purposes and shall include not only buildings, parts or units thereof, used solely as dwelling places [except motels, hotels, apartelles, pension houses, lodging houses and resorts] or also used for home industries, retail stores or other business purposes, if the tenant thereof and his family actually live therein and use them principally for dwelling purposes; Q-4 What is the business tax liability of a real estate dealer/lessor whose gross sales/receipts do not exceed P500,000.00 during any 12-month period? A-4 They shall be liable as Non-VAT taxpayers subject to 3% percentage tax imposed under Sec. 112 of the Tax Code. However, they have the option to register as VAT

taxpayers, in which case, they are liable to the 10% VAT with the benefit of input tax credits. Q-5 What is the business tax liability of individuals whose gross sales receipts do not exceed P100,000.00 during any 12-month period? A-5 Individuals whose gross receipts do not exceed P100,000.00 during any 12-month period shall be exempt from the VAT and 3% percentage tax imposed under Sec. 112, since they are considered principally for subsistence or livelihood and not in the course of trade or business. Q-6 Who are the persons liable to VAT? A-6 The following persons engaged in real estate business are liable to VAT: a. Any person, whether natural or juridical, engaged in the sale, barter, or exchange of real properties in the ordinary course of trade or business; b. Real estate lessors and sub-lessors; c. Non-resident lessors of real property located in the Philippines through their resident lessees; d. Non-stock, non-profit organizations engaged in the sale, barter, exchange or lease of real property, irrespective of the disposition of its net income and whether or not the sale/lease is exclusively to its members, as long as the transaction is undertaken in the regular conduct or pursuit of a commercial or an economic activity; and e. Government, its agencies and instrumentalities, including government-owned or controlled corporations engaged in the sale, barter, exchange or lease of real properties in the ordinary course of trade or business. Provided, however, that the gross sales/receipts from the sale, barter, exchange and/or lease of real property of the aforementioned taxpayers in the course of its/his trade or business during any 12-month period exceed P500,000.00. Q-7 Who is considered a real estate dealer? A-7 A real estate dealer is any person engaged in the business of buying, developing, selling, or exchanging real property as principal and holding himself out as a full-time or part-time dealer in real estate. Q-8 Who is considered a real estate lessor? A-8 A real estate lessor includes any person engaged in the business of leasing or subleasing of real property. Q-9 When is a real estate dealer considered to be engaged in low cost housing project? A-9 A real estate dealer is considered to be engaged in low-cost housing project when such project is registered and licensed by HLURB/HUDCC as low-cost housing pursuant to BP 220 or PD 957, or any other similar law. Low-cost housing refers to housing projects intended for homeless low-income family beneficiaries, undertaken by the Government or private developers, which may either be a subdivision or a condominium, wherein the unit selling price is not more than P375,000.00 or as maybe determined from time to time by HLURB/HUDCC; Q-10 When is a real dealer considered to be engaged in socialized housing? A-10 A real estate dealer is considered to be engaged in socialized housing when such project is registered and licensed by HLURB/HUDCC as socialized housing pursuant to RA 7279, otherwise known as the "Urban Development and Housing Act of 1992." Socialized housing refers to housing programs and projects covering houses and lots or homelots only undertaken by the Government or the private sector for the

underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberalized terms on interest payments, and such other projects intended for the underprivileged and homeless wherein the housing package selling price is not more than P150,000.00 or within the lowest interest rates under the Unified Home Lending Program (UHLP) or any equivalent housing program of the Government, the private sector or non-government organizations; Q-11 For purposes of determining exemption from VAT, what documents are required to be submitted by real estate dealer engaged in low-cost socialized housing projects? A-11 Within 30 days from approval of each project, real estate dealers engaged in lowcost/socialized housing are required to submit a duly authenticated copy of the certificate of license to sell issued by HLURB/HUDCC specifying the project name, location and number units to be sold, to the Revenue District Office where its principal place of business is located. Q-12 Are commissions of real estate agent/broker subject to VAT? A-12 Yes, commissions of real estate agent/broker are subject to VAT if the gross receipts exceed P500,000.00 during any 12-month period. Q-13 Can real estate dealers withhold the VAT from the commissions paid to real estate brokers? A-13 No, real estate dealers are not allowed to withhold VAT; however, government entities can withhold VAT on its payment for goods and services. Q-14 Are all sales of real property prior to January 1, 1996 subject to VAT? A-14 No. only sales of real property held primarily for sale to customers or for lease by real estate dealers or lessors on installment plan shall be subject to VAT with respect to the installment payments made on or after January 1, 1996. Sale of real properties on deferred payment basis in 1995 and prior years are not subject to VAT. Q-15 What do we mean by sale of real property on installment plan? A-15 Sale of real property on the installment plan means sale of real property the initial payments of which in the year of sale do not exceed 25% of Gross Selling Price. Q-16 What do we mean by sale of real property on the deferred payment basis? A-16 Sale of real property on a deferred payment basis means sale of real property, the initial payments of which in the year of sale exceed 25% of the gross selling price. Q-17 What does initial payment mean? A-17 Initial payment means payment or payments which the seller receives before or upon execution of the instrument of sale and payments which he expects or is scheduled to receive in cash or property (other than evidence of indebtedness of the purchases) during the calendar year when the sale or disposition of the real property was made. It covers any downpayment made and includes all payments actually or constructively received during the calendar year of sale, the aggregate of which determines the limit set by law. Q-18 How do we compute the percentage of initial payment? A-18 There are two ways of determining the percentage of the initial payment over the contract price 1. Add the downpayment and he scheduled principal amortization during the year of sale and divide the sum by the total contract price, or

2. Add the downpayment and the scheduled amortizations (principal plus interest) during the year of sale and divide the sum by the aggregate of the downpayment and the total amortization for the entire contract, including interest. If either test results to more than 25% then it is a sale on the deferred payment plan, otherwise, it is a sale on the installment plan. Q-19 What is the basis of the VAT on taxable sales of real property? A-19 For cash basis/deferred payment plan The computation of the VAT by persons/entities engaged in the sale of real property in the course of trade or business shall be based on the gross selling price which is either selling price stated in the sales document or the zonal values of the real properties sold, whichever is higher. In the absence of zonal values the gross selling price shall refer to the market value as shown in the latest tax declaration or the consideration, whichever is higher. Q-20 How is the zonal valuation rule applied in the case of sale of real property on installment plan basis? A-20 For sale of real property on installment plan, the computation of the VAT shall be based on the actual consideration received, including interests and other charges. However, upon full payment, if the zonal/market value is higher than the total receipts/collections, the additional VAT shall be paid accordingly. Q-21 What is the tax base of VAT on lease of real properties? A-21 The computation of the VAT by lessor of real properties shall be based on their gross receipts from the lease of real properties. Gross receipts, as defined under Revenue Regulations No. 7-95, means the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits in advance payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person excluding VAT. Q-22 If the contract of lease was notarized outside the Philippines, is the lease subject to VAT? A-22 Gross receipts from lease of real property covered by the VAT law are subject to VAT regardless of the place where the contract of lease was executed, if the property on lease is located in the Philippines. Q-23 If the lessor has real property for lease located in different places, should the lessor register each property separately? A-23 There shall only be one registration and, consequently, he shall pay an annual registration fee of P1,000.00 in the RDO where the main or head office is located. However, if he maintains an office within the premises of the leased properties, said office shall be considered as branch which shall also be registered and for which the applicable registration fee shall be paid. Q-24 Is the rental of residential houses or offices of embassies or diplomatic agents subject to the VAT, or percentage tax, as the case maybe? A-24 Yes, the exemption of diplomatic agents/embassies is limited only to direct taxes. Since the VAT and percentage taxes are indirect taxes, the lessors of diplomatic agents and embassies are liable thereto. However, if the sending state allows Philippine diplomatic agents/embassies exemption from indirect taxes on transactions in that state, their diplomatic agents/embassies shall enjoy exemption from indirect taxes in the Philippines, pursuant to the international rule on reciprocity.

Q-25 How are real property transaction documented for VAT purposes? A-25 Taxable sales of real property on cash basis and on the deferred payment plan shall, in addition to the document of sale, be covered by a VAT invoice for the entire selling price and Non-VAT official receipts for the initial and succeeding payments. Taxable sales of real property on the installment plan shall, in addition to the document of the sale, be covered by a VAT receipt for every installment payment. Taxable lease or real property shall be covered by a VAT receipt. Exempt sale of real property be real estate dealers shall, in addition to the document of sale, be covered by non-VAT receipts upon collection of the payments. Exempt lease of real property by real estate lessors shall be covered by a non-VAT receipt. Q-26 What is the consequence if a VAT-exempt person issues a VAT invoice or receipt? A-26 Any person whose sale or lease of real property is VAT-exempt, but issues a VAT invoice or receipt shall, in addition to his liability to other applicable percentage tax, if any, be liable to VAT without the benefit of input tax credit, and such tax shall not also be recognized as input tax credit to the purchaser/lessee. Q-27 Can unused invoices or receipts printed prior to January 1, 1996, of persons becoming liable to VAT for the first time, be used on or after January 1, 1996? A-27 Yes, unused invoices or receipts printed prior to January 1, 1996 can still be used provided that an inventory indicating the number of booklets and the corresponding serial numbers as of December 31, 1995 shall be submitted to the RDO where the main office is located on or before January 31, 1996 and the phrase "VAT registered as of (date of registration) is stamped on all copies thereof. Said unused invoices or receipts shall be allowed for use in transactions subject to VAT up to June 30, 1996. Q-28 Are real estate dealers entitled to the 8% presumptive input tax? A-28 Yes, real estate dealers shall be entitled to the 8% presumptive input tax. Q-29 What is the basis of the 8% presumptive input tax of the real estate dealer? A-29 The presumptive input tax credit of 8% of the real estate dealers shall be based on the book value of the improvements, such as buildings, roads, drainage systems, water drainage system perimeter posts, landscaping and other similar structures constructed on or after January 1, 1988 (the effectivity of E.O. 273), in addition to its inventory of supplies and materials for use in the business. Q-30 Are real lessors entitled to the 8% presumptive input tax? A-30 Yes, real estate lessors are entitled to the 8% presumptive input tax only with respect to their inventory of supplies and materials. Q-31 What are documents required to be filed by sellers or lessors of real property subject to VAT on or before January 31, 1996? A-31 Seller or lessor of real properties are required to submit the following documents not later than January 31, 1996 to the Revenue District Office where their principal place of business is located. A) For Presumptive input tax purposes; 1) Inventory of goods, supplies & materials not for sale but purchased for use in business on hand as of December 31, 1995. 2) Inventory of goods or properties and improvements as of December 31, 1995; (for real estate dealer only) B) Inventory of unused invoices as of December 31, 1995, and

C) Schedule of receivable for contracts on a deferred payment basis as Dec. 31, 1995. Failure to submit this schedule shall subject receivables to VAT. Q-32 How does the threshold provision of P500,000.00 apply to real estate lessor to determine whether they are liable to VAT? A-32 For purposes of determining compliance with the threshold of P500,000.00, even gross receipts from lease of residential units covered by the Rent Control Law shall be included. If the aggregate of the gross receipts exceeds P500,000.00, then the real estate lessor shall register as a VAT person. However, for purposes of determining the VAT payable, VAT shall be computed only on the gross receipts from lease of real properties/residential units not covered by the Rent Control Law. To illustrate: For the month of January, 1996, ABC Realty Inc. is the lessor of a 15-door apartment with the following monthly rental charges: 10 units are being leased out for P3,950 per unit; while 5 units are being leased out for P5,000 per unit. Is ABC Realty Inc. subject to VAT? If so, how much is the VAT available? I. Determine first whether the gross receipts of ABC Realty Inc. for the taxable year (TY) 1996 from the lease of the 15-door apartment exceeds the threshold of P500,000.00. A. Determine the gross receipts for TY 1995 from rentals covered by the rent Control Law: 10 x P3,950 = P39,500/month x 12 months P474,000 B. Determine the gross receipts for TY 1995 from rentals not covered by the Rent Control Law: 5 x P5,000 = P25,000/month x 12 months P300,00 C. Add (A) and (B) to determine whether ABC's gross receipts from the aforesaid lease during the 12-month period exceeds the P500,000.00 threshold. P474,000 (A) + 300,000 (B) P774,000 Excepted Gross Receipts for TY 1996 Therefore, ABC Realty Inc. is subject to VAT because it expects to earn gross rentals exceeding the P500,000 threshold for TY 1996. II. The VAT payable of ABC Realty Inc. for the month of January, 1996 shall be computed as follows: Assume that ABC Realty Inc. incurred P20,000 worth of VAT-invoiced building materials for the repair and maintenance of the apartment units for the month of January, 1995. 1/11 of P25,000 P2,272.73 (Output Tax) Less: 1/11 of P20,000 x 300

 774 704.72 (Input Tax) VAT payable for the month of Jan.; 1995 P1,568.01 N.B. the VAT payable is computed on the portion of the gross receipts from rentals corresponding to the five (5) apartment units being leased out at a monthly rental of P5,000.00 per unit only. Q-33 What is the manner of payment of VAT on real property transactions? A-33 As a rule, the VAT due on real property transactions shall be paid upon filing of the VAT return/declaration. However, in the case of lease of real properties owned by non-resident lessors, the VAT due shall be withheld and remitted by the lessee through the filing of a VAT return/declaration for and in behalf of the non-resident owner. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 4-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 4-96 SUBJECT : Clarification of Issues Affecting Media under R.A. No. 7716, otherwise known as the "Expanded VAT Law". TO : All Internal Revenue Officers and Others Concerned. Q-1 A-1 Which of the various forms of media are liable to VAT? a. Print b. Broadcast c. Advertising d. Promotion Q-2 Is the sale and/or importation of newspapers, books, magazines, periodicals subject to VAT? A-2 No, the sale of books, magazines, periodicals, newspapers including book publishing and printing as well as its distribution and circulation, except their importation, are exempt from VAT pursuant to R.A. No. 8047. Q-3 Are the gross receipts from advertising of newspaper and magazines subject to VAT? A-3 Yes, the gross receipts from advertising of newspapers and magazines are subject to VAT. Q-4 What is the basis of computing VAT in the case of media? A-4 The basis for computing VAT payable on transactions of media shall be the gross receipts.

To illustrate: Assume that an advertiser pays an advertising agency the amount of P100,000 to create a commercial and run the same on print and/or broadcast media with the advertising agency getting 15% of such amount as commission/service fee. Assumption 1: (a) The advertising agency issues a VAT official receipt to the advertiser for P15,000 and a provisional receipt for the P85,000 as share of the Media. The VAT payable by the advertising agency shall be computed as follows: Commission/Service Fee (15% x P100,000) P15,000.00 Output VAT (1/11 of P15,000) P1,363.63 Less: Applicable Input VAT Credits (x x x) VAT Payable P x x x (b) The print/broadcast media issues a VAT official receipt to the advertiser for P85,000. The VAT shall be computed as follows: Amount received for Advertising Space, Radio/TV Spots/Airtime (85% x P100,000) P85,000.00 Output VAT (1/11 of P85,000) P7,727.27 Less: Applicable Input VAT Credits (x x x) VAT Payable P x x x Assumption 2: The advertising agency issues a VAT official receipt to the advertiser for the total amount of P100,000 and Media issues a VAT official receipt for P85,000.00 to the advertising agency for the payment of the advertisement (a) The VAT payable by the advertising agency shall be computed as follows: Gross Receipts P100,000.00 Output VAT (1/11 of P100,000) P9,090.90 Less: Applicable Input VAT Credits (1/11 of P85,000) (7,727.27) VAT Payable P1,363.63 (b) The VAT payable by the print/broadcast media, using a VAT invoice issued in the name of the advertising agency, shall be computed as follows: Amount received for advertising space, Radio/TV Spots/Airtime (85% x P100,000) P85,000.00

 Output VAT (1/11 of P85,000) P7,727.27 Less: Applicable Input VAT Credits (x x x) VAT Payable by Media Pxxx Q-5 Are importations by broadcasting and television stations subject to VAT? A-5 The importation of radio and television equipment, spare parts, and allied technical and program materials to be used exclusively by broadcasting and television stations in their broadcast operations under Presidential Decree No. 1362 * shall be subject to VAT including the value of the radio or television time used by the Government set off against whatever duties and taxes which the radio or television station should have paid. Q-6 Where should media entities register? A-6 The head or main office and branches are required to register and pay the annual registration fee of P1,000 each with the Revenue District Office (RDO) where said head or main office and branches are located: Q-7 Are radio and TV broadcasters required to register? How about the payment of P1,000.00 registration fee? A-7 Yes, radio and TV broadcasters, as well as actors, actresses, talents, singers and emcees, choreographers, musical, radio, movie, television and stage directors, are required to register as Non-VAT taxpayers. They will likewise pay the P1,000.00 annual registration fee. However, if there exists an employer-employee relationship, the person need not register, as he is exempt from VAT under Sec. 103. Q-8 Are radio and TV broadcasters subject to VAT? When? A-8 Radio and TV broadcasters will not be subject to VAT during the two-year moratorium period. After this period, they will be subject to VAT if the gross receipts from the practice of their profession exceeds P500,000.00 in any 12-month period. Q-9 Are extension offices required to register without paying the annual registration fee? A-9 Extension offices not generating sales such as studio or place of production are required to register without paying the annual registration fee of P1,000.00. Q-10 Are relay stations required to register? A-10 Relay stations which are merely transmitter structures are not required to register. Q-11 Are billboards required to be registered? A-11 Billboards of whatever type used in advertising are not required to be registered. Q-12 (a) Who are entitled to presumptive input tax credit? (b) What is the basis of computation? (c) Are capital goods also entitled to presumptive input tax? A-12 (a) Only VAT-registered persons shall be entitled to presumptive input tax credits. (b) The 8% presumptive input tax credit for media shall be computed based on the value of the inventories of goods, materials or supplies not for sale but purchased for use in business in their present condition, such as, newsprint, video films, VCR tapes, and other VAT-invoiced production materials on hand as of December 31, 1995.

(c) Movable capital goods are also entitled to 8% presumptive input tax based on book value as of December 31, 1995. Q-13 What special information are required of members of media on or before January 31, 1996? A-13 Members of media registered as VAT taxpayers shall submit on or before January 31, 1996 to the RDO, where the principal place of business is located, the following: a. Inventory of goods, materials and supplies as of December 31, 1995 for purposes of the presumptive input tax credit; b. Inventory of unused invoices/receipts as of December 31, 1995. c. List of names of clients and the amounts of the contract price outstanding as of December 31, 1995 Q-14 Are services already rendered and billed before January 1, 1996, but collected thereafter subject to VAT? A-14 No, these are not subject to VAT as long as these accounts are included in the special information return submitted to the BIR by the taxpayer on or before January 31, 1996. However, the same accounts shall be subject to the applicable percentage tax, if any. All revenue officials and employees are enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Footnotes * PD 1362 "Allowing Radio Broadcasting and Television Stations to Import Radio or Television Equipment, Spare Parts and Allied Technical and Program Materials to be used Exclusively in their Broadcast Operations Subject to Certain Conditions." C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 5-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 5-96 SUBJECT : Clarification of Issues Affecting Franchise Grantee under Section 117 of the Tax Code, as Amended, under R.A. No. 7716, Otherwise known as the "Expanded VAT Law." TO : All Internal Revenue Officers and Others Concerned. Q-1 What are the franchise grantees subject to VAT beginning January 1, 1996? A-1 a. Telephone and telegraph companies; b. Radio and television broadcasting; and c. Other franchise grantees which are not include in No. 2 hereunder. Q-2 What franchise grantees are not subject to VAT but to the two percent (2%) tax under Section 117 of the Tax Code?

A-2 a. Electric franchise grantees; b. Gas franchise grantees; and c. Water utilities. Q-3 Now that franchise grantees are already subject to VAT, will they still be subject to the franchise tax? A-3 Franchise grantees now subject to VAT are no longer subject to the franchise tax. Q-4 What happens to the "in lieu of all taxes" provision in the character of a franchise grantee now covered by VAT? A-4: The "in lieu of all taxes" provision in the franchise is not affected by the Expanded VAT Law. VAT merely replaced the franchise tax. In other words, VAT instead of franchise tax shall be in lieu of all taxes due from a franchise grantee. Q-5 What is the basis in computing VAT payable on transaction of telecommunications companies? A-5 The basis for computing VAT payable on transactions of telecommunications companies shall be the gross receipts. Q-6 What is gross receipts for purposes of franchise grantees subject to VAT? A-6 For purposes of franchise grantees subject to VAT, gross receipts, as defined under Revenue Regulations No. 7-95, refer to the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits and advance payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person, excluding VAT. However, said gross receipts subject to VAT shall not include amounts earmarked for payment to another telecommunications company; foreign administration's (FA's) share for the services performed outside the Philippines; and amounts received from overseas dispatch, message or conversation originating from the Philippines which is covered by Section 118, Title V of the Tax Code. Q-7 What portion of their gross receipts is not subject to VAT? A-7 a. The share of the foreign telecommunications administration (FA) in the payment received by a local telecommunications company from its customers in accordance with their agreement is not subject to VAT because the related services are performed by FA outside the Philippines. The telecommunications company shall not charge VAT on the FA's share. In billing customers, the local telecommunications company shall present the FA's share separately with a notation that it is VAT exempt. The FA's share may be presented on the same VAT invoice or official receipt showing the telecommunications company's other VAT taxable charges. b. Deposit for telephone instruments and the like are not subject to VAT. However, if the said deposits for telephone instruments and the like are forfeited, the telecommunications company shall be subject to VAT thereon. Q-8 What is the basis of the presumptive input tax of franchise grantees subject to VAT? A-8 The presumptive input tax credit of franchise grantees subject to VAT shall be based on the value of the inventories of goods, supplies, materials and spare parts purchased for use in business as of December 31, 1995. Q-9 What are the requirements to be submitted by the franchise grantees on or before January 31, 1996 to the RDO where the registration was made?

Q-9 a. Inventory of supplies, materials and goods purchased for use in business on hand as of December 31, 1995 for purposes of the presumptive input tax credits; and b. Inventory of unused invoices as of December 31, 1995. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 6-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 6-96 SUBJECT : Clarification of Issues Affecting Operators of Taxicabs, Rent-a-Car Companies, Tourist Buses; and other Common Carriers by Land, Air and Sea Relative to their Transport of Goods or Cargoes, under Republic Act No. 7716, Otherwise Known as the "Expanded VAT Law." TO : All Internal Revenue Officers and Others Concerned. Q-1 What are the common carriers subject to VAT beginning January 1, 1996? A. The following common carriers will be subject to VAT beginning January 1,1996: a. Operators of taxicabs; b. Operators of rent-a-car companies (utility cars for rent or hire driven by the lessees); c. Operators of tourist buses; d. Common carriers for transport of goods or cargoes, such as airfreight, shipping and trucking; e. Philippine Airlines (PAL) relative to domestic transport of goods or cargoes; and f. Other common carriers including Non-stock, non-profit organizations, government-owned and controlled corporations and cooperatives engaged in the transport of goods or cargoes, such as but not limited to trucks, trailers, jeepneys and the like, contracted to transport cargoes to any point in the Philippines. Q-2 Who are the common carriers required to register as VAT-taxpayer and pay the P1,000 annual registration fee? A. Those whose gross receipts from the transport of cargoes for any 12 month period exceed P500,000.00 are required to register as VAT-taxpayers and pay the P1,000.00 annual registration fee. For failure to register as such, they shall still be liable for the payment of VAT plus the applicable surcharge and interest, but cannot claim credit for input taxes. Q-3 Who are the common carriers to the 3% percentage tax? A. Those common carriers enumerated in No. 1 whose gross receipts in all taxable lines of business exceed P 100,000.00 but do not exceed P5000,000.00 for any 12-month period shall be liable to the 3% tax imposed under Sec. 112 of the Tax Code, as amended.

Q-4 Who are the common carriers exempt from the payment of VAT, the registration fee and the 3% percentage tax? A. Those common carriers enumerated in No. 1 whose gross receipts in all business lines do not exceed P100,000.00 during any 12-month period shall be exempt from the payment of VAT. They are required to register but shall be exempt from the payment of registration fee and from the 3% percentage tax imposed under Sec. 112 of the Tax Code, as amended. Q-5 Who are required to register and pay the annual registration fee of P1,000.00 each with the RDO where they are located? A. In general, the following are required to register and pay the annual registration fee of P1,000.00 each with the Revenue District Officer (RDO) of the place where (a) or (b) below is located: a. Main or head office; and b. All terminals and sub-terminals generating sales. Q-6 What are the allowable input tax credits to VAT registered common carriers who are also engaged in the transport of passengers? A. A VAT-registered common carrier who is also engaged in the transport of passengers shall be allowed input tax credit as follows: 1. Total input tax which can be directly attributed to the transport of cargoes; and 2. A ratable portion of any input tax which cannot be directly attributed to either activity. Q-7 What is the basis for computing the VAT payable of VAT registered common carriers? A. The basis for computing VAT payable by the common carriers enumerated in No. 1 shall be their gross receipts from transport of cargoes. To illustrate: ABC Bus Company is operating provincial buses from Quezon to Manila and Manila to Quezon. Mr. Pedro Santos took a ride on one of the buses for which he was issued two (2) tickets: Ticket No. 001 covering his one (1) way fare of P200 and Ticket No. 002 covering his cargoes in the amount of P330. Let us suppose that ABC Bus Company has accumulated VAT-invoiced purchases, such a lubricating oil in the amount of P50.00 and wax in the amount of P50.00. How much is the VAT payable of ABC Bus Company? (a) The VAT payable by ABC Bus Company shall be computed as follows: Gross receipt: Passenger P200.00 Cargoes 330.00 Total P530.00 ======= Purchases: Lubricating oilP50.00 Wax 50.00 Total Purchases P100.00 ======= VAT payable is:

VAT Output Tax (P330 x 1/11) P30.00 Less: VAT Input Tax (P330 x 1/11) 5.45 P500 VAT Payable P24.55 ======= (b) The common carrier's tax of 3% on the gross receipts from the passenger's fare shall be computed as follows: Passenger's fare (Quezon Manila) P200.00 x .03 COMMON CARRIER'S TAX P6.00 ===== Q-8 Are school buses and passenger buses rented for special trips subject to VAT? A. No, school buses and passenger buses rented for special trips, such as excursions and the likes, are not subject to VAT but to the 30% common carrier's tax. Q-9 Are operators of taxicabs still liable to the 3% common carrier's tax under Sec. 115 of the Tax Code? A. No, operators of taxicabs shall no longer be subject to 3% common carrier's tax imposed under Sec. 115 of the Tax Code. Q-10 When are international cargo vessels subject to VAT? A. International cargo vessels, which include international airlines and freight forwarders with their own fleet and/or planes, shall be subject to VAT two years after the effectivity of RA 7716. In the meantime they shall continue to pay the 3% common carrier's tax on their gross receipts derived from outgoing freight. Q-11 What is the meaning of the gross receipts? A. Gross receipts as defined under Sec. 4.102-1 of the Revenue Regulations No. 795, refer to the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits and advanced payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person, excluding VAT. Q-12 Who are required to register without paying the annual registration fee of P1,000.00? A. The following are required to register without paying the annual registration fee of P1,000.00: a) Terminals and sub-terminals not generating sales; b) Satellite offices; and c) Garages that do not sell tickets but are merely use for the purpose of filling in gasoline or repair/maintenance work. The above offices/terminals are required to register in the RDO where said offices/terminals are located. Q-13 What is the basis of the presumptive input tax credit of the transportation companies subject to VAT? A. The presumptive input tax credit of the transportation companies subject to VAT shall be based on inventories of goods, supplies, materials and spare parts not for sale but

purchased for use in business on hand as of December 31, 1995 equivalent to 8% of the book value as it appears on the audited financial statements as of December 31, 1995. Q-14 What is the basis of the presumptive input tax in case the supplies, materials and spare parts are used for both VAT and non-VAT operations? A. In case the supplies, materials and spare parts are used for both VAT and nonVAT operations, only a ratable portion of the value of such materials, supplies and spare parts shall be available as the basis for the presumptive input tax mentioned herein, computed by multiplying the cost of the supplies, materials and spare parts, by the proportion which the gross receipts from vatable activities bears over the total gross receipts from all operations for the preceding taxable year. Q-15 After registration of the transportation company subject to VAT, what documents shall be submitted not later than January 31, 1996? A. The following shall be submitted not later than January 31, 1996 to the RDO where the registration was made: a. Inventory of goods, supplies, materials and spare parts not for sale but purchased for used in business on hand as of December 31, 1995 for purposes of the presumptive input tax credit; b. Inventory of unused receipts; and c. Schedule of receivables of VAT taxpayers under No. 1 above as of December 31, 1995. Failure to submit the schedule shall subject the collection of these receivables to VAT. Q-16 Who are required to issue duly registered VAT official receipts? A. All taxpayers enumerated in A-1 above. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 7-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 7-96 SUBJECT : Clarification of Issues Affecting the Hotel and Restaurant Industry, Under Republic Act No. 7716, Otherwise Known as the "Expanded VAT Law." TO : All Internal Revenue Offices and Others Concerned. Q-1: Who are the persons or entities engaged in the hotel and restaurant business subject to VAT beginning January 1, 1996? A-1: The following persons or entities engaged in the hotel and restaurant business are subject to VAT beginning January 1, 1996: 1. Proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, apartelles and resorts; 2. Proprietors or operators of restaurants, refreshment parlors, cafes and other eating places;

3. Proprietors or operators of bars and clubs; 4. Caterers; 5. Non-stock, non-profit organizations, government-owned and controlled corporations and cooperatives engaged in the hotel and restaurant business; and 6. Other similar establishments. Q-2: Who shall register as VAT taxpayers? A-2: Those whose taxable gross receipts for any 12 month period exceed P500,0 00.00 shall register as VAT taxpayers. Q-3: Who shall register as NON-VAT taxpayers? A-3: Those whose gross receipts do not exceed P500,000.00 for any 12 month period shall register as NON-VAT taxpayers. Q-4: What is the basis in the computation of VAT payable on transaction of hotel and restaurant industry? A-4: The basis in the computation of VAT payable on transactions of hotel and restaurant industry shall be the gross receipts on sale of services. Q-5: What is the "gross receipts" in the case of hotel and restaurant proprietors or operators? A-5: The term "gross receipts" in the case of hotel and restaurant operators shall include, among others, charges for rooms, laundry and valet services, food and beverages consumption, corkage, handling charges for providing telephone, telex, cable, or fax services, cake shop sales, lease to concessionaires, compensation and other services fees. The said "gross receipts", however, shall not include the following: a. Service charges billed separately and actually distributed to waiters and employees; b. Actual cost of long distance and overseas telephone calls, fax, cable, telex and charges of the telecommunication companies collected by the establishment from the customers/clients for the concerned telecommunication companies, such as PLDT which are earmarked for payment for the latter; c. VAT passed on to customers; and d. Local taxes charged. Q-6: What is the basis for the presumptive input tax of the hotel and restaurant industry? A-6: The basis for the 8% presumptive input tax credit shall be the value of the inventory of goods, materials and supplies for sale or for use in business as of December 31, 1995, except those goods, materials for which input tax has already been claimed. Q-7: What are the reportorial requirements to be submitted by the hotel and restaurant operators on or before January 31, 1996 to the RDO where the principal place of business is located? A-7: The following shall be submitted: a. Inventory of supplies and goods for sale and/or purchased for use in business as of December 31, 1995 for purposes of presumptive input tax credit; and b. Inventory of unused invoices/receipts as of December 31, 1995. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO

Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-11-95 Revenue Memorandum Circular No. 8-96 August 11, 1995 REVENUE MEMORANDUM CIRCULAR NO. 8-96 SUBJECT : GUIDELINES IN THE PROCESSING OF REQUEST FOR CORRECTION OF PERSONAL INFORMATION IN THE RECORDS OF THE CIVIL SERVICE COMMISSION. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 14, s. 1995 dated July 27, 1995. "Pursuant to CSC Resolution No. 95-4466 dated July 27, 1995 the Commission adopts the following guidelines to be used in processing requests for correction of personal information in the records of the Commission: 1. All requests for correction of names and/or dates of birth appearing in the records of this Commission must be filed at the Central Office of the Commission attention Office for Legal Affairs; 2. The said requests must be accompanied by a copy of the birth certificate duly authenticated by the Local Civil Registrar of the city or municipality where the birth was recorded or registered or the National Statistics Office; 3. The said birth certificate must contain information which were recorded or registered within a reasonable period of time after the birth of the person making the request; 4. A birth certificate issued on the basis of a late registration of birth is not sufficient evidence to warrant a correction or change of information in the records of the Commission in the absence of a court order; 5. The action on said request shall be contained in an appropriate resolution; and 6. Incorrect names or birthdates appearing in the records of the Commission due to typographical or mechanical error in copying the information from source documents such as personal data sheet, applications to take Civil Service examinations, appointment papers and the like, maybe corrected by the Regional Office which made the mistake but a report thereof must be submitted immediately to the Commission for notation. This Memorandum Circular shall take effect immediately. (Sgd.) CORAZON ALMA G. DE LEON" Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue

July 27, 1995 MEMORANDUM CIRCULAR NO. 14-95 TO : ALL HEADS OF DEPARTMENTS AND AGENCIES OF THE NATIONAL GOVERNMENT, INCLUDING GOVERNMENT OWNED AND/OR CONTROLLED CORPORATIONS AND STATE UNIVERSITIES AND COLLEGES. SUBJECT : GUIDELINES IN THE PROCESSING OF REQUESTS FOR CORRECTION OF PERSONAL INFORMATION IN THE RECORDS OF THE CIVIL SERVICE COMMISSION. Pursuant to CSC Resolution No. 95-4466 dated July 27, 1995 the Commission adopts the following guidelines to be used in processing requests for correction of personal information in the records of the Commission: 1. All requests for correction of names and/or dates of birth appearing in the records of this Commission must be filed at the Central Office of the Commission attention Office for Legal Affairs; 2. The said requests must be accompanied by a copy of the birth certificate duly authenticated by the Local Civil Registrar of the city or municipality where the birth was recorded or registered or the National Statistics Office; 3. The said birth certificate must contain information which were recorded or registered within a reasonable period of time after the birth of the person making the request; 4. A birth certificate issued on the basis of a late registration of birth is not sufficient evidence to warrant a correction or change of information in the records of the Commission in the absence of a court order; 5. The action on said requests shall be contained in an appropriate resolution; and 6. Incorrect names or birthdates appearing in the records of the Commission due to typographical or mechanical error in copying the information from source documents such as personal data sheet, applications to take Civil Service examinations, appointment papers and the like, maybe corrected by the Regional Office which made the mistake but a report thereof must be submitted immediately to the Commission for notation. This Memorandum Circular shall take effect immediately. CORAZON ALMA G. DE LEON Chairman C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 12-15-95 Revenue Memorandum Circular No. 9-96 December 15, 1995 REVENUE MEMORANDUM CIRCULAR NO. 9-96 SUBJECT : PRESCRIBING GUIDELINES AND PROCEDURES FOR THE GRANT OF NIGHT-SHIFT DIFFERENTIAL PAY TO GOVERNMENT EMPLOYEES. TO : All Revenue Officials and Employees and others concerned.

For the information and guidance of all revenue officials and employees, quoted hereunder is Budget Circular No. 8, s. 1995 of the Department of Budget and Management, Malacaang Manila. "1.0 PURPOSE This Circular is being issued to rationalize and standardize rates of night-shift differential pay granted to government employees pursuant to Presidential Decree No. 985 and Republic Act No. 6758, as amended. 2.0 COVERAGE All government employees, except those enumerated in Section 3.0 hereof, irrespective of employment status, whether permanent, casual, temporary and contractual, whose regular schedule of work fall partly or wholly between the hours of 6:00 Post Meridian (PM) and 6:00 Ante Meridian (AM) of the following day. 3.0 EXEMPTION The following government employees are not covered by this Circular: 3.1 Public health workers, who are already covered by RA 7305; 3.2 Government employees whose schedule of office hours fall between 6:00 AM to 6:00 PM. Services rendered beyond the regular eight hour schedules are paid overtime pay in accordance with existing laws, rules and regulations. 3.3 Government employees whose services are required or are on call 24 hours a day such as the uniformed personnel of the Armed Forces of the Philippines (AFP), the Philippine National Police (PNP), the Bureau of Jail Management (BJMP) and the Bureau of Fire Protection (BFP). 4.0 DEFINITION OF TERMS 4.1 Night shift Differential Pay Compensation premium granted to government personnel whose regular working hours fall wholly or partly within 6:00 PM to 6:00 AM of the following day. 4.2 Hourly Basic Rate The basic salary rate per hour derived by (a) dividing the monthly rate by 22 working days, and (b) dividing the quotient derived in (a) by 8 hours. 5.0 RULES AND REGULATIONS 5.1 Night-shift differential pay may be granted to government personnel at a rate not exceeding 20% of the hourly basic rate of the employee. 5.2 When the schedule of working hours falls partly within 6:00 PM to 6:00 AM, the night shift differential pay shall be paid only for the hours within 6:00 PM to 6:00 AM of the following day. 5.3 When an employee working in a regular night shift falling within the 6:00 PM to 6:00 AM period renders services in excess of the regular 8-hour night shift, the excess hours shall be compensated in accordance with the rules and regulations on overtime compensation. 5.4 To qualify for the night-shift differential pay, the official working hours shall be prescribed by the head of office taking into consideration the nature of the services of the Office concerned and the necessity for an official shift outside the ordinary working hours prescribed by the Civil Service Commission, provided that such official working hours is observed for a period of at least 10 working days. 5.5 Payment of night-shift differential pay may be authorized by the Head of Office without the need of prior approval from the Department of Budget and Management. 6.0 FUNDING SOURCE

The funds necessary to implement the provisions of this Circular shall be charged against existing appropriations for the purpose of departments/agencies concerned. For government owned or controlled corporations, the amount shall be charged against their respective corporate funds. For local government units, the amount shall be charged against their respective local funds. In case an agency has no appropriation for the purpose, it may use savings from released allotments for personal services. 7.0 SAVING CLAUSE Cases not covered by the provisions of this Circular shall be submitted to the DBM for appropriate action and/or resolution. 8.0 REPEALING CLAUSE All circulars, guidelines, rules and regulations or provisions therein which are inconsistent with the provisions of this Circular are hereby modified accordingly. All previous approval and authority granted by the DBM which are inconsistent with this Circular are likewise deemed superseded and modified accordingly. RMC Prescribing guidelines & procedures for the grant of night-shift differential pay to gov't. employees. 9.0 EFFECTIVITY This Circular shall take effect December 4, 1995. (Sgd.) SALVADOR M. ENRIQUEZ, JR." Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue BUDGET CIRCULAR NO. 8-95 TO : Heads of Departments, Bureaus, Offices and Agencies of the National Government Including State Universities and Colleges; Government-Owned and/or Controlled Corporations and Financial Institutions; Local Government Units; and All Others Concerned. SUBJECT : PRESCRIBING GUIDELINES AND PROCEDURES FOR THE GRANT OF NIGHT-SHIFT DIFFERENTIAL PAY TO GOVERNMENT EMPLOYEES. 1.0 PURPOSE This Circular is being issued to rationalize and standardize rates of night-shift differential pay granted to government employees pursuant to Presidential Decree No. 985 and Republic Act No. 6758, as amended. 2.0 COVERAGE All government employees, except those enumerated in Section 3.0 hereof, irrespective of employment status, whether permanent, casual, temporary and contractual, whose regular schedule of work fall partly or wholly between the hours of 6:00 Post Meridian (PM) and 6:00 Ante Meridian (AM) of the following day. 3.0 EXEMPTION

The following government employees are not covered by this Circular: 3.1 Public health workers, who are already covered by RA 7305; 3.2 Government employees whose schedule of office hours fall between 6:00 AM to 6:00 PM. Services rendered beyond the regular eight hour work schedules are paid overtime pay in accordance with existing laws, rules and regulations. 3.3 Government employees whose services are required or are on call 24 hours a day such as the uniformed personnel of the Armed Forces of the Philippines (AFP), the Philippine National Police (PNP), the Bureau of Jail Management (BJMP) and the Bureau of Fire Protection (BFP). 4.0 DEFINITION OF TERMS 4.1 Night shift Differential Pay Compensation premium granted to government personnel whose regular working hours fall wholly or partly within 6:00 PM to 6:00 AM of the following day. 4.2 Hourly Basic Rate The basic salary rate per hour derived by (a) dividing the monthly rate by 22 working days, and (b) dividing the quotient derived in (a) by 8 hours. 5.0 RULES AND REGULATIONS 5.1 Night-shift differential pay may be granted to government personnel at a rate not exceeding 20% of the hourly basic rate of the employee. 5.2 When the schedule of working hours falls partly within 6:00 PM to 6:00 AM, the night shift differential pay shall be paid only for the hours within 6:00 PM to 6:00 AM of the following day. 5.3 When an employee working in a regular night shift falling within the 6:00 PM to 6:00 AM period renders services in excess of the regular 8-hour night shift, the excess hours shall be compensated in accordance with the rules and regulations on overtime compensation. 5.4 To qualify for the night-shift differential pay, the official working hours shall be prescribed by the head of office taking into consideration the nature of the services of the Office concerned and the necessity for an official shift outside the ordinary working hours prescribed by the Civil Service Commission, provided that such official working hours is observed for a period of at least 10 working days. 5.5 Payment of night-shift differential pay may be authorized by the Head of Office without the need of prior approval from the Department of Budget and Management. 6.0 FUNDING SOURCE The funds necessary to implement the provisions of this Circular shall be charged against existing appropriations for the purpose of departments/agencies concerned. For government owned or controlled corporations, the amount shall be charged against their respective corporate funds. For local government units, the amount shall be charge against their respective local funds. In case an agency has no appropriation for the purpose, it may use savings from released allotments for personal services. 7.0 SAVING CLAUSE Cases not covered by the provisions of this Circular shall be submitted to the DBM for appropriate action and/or resolution. 8.0 REPEALING CLAUSE All circulars, guidelines, rules and regulations or provisions therein which are inconsistent with the provisions of this Circular are hereby modified accordingly. All

previous approval and authority granted by the DBM which are inconsistent with this Circular are likewise deemed superseded and modified accordingly. 9.0 EFFECTIVITY This Circular shall take effect December 4, 1995. SALVADOR M. ENRIQUEZ, JR. Secretary C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 12-15-95 Revenue Memorandum Circular No. 10-96 December 15, 1995 REVENUE MEMORANDUM CIRCULAR NO. 10-96 SUBJECT : REITERATING THE POLICY ON RETENTION IN THE SERVICE OF PERSONS WHO HAVE REACHED THE COMPULSORY RETIREMENT AGE OF 65 YEARS. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Finance Memorandum dated November 22, 1995. "Quoted hereunder is the content of Memorandum Circular No. 134 dated October 21, 1995 of the Office of the President on the above subject matter. "It has been observed that despite the strict conditions provided for in Memorandum Circular No. 163 dated March 5, 1968, as amended, requests for retention in the service of government personnel who have reached the compulsory retirement age of 65 years are still being recommended/requested by heads of offices concerned. In this connection, all heads of departments, bureaus, offices and instrumentalities of the government including government owned or controlled corporations, are hereby enjoined to require their respective offices to strictly comply with the pertinent portion of which reads as follows: "Officials or employees who have reached the compulsory retirement age of 65 years shall not be retained in the service, except for extremely meritorious reasons in which case the retention shall not exceed six (6) months". This Circular shall take effect immediately. By authority of the President: (Sgd.) RUBEN D. TORRES Executive Secretary" Strict compliance to the aforesaid Memorandum Circular is hereby enjoined. (Sgd.) MA. ELEANOR F. DELA CRUZ" Assistant Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible.

LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 11-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 11-96 SUBJECT : Clarification of Issues Affecting Non-Life Insurance Components, under Republic Act No. 7716, Otherwise Known as the "Expanded VAT Law". TO : All Internal Revenue Officers and Others Concerned. Q-1 What insurance companies are subject to VAT beginning January 1, 1996? A-1 The following non-life insurance companies are subject to VAT on gross premium received beginning January 1, 1996: a. Marine, fire and casualty insurance companies; b. Surety, fidelity, indemnity and bonding companies; c. Mutual benefit associations; d. Government-owned or controlled corporations engaged in the business of non-life insurance; e. Non-stock, non-profit organizations and cooperatives engaged in the business of non-life insurance; and f. All other persons, whether individual, trust estate, partnership, association, joint venture, or corporation engaging in the non-life insurance business, such as but not limited to non-resident foreign persons rendering non-life insurance services in the Philippines in the course of its trade or business. Q-2 What lines of insurance business are not subject to VAT? A-2 Premiums on the following insurance policies are not subject to VAT: a. Crop insurance; b. Life and disability insurance; and c. Health and accident insurance; Q-3a Who are those required to register as VAT-taxpayers and pay the P1,000.00 annual registration fee? A-3 Those whose taxable gross receipts during any 12-month period exceed P500,000.00. Q-3b What are the consequences of failure to register as such? a. The non-life insurance company is still liable for the payment of the VAT on the gross premiums collected; but b. It is not entitled to any input tax credit as a penalty for non-registration. Q-4 What are the non-life insurance companies required to register as Non-VAT taxpayers and pay the P1,000.00 annual registration fee? To what tax will they be subjected to? A-4 Those whose gross receipts exceed P100,000 but do not exceed P500,000.00 for any 12-month period are required to register as non-VAT taxpayer and pay the P1,000.00 registration fee. They shall be subject to the 3% tax imposed under Sec. 112 of the Tax

Code upon effectivity of R.A. 7716, and 4% two years thereafter, of their gross quarterly sales or receipts. They, however, have the option to register as VAT taxpayers. Q-5 Are insurance agents and/or brokers subject to VAT? A-5 Yes. Insurance agents and/or brokers have been subjected to VAT since January 1, 1988 under E.O. 273, and will continue to be liable to the payment of the 10% VAT. Q-6 If an insurance company is engaged in both life and non-life insurance business, how much registration fee will it pay? A-6 An insurance company that is engaged in both life and non-life insurance business is required to register both as a Non-VAT and VAT taxpayer and pay an annual registration fee of P1,000.00 only, provided that both lines of business are conducted in one establishment. Q-7 What is required of a VAT-registered non-life insurance company in addition to the maintenance of the regular accounting records? A-7 A VAT-registered non-life insurance company shall, in addition to the regular accounting records, be required to maintain at its main or head office of a record of its daily collections and monthly payments of VAT. Q-8 What are included in the "gross receipts" subject to VAT of non-life insurance companies? A-8 The "gross receipts" subject to VAT of non-life insurance companies shall include the total premiums collected whether such premiums are paid in money, notes, credits or any substitute for money. Q-9 What are not included in the "gross receipts" of non-life insurance companies? A-9 Said "gross receipts" shall not include the following: a. Premiums refunded within six (6) months after payment on account of rejection of risk or returned for other reason to the person insured (return premiums); b. Premiums on reinsurance of a company that has already paid the tax; c. Premiums on account of any reinsurance, if the risk insured against covers property located outside of the Philippines; d. Documentary stamp and local taxes passed on by the insurance company to the insured; and e. VAT passed on the insured. Q-10 What premiums and commissions received by non-life insurance companies in 1996 are not subject to VAT? A-10 Premiums and commissions due under the terms of an existing policy or insurance contracts which were billed but not yet paid as of December 31, 1995 are not subject to VAT, subject to compliance of the following requirements. a) The insurance companies shall file an information return on or before January 31, 1996 showing the name(s) of client(s) and amounts due as of December 31, 1995; b) The insurance company had billed the unpaid amount as of December 31, 1995 and a copy of such billing is attached to the information return mentioned above; c) The insurance company had recorded the receivable in its 1995 books of accounts; and d) The insurance company files not later than January 20, 1996; or on or before the 20th day after each calendar quarter, the regular percentage tax return for the payment of the 5% premium tax on payments received in 1996, from his receivables in (a).

Q-11 What is the basis for the 8% presumptive input tax of non-life insurance companies? A-11a The 8% presumptive input tax credit of non-life insurance companies shall be based on the value of the inventory of materials, supplies and other VAT-invoiced items not for sale but purchased for use in the business as of December 31, 1995, except those materials and supplies for which input tax has already been claimed. Q-12b What is the use of the presumptive input tax credit and unused input tax credit? A-12b The presumptive input tax credit and unused input tax credit directly attributed to transactions subject to VAT can be applied to the VAT payable (output VAT) in the current taxable month and any unused input tax credits should be reflected in the monthly VAT declaration or quarterly VAT return, whichever is applicable, and the same shall be creditable against the output VAT for the succeeding months or quarters. Q-13 What are required to be submitted by the non-life insurance company after registration? A-13 After registration of the non-life insurance company, the following are required to be submitted not later than January 31, 1996 to the RDO where the principal place of business is located: a. Inventory of materials and supplies not for sale but purchased for use in business, as of December 31, 1995 for purposes of the presumptive input tax credit; b. Inventory of unused non-VAT invoices/receipts as of December 31, 1995 for stamping as VAT receipts. c. Schedule of non-life insurance premiums receivables as of December 31, 1995. Q-14 What shall be done with unused non-VAT official receipts printed prior to January 1, 1996? A-14 Unused non-VAT invoices or receipts printed prior to January 1, 1996 will be allowed for use in transactions subject to VAT up to June 30, 1996 only, provided that they have been properly stamped with the words "VAT-registered as of (date of registration)". Q-15 What is required of a non-life insurance company in filing and paying its 5% premium tax for the period ending December 31, 1995? A-15 In filing and paying the 5% premium tax for the period ending December 31, 1995, the non-life insurance company/ies enumerated in No. 1 above shall use BIR Form Co. 2531 and the said tax payable shall be based on their gross receipts as defined in No. 10 above. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-17-96 Revenue Memorandum Circular No. 12-96 January 17, 1996 REVENUE MEMORANDUM CIRCULAR NO. 12-96

SUBJECT 25.24) TO :

Missing copies of Revenue Official Receipts (BIR Form No.

All Internal Revenue Officers, Employees and Others Concerned

Notice is hereby given of the missing copies of Revenue Official Receipts (BIR Form No. 25.24), to wit: Serial Number Quantity 4002300-M One (1) copy (triplicate) One (1) copy (quadruplicate) The abovementioned revenue official receipts which were reported as missing by Ms. Brenda G. Parcon, Revenue Officer II of Revenue District Office No. 112, Mabini, Davao and the other copies of the set bearing said serial number are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-15-96 Revenue Memorandum Circular No. 13-96 January 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 13-96 SUBJECT : Clarification of Issues Affecting Dealers in Securities and Lending Investors Under Republic Act No. 7716, Otherwise Known as the "Expanded VAT Law". TO : All Internal Revenue Officers and Others Concerned. Q-1: Are dealers in securities and lending investors liable to pay VAT under R.A. No. 7716? A-1: Yes, dealers in securities and lending investors are liable to pay VAT under R.A. No. 7716. Q-2: What is the meaning of the term "securities"? A-2: The term "securities" means shares of stock in a corporation and rights to subscribe for or to receive such shares. The term includes bonds, debentures, notes or certificates, or other evidence of indebtedness, issued by any corporation, including those issued by a government or political subdivision thereof, with interest coupons or in registered form. Q-3: What is the meaning of the term "dealer in securities"? A-3: The term "dealer in securities" means a merchant of stocks or securities, whether an individual, partnership or corporation, with an established place of business, regularly engaged in the purchase of securities and their resale to customers; that is, one who as a

merchant buys securities and sells them to customers with a view to the gains and profits that may be derived therefrom. Q-4: What is the basis of the VAT of dealers in securities? A-4: On sales of securities listed and traded in the local stock exchange, the VAT shall be based on gross income as defined under Sec. 28(a) of the Tax Code derived from their sale or exchange of the listed and traded securities. The term "gross income" means total gross selling price less the total acquisition cost of securities sold for the month or quarter plus any other or incidental income. Where the transaction is done "over-the-counter", the basis shall be the gross income as indicated in the VAT invoice; otherwise, the VAT shall be computed based on 1/11 of the total invoice amount. Q-5: What input taxes can be credited by dealers in securities against their output taxes? A-5: All input taxes provided for in Sec. 104 of the Tax Code may be credited against their output taxes, provided that the substantiation requirements prescribed in Sec. 4.1045 of Rev. Reg. 7-95 are satisfied. Q-6: Are all transactions involving securities subject to VAT? A-6: No. Transactions of a transferor who is not a dealer in securities under the following cases are exempt from VAT. 1. Judicial sale; 2. Foreclosure by mortgagee or pledgee; 3. Isolated transactions; 4. Distribution of stock dividends or exchange of stocks under a reorganization plan or issuance or additional capital stock; 5. Merger or consolidation; 6. Exchange of convertible currency; 7. Trustee to any bank, trust company, insurance company, any corporation or any broker or dealer; 8. Broker's transaction; 9. Pre-incorporation subscription; Q-7: Are sales, barters or exchanges of shares of stocks listed and traded through the local stock exchange subject to VAT? A-7: It depends. Transactions by dealers in securities are subject to VAT; transactions by non-dealers in securities are exempt from VAT. Q-8: Are sales, barters or exchanges of shares of stocks not listed in the local stock exchange subject to VAT? A-8: It depends. Transactions by dealers in securities are subject to VAT; transactions by non-dealers in securities are exempt from VAT. Q-9: Are Initial Public Offering (IPO) of shares of stocks subject to EVAT? A-9: No. They are subject to percentage taxes of 4%, 2% and 1%, depending on the proportion of the shares of stocks sold, bartered or exchanged to the total outstanding shares of stocks after the listing in the stock exchanges. Q-10: What is the nature of business and the tax liability of pre-need companies? A-10: Pre-need companies shall be considered as dealers in securities and shall be subject to VAT based on their gross income.

Gross income shall mean actual receipts on contract price minus contributions to the trust fund to be set up independently as mandated by the Securities & Exchange Commission. The amount of such contribution shall be indicated in the VAT official receipt, otherwise the entire amount shall be subject to VAT. Corollarily, the input tax allowable to the customer shall be based on the amount of the contract price net of the trust fund contribution. Q-11: What is the meaning of the term "lending investors"? A-11: The term "lending investors" include all persons, other than banks, non-bank financial intermediaries, finance companies and other financial intermediaries not performing quasi-banking functions, who make a practice of lending money for themselves or others at interest. Q-12: What is the tax base used in the computation of the VAT liability of a lending investor? A-12: The tax base used in computing the VAT liability is the gross income consisting of interests, fees, charges, and incidental receipts derived from the lending of money. Q-13: What are the sources of the 8% presumptive input tax of dealers in securities and lending investors? A-13: The sources of presumptive input tax of dealers in securities and lending investors are inventories of supplies, materials or goods as of December 31, 1995 for use in the ordinary course of business, a list of which shall be submitted to the BIR on or before January 31, 1996. All revenue officials and employees are hereby enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 01-25-96 Revenue Memorandum Circular No. 14-96 January 25, 1996 REVENUE MEMORANDUM CIRCULAR NO. 14-96 SUBJECT : Missing one (1) set of Certificate Authorizing Registration (BIR Form No. 1954-B). TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the loss of one (1) set of Certificate Authorizing Registration (BIR Form No. 1954-B), to wit: Serial Number Quantity 38000 One (1) set The abovementioned Certificate Authorizing Registration which was reported as missing by Ms. Chona B. Villamiel, Revenue Officer I, Revenue Region No. 7, Quezon City, is hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated.

Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-13-96 Revenue Memorandum Circular No. 15-96 February 13, 1996 REVENUE MEMORANDUM CIRCULAR NO. 15-96 SUBJECT : Publication of missing Accountable Forms. TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing accountable forms, to wit: Kinds of Forms Serial Numbers Quantity CAR (BIR Form No. 1954-A) 586786 one (1) set CAR (BIR Form No. 1954-B) 86228 duplicate copy ROR (BIR Form No. 25.24) 6584352 original copy OR (AF-51) 1844299 original copy 1844300 " 1849301 " 1849302 " 1850000 " The abovementioned accountable forms which were reported as missing by Mr. Luciano S. Malapitan, Assistant Regional Director of Revenue Region No. 9, San Pablo City, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-20-96 Revenue Memorandum Circular No. 17-96 February 20, 1996 REVENUE MEMORANDUM CIRCULAR NO. 17-96 SUBJECT : Clarification of Issues Affecting Zero-Rated Sales and Claims for Input Tax Credit/Refund under Republic Act No. 7716, Otherwise Known as the "Expanded VAT Law". TO : All Internal Revenue Officers and Others Concerned.

Q-1 What is zero-rated transaction? A-1 A zero-rate transaction refers to sale, lease, barter or exchange of goods, properties and/or services subject to VAT at the rate of zero percent (0%) pursuant to Sec. 100 and Sec. 102 of the National Internal Revenue Code (Tax Code). Q-2 What is VAT-exempt transaction? A-2 A VAT-exempt transaction refers to sale, lease, barter or exchange of goods, properties and/or services that are exempt from VAT under Sec. 103 of the Tax Code. Q-3 Distinguish zero-rated from VAT-exempt transaction. A-3 In a zero-rated transaction the seller is allowed to claim input tax credit-refund on his purchase of VAT taxable goods, properties or services. In an exempt transaction, the seller is not entitled to such tax credit/refund. Q-4 Who shall qualify for zero-rating? A-4 Any VAT-registered person whose sales fall under Sec. 100(a)(2) and 102(b) of the Tax Code. Q-5 What transactions are zero-rated? A-5 The following transactions are zero-rated: I With respect to Goods 1. Export sales. The term "export sales" means: (a) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods and services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (b) Sale of raw materials or packaging materials to non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods paid for in acceptable foreign currency and accounted for accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (c) Sale of raw materials or packaging materials to export-oriented enterprises whose export sales exceed seventy percent (70%) of total annual production; (d) Sale of gold to Bangko Sentral ng Pilipinas (BSP); and (e) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws. 2. Foreign currency dominated sale. The phrase "foreign currency dominated sale" means sale to a non-resident of goods, except those mentioned in Section 149 and 150 of the Code, assembled or manufactured in the Philippines for delivery to a resident in the Philippines, paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP), and 3. Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subject such sale to zerorate. II. With respect to Services 1. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are

paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); 2. Services other than processing, manufacturing or repacking for other persons doing business outside the Philippines for goods which are subsequently exported, as well as services by a resident to a non-resident foreign client such as project studies, information services, engineering and architectural designs and other similar services, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. 3. Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subject the supply of such services to zero-rate; 4 Services rendered to vessels engaged exclusively in international shipping; and 5. Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed seventy (70%) of total annual production. Q-6 What are effectively zero-rated transactions? A-6 Effectively zero-rated transactions shall cover local sale of goods, properties and services to purchasers enjoying exemption from indirect taxes under special laws or international agreements such as: I. With respect to Goods: (1) Sale of raw materials or packaging materials to export-oriented enterprise whose direct export sales exceed seventy percent (70%) of total annual production. (2) Foreign currency denominated sale of goods to a non-resident, except those mentioned in Sections 149 and 150 of the Tax code, assembled or manufactured in the Philippines for delivery to a resident in the Philippines, paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas. (3) Sale to SBMA and CDA registered enterprises pursuant to RA 7927, sale to PEZA registered enterprises pursuant to RA 7916 and sale to ADB and IRRI pursuant to international agreements, etc., and (4) Sale of gold to the Bangko Sentral ng Pilipinas (BSP). II. With respect to Services: (1) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero rate. (2) Services rendered to vessels engaged exclusively in international shipping; and (3) Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose direct export sales exceed seventy percent (70%) of total annual production. Q-7 What are automatically zero-rated transactions? A-7 The following sales by VAT-registered taxpayers are automatically zero-rated: I. With respect to Goods: 1. The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in

acceptable foreign currency or its equivalent in goods and services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas; and 2. Sale of raw materials or packaging materials to non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP). II. With respect to Services: 1. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); and 2. Services other than processing, manufacturing or repacking for other persons doing business outside the Philippines for goods which are subsequently exported, as well as services by a resident to a non-resident foreign client such as project studies, information services, engineering and architectural designs and other similar services, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. Q-8 Distinguish effectively zero-rated from automatically zero-rated transactions. A-8 In an effectively zero-rated transaction, the VAT registered seller of goods or services is required to file an application and secure approval for zero-rating; whereas in an automatically zero-rated transaction, the VAT registered seller need not file an application for zero-rating. Q-9 How does a VAT-registered seller taxpayer apply for effective zero-rating? A-9 A properly filled-up Application for Zero-Rating together with the required attachments must be submitted for approval to the appropriate Revenue District Office having jurisdiction over its principal place of business. Q-10 When do you apply for effective zero-rating? A-10 Applications for effective zero-rating shall be filed before the initial sale to a customer with respect to transactions enumerated in A-6. Approved applications for zero rating shall be effective for 12 months from the date of issuance of the approval. Q-11 Under Sec. 4.100-2 (a) (5) of Revenue Regulations 7-95, sale of finished products by a BOI registered export producer (indirect exporter) to another BOI-registered export producer or export trader that subsequently exports the same is considered export sale and, therefore, subject to output VAT at zero percent (0%). What are the requirements for purposes of zero-rating and entitlement to tax credits/refunds? A-11 The BOI-registered export producer (indirect exporter) after registering as a VATperson, shall apply for VAT zero-rating with the RDO where its main office is located, submitting copies of its BOI certificate of registration, as well as those of the customers/buyers. Once approved, the indirect exporter is considered a zero-rated taxpayer for its sale of finished products to the BOI-registered export producer or export trader. The indirect exporter shall submit to the BIR, along with its quarterly VAT returns proof of actual exportation of the products consisting of bills of lading and other shipping documents certified to by the BOI-registered exports producer/trader. Failure to furnish the BIR with such proof of exportation shall subject such indirect export sale to the 10% output VAT?

Q-12 Explain the distinction between the requirement for accreditation under the Export Development Act ("earns at least 50% of its normal operating revenues from the sale of its products or services abroad for foreign currency") and requirement to qualify as an export-oriented enterprise ("whose export sales exceed 70% of the total annual production of the preceding taxable year"). A-12 The 50% requirement is only for accreditation as an exporter under the Export Development Act while the 70% requirement is for entitlement to apply for effective zero-rating of transactions under Sec. 100(2)(a)(3) and Sec. 102(2)(b)(5) by export oriented enterprises. Q-13 Is the importation of equipment, materials and/or supplies that are merely consigned and which are not intended to remain in the country but in fact required to be "re exported or "shipped back" to their country of origin, or the importation through a customs bonded manufacturing warehouse of raw materials, supplies and spare parts used in the manufacture/assembly of articles for export, subject to the 10% VAT on importation? A-13 No. The importations of machinery, equipment and spare parts which are merely consigned to a BOI-registered enterprise are exempt from the VAT provided the appropriate re-export bond is posted and that the consigned equipment shall be for the exclusive use of the registered enterprise [Article 39(c) and (f), Title III, Executive Order No. 226, as amended by Republic Act No. 7918] So also importations through a customs bonded manufacturing warehouse of raw materials and spare parts used in the manufacture/assembly of products for export are likewise exempt from the VAT [Sec. 4, 100-2(a)(5) Revenue Regulations No. 7-95]. Customs bonded manufacturing warehouses are outside of the jurisdiction of the Philippine Customs Territory and, thus, the raw materials and spare parts are deemed not to have entered said territory and were never introduced into Philippine commerce. Q-14 Zero-rated taxpayers will normally have an excess of input taxes over output taxes. Can the excess be offset against the taxpayer's other internal revenue tax liabilities"? A-14 No. Direct offsetting of excess input over output taxes against other internal revenue tax liabilities of the zero-rated taxpayer is not allowed. Q-15 What are the consequences for failure of the seller to secure prior approval for effectively zero rating? A-15 Such transactions shall be considered exempt from VAT. However, if it turns out that there are other factors that would disqualify the transaction from zero-rating other than the failure to file an application thereof, then such transaction shall be subject to the VAT at 10%. Q-16 Is there a prescriptive period to claim for VAT Credit/Refund? A-16 Yes. The following are the prescribed period for filing a claim for VAT credit/refund: (1) For zero-rated taxpayer within two (2) years after the close of the taxable quarter when the zero-rated sales were made. (2) For input tax on capital goods within two (2) years after the close of the taxable quarter when the importation of purchase was made. (3) For cancelled registration/change in or cessation of status within two (2) years from the date of cancellation of VAT registration.

Q-17 What is the prescribed period for the processing of tax credit or refund of unused input tax credit. A-17 The law provides that the Commissioner shall grant the VAT credit/refund within sixty (60) days from the date of submission of complete documents in support of the application by the claimant. All revenue officials and employees are enjoined to give this Circular the widest publicity possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-22-96 Revenue Memorandum Circular No. 18-96 February 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 18-96 SUBJECT : Missing one (1) original copy of Revenue Official Receipt (BIR Form No. 25.24). TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one original copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 5519147 one (1) original copy The above copy which was reported as missing by Mr. Francisco R. Opiniano, Revenue Officer I of Revenue District Office No. 97, Gingoog City, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-27-96 Revenue Memorandum Circular No. 19-96 February 27, 1996 REVENUE MEMORANDUM CIRCULAR NO. 19-96 SUBJECT : Missing three (3) sets of Authority to Accept Payment Excise Tax (ATAPET-BIR Form No. 2319A-E). TO : All Internal Revenue Officers, Employees and Others Concerned.

Notice is hereby given of the missing three (3) sets of Authority to Accept Payment Excise Tax (ATAPET-BIR Form No. 2319A-E), to wit: Serial Number Quantity 024281 one (1) set 024282 one (1) set 024283 one (1) set The above-mentioned sets which were reported as missing by Ms. Shirley C. Castillo, Revenue Officer II (Collection) of Revenue District No. 57, San Pedro, Laguna have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal Revenue officers, employees and others concerned are requested to promptly notify this Office in case the above-mentioned forms are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 02-15-96 Revenue Memorandum Circular No. 20-96 February 15, 1996 REVENUE MEMORANDUM CIRCULAR NO. 20-96 SUBJECT : CONTINUING PROFESSIONAL EDUCATION COUNCIL. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Professional Regulation Commission Memorandum dated December 28, 1995. "Pursuant to PRC Resolution No. 381 of the Professional Regulation Commission, Series of 1995, the Board hereby announces the following: 1. Effective November 13, 1995 accreditation of CPE Providers & CPE Programs, Activities or Sources shall be the function of the newly created body, the CONTINUING PROFESSIONAL EDUCATION COUNCIL FOR THE PROFESSION OF ACCOUNTANCY with address at: Professional Regulation Commission P. Paredes St., Manila 2. Application Forms for Accreditation are available at the CPE Council Office, PRC, P. Paredes Manila starting January 2, 1996. 3. All programs, activities or sources are required to be preapproved at least 30 days before the same if offered to Registered Professionals. Please be guided accordingly. (Sgd) ROSALINDA D. EVANGELISTA Chairman CPE Council for Accountancy

Noted: HERMOGENES P. POBRE" Commission Chairman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-04-96 Revenue Memorandum Circular No. 21-96 March 4, 1996 REVENUE MEMORANDUM CIRCULAR NO. 21-96 SUBJECT : Missing one (1) duplicate copy of Revenue Official Receipt (BIR Form No. 25.24). TO : All Internal Revenue Officers, Employees and Others Concerned. Notice is hereby given of the missing one duplicate copy of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 4473484-M one (1) duplicate copy The above copy which was reported as missing by Ms. Yolanda O. Cresencio and Ms. Elsa D. Young of Revenue District Office No. 73, San Jose, Antique, and the other copies of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copy is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-04-96 Revenue Memorandum Circular No. 22-96 March 4, 1996 REVENUE MEMORANDUM CIRCULAR NO. 22-96 SUBJECT : Missing one (1) set of Letter of Authority (BIR Form No. 19.65) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the missing one set of Letter of Authority (BIR Form No. 19.65), to wit: Serial Number Quantity 81222 One (1) set

The abovementioned Letter of Authority which was reported as missing by Mr. Romeo E. Naranjo, Assistant Revenue District Officer of Revenue District Office No. 113, Davao City, is hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipt is found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-28-96 Revenue Memorandum Circular No. 23-96 March 28, 1996 REVENUE MEMORANDUM CIRCULAR NO. 23-96 SUBJECT : VAT on rental payable to non-resident foreign corporation or owners for the use or lease of properties in the Philippines. TO : All internal revenue officers and others concerned. In BIR ruling No. 161-95 dated October 23, 1995, it was ruled that payments for rental of tangible personal (movable) property, e.g., aircrafts, to a non-resident foreign corporation are not subject to the value-added tax imposed under Section 102 of the Tax Code, as amended, on the ground that non-resident foreign corporations are not covered by our VAT law. However, this is not true anymore in the light of Section 4.102-1(a) of Revenue Regulations No. 7-95 implementing Section 102(a) of the Tax Code, as amended by R.A. No. 7716, which provides that the use or lease of property, whether personal or real, shall be subject to VAT regardless of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the Philippines. In view of the foregoing, that portion of the said BIR Ruling No. 161-95 holding that payments for rental of tangible personal (movable) property to a non-resident foreign corporation are not subject to VAT is hereby revoked. The VAT on rental and/or royalties payable to non-resident foreign corporations or owners for the use or lease of properties in the Philippines shall be based on the contract price agreed upon by the licensor and the licensee. The licensee shall be responsible for the payment of VAT on such rentals in behalf of the non-resident foreign corporation or owner by filing a separate VAT declaration/return which shall be sufficient evidence in claiming input tax credit by the licensee. (SEC. 4.102-1(b), Revenue Regulations No. 7-95) All internal revenue officers and others concerned are hereby enjoined to be guided accordingly and to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-22-96 Revenue Memorandum Circular No. 24-96 March 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 24-96

SUBJECT No. 1954) TO :

Missing sets of Certificate Authorizing Registration (BIR Form

All Internal Revenue Officers, Employees and Others Concerned

Notice is hereby given of the missing sets of Certificate Authorizing Registration (BIR Form No. 1954), to wit: Serial Numbers Quantity 787798 one (1) set 779380 -do779579 -do779459 -do779603 one (1) copy (duplicate) The abovementioned sets of Certificate Authorizing Registration (BIR Form No. 1954) which were reported as missing by Ms. Cecilia A. Montoya, Acting Administrative Officer and Ms. Charlyn G. Pangan, Revenue Clerk II of Revenue District Office No. 4, Calasiao, Pangasinan, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned sets are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 03-27-96 Revenue Memorandum Circular No. 25-96 March 27, 1996 REVENUE MEMORANDUM CIRCULAR NO. 25-96 SUBJECT : RESOLUTIONS NO. 2825 AND 2826 PROMULGATED ON FEBRUARY 12 AND 26, 1996, RESPECTIVELY BY THE COMMISSION ON ELECTIONS. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is a portion of Resolutions No. 2825 and 2826 promulgated on February 12 and 26, 1996, respectively by the Commission on Elections in connection with the May 6, 1996 Sangguniang Kabataan election. "2. DEPARTMENT OF FINANCE The Department of Finance, and its Secretary, Undersecretaries, Bureau Directors and other officials and employees. A. During the election period, all Provincial, City and Municipal Treasurers shall remain in their present assignments and shall not be transferred or detailed, whether temporarily or permanently, to another province, city or municipality, except upon prior authority of the Commission; no employee holding a temporary appointment shall be designated as Officer-In-Charge or Acting Municipal Treasurer in any municipality; B. Except upon prior approval of the Commission, no Provincial, City or Municipal Treasurer shall be granted leave from office during the period starting one week before

and up to one week after election day. He shall at all times assign a responsible person in his office to receive telegrams and instructions from the Commissions relative to election matters to ensure immediate action thereon; C. (1) All City or Municipal Treasurers shall be responsible for the preservation, storage and distribution of election forms, paraphernalia, supplies and materials and for any loss, destruction or damage thereof. (2) All City or Municipal Treasurers shall keep a record of the quantity and serial numbers of official ballots, election returns, and other election forms allocated for distribution to the precincts and shall furnish legible copies thereof to the candidates, upon written request, and the Election Records and Statistics Department, Commission on Elections, Manila, immediately after their distribution. (3) The official ballots and election returns shall not be delivered to the boards of election tellers earlier than the first hour on election day. However, the Commission, through the City and Municipal Election Officers may authorize the City and Municipal Treasurers, for reasons such as, but not limited to, distance, weather condition in the locality and difficulty of transportation, to deliver said official ballots, election returns and other forms to the election tellers of any particular precinct at earlier date with prior written notice thereof to all the candidates for Sangguniang Kabataan and the Election Officer, Provided, That, such advance delivery shall in no case be earlier than two (2) days before election day, which shall be duly reported to the Office of the Deputy Executive Director for Operations. IN EVERY CASE, THE ELECTION OFFICER SHALL SUPERVISE THE DISTRIBUTION OF THE SAID FORMS AND PARAPHERNALIA. The Board of election tellers shall issue the proper receipt stating clearly the date, number of pads and sets and corresponding quantity and serial numbers of the official ballots and the election returns received. The Election Officer and City or Municipal Treasurer shall submit a joint written report within five days after election day to the Election Records and Statistics Department, Commission on Elections, Manila of the quantity and serial numbers of the ballots and election returns received from the Commission and the corresponding distribution per precinct. Any candidate may also be furnished copies thereof upon request. (4) The official ballots and election returns shall be distributed to the boards of election tellers in the presence of duly designated watchers of the candidates, if any. (5) Upon receipt and acknowledgment thereof, the official ballots and election returns shall be placed inside the ballot box which shall be locked with a padlock in the presence of the City or Municipal Treasurer. The chairman of the board of election tellers shall keep the key to the padlock. D. The City or Municipal Treasurer shall submit to the Election Officer an official report on ballot boxes which were not returned to him by the board of election tellers immediately after adjournment of the proceedings of the board of election day." All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c.

04-18-96 Revenue Memorandum Circular No. 26-96 April 18, 1996 REVENUE MEMORANDUM CIRCULAR NO. 26-96 SUBJECT : COMPLIANCE WITH MEMORANDUM CIRCULAR NO. 9513 DATED JUNE 15, 1995. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Office of the Ombudsman Memorandum Circular No. 1 dated March 13, 1996. "The Office of the Ombudsman, in effecting the mandate as provided under Republic Act No. 6713, has issued Memorandum Circular No. 95-13 dated June 15, 1995, (Attachment "A") providing for the guidelines for the filing of statement of assets and liabilities before this Office. In this regard, the Office of Ombudsman has prescribed the necessary forms that will be used for its implementation, to wit: 1. New form for Statement of Assets and Liabilities (Attachment "B") 2. Assets, Liabilities and Networth Summary Report (Attachment "C") 3. Certification reflecting the list of employees who failed to comply with the circular (Attachment "D") Further, as shown in Attachment "E", the said circular has identified the officials or officers who will be responsible for the submission of the requirements therein setforth. It may be noted that for agencies with regional offices, its regional directors or sectoral vice presidents, as in the case of government-owned or controlled corporations, are the ones responsible for the preparation and submission of the required documents. Accordingly, you are hereby enjoined to use these forms in complying with the provisions of Sec. 7 of Republic Act No. 6713. BY AUTHORITY OF THE OMBUDSMAN: NICANOR J. CRUZ, JR." Assistant Ombudsman All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue PUBLIC ASSISTANCE AND CORRUPTION PREVENTION OFFICE MEMORANDUM CIRCULAR NO. 1 TO : ALL CONCERNED SUBJECT : COMPLIANCE WITH MEMORANDUM CIRCULAR NO. 9513 DATED JUNE 15, 1995. DATE : MARCH 13, 1996

The Office of the Ombudsman, in effecting the mandate as provided under Republic Act No. 6713, has issued Memorandum Circular No. 95-13 dated June 15, 1995, (Attachment "A") providing for the guidelines for the filing of statement of assets and liabilities before this Office. In this regard, the Office of the Ombudsman has prescribed the necessary forms that will be used for its implementation, to wit: 1. New form for Statement of Assets and Liabilities (Attachment "B") 2. Assets, Liabilities and Network Summary Report (Attachment "C") 3. Certification reflecting the list of employees who failed to comply with the circular (Attachment "D") Further, as shown in Attachment "E", the said circular has identified the officials or officers who will be responsible for the submission of the requirements therein setforth. It may be noted that for agencies with regional offices, its regional directors or sectoral vice presidents, as in the case of government-owned or controlled corporations, are the ones responsible for the preparation and submission of the required documents. Accordingly, you are hereby enjoined to use these forms in complying with the provisions of Sec. 7 of Republic Act No. 6713. BY AUTHORITY OF THE OMBUDSMAN: NICANOR J. CRUZ, JR. Assistant Ombudsman June 15, 1995 MEMORANDUM CIRCULAR NO. 95-13 TO : ALL HEADS OF DEPARTMENTS, BUREAUS, OFFICES AND AGENCIES OF THE NATIONAL AND LOCAL GOVERNMENTS, ARMED FORCES OF THE PHILIPPINES INCLUDING GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS AND SUBSIDIARIES AND ALL OTHER CONCERNED. SUBJECT : GUIDELINES/PROCEDURES ON THE FILING OF STATEMENTS OF ASSETS, LIABILITIES AND NETWORTH AND DISCLOSURES OF BUSINESS INTERESTS AND FINANCIAL CONNECTIONS WITH THE OFFICE OF THE OMBUDSMAN REQUIRED UNDER SECTION 8, REPUBLIC ACT NO. 6713. I. PURPOSE Pursuant to the provisions of Rule VIII of the Rules Implementing the Code of Conduct and Ethical Standards for Public Official and Employees (RA 6713), this Memorandum Circular is hereby issued to prescribe the manner/procedure of filing of statements of assets, liabilities and networth and disclosures of business interests and financial connections before the Area/Sectoral Offices of the Office of the Ombudsman. II. COVERAGE The Memorandum Circular shall apply to the following officials and employees: (1) Regional Officials and Employees of Departments, etc.; (2) PNP Regional Officials and Employees; (3) Provincial elective and appointive officials and employees, e.g. Provincial Governor, members of the Sangguniang Panlalawigan, Provincial Treasurer and other low ranking employees in the province;

(4) Municipal & City elective and appointive officials and employees, e.g. Mayors, SB members and barangay officials; (5) Regional Officials & Employees of Government-owned & controlled corporation and subsidiaries in the region e.g. DEP, LBP, POIC, PNB, etc.; (6) Regional Officials & Employees of State Colleges & Universities, e.g. VicePresident, Deans, Professors, etc.; (7) Officers of AFP below the rank of Colonel and Naval Captain. (see attachment "A") III. RESPONSIBILITY The head of the office/agency regional or local government unit concerned shall ensure full compliance with the guidelines herein set forth. The chief of the personnel division or in his absence the chief of the administrative division or the person designated by the head of the agency, shall be tasked to receive and consolidate the statement and disclosure and the submission of reports required herein. IV. PROCEDURE A. Submission of Statement of Assets, Liabilities and Networth and Disclosure of Business Interests and Financial Connections All public officials and employees concerned shall file their respective statements and disclosures with their respective chief of the personnel division or in his absence the chief of the administrative division or the person designated by the head of the agency, to be subsequently submitted to the respective area or sectoral offices of the Office of the Ombudsman as specified in Attachment "A" on this Circular. In case of married persons (except those legally separated or those with regime of complete separation of property) who are both working in government, they shall jointly file the statement required herein and that copies thereof must be filed in both agencies where they are employed. The officials and employees shall file the same: 1. Within thirty (30) days after assumption of office, statements of which must be reckoned as of his first day of service; 2. On or before April 30 of every year thereafter, statements of which must be reckoned as of the end of the preceding year; and 3. Within thirty (30) days after separation from the service, statements of which must be reckoned as of his last day of office. The required statement and disclosure shall be reflected on the revised form (see Attachment "B") and shall be prepared in triplicate, the original copy to be submitted to the Office of the Ombudsman or its respective area/sectoral offices (Luzon, Visayas, Mindanao and Armed Forces), another copy to be attached to the official/employee's 201 file, and the last copy to be retained by the filer. B. Submission of Summary Report The administrative/personnel division shall consolidate all the statements/disclosure of the agency's officials and employees in a summary report (see attachment "C") to be certified by the head of the agency. The summary report shall contain the following information: 1. Name of official/employee 2. Position 3. Date when said official/employee filed his/her Statement of Assets and Liabilities

The Summary Report, together with the statements and disclosures, shall be submitted/mailed on or before 31 May of every year to: OFFICE OF THE DEPUTY OMBUDSMAN for LUZON 1st Copy Old MWSS Building 176 Arroceros St., Manila OFFICE OF THE DEPUTY OMBUDSMAN for VISAYAS Palace of Justice, Cebu City OFFICE OF THE DEPUTY OMBUDSMAN for MINDANAO Bangoy-Monteverde Sts., Davao City OFFICE OF THE DEPUTY OMBUDSMAN AFP 2nd F1., Malacaang Annex Bldg. 1610 J.P. Laurel St., San Miguel, Manila 2nd Copy OFFICE FILE (Personnel Division) As regards the filing of statement of assets and liabilities by public officials or employees who have first assumed office or have been separated from the service, the administrative/personnel division shall likewise consolidate all the statements/disclosure of the said officials and employees in a summary report (see attachment "C") to be certified by the head of the agency. The said summary report, together with the statements of assets and liabilities, shall be submitted fifteen days (15) upon receipt of Statement of Assets and Liabilities. C. Submission of a verified report of those who failed to file their statements and disclosures The administrative/personnel division shall likewise prepare a report indicating therein the list of officials and employees who failed to submit their respective statements of assets and liabilities and networth and disclosures of business interests and financial connections. The said report shall be under oath and shall be submitted in the same manner as prescribed in IV.B of this circular. (see attachment "D"). D. Monitoring of compliance with the guidelines setforth herein. The Office of the Ombudsman shall create a task force assigned to maintain a computerized database of all public officials and employees required to file their statement of assets and liabilities and to monitor full compliance therewith. V. PENALTY CLAUSE The head of agency and/or the chief of the administrative/personnel division, who failed to perform their duties as defined herein shall constitute obstruction defined and penalized under Section 36 of Republic Act No. 6770, otherwise known as the Ombudsman Act of 1989 and/or neglect of duty under Section 46, Chapter 7, Subtitle A,

Title I, Book V of the Executive Order No. 292, otherwise known as the Administrative Code of 1987. VI. EFFECTIVITY This Memorandum Circular shall take effect after fifteen (15) days following the completion of its publication in a newspaper of general circulation. Manila, Philippines, June 15, 1995. FRANCISCO A. VILLA Acting Ombudsman Attachment "B" SWORN STATEMENTS OF ASSETS, LIABILITIES AND NETWORTH DISCLOSURE OF BUSINESS INTERESTS AND FINANCIAL CONNECTIONS AND IDENTIFICATION OF RELATIVES IN THE GOVERNMENT SERVICE As of December 31, 19___ (Required by R.A. No. 6713) _______________________________ Position/Income ___________________ Surname First Name M.I. Office __________________________ Address ___________________ Office Address ___________________ __________________________ _______ _______________________________ Spouse Name ______________________ Position _________________________ Surname First Name M.I. Office __________________________ Unmarried Children below 18 years of age: Name Date of Birth ____________________________ _______________________________ ____________________________ _______________________________ ____________________________ _______________________________ ____________________________ _______________________________ ____________________________ _______________________________ A. 1. A. ASSETS, LIABILITIES AND NETWORTH ASSETS Real Properties ACQUISITION COST KIND LOCATION YEAR MODENATURE ASSESSED CURRENT LAND IMPROVEMENTS ACQUIRED OF OF VALUE FAIR BUILDING ACQUISITION VALUE (paraphernal, conjugal or community) PROPERTY MARKET

ETC.

b.

Total P____________ Personal and Other Properties KIND/S YEAR ACQUIRED ACQUISITION COTS

Total P_____________ LIABILITIES (Loans, mortgage etc.) NATURE NAME OF CREDITORS

AMOUNT

NETWORTH (Total) Assets (la + lb) less Total P __________ Total Liabilities (2) Total P __________ (Note: Please use additional forms/sheets if necessary. Also, please reproduce this form back to back (Form 2) 1995 ATTACHMENT "C" Assets, Liabilities and Networth Summary Report As of December 31, 19___ Page No. _____ Office _____________________ (In triplicate)

Address ____________________

NAMEPRESENT Specific Number of POSITION/ date years ANNUAL INCOME when in ASSET/S NETWORTH first Government Assumed Service in Office CERTIFIED CORRECT: _______________________ _________________ Director for Administration Personnel Officer Noted: ___________________ Agency Distribution:

LIABILITIES

original copy to the Office of the Ombudsman, Central Records duplicate copy to Office of the Deputy Ombudsman of their respective Regions Attachment "D" (Letter Head) CERTIFICATION This is to certify that the following officials/employees of this Office have failed to submit their Statement of Assets, Liabilities and Networth and Disclosure of Business

Interest and Financial Connections for the year ____ as required under Section 8 of Republic Act No. 6713 as implemented by Memorandum Circular issued by the Office of the Ombudsman on June 21, 1995. Name of Official/Employee Designation/Position This certification is being issued for whatever legal purpose it may serve. _______________________ (Place and Date of Issuance) _______________________________ (Name of Administrative/Personnel Head) SUBSCRIBED AND SWORN to before me this ____ day of ____________, 19___ at ___________________. _______________________ ADMINISTERING OFFICER Note: Please use additional forms if necessary. Distribution: original copy to Office of the Ombudsman, Central Records duplicate copy to Office of the Ombudsman, of their respective Regions triplicate copy to office file (Personnel Division) C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 04-18-96 Revenue Memorandum Circular No. 27-96 April 18, 1996 REVENUE MEMORANDUM CIRCULAR NO. 27-96 SUBJECT : SPECIAL PRIVILEGES TO : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Civil Service Commission Memorandum Circular No. 06, s. 1996. "Pursuant to CSC Resolution No. 96-2242 dated March 21, 1996, the Commission resolved to authorize agencies, with or without existing or approved Collective Negotiation Agreement (CNA) to grant Special Privileges enumerated under the checklist of reasonable working conditions in the public sector as embodied in CSC MC No. 30, s. 1994, as follows: a. paternity leavef. birthday leave b. funeral/mourning leave g. hospitalization leave c. graduation leave h. accident leave d. enrollment leave i. relocation leave e. wedding/anniversary leave subject to the following conditions:

1. That the employee may be granted a maximum of three (3) days within a calendar year for the availment of any special privilege/s of his/her choice which he/she would opt to avail; 2. That such special privileges shall be non-cumulative and non-commutable; and 3. That the employee shall seek approval of the application for the said special privileges for at least one (1) week prior to the availment of the special privilege, except on emergency cases. It is understood, however, that same, if utilized shall not be charged to or deducted from the officials'/employees accumulated leave credits. All other existing Civil Service Commission Resolutions and issuances which are inconsistent herewith, are deemed repealed or amended. Please be guided accordingly. (Sgd.) CORAZON ALMA G. DE LEON Chairman March 21, 1996" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue March 21, 1996 MEMORANDUM CIRCULAR NO. 06-96 FOR : ALL HEADS OF DEPARTMENTS, BUREAUS AND AGENCIES OF NATIONAL AND LOCAL GOVERNMENT, INCLUDING GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS AND STATE COLLEGES AND UNIVERSITIES SUBJECT : Special Privileges Pursuant to CSC Resolution No. 96-2242 dated March 21, 1996 the Commission resolved to authorize agencies, with or without existing or approved Collective Negotiation Agreement (CNA) to grant Special Privileges enumerated under the checklist of reasonable working conditions in the public section as embodied in CSC MC No. 30, s. 1994, as follows: a. paternity leavef. birthday leave b. funeral/mourning leave g. hospitalization leave c. graduation leave h. accident leave d. enrollment leave i. relocation leave e. wedding/anniversary leave subject to the following conditions: 1. That the employee may be granted a maximum of three (3) days within a calendar year for the availment of any special privilege/s of his/her choice which he/she would opt to avail; 2. That such special privileges shall be non-cumulative and non-commutable; and

3. That the employee shall seek approval of the application for the said special privileges for at least one (1) week prior to the availment of the special privilege, except on emergency cases. It is understood, however, that same, if utilized shall not be charged to or deducted from the officials'/employees' accumulated leave credits. All other existing Civil Service Commission Resolutions and issuances which are inconsistent herewith, are deemed repealed or amended. Please be guided accordingly. CORAZON ALMA G. DE LEON Chairman [Re: Special Privileges] March 21, 1996 RESOLUTION NO. 962242 WHEREAS, Sections 1 and 2, Rule VIII of the Omnibus Rules, Implementing Book V of the Administrative Code of 1987 provide as follows: "Sec. 1. Every department . . . shall create an environment or work climate conducive to the development of personal skills, talents and values for better public service; Sec. 2. The Career and Personnel Development Plant shall include . . ., provisions for welfare, counseling, recreation and similar services, . . ." (underscoring supplied) WHEREAS, in accordance with these provisions, and as the central personnel agency of the government, the CSC pursuant to CSC MC No. 30 s. 1994 came up with a checklist of reasonable working conditions in the public sector which may be used by the management and the union in their negotiation and which include among other reasonable working conditions the grant of special privileges, as follows: a. paternity leavef. birthday leave b. funeral/mourning leave g. hospitalization leave c. graduation leave h. accident leave d. enrollment leave i. relocation leave e. wedding/anniversary leave WHEREAS, the abovementioned Circular did not specify the total number of days the management and union can negotiate; WHEREAS, numerous agencies are requesting for the grant of said special privileges to their employees with varied number of days; WHEREFORE, this Commission hereby resolves to authorize agencies, with or without existing or approved CNA, to grant Special Privileges, subject to the following conditions: 1. That the employee may be granted a maximum of three (3) days within a calendar year for the availment of any special privilege/s of his/her choice which he/she would opt to avail; 2. That such special privileges shall be non-cumulative and non-commutable; and 3. That the employee shall seek approval of the application for the said special privileges for at least one (1) week prior to the availment of the special privilege, except on emergency cases.

It is understood, however, that same, if utilized shall not be charged to or deducted from the officials'/employees' accumulated leave credits. All other Civil Service Commission Resolutions and issuances which are inconsistent herewith are deemed repealed or amended. This Resolution shall take effect immediately. Quezon City, March 21, 1996. CORAZON ALMA G. DE LEON Chairman RAMON P. ERENETA, JR. THELMA P. GAMINDE Commissioner Commissioner Attested by: CARMENCITA GISELLE B. DAYSON Board Secretary VI C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 04-17-96 Revenue Memorandum Circular No. 28-96 April 17, 1996 REVENUE MEMORANDUM CIRCULAR NO. 28-96 SUBJECT : MODEL OFFICE AWARD TO : All Revenue Officials and Personnel 1. Rationale Due to the positive feedback generated by the first "Model Office" competition last year, the Model Office Award shall now be a regular annual activity of the Bureau. All officials and employees are enjoined to improve and maintain the physical appearance and arrangement of their offices without the need for extravagant expenditures to meet the following objectives: 1) Improve the work environment/area for the BIR staff 2) Create a client-friendly environment to welcome visitors to our offices and familiarize them with the BIR projects and objectives. II. Criteria The competition for the "Model Office Award" will have the following general criteria; 1) Availability of pertinent information and guidelines 20% 2) Cleanliness and orderliness 30% 3) Quality service rendered to clients 50% TOTAL 100% Components of each criterion are shown in Annex A containing the specific Tallysheet Report for the Model Office Award. III. Board of Judges The Board of Judges shall be composed of the following: 1. Regional Level:

a) Regional Division The Regional Director as Chairman, and a representative from both the regional Civil Service Commission (CSC) and the Department of Education, Culture and Sports (DECS) as members; b) Revenue District The Regional Director as Chairman, and two representatives from the Regional Office as members. 2. National Office Level The three Deputy Commissioners. 3. Overall Level The Commissioner or her authorized representative, the Deputy Commissioner for Operations or his authorized representative and the Deputy Commissioner for Resource Management Group to be represented by the Chairperson of the Model Office Committee. Names of the designated judges for the regional divisions and district levels should officially submitted in writing by the Regional Director to the Chairperson of the Model Office Committee on or before May 15, 1996. IV. Judging Period Included in the contest are the Regional Divisions, Revenue District Offices (RDOs) and Divisions under the different Services in the National Office. Judging for the regional and national levels shall take place during the months of May and June 1996. The overall judging shall be done during the month of July as soon as the reports on the regional and national office level winners have been committed to the Model Office Committee. V. Announcement of Winners There will be two winners in each region: and RDO and a Regional Division. Only one winner will be chosen in the National Office. Among all these winners, only one overall Model Office winner will be chosen. Announcement of winners shall be held a week before the celebration of the BIR Anniversary and awarding of winners will be on August 1, 1996. The overall winner shall be awarded in the National Office while the regional/district winners will be done in their respective regions. VI. Prizes The BIR Model Office Overall Winner shall be given a Certificate of Recognition, Plaque of Participation and cash gift. Regional Division, Revenue District and National Offices winners shall be given Plaques of Recognition. For your guidance and compliance. LIWAYWAY VINZONS-CHATO Commissioner ANNEX A MODEL OFFICE AWARD TALLYSHEET SERVICE/REVENUE REGION ____________________ Rating Scale: Very Satisfactory: 5% Satisfactory: 4% Good: 3% Poor: 1% C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c.

Fair: 2%

05-07-96 Revenue Memorandum Circular No. 29-96 May 7, 1996 REVENUE MEMORANDUM CIRCULAR NO. 29-96 SUBJECT : 1996 TAX QUIZ BEE TO : All Revenue Officials and employees concerned In line with the 92nd Anniversary celebration, the Bureau of Internal Revenue shall conduct a Tax Quiz Bee. The objectives of the Tax Quiz Bee are the following: a) To enhance the public's knowledge and awareness of the tax system of the country, particularly that of the student sector; b) To further the Bureau's plans of continuing the education and information campaign of the Tax Administration Strategic Plan. The Tax Quiz Bee shall be open to all college students nationwide. Employee of the Bureau of Internal Revenue are not allowed to join the quiz bee. To ensure this, students registering for the contest shall be required to present their college ID and their registration forms for the current semester. Registrations shall be held at their respective colleges or at Regional District Offices of the BIR before July 8, 1996. The quiz bee shall be conducted by the Regional Directors at designated regional offices. They shall be assisted by representatives from the National Office. The Regional offices shall be responsible for the conduct of the information drive. They shall also be responsible in informing the colleges and universities of the Tax Quiz Bee through posters and other means. The regional offices shall prepare a list of entries using the format in Annex A. The list of entries shall be finalized a week before the contest. Should the number of entries exceed 15, two, (2) rounds of the quiz bee shall be conducted by the region concerned. The questions in the Tax Quiz Bee shall be based on the National Internal Revenue Code 1993, as amended. The contest mechanics and rules are as follows: 1. There will be three (3) categories for the Quiz Bee, the EASY category, the AVERAGE category and the DIFFICULT category. 2. There will be ten (10) questions for each category. For every correct answer, 10 points will be given for the EASY category, 15 points for the AVERAGE category, and 20 points for the DIFFICULT category, the total of which is 450 points (100 pts. for the Easy category, 150 pts. for the Average category and 200 pts. for the Difficult category). 3. The contestants shall be given the chance to answer the EASY questions in 30 seconds, the AVERAGE questions in 60 seconds and the DIFFICULT questions in 90 seconds. 4. A Quiz Master shall be designated by the Regional Director to act as the emcee of the program. 5. The participants shall be required to present themselves one hour before the conduct of the Tax Quiz Bee. 6. Each of the participants shall be provided with chalk (pentel pens), a chalkboard and a blackboard eraser. 7. The participants shall write their answers on the chalkboards (or papers) instead of answering the questions orally.

8. The points system shall be used in the conduct of the Tax Quiz Bee. 9. The contestants shall start writing their answers at the first ring of the buzzer. On the second ring, the contestants shall stop writing. On the first instance that a contestant starts writing before the first ring of the buzzer, he/she shall be given a warning. Upon the third violation of the rule aforementioned, he/she shall be disqualified from the quiz bee. 10. The first instance that a contestant continues writing after the second buzzer has sounded, he/she shall be given a warning. He/she shall be disqualified after the third warning. 11. Wrong Spelling shall be considered as an Incorrect Answer. 12. Coaching from the audience shall not be tolerated. 13. Regional employees shall act as proctors during the contest. This is to ensure the proper scoring and that no copying of answers and other forms of cheating will occur. The proctors shall be the ones to check the answers and make sure that points are given accordingly. They shall be consulted in case an error in scoring occurs or when there is any doubt about the final scores. 14. The participant if found and proved to be cheating, shall immediately be disqualified from the quiz bee. 15. In case of a tie, tie-breaker questions will be asked until the tie is broken. 16. The BIR National Office representative and/or RDO officers shall compose the Committee which will decide on the validity of answers given. The decision of the Committee shall be final and irrevocable. 17. The participant with the highest score shall be declared as the winner in his region. 18. In case two (2) rounds of the quiz bee are conducted, the score of the winner in the first round will be compared with the score of the winner in the second round. The one with the higher score will be declared as the official winner of the concerned region. 19. The top three regional winners will then compete against each other for the championship title. The competition will be televised nationwide. 20. The championship shall be conducted at the National Office of the BIR or at a designated place during the 92nd Anniversary celebration. 21. Awarding of the Tax Quiz Bee shall be held during the Anniversary celebration of the Bureau of Internal Revenue. The regional winners shall be awarded cash prizes amounting to P5,000 and Certificates of Recognition. For the championship, first prize shall be P10,000.00, second prize shall be P7,500.00 and the third prize P5,000.00. Aside from these cash prizes, the champion and the runners-up shall also receive Plaques of Recognition. For the information of all concerned. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Annex A Annex B C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c.

01-04-96 Revenue Memorandum Circular No. 30-96 January 4, 1996 REVENUE MEMORANDUM CIRCULAR NO. 30-96 SUBJECT : WITHHOLDING TAX PAYMENTS UNDER RR 1-90 AS AMENDED BY RR 12-94 ON SALE OF CONDOMINIUM UNITS ON A DEFERRED PAYMENT BASIS TO : All Revenue Officials and Employees and Others Concerned For the information and guidance of all revenue officials and employees, quoted hereunder is BIR Ruling No. 019-96 dated 2-20-96 modifying BIR Ruling No. 078-94 dated March 18, 1994. "E. L. Punsalan & Associates Suite 403, Valgosons Realty Bldg. 2151 Pasong Tamo, Makati City Attention: Atty. Eranio L. Punsalan Gentlemen : This refers to BIR Ruling No. 078-94 dated March 18, 1994 where this Office held that "In reply thereto, I have the honor to inform you that pursuant to Revenue Regulations No. 1-90 sale, exchange or transfer of real property whether capital or ordinary asset by a corporation which is habitually engaged in the real estate business, certified as such by the Chamber of Real Estate and Builders Association, Inc. (CREBA), and who is registered with HUDCC shall be subject to a creditable withholding tax of two and onehalf percent (2.5%) based on the gross selling price or total amount of consideration or its equivalent paid to the seller/owner. Revenue Regulations No. 1-90 covers all types of sale, i.e., cash sale, sale on installment basis and sale on a deferred payment basis. Thus, even if the aforementioned sales of your clients' condominium units are on a deferred payment basis, the sales are still subject to the creditable withholding tax under Revenue Regulations No. 1-90 based on their gross selling price. The Certificate Authorizing Registration (CAR) is issued upon presentation by the seller of proof of actual full payment of capital gains tax/expanded withholding tax and documentary stamp tax due on the sale of real property. Such being the case, the aforementioned sales of condominium units, the gross selling price of which has been fully paid as of this date and the gain realized from said sales has been reflected as part of their taxable income in the year of sale, the RDO concerned may now issue the CAR to the seller upon submission of the following: (1) Quarterly ITR or final ITR and receipts of payment of income tax on the year the specified condominium units were reported as part of the Gross Income; (2) The withholding tax payment under RR 1-90 on the initial or downpayment on said units; (3) Instrument of Sales; (4) Breakdown of cash (sales) transaction during the quarter/year". After a careful restudy of the aforesaid ruling, this Office is of the opinion as it hereby holds that since the initial or downpayments on the sale of the condominium units of your clients exceeds twenty-five percent (25%) of the selling price such that the sale is considered a cash sale, the withholding tax payment under RR 1-90 as amended by RR

12-94 should not only be on the initial or downpayment on said units but on the entire selling price. Such being the case, before the RDO concerned may issue the CAR to the seller the following documents must be submitted: (1) Quarterly ITR or final ITR and receipts of payment of income tax on the year the specified condominium units were reported as part of the Gross Income; (2) The withholding tax payment under RR 1-90 based on the gross selling price and not merely on the initial or downpayment on said units which exceeds 25% of the selling price; (3) Instrument of Sales; (4) Breakdown of cash (sales) transaction during the quarter/year. This modifies BIR Ruling No. 078-94 dated March 18, 1994 insofar as the withholding tax payment under RR 1-90 as amended by RR 12-94 is concerned which should be on the entire selling price of the condominium units and not only on the initial or downpayment. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 05-08-96 Revenue Memorandum Circular No. 31-96 May 8, 1996 REVENUE MEMORANDUM CIRCULAR NO. 31-96 SUBJECT : GUIDELINES ON THE GRANT OF HAZARD DUTY PAY TO : All Revenue Officials and Employees and others concerned For the information and guidance of all revenue officials and employees, quoted hereunder is Department of Budget and Management National Budget Circular No. 451 dated March 14, 1996. "1. Purpose This Circular is being issued to rationalize the guidelines on the grant of Hazard Duty Pay as authorized under the pertinent provisions of the annual General Appropriations Act. 2. Concept of Hazard Duty Pay Hazard Duty Pay is a compensation premium or allowance which is generally paid to officials and employees who, because of the nature and/or location of their work are exposed to hazards. However, exposure to hazards which affect the entire population in a

locality as air, land and water borne and noise hazards are not compensable under the terms and conditions of this Circular. 3. Coverage All government officials and employees, under permanent, temporary, or casual status, and contractual personnel whose employment is in the nature of a regular employee and whose compensation is charged from lump-sum for the purpose or from personal services component of a project or from personal services component of a project fund, on fulltime basis, of the national government, government-owned and/or controlled corporations and government financial institutions. 4. Exemptions 4.1 All government officials and employees assigned or stationed to work areas where the entire population in a locality are also exposed to the same air, land and water borne, and noise hazards. 4.2 All government officials and employees entitled to Hazard Duty Pay under special laws, charters or enabling acts which are already being implemented. 5. Definition of Terms As used in this Circular hazardous word areas shall mean any of the following: 5.1 Difficult/distressed/isolated work areas or hardship posts characterized by distance, inconvenience of travel due to bad roads and conditions of the terrain, isolation, inaccessibility and extreme weather conditions as may be declared and duly certified as such by the department secretary concerned or equivalent office in the case of the government-owned and/or controlled corporations and government financial institutions; 5.2 Work areas affected by volcanic activity/eruption including subsequent flow of lahar and other pyroclastic materials, as may be solely declared and duly certified as such by the Secretary of Science and Technology upon recommendation of the Director of the Philippine Institute of Volcanology and Seismology; 5.3 Work areas which entail risks or danger to health and safety due to direct unavoidable exposure to radiation, communicable/contagious/infectious diseases; combustible, dangerous, noxious odor/toxic chemicals/gas/biological hazards and substances as may be solely declared and duly certified as such by the Secretary of Health upon recommendation of the inter-agency committee created for the purpose; 5.4 Work areas which entail risks or danger to health and safety due to direct unavoidable exposure to hazardous pollutants as may be solely declared and duly certified as such by the Secretary of Environment and Natural Resources upon recommendation of the inter-agency committee created for the purpose; 5.5 Institutions for mental health where exposure to bodily harm and risks from psychiatric patients actually exist as may be solely declared and duly certified as such by the Secretary of Health; 5.6 Prison camps/reservations or penal colonies without adequate police protection as may be declared and duly certified as such by the Secretary of Justice upon recommendation of the Director of the Bureau of Corrections; 5.7 Embattled or strife-torn work areas which refer to the site of armed encounters between government troops and enemy forces and/or enemy-initiated attacks, raids or armed ambuscades; and work areas which entail risks or danger due to direct unavoidable exposure to explosives as may be solely declared and duly certified as such by the

Secretary of National Defense. It is also an area where enemy concentration/training camps are reported to exist; and 5.8 Work areas where rescue operations/evacuation had to be carried out due to natural calamities, where the rescuers are directly and actually exposed to harm, danger or occupational risks or perils to life in the course of performing their duties as may be solely declared and duly certified by the Chairman of the National Disaster Control Coordinating Council (NDCCC) upon recommendation of the Director of the Office of Civil Defense (OCD). 6. General Guidelines 6.1 Heads of national government agencies, including government-owned and/or controlled corporations and government financial institutions, are hereby authorized to grant Hazard Duty Pay to their officials and employees in accordance with the rules prescribed in this Circular without the need for approval by the Department of Budget and Management (DBM). 6.2 Where more incentives are needed to attract qualified applicants to the government service, the rates authorized herein may be augmented subject, however, to the approval of the DBM. 6.3 The period of entitlement to Hazard Duty Pay shall be coterminous with the duration of the actual assignment of the official or employee in the work areas enumerated under Item 4 of this Circular or with the existence of such danger or peril, but in no case shall it exceed three (3) months unless renewed and subsequent authority is granted therefor in accordance with the provisions of this Circular. 6.4 Part-time officials and employees shall receive half of the amount received by a full-time official or employee in the same situation. 6.5 The Hazard Duty Pay of officials and employees who are on full-time or part-time detail with another agency shall be paid by their mother agency. 6.6 Officials and employees, who due to the peculiar nature of their work, would appear to be entitled to more than one type of Hazard Duty Pay, shall be allowed to enjoy just one type of Hazard Duty Pay that is more advantageous to them. 6.7 Agencies concerned shall submit either to the Compensation and Position Classification Bureau (CPCB), Regional Coordination Service (RCS) or Regional Offices (ROs) of the DBM not later than fifteen (15) days after the end of each quarter of a fiscal year a list of officials and employees granted Hard Duty Pay using the attached format (Annex A). Failure to submit the said list shall, pursuant to Section 57 of EO 292, subject agencies concerned with appropriate sanctions under existing budget rules and regulations. 6.8 Certifying officials mentioned herein may issue specific guidelines relative to the limits and period of exposure of officials and employees in hazardous work areas in addition to the general guidelines provided herein. 6.9 Said officials shall also immediately copy-furnish the CPCB/RCS/ROs of the DBM of any declaration and certification issued concerning hazardous work areas. 7. Prescribed Rates 7.1 Officials and employees who are actually assigned or stationed in work areas defined under Item 5.1 to 5.7 hereof shall be entitled to Hazard Duty Pay at the following rates: Period of Exposure Monthly Rates

1 to 10 days P400 11 to 20 days 500 21 to 31 days 600 7.2 Officials and employees who are directly involved in rescue operations under Item 5.8 hereof shall be entitled to Hazard Duty Pay at the maximum rate per month regardless of the period of exposure. 7.3 The above rates shall be subject to change in accordance with the annual General Appropriations Act. 8. Limitations Officials and employees who are under the following instances for more than one (1) full calendar month shall not be entitled to Hazard Duty Pay: 8.1 those on vacation, sick or study leave with or without pay; 8.2 those on maternity or terminal leave; 8.3 those on summer vacation; and 8.4 those on full-time detail with another agency or special project of another agency, on attendance in training course/scholarship grant/seminar or any other similar activity, and on official travel outside of their official station which is not among those enumerated in Item 5 hereof. Otherwise, they shall be authorized Hazard Duty Pay in accordance with the provisions of this Circular. 9. Fund Source The Funding sources for the amounts necessary to implement the provisions of this Circular shall be as follows: 9.1 For national government agencies, the amount shall be charged against the specific appropriation for the purpose as provided in the Personal Services Itemization. 9.1.1 Where no funds are appropriated therefor, the amount shall be charged against savings from released allotment for current operating expenditures provided all authorized mandatory expenses shall have been paid first. 9.1.2 Any amount utilized out of savings from PS, whether or not realigned from MOOE, to cover payment of Hazard Duty Pay shall be deducted from any claims from Miscellaneous Personnel Benefits Fund (MPBF). 9.1.3. As a matter of policy, savings can only be determined after the third quarter. 9.2 For government-owned and/or controlled corporations and government financial instructions, the amount shall be charged against their respective corporate funds. 10. Responsibility of the Head of Agency The head of agency shall be responsible and held personally liable for any payment of Hazard Duty pay not in accordance with the provisions of this Circular without prejudice, however, to the refund of any excess payment by the official or employee concerned. 11. Resolution of Issues Cases not covered by the provisions of this Circular shall be submitted to the DBM for resolution. 12. Repealing Clause This Circular supersedes National Compensation Circular No. 76 dated March 31, 1995. 13. Effectivity This Circular shall take effect January 1, 1996.

(Sgd.) SALVADOR M. ENRIQUEZ, JR." Secretary All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 05-20-96 Revenue Memorandum Circular No. 32-96 May 20, 1996 REVENUE MEMORANDUM CIRCULAR NO. 32-96 SUBJECT : Loss of one (1) pad of official Receipt (Accountable Form 51) TO : All Internal Revenue Officers, Employees and Others Concerned Notice is hereby given of the loss of one (1) pad of Official Receipt (Accountable Form 51), to wit: Inclusive Serial Numbers Quantity 6859551-6859600 One (1) pad The abovementioned official receipt which were reported as missing by Ms. Susana C. Munleon of Revenue District Office No. 26, Malabon, Metro Manila, are hereby deemed cancelled and all official transactions involving the use thereof are therefore invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned receipts are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. ESTELITA C. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-04-96 Revenue Memorandum Circular No. 33-96 June 4, 1996 REVENUE MEMORANDUM CIRCULAR NO. 33-96 SUBJECT : SHOWCASE OF BIR HUMAN RESOURCE TALENTS TO : All Revenue Officials and Personnel On the occasion of the Bureau's 92nd Anniversary celebration, each Regional Office and each Group in the National Office will be required to participate in a "Showcase of BIR Human Resource Talents" that will be held for this purpose. This activity is intended to foster camaraderie among our staff, as well as to highlight the Anniversary Theme "BIR Transformation for Philippines 2000". The rules and guidelines are as follows: 1. Participation is mandatory for all concerned officers (a total of twenty-two [22] groups coming from the nineteen [19] Regional Offices and the three [3] National Office

groups, namely, the Operations, Resource Management, and Information Systems Groups). 2. Each presentation should have relevance to the Anniversary Theme "BIR Transformation for Philippines 2000". 3. The number of participants for a particular groups should not be less than ten (10) persons. 4. The participants should be officially included in the plantilla of the office which they are representing. 5. The presentation, which could not exceed fifteen (15) minutes for each group, can be a combination of song, dance, or pantomime. A. An Elimination Phase for the following groupings will be held in the indicated venues: GROUPINGS COMPETING REGIONS/OFFICES VENUES Luzon I Luzon II Luzon III Visayas Mindanao Region Nos. 1, 2, 3, and 4 Baguio City Region Nos. 5, 6, 7, and 8 Quezon City National Office Groups (3 groups) Quezon City Region Nos. 9 and 10 Region Nos. 11, 12, 13 and 14 Bacolod City Region Nos. 15, 16, 17, 18, and 19 Cagayan de Oro

The Elimination Phase is scheduled on July 19, 1996, and one (1) winner will be selected for each grouping, or a total of five (5) winners. B. The Final Phase is scheduled on July 31, 1996, in Manila, where the five (5) winners in the Elimination Phase will compete with each other. 5. The Criteria for judging for the two (2) Phases are as follows: 5.1 Thematic Presentation (with rele30% vance to the Anniversary Theme 5.2 Originality 25% 5.3 Creativity (Timing, Technique 25% of Presentation 5.4 Production Value (Setting, Costumes 20% Props) 6. The composition of the Board of Judges for each Phase will be as follows: 6.1 For the elimination Phase: A Representative from * The Office of the Regional Director of the Department of Education, Culture and Sports (DECS) for the Regions of the selected venues; * Any Non-Government Organization (NGO), i.e., the Rotary Club, the PCCI, etc. * The arts and theater groups in the Regions of the selected venues. 6.2 The members of the Board of Judges for the Final Phase will be identified/announced at a latter date.

7. Prizes in the form of plaques and cash will be awarded to the First (1st), Second (2nd) and Third (3rd) Prize Winners. Certifications of Participation will be given to all participants. A steering Committee will be created to coordinate with the Regional Directors of Revenue Region Nos. 2, 7, 12 and 16, where the Elimination Phase will take place. All Deputy Commissioners and Regional Directors are required to submit the Information Form prescribed in Annex A to the Steering Committee, c/o the Assistant Commissioner, Human Resource Development Service, BIR National Office, not later than July 15, 1996. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue ANNEX A SHOWCASE OF BIR HUMAN RESOURCE TALENTS COMPETITION INFORMATION FORM 1. Revenue Region _________________________ 2. National Office __________________________ 3. Names and Designations of Participants Place of Assignment 3. Title of Presentation SUBMITTED BY: ________________________________ (Signature over Printed Name) Deputy Commissioner/Regional Director _______________________ Date Submitted C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 06-14-96 Revenue Memorandum Circular No. 35-96 June 14, 1996 REVENUE MEMORANDUM CIRCULAR NO. 35-96 SUBJECT : GUIDELINES TO IMPLEMENT SECTION 16 OF EXECUTIVE ORDER NO. 248 AS AMENDED BY EXECUTIVE ORDER NO. 248-A WHICH PRESCRIBES THE REGULATIONS AND NEW RATES OF ALLOWANCE FOR OFFICIAL LOCAL AND FOREIGN TRAVELS OF GOVERNMENT PERSONNEL. TO : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is Commission on Audit Circular No. 96-004 dated April 19, 1996 addressed to all Heads of Departments, Bureaus, Offices and Agencies of the National Government, Managing Heads of Government Owned and/or Controlled Corporations; Provincial Governors, City and Municipal Mayors; COA Directors, Heads of Auditing Units; and All Others Concerned, to wit:

"1.0 RATIONALE This Circular is issued pursuant to the rule making power of the Commission under Section 2(2), Article IX-D of the Constitution and to Section 16 of Executive Order No. 248 dated May 29, 1995, as amended by Executive Order No. 248-A dated August 14, 1995, which provides that 'Within sixty (60) days after his return to the Philippines, in the case of officials travel abroad, or within (30) days of his return to his permanent official station in the case of official local travel, every official or employee shall render an account of the case advance received by him in accordance with existing applicable rules and regulations and/or such rules and regulations as may be promulgated by the Commission On Audit for the purpose. Payment of the salary of any official or employee who fails to comply with the provisions of this Section shall be suspended until he complies therewith' 2.0 GENERAL GUIDELINES 2.1 Both official local and foreign travels shall be treated and accounted for as cash advances. Official local travel shall no longer be treated as direct charges to appropriations or allotments. The Accountant shall obligate all cash advances granted. 2.2 No cash advance shall be granted to any official or employee unless a proper accounting of the previous cash advance for travel given to him is first made or the same is first liquidated and/or settled. 2.2.1 Proper accounting shall mean the receipt by the Accountant of the prescribed liquidation documents although not yet recorded in the books of accounts nor audited by the auditor. 2.2.2 Liquidation shall mean the recording of the liquidation documents in the books of accounts by the accountant as a credit to the cash advance account after verifying the same, although not yet audited by the auditor. 2.2.3 Settlement shall mean the issuance of the Credit Notice by the Auditor after the audit of the liquidation documents. 2.3 Cash advances granted for purposes of official travel, both local and foreign, shall not require bonding of the traveling official or employee. 3.0 SPECIFIC GUIDELINES 3.1 OFFICIAL LOCAL TRAVEL OF GOVERNMENT PERSONNEL 3.1.1 DRAWING OF CASH ADVANCE 3.1.1.1 The cash advance voucher for official local travel shall be supported by the following: a. Travel order properly approved in accordance with Section 5 of EO 248, as amended; b. Itinerary of travel (Appendix A) detailing the transportation expenses and travel expenses to be incurred as basis for determining the amount of cash advance; 3.1.1.2 The amount of transportation expenses allowable shall be the actual rates of the authorized means of transportation (land, sea and air) from the permanent official station to the destination or place of work or assignment in the field and back, plus other incidental expenses; a. From the office or residence to the point of embarkation; b. From the point of embarkation to the point of debarkation in the place of destination;

c. From the point of debarkation to the office of destination or temporary residence in the place of assignment in the field and return. 3.1.1.3 The transportation expenses shall be in addition to the travel expenses which as defined under Section 6 of EO 248, as amended, is divided into two components: i.e., travel allowance of two hundred pesos which will cover the cost of meal, inland transportation and other incidental expenses; and hotel room/lodging rate of one hundred pesos. 3.1.1.4 The allowable transportation expenses shall not include local or inland transportation and other expenses after arrival in the office or temporary residence in the place of assignment in the field which are contemplated to be covered by the travel allowance specified in Section 6 (a) of EO 248. 3.1.1.5 Only ordinary public conveyance or customary modes of transportation shall be used. Exceptions may be made in meritorious cases and justified by prevailing circumstances. Fir this purpose, the Department/Agency Head concerned or his equivalent shall determine and indicate in the travel authority, the mode or class of transportation and the kind of hotel lodging/pension houses to be taken, which in all cases shall be the most advantageous to the government from the standpoint of economy and efficiency. 3.1.1.6 As a general rule, claims for payment of travel expenses for official local travel in the amount of P300 per day as provided for under Section 6 of EO 248, shall not require the presentation of bills receipts except in the following case: a. When the claim for reimbursement of actual travel expenses is in excess of P300 per day, in which case, submission of the following shall be required: Bills or invoices with official receipts covering the whole amount claimed; Certification of the head of the agency as to the absolute necessity of the expenses in the performance of the assignment. b. When the official travel/assignment is to places within the fifty (50) kilometers radius from the last city or municipality covered by the Metropolitan Manila Area (MMA) for those whose permanent official stations is in the MMA, or the city or municipality wherein their permanent official station is located in the case of those outside the MMA and the amount of travel expenses being claimed includes the hotel room/lodging rate, the following shall be required: Submission of the hotel room/lodging bills or invoices with official receipts to prove that they stayed in the place of destination or assignment and are not commuting daily from the place of assignment to the place of their residence or permanent official station. If they commute daily from the place of their assignment to the place of their residence or permanent official station, they shall be allowed to collect only the amount of P200 per day which shall include the reimbursement of actual fare at the prevailing rates of the authorized mode of transportation from the permanent official station to the destination or place of work and back, and the reasonable cost of actual meal allowance. The presentation of bills and receipts covering the cost of meals shall no longer be required, except for the transportation tickets which shall form part of the evidence of the actual travel undertaken. 3.1.1.7 In cases where government vehicles are used in the travel, the officials and employees concerned are not entitled to the transportation expenses.

3.1.1.8 To ensure that government funds and property are used only for official purposes, no reimbursement of the cost of gasoline and oil shall be allowed where a private vehicle is used. However, the officials and employees concerned shall be entitled to the reimbursement of the equivalent cost of the customary mode of transportation. Under no circumstances should fuel be issued to privately owned motor vehicles. 3.1.1.9 To preclude double payment of expenditures, the travel allowance prescribed shall not be allowed in cases where the fare paid for transportation includes meals and quarters enroute, or where meals and lodging are paid for or furnished by the government. Where the cost of meals and lodging paid for by the government does not exceed P300 per day or where either meals or lodging only is furnished by the government, the difference shall be paid to the official or employee concerned to take care of local or inland transportation and other incidental expenses while in the place of assignment. If the cost of meals and lodging furnished by the government is equal to or exceeds P300 per day, no travel expenses shall be paid by the government. 3.1.2 LIQUIDATION OF CASH ADVANCE 3.1.2.1 The cash advance for travel shall be liquidated by the official/employee concerned strictly within thirty (30) days after his return to his permanent official station as required under Section 16 of EO 248 as amended otherwise, payment of his salary shall be suspended until he complies therewith. 3.1.2.2 The official/employee concerned shall draw a liquidation voucher to be supported by the following: a. Certificate of travel completed (Appendix B); b. Plane, boat or bus tickets covering actual transportation fare from the official station or residence to the place of destination and back. A certification or affidavit of loss executed by the official or employee concerned shall not be considered as appropriate replacement for the required transportation tickets. c. Certification of the head of the agency as to the absolute necessity of the expenses together with the corresponding bills and receipts, if the expenses incurred for official local travel exceeds the prescribed rate of P300 per day. The presentation of a certification or affidavit of loss in place of the bills and receipts shall not be considered for this purpose. d. Hotel room/lodging bills with official receipts in the case of official travel to places within the fifty (50) kilometers radius from the last city or municipality covered by the MMA in the case of those whose permanent official station is in the MMA, or the city or municipality wherein the permanent official station is located in the case of those outside the MMA, if the travel allowance being claimed includes the hotel room/lodging rate. e. Certificate of appearance or a copy of the report on the accomplishment of the purpose of the travel duly note by the agency head or his authorized representative. However, the certificate of appearance shall no longer be required in the case of travels of agency heads within their area of jurisdiction. 3.1.2.3 Where a trip is cancelled, the amount paid in advance shall be refunded in full. In cases where the trip is cut short or terminated in advance of the itinerary, the excess payment shall likewise be refunded. These refunds shall be made immediately upon cancellation or termination of the trip. It shall be the primary duty of agency heads to enforce promptly the refund.

3.1.2.4 When a trip exceeds the approved itinerary, the additional travel expenses due shall be paid upon satisfaction of the following requirements: a. Submission of a written justification satisfactory to the agency head or his authorized representative and an additional itinerary for the extension of the trip. b. Where the whole travel exceeds one (1) calendar month, approval of the President shall first be secured before the additional payment shall be made. 3.2 OFFICIAL TRAVEL ABROAD OF GOVERNMENT PERSONNEL 3.2.1 DRAWING OF CASH ADVANCE 3.2.1.1 The cash advance voucher for official foreign travel shall be supported by the following: a. Travel Order properly approved in accordance with Section 8 of EO 248, as amended; b. Itinerary of travel (Appendix A) detailing the transportation expenses and travel expenses including clothing and pre-departure expenses to be incurred as basis for determining the amount of cash advance. The commutable pre-departure expenses shall cover miscellaneous/incidental expenses such as passport, photographs, immunization, visa fees, taxi fare, tips, porterage and terminal fees as provided for under Section 9 of EO 248, as amended. c. Where applicable, the authority from the Office of the President to claim Representation Expenses; d. Certification of the official or employee concerned duly verified by the Accountant to the effect that no clothing allowance had been received during the next preceding twenty-four (24) months, if clothing allowance is being claimed; 3.2.1.2 The amount of transportation expenses allowable shall be the actual rates of the authorized means of transportation: a. From the point of embarkation to the point of debarkation in the place of destination; b. From the point of debarkation to the office of destination or temporary residence in the place of assignment in the foreign country and return. The transportation expenses shall be in addition to the Travel Allowance of One Hundred United States Dollars ($100) and Hotel Room/Lodging Rate of Two Hundred United States Dollars ($200) per day as provided for under Section 12 of EO 248, as amended. No transportation expenses shall be paid if the official or employee authorized to travel abroad is provided with transportation by the host country or sponsoring organization or agency. Where the official of employee traveling abroad is provided by the host government or institution with per diem or allowance lower than that prescribed in EO 248, as amended, he shall be entitled to the difference only. 3.2.2 LIQUIDATION OF CASH ADVANCE 3.2.2.1 The cash advance for travel shall be liquidated by the official/employee concerned strictly within sixty (60) days after his return to the Philippines as required under Section 16 of EO 248, as amended, otherwise, payment of his salary shall be suspended until he complies therewith. 3.2.2.2 The official/employee concerned shall draw a liquidation voucher to be supported by the following: a. Certificate of travel completed (Appendix B);

b. Plane or boat tickets covering actual transportation fare from the point of embarkation in the Philippines to the place of destination and back, provided, that the presentation of a certification or affidavit of loss executed by the official or employee concerned shall not be considered as appropriate replacement for the required transportation tickets; c. Bills and receipts covering representation expenses incurred, if the official concerned has been authorized to incur the same; d. Hotel room bills with official receipts, regardless of whether or not the amount exceeds the prescribed rate of Two Hundred United States Dollars per day, provided that for this purpose, no certification or affidavit of loss shall be considered or accepted; e. Where the actual travel expenses exceeds the prescribed rate of Three Hundred United States Dollars per day, the certification of the head of the agency concerned as to its absolute necessity shall also be required in addition to the presentation of the hotel room bills with official receipts; 3.2.2.3 Where a trip is cancelled, the amount paid in advance shall be refunded in full. In cases where the trip is cut short or terminated in advance of the itinerary, the excess payment shall likewise be refunded. The head of the agency shall see to it that such refunds are enforced promptly. 3.3 MONITORING OF CASH ADVANCES FOR TRAVEL 3.3.1 The Accountant shall retain a copy of the travel advance voucher and the itinerary of travel (Appendix A). He shall take an index of the cash advances made by each officials/employee and shall monitor the liquidation of the said cash advances. 3.3.2 In addition, the Accountant shall: a. Send within ten (10) days before the expiration of the 30 or 60 days period specified under Section 16 of EO 248, a written reminder under signature of the head of the agency or his duly authorized representative, enjoining the official or employee concerned to liquidate his travel cash advance. This is to preclude complaints arising from suspension of salaries due to non-liquidation of travel advances. b. Delete the name of the official or employee from the subsequent payrolls until such time that the travel cash advance has been fully liquidated, if the official or employee concerned fails to liquidate the cash advance within the prescribed period. c. Verify the liquidation voucher and supporting documents, and record the same in the books of accounts subject to the post audit by the auditor. 4.0 REPEALING CLAUSE All COA Circulars and issuances pertaining to official local and foreign travels, inconsistent with the provisions contained herein, are hereby amended or modified accordingly. 5.0 EFFECTIVITY This Circular shall take effect immediately Executive Order No. 248 dated May 29, 1995 and Executive Order No. 248-A dated August 14, 1995 are appended to this Circular as Annexes 1 and 2." All internal revenue officers and others concerned are requested to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner

Appendix "A" REPUBLIC OF THE PHILIPPINES MINISTRY OF FINANCE Bureau of internal revenue FISCAL CONTROL DIVISION Quezon City ITINERARY OF TRAVEL NAME: ____________________ Monthly Salary ___________ Position: ___________________ Official unreadable: ________________________________________________ Purpose of Travel: ________________________________________ Appendix "A" APPENDIX B BUREAU OF INTERNAL REVENUE CERTIFICATION OF TRAVEL COMPLETED _____________________ ________________________ (Name) (Status) _____________________ ________________________ (Designation) (Date) I certify that I have completed the travel approved in Itinerary Travel No. __________ dated _____________ under conditions below: __________ Strictly in accordance with the approved Itinerary. __________ Cut short as explained below. Excess expense in the amount of P______ was refunded under O.R. No. _________ dated ___________ __________ Extended as explained below. Additional Itinerary was submitted. __________ Other deviations is explained below.

Explanations or Justification: _____________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ Evidence of travel attached hereto: ___________________________________________________________________

___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ Respectfully submitted ___________________ On evidence and information of which I have knowledge the travel was actually undertaken. _________________ EXECUTIVE ORDER NO. 248 PRESCRIBING RULES AND REGULATIONS AND NEW RATES OF ALLOWANCES FOR OFFICIAL LOCAL AND FOREIGN TRAVELS OF GOVERNMENT PERSONNEL WHEREAS, the existing rules and regulations and authorized rates of allowances for official local and foreign travels of government personnel have become unrealistic and no longer responsive to their reasonable needs; WHEREAS, present circumstances warrant a review of the existing rules and regulations and rates of travel allowances governing official travel here and abroad of government personnel; WHEREAS, to provide government personnel on official travel here and abroad with fairly reasonable means within the financial capability of the government to enable them to travel in a manner befitting their representative capacity, it is necessary to further modify and adjust existing rules and regulations and authorized allowances thereon; WHEREAS, pursuant to Section 79 of Presidential Decree No. 1177, dated July 30, 1977, and Section 72, Chapter 7, Book-VI of Executive Order NO. 292, otherwise known as the Administrative Code of 1987, the rates of travel allowances may be changed from time to time as may be determined by the President upon recommendation of the Travel Rates Committee therein created consisting of the Secretary of Budget and Management as Chairman and the Secretary of Foreign Affairs, the Secretary of Tourism and the Chairman, Commission on Audit, or their representatives, as members; WHEREAS, the Travel Rates Committee in accordance with its mandate has submitted to the President recommendations to modify and adjust existing rules and regulations and authorized allowances for local and foreign travels. NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: SECTION 1. COVERAGE. This Executive Order shall govern official local and foreign travels of government personnel, both national and local, including personnel of government-owned and/or controlled corporations and government financial institutions. SECTION 2. NATURE OF TRAVEL. Travels and assignments under this Executive Order shall cover only those which are urgent and extremely necessary, will involve the minimum expenditure and are beneficial to the agency concerned and/or the country. SECTION 3. CATEGORY OF TRAVEL AND THE GOVERNING RULES AND REGULATIONS. Official Local Travel shall be governed by TITLE I, Official Travel Abroad by TITLE II, and the Miscellaneous Provisions in TITLE III.

TITLE I: OFFICIAL LOCAL TRAVEL OF GOVERNMENT PERSONNEL SECTION 4. DEFINITION OF TERMS. For purposes of this Executive Order, the following terms shall be construed to mean: a) Permanent Official Station the office or regular place of work of the officer or employee concerned. b) Travel Allowance the authorized amount which shall cover the daily subsistence and incidental expenses while on official travel. c) Hotel Room/Lodging Rate The daily hotel room rate including prescribed taxes and service charges. SECTION 5. APPROVAL OF TRAVEL. Official local travel for seven (7) calendar days and below shall be approved by the head of office/bureau or their equivalent. Travel that will last for more than seven (7) calendar days but not more than one (1) calendar month shall be approved by the Department Secretary or his equivalent. Travel that will last for more than one (1) calendar month shall be approved by the President of the Philippines or official duly authorized by him. For purposes of this Order, approval of travel of officials and employees of governmentowned and/or controlled corporations and financial institutions that will last for not more than one (1) calendar month shall be subject to the policies, rules and regulations that will be adopted by their respective governing Boards, and by the Secretary of the Interior and Local Government in the case of officials and employees of local government units. SECTION 6. ALLOWABLE TRAVEL EXPENSES. The Travel expenses of government personnel regardless of rank and position shall be in the amount of Three Hundred Pesos (P300.00) per day divided into two (2) components: a) Travel Allowance of Two Hundred Pesos (P200.00) which will cover the cost of meal, inland transportation and other incidental expenses; and b) Hotel Room/Lodging Rate at One Hundred Pesos (100.00). Claims for reimbursement of actual expenses in excess of Three Hundred Pesos (P300.00) above-prescribed for travel allowance and hotel/lodging rate may be allowed upon certification by the head of agency concerned as absolutely necessary in the performance of an assignment and presentation of bills and receipts: Provided, That, for this purpose, certification or affidavit of loss shall not be considered as appropriate replacement for the required hotel room/lodging bills and receipts. Full travel expenses shall be allowed only in cases of absence from the permanent official station for one (1) full day. In cases where such absence is for less than a full day the travel allowance shall be divided as follows: a) When leaving the permanent official station before 12:00 shall be allowed the full amount of the travel expenses. b) When leaving the permanent official station after 12:00 noon shall be allowed only one-half (1/2) of the amount of the travel allowances, and full amount for Hotel Room Lodging Rate. c) When returning to the permanent official station before 12:00 noon shall be allowed one-half (1/2) of the amount of the travel allowance only. d) When returning to the permanent official station after 12:00 noon shall be allowed the full amount of the travel allowance only. No portion of the actual cost of travel expenses allowed to Department Secretaries, Undersecretaries, Assistant Secretaries, and their equivalent, and other government

officials shall cover the expenses of any of the staff accompanying said officials in the travel, otherwise, such staff shall not be allowed any of the allowances herein authorized. The Department/Agency Head concerned or his equivalent shall determine the mode class of transportation and the kind of hotel/lodging/pension houses to be taken which will cases shall be the most advantageous to the government from the standpoint of economy efficiency. Only the ordinary public conveyance or customary modes of transportation shall be used, except in meritorious cases and justified by prevailing circumstances. Officials and employees whose permanent official station is within the Metropolitan Manila Area shall not be allowed the travel expenses herein authorized for their travel/assignment to places within the Metropolitan Manila Area. The same restriction shall also apply those in cities and municipalities outside the Metropolitan Manila Area when assigned to places within the city or municipality wherein their permanent official station is located. Claims for payment of travel expenses is: for official travel/assignment to places within the fifty (50) kilometers radius from the last city or municipality covered by the Metropolitan Manila Area in the case of those whose permanent official station is in the Metropolitan Manila Area, or the city or municipality wherein their permanent official station is located in the case of those outside the Metropolitan Manila Area, shall be allowed only upon presentation of proof, duly supported by bills or invoices with official receipts of expenses incurred, that they stayed in the place of their assignment for the whole duration of their official travel. If they commute daily from the place of their assignment to the place of their residence or permanent official station, they shall be allowed only the reimbursement of actual fare at the prevailing rates of the authorized mode of transportation from the permanent official station to the destination or place of work and back, and a reasonable cost of actual meal allowance, but in no case shall exceed the Two Hundred Pesos (P200.00) travel allowances herein authorized. TITLE II: OFFICIAL TRAVEL ABROAD OF GOVERNMENT PERSONNEL SECTION 7. NATURE OF TRAVEL. Travels and assignments under this Executive Order shall cover only those which are urgent and extremely necessary, will involve the minimum expenditure and are expected to bring immediate benefit to the country, and shall refer only to those under the category of conferences, special missions, and other non-study trips such as those undertakes for the following purposes: a) To attend conferences or seminars sponsored by foreign government or international government organizations to which the Philippine Government it committed or invalid to send representatives or participants; b) To attend conferences or seminars sponsored by private organizations, whether international or not, invitations to which have been sent through their respective governments to the Philippine Government; c) To conduct examinations or investigations of Philippine Government agencies or affairs; d) To undertake any other official mission which cannot be assigned to any other Philippine government official or officials already abroad; e) To participate in short courses in certain areas of specialization arranged directly by government agencies with foreign institutions of learning;

f) To attend training seminars as component of contracts of foreign suppliers, with or without government funding; and g) To attend training courses funded from loans secured from foreign sources. SECTION 8. APPROVAL OF THE PRESIDENT. All official travels abroad of Department Secretaries, Undersecretaries, Assistant Secretaries, heads, senior assistant heads and assistant heads of government-owned and/or controlled corporations and financial institutions, and heads of local government units like Provincial Governors and Mayors of highly urbanized cities or independent component cities, and other officials of equivalent rank whose nature of travel falls under the categories prescribed in this Order shall be subject to the prior approval of the President of the Philippines. All other positions concerned shall be with prior approval of their respective Department Secretaries and their equivalent; Provided, That, travel that will last for more than one (1) calendar month shall also be subject to the approval of the President of the Philippines. For this purpose, official foreign travel that will last for one (1) calendar month and below of other officials and employees of government-owned and/or controlled corporations and financial institutions shall be approved by the Department Secretaries or their equivalent to which such government-owned/controlled corporations and financial institutions are attached, and by the Secretary of the Interior and Local Government in the case of other officials and employees of local government units. Prior clearance from the Office of the President shall also be required for foreign trips of delegations or groups of two or more persons regardless of the rank of participants. SECTION 9. PRE-DEPARTURE EXPENSES. Officials and employees authorized to travel abroad shall be entitled to One Thousand Five Hundred Pesos (P1,500.00) commutable pre-departure allowance to cover miscellaneous/incidental expenses, such as tax, fare, passport photographs, immunization, visa fees, tips, porterage, and airport terminal fees. SECTION 10. TRANSPORTATION. In case officials and employees authorized to travel abroad are not provided with transportation by the host country or sponsoring organization or agency, they shall be allowed official transportation which shall be of the economy class unless otherwise specified in the travel authority and approved by the President. SECTION 11. CLOTHING ALLOWANCE. Officials and employees authorized to travel abroad shall be granted clothing allowance equivalent to Four Hundred United States Dollars (US$400.00). Clothing allowance shall not be granted oftener than once in every twenty-four (24) months and a certification shall be submitted to the effect that no clothing allowance had been received during the next preceding twenty-four (24) months. SECTION 12. TRAVEL ALLOWANCE AND HOTEL ROOM RATE/PER DIEM. Officials and employees who travel abroad shall be granted travel allowance of One Hundred United States Dollars (US$100.00) and hotel room/lodging rate of Two Hundred United States Dollars (US$200.00) per day. Claims for lodging or hotel accommodation shall be allowed only when duly supported by appropriate hotel room bills with official receipts: Provided, that, for this purpose, no certification or affidavit of loss shall be considered or accepted. Subject to approval of the President, actual travel expenses in excess of the Three Hundred United States Dollars (US$500.00) above-prescribed for travel allowance and

hotel room/lodging rate, may be allowed upon certification by the head of agency concerned as absolutely necessary in the assignment and presentation of hotel room bill with official receipts. The above travel allowance is intended to cover subsistence, local transportation and other incidental expenses, and shall not be divided into units: Provided, That, full travel allowance shall be allowed only in accordance with the provisions of the third paragraph of Section 6 thereof. For purposes of this Order and of the provisions of Section 75 of R.A. No. 7157, otherwise known as the Foreign Service Act of 1991, the travel allowance and hotel room rate herein provided shall also be known as per diems insofar as the Department of Foreign Affairs is concerned. As such, it shall consist of four (4) units: breakfast, lunch, dinner and lodging. The Secretary of Foreign Affairs is duly authorized to prescribe additional guidelines thereon, particularly in the proper allocation of amounts per units thereof. The travel allowance herein provided for shall be granted only for the duration of the official trip, including actual travel time, which shall be computed according to the most direct air route, unless otherwise specified in the authority for the trip. Any additional time extension caused by taking a diverse route shall not be on government time and expense. SECTION 13. REPRESENTATION EXPENSES. Philippine delegations to international conferences, conventions or special missions, as will as individuals traveling on official business may, upon prior approval of the President, be allowed noncommutable representation expenses not exceeding One Thousand United States Dollars (US$1,000.00), duly supported by bills or receipts, as shall be absolutely necessary to enable them to uphold the prestige of the Republic of the Philippines, to represent the country with dignity and distinction, and to carry out their functions and objectives more effectively. Representation expenses may be incurred for necessary entertainment, contributions, flowers, wreaths, and the like, when justified by circumstances and in conformity with the generally accepted customs, usages, and practices. SECTION 14. APPLICABILITY TO PERSONNEL STATIONED ABROAD. Officials and employees already posted abroad may avail themselves of the allowances prescribed under this Order when they travel officially outside of their post of assignment, or to countries to which they are duly accredited on a non-resident basis, or to countries over which the post has concurrent jurisdiction; Provided, That (1) unless indicated otherwise, funds therefor are chargeable to the post allotment and no supplemental budget is requested for the purpose; (2) prior authority is secured from their respective Department Secretaries and those officials of equivalent rank; (3) the travel necessitates an overnight stay by reason of distance and/or the non-availability of return transportation; and (4) travel within the one hundred (100) mile radius from the city or municipality wherein the official station of such official or employee is located shall not be allowed any of the allowances herein authorized. Officials and employees who are either assigned from their Home Office to a post abroad or cross-posted from one post another shall be entitled to the lodging portion of the allowances herein granted during the month said personnel arrived at the post; Provided, That the claim which shall be supported by appropriate bills with receipts does not

commence until their actual arrival at the post; Provided, Further, That, pursuant to Section 65 of R.A. No. 7157, they shall not collect living quarters allowance until the first day of the month following their arrival at the post of assignment; Provided, Finally, That, the lodging portion of the allowance shall be granted on the basis of the classification of the post as stated under E.O. No. 101, series of 1993, with Two Hundred United States Dollars (US$200.00) per day as the ceiling thereof. SECTION 15. PAYMENT OF ALLOWANCE DIFFERENTIAL. Where the official or employee traveling abroad is provided by the host government or institution with per diem, or allowance lower than that prescribed in this Order, he shall be entitled to the difference only. TITLE III: MISCELLANEOUS PROVISIONS SECTION 16. RENDITION OF ACCOUNT ON CASH ADVANCES. Within sixty (60) days after his return to the Philippines , in the case of official travel abroad, or within (30) days of his return to his permanent officials station in the case of official local travel, every official or employee shall render an account of the cash advance received by him in accordance with existing applicable rules and regulations and/or such rules and regulations as may be promulgated by the Commission on Audit for the purpose. Payment of the salary of any official or employee who fails to comply with the provisions of this Section shall suspended until he complies therewith. SECTION 17. AUTOMATIC ADJUSTMENT. If in a span of at five (5) years the inadequacy of the adjusted rates of allowances is again felt, upward adjustment may be automatically made using the factors and computation used by the Travel Rates Committee particularly Attachments A and B, which are made integral parts hereof. SECTION 18. SUBMISSION OF REPORT. Every official or employee assigned or authorized to travel under this Order shall, within one (1) month after his return to official station, submit a report with his recommendations, if any, on the conference or seminar attended, examination or investigation conducted, or mission undertaken, to the head of his office. In case of participation in an international conference or convention abroad in which the Philippines is represented by a delegation, a report of the delegation shall be submitted to the President of the Philippines through the Secretary of Foreign Affairs not later than one (1) month after the closing of the conference or convention. Any member of the delegation may also submit a supplementary report. Violation of the provisions of this Section shall subject the official or employee concerned to disciplinary action. SECTION 19. INSURANCE. Any official or employee on travel pursuant to this Order shall be allowed reimbursement of premium for accident insurance coverage, not exceeding Two Hundred Thousand Pesos (P200,000.00) for the duration of his official travel. Under no circumstances, however, shall premiums on insurance of personal or household effects belonging any official or employee on official travel be charged to government funds. SECTION 20. CHARGEABILITY OF EXPENSES. The expenses authorized under this order shall, unless otherwise specified, be chargeable against the appropriations of the office which the official or employee concerned belongs. SECTION 21. SAVING CLAUSE. Cases not covered by this Order shall be referred to Office of the President for final resolution.

SECTION 22. FUNDING SOURCE. In the case regular government offices/agencies, funds shall be as provided for each of the departments/agencies/offices for the item on Traveling Expenses in the annual General Appropriations Act. For government-owned and/or controlled corporations and financial institutions and local government units, finding for the purpose shall be sourced solely from their respective corporate and local funds. SECTION 23. REPEALING CLAUSE. The pertinent provisions of Executive Order No. 53, dated October 29, 1986, Executive Order No. 151, dated March 19, 1987, as implemented by National Budget Circular No. 391, dated October 6, 1987, and National Budget Circular No. 391-A, dated June 29, 1989, Executive Order No. 401. dated April 26, 1990, and administrative authorizations not consistent with this Order are hereby modified or repealed accordingly. SECTION 24. EFFECTIVITY. This Executive Order shall take effect immediately. DONE in the City of Manila, this 29th day of May, in the year of Our Lord, Nineteen Hundred and Ninety-Five. EXECUTIVE ORDER NO. 248-A AMENDING EXECUTIVE ORDER NO. 248, DATED 29 MAY 1995 WHICH PRESCRIBED RULES AND REGULATIONS AND NEW RATES OF ALLOWANCES FOR OFFICIAL LOCAL AND FOREIGN TRAVELS OF GOVERNMENT PERSONNEL I, FIDEL V. RAMOS. President of the Philippines, by virtue of the powers vested in me by law, do hereby amend Section 7, Title II of Executive Order No. 248 dated 29 May 1995 entitled "Prescribing Rules and Regulations and New Rates of Allowances of Official Local and Foreign Travels of Government Personnel", by deleting sub-sections e. f and g, to read as follows: "SEC. 7. NATURE OF TRAVEL. Travels and assignments under this Executive Order shall cover only those which are urgent and extremely necessary, will involve the minimum expenditure and are expected to bring immediate benefit to the country, and shall refer only to those under the category of conferences, special missions, and other non-study trips such as those undertaken for the following purposes: a. To attend conferences or seminars sponsored by foreign governments or international government organizations to which the Philippine Government is committed or invited to send representatives or participants: b. To attend conferences or seminars sponsored by private organizations, whether international or not. Invitations to which have been sent through their respective governments to the Philippine Government: c. To conduct examinations or investigations of Philippine Government agencies or affairs: and d. To undertake any other official mission which cannot be assigned to any other Philippine government officials already abroad." This Executive Order shall take effect Immediately. DONE in the City of Manila, this 14th day of August, in the year of Our Lord. Nineteen Hundred and Ninety Five. C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c.

08-09-96 Revenue Memorandum Circular No. 37-96 August 9, 1996 REVENUE MEMORANDUM CIRCULAR NO. 37-96 SUBJECT : CELEBRATION OF THE "7TH NATIONAL STATISTICS MONTH" IN OCTOBER, 1996 TO : ALL DIVISION CHIEFS, REGIONAL DIRECTORS, REVENUE DISTRICT OFFICERS AND OTHER OFFICERS CONCERNED Pursuant to Presidential Proclamation No. 647 issued on September 1990 "Declaring the Month of October of Every Year as the National Statistics Month," the "7th National Statistics Month" (NSM) will be celebrated in October, 1996. This year's celebration will have for its theme: "Statistics Towards Excellence in Education." The celebration of NSM is a nationwide event. All government agencies and its regional/field offices are requested to join the celebration by initiating activities at their level in any form such as symposium, workshop, conference, exhibit, lecture, film showing, statistical quiz, hanging of streamer, motorcade, slogan/essay/oratorical contests, etc. Regional/field offices may choose to have its own sub-theme. Attached is the NSCB Memorandum Circular No. 03-96 and letter from NSCB Secretary General for your information and guidance. You are hereby encouraged to participate in the said activity. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue July 3, 1996 Hon. Liwayway Vinzons Chato Commissioner Bureau of Internal Revenue National Office Bldg. East Avenue, Diliman, Quezon City Dear Commissioner Chato: In October 1996, we will again celebrate the National Statistics Month (NSM) pursuant to Presidential Proclamation No. 647 issued on September 1990 "Declaring the Month of October of Every Year as the National Statistics Month." In this respect, the National Statistical Coordination Board (NSCB) has issued Memorandum Circular No. 03-96 on June 26, 1996 enjoining all agencies of the government at the national and subnational levels and the private sector to actively participate in and support the Seventh NSM. The observance of this event is primarily aimed at promoting nationwide awareness and appreciation of the importance and value of statistics and eliciting the cooperation and support of the general public in upgrading the quality of statistics in the country. This year's celebration will have for its theme "Statistics Towards Excellence in Education" which has been translated into "Estadistikang Makabuluhan Tungo sa Edukasyong Mahusay" by the Komisyon sa Wikang Filipino. As in past years, may we again invite your office to join in the observance of the NSM by sponsoring activities that are relevant to the theme? Your participation could be in the form of symposium, workshop, conference, exhibit, lecture, film showing, statistical quiz, hanging of streamer, motorcade, slogan/essay/oratorical contest, etc.

Your activities will be included in the NSM Calendar of Activities to be prepared by the NSM Secretariat. We would appreciate receiving your calendar of activities using the attached format on/before July 31, 1996 and its submission to the following address: The Seventh National Statistics Month Secretariat Nation Statistical Coordination Board 2/F Midland Buendia Bldg., 403 Sen. Gil J. Puyat Avenue Makati city, Metro Manila Tel. Nos. 890 94 09; 896 22 26; FAX Nos. 89031 35;890 94 08 This will allow us to have ample time for the finalization of the calendar so that we could provide you with a printed copy by the last week of September. The celebration of the NSM is a nationwide event and hence we are also requesting the participation of your regional/field offices. In this connection, may we suggest the issuance of a memorandum order enjoining your regional/field offices to participate in the NSM activities? Based on your experience, the issuance of said memorandum order provides a basis for your staff in the regions to initiate activities of their levels. Our staff will get in touch with you to answer whatever questions you may wish to be clarified on the celebration of the NSM. Once again, we look forward to your cooperation in the observance of this event as you have done in the past and we thank you for your continuing support. Best regards. Very truly yours, ROMULO A. VIROLA Secretary General C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-22-96 Revenue Memorandum Circular No. 38-96 August 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 38-96 SUBJECT : IMPLEMENTING RULES AND REGULATIONS GOVERNING MORAL RECOVERY PROGRAM (as laid down under E.O. 319) TO : ALL REVENUE OFFICIALS AND EMPLOYEES AND OTHERS CONCERNED For the information and guidance of all revenue officials and employees, quoted hereunder is a copy of Implementing Rules and Regulations Governing Moral Recovery Program as laid down under E.O. 319 dated July 11, 1996 of the Office of the President. "General Statement of Policy The Preamble of the 1987 constitution ordains and promulgates that "the sovereign Filipino people imploring the aid of Almighty God in order to build a just and humane society and establish a government that shall embody our ideals and aspirations, promote the common good, conserve and develop our patrimony and secure to ourselves and our prosperity the blessing of independence and democracy under the rule of law and a regime of truth, justice, freedom, love, equality and peace; Article II, Section 21 of the Constitution's declaration of principles and state policies further provides that "the state shall maintain honesty, integrity in the public service and take positive measures against graft and corruption";

THEREFORE, it shall be the policy of government to: a. Strengthen the moral resources of the Filipino people rooted in the Filipino culture, values, and ideals that are Maka-Diyos, Maka-Tao, Maka-Bayan and MakaKalikasan. b. Pursue a vision of a Filipino nation that is God-centered, people empowered, prosperous national community living in Unity, Justice, Freedom, Love and Peace and governed by a visionary government that is democratic, responsive and effective with a community of civil and military servants who are professional, competent, disciplined and trustworthy. SECTION 1. Definition of Terms. For the purposes of these Rules, the following terms are defined: a. Institutionalization refers to the Presidential Order to formally/officially recognize, accept and include the Moral Recovery Program vision, values, programs, strategies and structures in the training/development programs and structures of all government departments, offices, agencies and government owned and controlled corporations and instrumentalities to formally allocate adequate and regular budget for this purpose. b. The Moral Recovery Program (MRP) refers to the national campaign for moral renewal which includes the objectives, strategies and cumulative experiences generated in the course of implementing Presidential Proclamation No. 62 dated 30 September 1992. c. Integrity Circles are the basic operating units of MRP's structure and promotional mechanism whereby government and civil society organizations are able to actively express/create/promote/enhance/ advance/realize their members' own wholeness and integrity toward's the achievement of the shared national vision. As such they constitute MRP's basic operational structure to lay the necessary foundation of the moral recovery crusade for the Filipino, core values' infusion into the organizational culture, systems and processes. d. Department includes any of the executive departments or entities having the category of a department, including the judiciary and the other constitutional commissions and bodies. e. Offices are grouped primarily on the basis of major functions to achieve simplicity, economy and efficiency in government operations and minimize duplication and overlapping of activities. f. Agencies/instrumentalities are units attached to the departments which operate and function in accordance with their respective characters law or orders creating them, except as otherwise provided in Administrative Code. g. Government-owned and controlled corporations are units attached to appropriate departments with which they have allied function as provided in the Administrative Code, or as may be provided by executive order, for policy and program coordination and for general supervision. h. Moral Recovery Officer (MRO) refers to an officer designated to initiate/convoke/inspire the formation of integrity circles or similar mechanisms, strategies and activities that would evoke mass action addressed at affecting personal change and lead to appropriate systematic and structural change within the organization.

SEC. 2. Creation of the Moral Recovery Program National Secretariat. The MRP National Secretariat shall be the implementing arm which shall monitor the performance of the MRP Integrity Circles of government agencies. The Composition of the MRP National Secretariat shall be as follows: 1. National Program Director who directs the policy formulation and implementation of plans and programs of the MRP Secretariat in accordance with Proclamation 62 and Executive Order 319 and in pursuit of the goals and objectives of the MRP; 2. Executive Director who directs and supervises the day to day operations of the MRP Secretariat in accordance with the work program approved by the National Program Director; 3. Operations and Support Services Staff for the implementation of the programs and projects from the national down to the grassroots level in accordance with MRP goals and objectives; The operational structure of the National Secretariat shall be replicated at the regional provincial, municipal/city and barangay levels through the Inter-Agency Councils, in pursuance of its objectives; There shall be a Council of Exemplars to be known as Kapulungan ng mga Kabayani sa Kabuuan at Kaginhawahan (KKKK) which shall serve as the advisory and policy making body of the program. The composition of the Council shall be the result of the selection process from the barangay up to the regional level and who shall embody the seven core Filipino values. The members shall be appointed by the President from a list of exemplars nominated by the regions and who in turn will be given recognition by the President at the Sambayanihan Congress to be held in celebration of Filipino values month every November. SEC. 3. Designation of Moral Recovery Officer. The heads of government agencies shall designate an MRO to initiate/convoke/inspire the formation of Integrity Circles from among the agencies' officers and staff. SEC. 4. Quarterly Reports. The MRP National Secretariat shall monitor the establishment of the Integrity Circles and submit quarterly reports on their activities and accomplishments to the Office of the President, through the Office of the Executive Secretary, copy furnished the Head, Presidential Management Staff. SEC. 5. Allocation of Human Resource Development (HRD) Training Appropriation. The 1% agency HRD training appropriation (GAA, MOE, Item No. 7) shall be allocated and used for the initial implementation of the agency's MRP. SEC. 6. Need for Agencies to Support the Integrity Circles. All agencies are required to provide the necessary support to the formation and maintenance of the agencies' Integrity Circle's and its efforts to initiate changes, transformations and to recognize & develop role models at all levels and sections and to render periodic report of the same to the National MRP Secretariat. SEC. 7. Effectivity. These rules shall take effect immediately. DONE in the City of Manila, this 11th day of July in the year of Our Lord, Nineteen Hundred and Ninety-Six. By Authority of the President: (Sgd.) RUBEN D. TORRES" Executive Secretary

All revenue officials and employees are enjoined to give this circular as wide as publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 08-22-96 Revenue Memorandum Circular No. 39-96 August 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 39-96 SUBJECT : Launching of the National Tepok Lamok and Dengue Sapok" Program TO : ALL REVENUE OFFICIALS AND EMPLOYEES AND OTHERS CONCERNED For the information and guidance of all revenue officials and employees, quoted hereunder is Administrative Order No. 281 of the Office of the President dated July 23, 1996. "WHEREAS, Section 15, Article II, of the Philippine Constitution provides that, "the State shall protect and promote the right to health of the people and instill health consciousness among them"; WHEREAS, there is a reported increase in the incidence of cases of dengue fever in Asia and in the country; WHEREAS, there is need to undertake preventive and control measures to address the increase in dengue fever cases; and WHEREAS, this will require concerted and collaborative efforts among the various national and local government agencies and the private sector. NOW, THEREFORE, I FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by Law and the Constitution, do hereby direct the following: SECTION 1. Establishment of the "National Tepok Lamok, Dengue Sapok" Program. A nationwide simultaneous clean-up operation and elimination of mosquito-breeding places, to be known as the National Tepok Lamok, Dengue Sapok Program is hereby established. SEC. 2. Participation of National Agencies and Local Government Units. All nationwide agencies particularly, the Department of Health (lead), Interior and Local Government, Social Welfare and Development, Environment and Natural Resources, Public Works and Highway, Education, Culture and Sports, National Disaster Coordinating Council, Office of the Press Secretary, and the Metro Manila Development Authority, as well as local government units are hereby directed to actively participate in the Program. SEC. 3. Launching of the Program. The Program shall be launched of 02 August 1996 which shall highlight a nationwide mass elimination of mosquito breeding places and observance of the four o'clock habit, whereby every citizen is enjoined to actively participate in the mass movement to eliminate breeding places of dengue at four o'clock in the afternoon everyday.

SEC. 4. Role of Local Government Units and Involvement of NGOs, POs and Private Sector. The local government units, in coordination with concerned agencies, shall ensure continued observance of the four o'clock habit and the sustained prevention and elimination of mosquito breeding places at the community level. They shall also be responsible for mobilizing the community, especially, the barangays, churches, nongovernment organizations, people's organizations, and the private sector in the Program. SEC. 5. Conduct of Information-Dissemination Campaign. The Office of the Press Secretary in coordination with the Department of Health and other concerned agencies shall undertake a massive tri-media information-dissemination campaign to educate and raise public awareness on dengue prevention and control. SEC. 6. Inclusion in Health Education Classes. The Department of Education, Culture and Sports, shall include in its health education classes, preventive and control measures against dengue fever. SEC. 7. Funding. The funds necessary for the implementation of the Program shall be sourced from the respective budgets of the concerned agencies and local government units. SEC. 8. Submission of Regular Reports. The Department of Health shall submit regular reports to the Office of the President on the status of dengue cases and the implementation of the Program. SEC. 9. Effectivity. This Administrative Order shall take effect immediately. DONE, in the City of Manila, this 23rd day of July, in the year of our Lord, Nineteen Hundred and Ninety-Six. (Sgd.) FIDEL V. RAMOS By the President: (Sgd.) RUBEN D. TORRES" Executive Secretary All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-09-96 Revenue Memorandum Circular No. 40-96 September 9, 1996 REVENUE MEMORANDUM CIRCULAR NO. 40-96 SUBJECT : "GSIS ANGAT-YAMAN (T-BILLS) PROGRAM" TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED For the information and guidance of all concerned, quoted hereunder is a letter from the Government Securities Dealing Department of the GSIS dated July 25, 1996, to wit: "COMMISSIONER LIWAYWAY V. CHATO Bureau of Internal Revenue BIR Building Diliman, Quezon City Dear Madam:

We have the honor to invite you and your personnel to invest in Treasury Bills and other government securities thru the GSIS. We also wish to encourage your office/company to avail of our services to access high-yielding investment alternative in T/Bills and other government securities. We further wish to request your assistance in promoting the "GSIS Angat-Yaman (T/Bills) Program" by posting the attached Open Invitation in your bulletin boards. We look forward to be of service to you." All internal revenue officers and others concerned are requested to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner OPEN INVITATION TO CO-WORKERS, OFFICERS & STAFF Looking for big opportunities with small investment at no risk? If you are sued to putting money in savings or time deposits, 'then you are probably losing 0.5% to 2.5% interest income per annum. If your banks require you to maintain at least P10,000 average daily balance on your savings deposit to earn 2% to 4%, then you are definitely foregoing around 6% to 8% interest income per annum. Why settle for less? We at GSIS will help you earn better on investments that are risk free. Earn more invest your money now in the "GSIS Angat-Yaman" T/Bills. You can now invest in Treasury Bills at rates much higher than what you would normally get in your savings deposits or even time deposits. To top it all, you get your interest income in advance. Our Angat-Yaman Program accepts a minimum placement of P10,000, an offer that is not available from other government securities dealers. You should not miss this chance to earn better income for your hard earned money. For more information, please call our Government Securities Dealing Department (GSDD) at telephone numbers 5511714 and 5511692 or 8916161-200 local 4824. ENRIQUETA P. DISUANCO VP Corporate Planning Group Concurrent OIC GSDD C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-05-96 Revenue Memorandum Circular No. 41-96 September 5, 1996 REVENUE MEMORANDUM CIRCULAR NO. 41-96 SUBJECT : TAX TREATMENT OF THE MONETARY SUM REPRESENTING ATONEMENT FROM THE JAPANESE PEOPLE TO FORMER WARTIME COMFORT WOMEN. TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED. For the information and guidance of all concerned, quoted hereunder is the letter reply of the Secretary of Finance, Honorable Roberto F. de Ocampo dated August 15, 1996: "Minister Makoto Katsura

Embassy of Japan 375 G.Puyat Avenue Makati City Dear Minister Katsura, This refers to your request to exempt the monetary sum representing atonement from the Japanese people to former wartime comfort women from the individual income tax and the donor's tax. Under our income tax laws, specifically, Sec. 28(b) 7 (C) of the National Internal Revenue Code, "social security benefits, pensions, and other similar benefits received by resident from foreign government" are excluded from the purview of gross income which is subject to income tax. Sec. 28(b)(6) also excludes "amounts of any damages received whether by suit or agreement on account of injuries or sickness" from taxable income. These provisions can be used to provide tax exemption for the reparation payments. Very truly yours, (SGD) ROBERTO F. DE OCAMPO Secretary" It is desired that this circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-10-96 Revenue Memorandum Circular No. 42-96 September 10, 1996 REVENUE MEMORANDUM CIRCULAR NO. 42-96 SUBJECT : GUIDELINES ON THE GRANT OF ONE-STEP ADJUSTMENT IN THE SALARY OF CAREER EXECUTIVE SERVICE OFFICERS (CESOs) PURSUANT TO CSC RESOLUTION NO. 94-5840 AND CES BOARD RESOLUTION NO. 129. TO : ALL REVENUE OFFICIALS AND EMPLOYEES AND OTHER CONCERNED. For the information and guidance of all revenue Officials and employees, quoted hereunder is the Career Executive Service Board Circular No. 12. s. 1996. "1. Civil Service Commission (CSC) Resolution No. 94-5840 dated 21 October 1994, provides that the salaries of Career Executive Service Officers or CESOs shall start at step 2 of the salary grades of their ranks: 2. Pursuant to the above-numbered CSC Resolution, the CES Board, through Resolution No. 129 dated 12 April 1996, has authorized the entitlement of a CESO to a one-step adjustment effective 26 November 1994, if he is already receiving the second or higher step of the salary grade of his rank upon the issuance of CSC Resolution No. 945840; 3. Consonance thereto, a CESO whose salary, at the time of the issuance of CSC Resolution No. 94-5840 is already on the second or higher step of the salary grade of his

rank by virtue of step increments earlier granted based their on merit or length of service, shall be entitled to a one-step adjustment in the salary grade of his rank effective 26 November 1994: provided, that where the rank of a CESO has salary grade lower than that of the CES position to which he is assigned/appointed to, the one-step salary adjustment shall be based on the salary grade of the higher position; provided, finally, that where the salary of the CESO is already at the eight step of the salary grade of the salary grade or his rank or position, this one-step entitlement shall no longer apply: This benefit shall likewise apply to those appointed to CES ranks after the issuance of the said CSC resolution who are already receiving the second or higher step of the salary grades of their ranks subject to the renditions setforth herein. 4. Career Executive Service Officers (CESOs) are officials who have CES eligibility and have been duly appointed by the President to ranks in the CES. 5. This Circular shall take effect immediately. Done in Quezon City, Philippines this 29th day of May 1996. (SGD) CORAZON ALMA G. DE LEON Chairman Attested by: (SGD.) ELMOR D. JURIDICO Executive Director All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-05-96 Revenue Memorandum Circular No. 43-96 September 5, 1996 REVENUE MEMORANDUM CIRCULAR NO. 43-96 SUBJECT : CONFERMENT OF CES ELIGIBILITY. TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED. For the information and guidance of all revenue officers and employees, quoted hereunder is the Career Executive Board Memorandum dated August 15, 1996 to all Incumbents of CES Positions: "We would like to clarify a possible confusion which the recently announced Career Service Examination may have created. The screening process for conferment of CES eligibility, which will qualify you for appointment to a rank in the CES and which will give you security of tenure, is still the four-stage examination prescribed by the CES Board. The four-stage process consists of: 1) MATB, 2) Assessment Center, 3) Validation of onthe-job performance; and, 4) Final interview with a Board member. A candidate is conferred CES eligibility after successfully passing the four stages. Officially, he becomes a CES eligible upon conferment by the Board en banc.

Because CESD eligibility gives officials the security of tenure and protects them from the instabilities brought about by periodic changes in political leadership, we would like you to know that your Board is doing everything possible to accelerate the eligibility process. We would like to provide you with all the avenues to acquire this eligibility. Thus, we have reviewed our screening policies and fine-tuned our procedures to shorten the period of completing the process without sacrificing its quality. We are conducting a MATB exclusively for you every year and the Secretariat has written to each of you enjoining you to take the MATB. We have exempted senior lever CES incumbents from the Assessment Center (AC) upon a study on AC performance revealed that this group has a very high 91% passing rate. We have made internal structural adjustments in the Secretariat to create a pool of full-time validators whose lone tasks to conceal validation interviews. For the last stage of the process, we would like to assure you that we have committed a number of days of our time exclusively for interviewing those of you who make it the last stage so that those found deserving will get their eligibility as soon as possible. After all, we have only eighteen months or so left to do our homework of insuring that majority of you who are qualified are secure come a new administration. Finally, the Board reiterates that the four-stages screening system remains the only process for acquiring CES eligibility. No other examination shall be recognized by your Board as equivalent to the examination for CES eligibility. CORAZON ALMA G. DE LEON Chairman CARMENCITA T. ABELLAROMEO B. OCAMPO Member Member JOSE T. PARDO Member SERAFIN D. TALISAYON" Member

All revenue officials are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 09-25-96 Revenue Memorandum Circular No. 45-96 September 25, 1996 REVENUE MEMORANDUM CIRCULAR NO. 45-96 SUBJECT : MISSING DUPLICATE, TRIPLICATE AND QUADRUPLICATE COPIES OF REVENUE OFFICIAL RECEIPT (BIR FORM NO. 25.24). TO : ALL INTERNAL REVENUE OFFICERS, EMPLOYEES AND OTHERS CONCERNED. Notice is hereby given of the missing duplicate, triplicate and quadruplicate copies of Revenue Official Receipt (BIR Form No. 25.24), to wit: Serial Number Quantity 7778650-M One (1) copy duplicate

One (1) copy triplicate One (1) copy quadruplicate. The above copies which were reported as missing be Ms. Sheela G. Galindez, Acting Collection Agent of Revenue District No. 35, Romblon, Romblon and the original copy of the set bearing the abovementioned serial number, have been cancelled and all official transactions involving the use thereof invalidated. Internal revenue officers, employees and others concerned are requested to promptly notify this Office in case the abovementioned copies are found, taking the necessary steps in the meantime to prevent the improper or fraudulent disposition or use thereof. THIS CIRCULAR SHOULD BE POSTED IN A CONSPICUOUS PLACE IN ALL COLLECTION AGENTS' OFFICES. ESTELITA P. AGUIRRE Deputy Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-22-96 Revenue Memorandum Circular No. 46-96 October 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 46-96 SUBJECT : ADMINISTRATIVE ORDER NO. 277 DATED JUNE 25, 1996 TO : All Internal Revenue Officers, Employees and Others Concerned For the information and guidance of all revenue officials and employees concerned, quoted hereunder is Administrative order No. 277 dated June 25, 1996. "ADMINISTRATIVE ORDER NO. 277 DIRECTING PARTICIPATING NATIONAL GOVERNMENT AGENCIES AND LOCAL GOVERNMENT UNITS TO ENSURE THE SPEEDY IMPLEMENTATION OF THE NATIONAL HEALTH INSURANCE PROGRAM AND FOR OTHER PURPOSES. WHEREAS, the Philippine Constitution declares that the State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost; and that priority for the needs of the underprivileged, sick, elderly, disabled, women and children shall be recognized; and that it shall be the policy of the State to provide free medical care to paupers; WHEREAS, RA 7875: The National Health Insurance Act of 1995 has been enacted in line with the declared policy of the State to provide adequate social services and improved quality of life for all, and for this purpose, the State shall adopt an integrated and comprehensive approach towards health development; WHEREAS, the Ten-Year Public Investment Plan for the Health Sector (1994-2004) identifies national health insurance as one of its priority public investment packages towards a national framework for universal insurance coverage; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: SECTION 1. Five-Year Phased-In Implementation of the Indigent Component of the National Health Insurance Program. The Philippine Health Insurance Corporation is hereby directed to conduct actuarial studies to show the viability of the Indigent

Component of the NHIP and to ensure that the NHIP shall have covered at least the poorest twenty five percent of the population within a period of five years. SECTION 2. Directive to Department of Finance. The DOF is hereby directed to ensure the effective resource mobilization for the implementation of the NHIP, particularly with regard to the fund sourced identified by Sec. 1 (4) of RA 7917, Sec. 3 par. 2 of RA 7654, and Sec. 22 (b) of RA 7660 and other pertinent laws. SECTION 3. Directive to Department of Budget & Management. The DBM is hereby directed to allocate funds as may be necessary and subject to the approved fiscal program of the national government, for premium subsidy and employer's counterpart contribution for the Medicare Program and include the same in the annual General Appropriations Act. SECTION 4. Directive to the Oversight Committee on the Local Government Code. The Oversight Committee on the Local Government Code is hereby directed to work with the PHIC in addressing the issue of devolution funding difficulties vis-a vis the local government units' counterpart contribution to the Indigent premium subsidy. SECTION 5. Directive to the Philippine Information Agency. The PIA, in close coordination with the PHIC, shall formulate a comprehensive communication plan with the corresponding budgetary requirement for an effective implementation of the NHIP. SECTION 6. Directive to Local Government Units. The LGUs are hereby directed to ensure the immediate and effective implementation of the Indigent component of the NHIP in their respective jurisdiction. To this end, the LGUs are directed to prioritize the NHIP in their annual social development plans. SECTION 7. Effectivity. This Administrative Order shall take effect immediately. DONE, in the City of Manila, this 25th day of June in the year of Our Lord, Nineteen Hundred and Ninety-Six. (SGD.) FIDEL V. RAMOS By the President: (SGD.) RUBEN D. TORRES Executive Secretary" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-22-96 Revenue Memorandum Circular No. 47-96 October 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 47-96 SUBJECT : MEMORANDUM CIRCULAR NO. 144 DATED JULY 5, 1996 TO : All Internal Revenue Officials, Employees and Others Concerned For the Information and guidance of all revenue officials and employees concerned quoted hereunder is Memorandum Circular No. 144 dated July 5, 1996; "MEMORANDUM CIRCULAR NO. 144 DIRECTING ALL AGENCIES OF THE NATIONAL GOVERNMENT, INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GOCCs) AND

THEIR INSTRUMENTALITIES, TO COMPLY WITH THE PROVISIONS OF ADMINISTRATIVE ORDER NO. 129 Administrative Order No. 129 (AO 129) issued on 16 May 1994 provides for a specific time frame for each phase of the bidding and award process (i.e. from evaluation of prequalification statements up to issuance of notice to proceed) for infrastructure and other construction works and consulting services contracts. In order to fully monitor agency compliance with the provisions of AO 129, it is indicated in said AO that all Government Agencies and GOCCs shall submit to the Committee on Infrastructure (INFRACOM) of the NEDA Board a list of all approved infrastructure and other construction works contracts involving costs of P10.0 million above indicating the actual processing time used/spent for each phase of the bidding and award/process. It has come to the attention of the Office of the President that only few agencies submit their reports to the INFRACOM on such approved contracts. To ensure that infrastructure and other construction works and consulting contracts are entered into in accordance with the timetables prescribed under AO 129, all concerned agencies are hereby directed to fully comply and submit the required reports under AO 129 to the INFRACOM. This Memorandum Circular shall take effect immediately. By Authority of the President: (SGD.) RUBEN D. TORRES Executive Secretary" All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-18-96 Revenue Memorandum Circular No. 49-96 October 18, 1996 REVENUE MEMORANDUM CIRCULAR NO. 49-96 SUBJECT : Guidelines in the Preparation and Submission of Purchase Orders Relative to the Procurement of Supplies and Equipment. TO : All Internal Revenue Officers and Others Concerned. For the information and guidance of all concerned, quoted hereunder is Commission on Audit Circular No. 96-010 dated August 15, 1996, to wit: "Commission on Audit Circular No. 96-010 To : All Heads of Department, Agencies, Bureaus and Offices of the National Government; Managing Heads of Government-Owned and or Controlled Corporations, Self-Governing Boards or Commissions; Provincial Governors, City and Municipal Mayors; Provincial, City or Municipal Treasurers; COA Directors; Heads of Auditing Units National, Local and Corporate Sectors and All Others Concerned. Subject : Guidelines in the Preparation and Submission of Purchase Orders Relative to the Procurement of Supplies and Equipment.

It has been observed that most of the purchase orders submitted by government agencies to COA auditors do not indicate all the necessary information pertaining to the purchase. Moreover, most agencies do not submit the copy of the purchase orders within the prescribed period, thereby causing undue delay in the post audit of transactions. Accordingly, the following guidelines and procedures are hereby prescribed for the guidance of all concerned: A. Date of submission of the copy or purchase order (PO) 1. A copy of any letter or purchase order, irrespective of amount, and all supporting documents thereto, shall be submitted to the unit or agency Auditor concerned within five (5) days from issuance. The Auditor concerned shall, within five (5) days following his receipt thereof, inform management in writing of any defect and/or deficiencies found in audit (COA Circular No. 76-34 dated July 15, 1976). 2. The agency official responsible for accepting deliveries of procured items shall, within twenty-four (24) hours from such acceptance, notify the Auditor of the time and date of the scheduled deliveries (COA Circular No. 95-006 dated May 18, 1995). In case of partial delivery of any item in the P.O., the copy to be submitted shall indicate which items have been delivered, and which have not. 3. Copy of P.O. must be legible in all respects, and shall be submitted to the Office of the COA Auditor of the agency concerned. B. Basic data which should invariably appear in the P.O. 1. The existing forms of the purchase order or other contract used by the agencies may be continued, provided that it shall contain all the following data or information: (a) Purchase Order Number (b) Date of Purchase Order (c) Complete name of supplier (d) Complete address of supplier (e) Information whether the supplier is a manufacturer or exclusive distributor; registered with SEC, DTI or both (f) Telephone and fax number of supplier, if any (g) Date of Delivery (h) Complete item name (i) Complete detailed item specification, including accessories i.e., narrative description, size/dimension/volume, model, use of item, color, capacity, horsepower, voltage, watts, gauge, kind of equipment where spare part is to be used, whether replacement or original (for spare parts), part number of spare parts, type and classification of material, brand new or second hand, etc. (j) Price (individual unit price; if lot price any document showing the detailed breakdown of the cost should likewise be submitted) (k) Unit of measure when it is not universally accepted indicate numbers or weight, or lineal measure; i.e., if stated as per "roll", indicate the number of yards/meter per roll; if per "box", state number/pcs. contents, if per bag how many pounds or kilos. (l) Quantity or number of units. (m) Brand name. If no brand, state "none" (n) Country of manufacture or origin of item; i.e., local (or RP); or if foreign origin specify country. (o) Terms, i.e., COD, n/30 days, etc.

(p) Mode of procurement; i.e., public bidding, canvass, negotiated sale, and such other authorized modes. If "repeat order" indicate previous Purchase Order and date which was used as basis. (q) Taxes paid by agency; i.e., VAT, etc. If taxes are paid by supplier, do not indicate. This circular shall take effect immediately. (SGD.) CELSO D. GANGAN Chairman (SGD.) ROGELIO B. ESPIRITU Commissioner Commissioner (SGD.) SOFRONIO B. URSAL

All internal revenue officers and others concerned are requested to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-22-96 Revenue Memorandum Circular No. 50-96 October 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 50-96 SUBJECT : DECLARING 21 TO 28 OCTOBER 1996 AND FOR EVERY YEAR THEREAFTER AS DUAL TRAINING SYSTEM (DTS) WEEK. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Proclamation No. 884 by the President of the Philippines dated September 24, 1996. "WHEREAS, the Dual Training System (DTS) has been institutionalized as an instructional delivery system of technical education an vocational training under Republic Act No. 7686; "WHEREAS, the DTS combines in-plant training, in-school and in-center training based on a training plan jointly designed by the educational and industrial sectors; WHEREAS, it is imperative to deepen the knowledge of Local Government Units (LGUs), the Department of Interior and Local Government (DILG), the Department of Education, Culture and Sport (DECS), Professional Regulations Commission (PRC), the Department of Trade and Industry (DTI), the Department of Finance (DOF) with the Bureau of Internal Revenue (BIR) and the Department of Budget and Management (DBM), towards fully implementing and fast-tracking the dual training system as the preferred mode of skills development; WHEREAS, it is necessary to take steps to institutionalize a multi-sectoral implementation of a comprehensive competency-based system delivered through the dual training system. WHEREAS, it is necessary to take steps to institutionalize a multi-sectoral implementation of a comprehensive competency-based system delivered through the dual training system. NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby declare October 21-28, 1996, and for every

year thereafter as Dual Training System (DTS) Week under the auspices of the Technical Education and Skills Development Authority (TESDA). I hereby issue a general call for support of the private sector, particularly of the Philippine Chamber of Commerce and Industry (PCCI), the Trade Union Congress of the Philippines (TUCP), the Federation of Free Workers (FFW), the Dual System Chamber of Industry (DSCI), the Governors and Mayors League of the Philippines, the Dual Tech Training Center Foundation, Inc. (DTTCFI), the National Federation of Student Councils and private and public technicalvocational schools/centers sector to work actively with the TESDA Board to ensure the successful conduct of the National Congress on DTS and implementation of the Dual Training System. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. DONE in the City of Manila, this 25th day of September in the year of Our Lord, Nineteen Hundred and Ninety-Six. (Sgd.) FIDEL V. RAMOS" By the President: (Sgd.) RUBEN D. TORRES Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue PROCLAMATION NO. 884 DECLARING 21 TO 28 OCTOBER 1996 AND FOR EVERY YEAR THEREAFTER AS DUAL TRAINING SYSTEM (DTS) WEEK WHEREAS, the Dual Training System (DTS) has been institutionalized as an instructional delivery system of technical education and vocational training under Republic Act No. 7686; WHEREAS, the DTS combines in-plant training, in-school and in-center training based on a training plan jointly designed by the educational and industrial sectors; WHEREAS, it is imperative to deepen the knowledge of Local Government Units (LGUs), the Department of Interior and Local Government (DILG), the Department of Education, Culture and Sports (DECS), Professional Regulations Commission (PRC), the Department of Trade and Industry (DTI), the Department of Finance (DOF) with the Bureau of Internal Revenue (BIR) and the Department of Budget and Management (DBM), towards fully implementing and fast-tracking the dual training systems as the preferred mode of skills development. WHEREAS, it is necessary to take steps to institutionalize a multi-sectoral implementation of a comprehensive competency-based system delivered through the dual training system. NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby declare October 21-28, 1996 and for every year thereafter as Dual Training System (DTS) Week under the auspices of the Technical Education and Skills Development Authority (TESDA). I hereby issue a general call for

support of the private sector, particularly of the Philippine Chamber of Commerce and Industry (PCCI), the Trade Union Congress of the Philippines (TUCP), the Federation of Free Workers (FFW), the Dual System Chamber of Industry (DSCI), the Governors and Mayors League of the Philippines, the Dual Tech Training Center Foundation, Inc. (DTTCFI), the National Federation of Student Councils and private and public technicalvocational schools/centers sector to work actively with the TESDA Board to ensure the successful conduct of the National Congress on DTS and implementation of the Dual Training System. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. DONE, in the City of Manila, this 24th day of September in the year of Our Lord, Nineteen Hundred and Ninety-Six. C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 10-22-96 Revenue Memorandum Circular No. 51-96 October 22, 1996 REVENUE MEMORANDUM CIRCULAR NO. 51-96 SUBJECT : CLARIFICATION ON THE GRANT OF SPECIAL PRIVILEGES UNDER MEMORANDUM CIRCULAR NO. 6, s. 1996. TO : All Revenue Officials and Employees and others concerned. For the information and guidance of all revenue officials and employees, quoted hereunder is Resolution No. 966162 from the Civil Service Commission dated September 23, 1996. "WHEREAS, in CSC Resolution No. 96-2242 dated March 21, 1996, the, the Commission authorized agencies to grant special privileges enumerated under the checklist of reasonable working conditions in the public sector; WHEREAS, said Resolution No. 9602242 has been circularized by CSC Memorandum Circular No. 6, s. 1996; WHEREAS, there is a need to clarify the grant of the various special privileges under said Resolution/MC; WHEREFORE, the Commission hereby issues the following clarification on the grant of special privileges under Memorandum Circular No. 6, s. 1996 and CSC Resolution No. 96-2242: 1. The availment of special privileges shall be limited as follows: a. Paternity leave superseded by RA 8187 b. Funeral/mourning leave on the occasion of the death of a member of the immediate family of the employee c. Graduation leave on the occasion of the employee's, his/her spouse's or children's graduation d. Enrollment same as graduation leave e. Wedding/anniversary leave on the occasion of the employee's wedding and/or wedding anniversary, to be enjoyed on the actual date of marriage or anniversary f. Birthday leave on the occasion of the employee's actual birthday g. Hospitalization leave by reason of the hospitalization of the employee or any member of his/her immediate family

h. Accident leave by reason of an accident involving the employee or any member of his/her immediate family i. Relocation leave by reason of the occurrence of such calamities or disasters personally affecting the employee such as flood, earthquake, typhoon, or fire. 2. The term "immediate family" as used herein shall include "any relative within the first degree of consanguinity or affinity, living under the same roof and dependent upon the employee for support". 3. These privileges shall be enjoyed only by those who have rendered six (6) months of continuous, satisfactory service. Casual or emergency employee or laborers may enjoy these privileges after they have rendered at least six months' service in the aggregate. 4. Teachers are not covered by this Circular. 5. All Collective Negotiation Agreements (CNAs) granting more than what is under this Circular are hereby amended accordingly. (Sgd.) CORAZON ALMA G. DE LEON Chairman (Sgd.) RAMON P. ERENETA, JR. (Sgd.) THELMA G. GAMINDE Commissioner Commissioner Attested by: (SGD.) CARMENCITA GISELLE E.B. BRINGAS" Board Secretary VI All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue CSC RESOLUTION NO. 966162 WHEREAS, CSC Resolution No. 96-2242 dated March 21, 1996, the Commission authorized agencies to grant special privileges enumerated under the checklist of reasonable working conditions in the public sector; WHEREAS, said Resolution No. 96-2242 has been circularized by CSC Memorandum Circular No. 6, s. 1996; WHEREAS, there is a need to clarify the grant of the various special privileges under said Resolution/MC; WHEREFORE, the Commission hereby issues the following clarification on the grant of special privileges under Memorandum Circular No. 6, s. 1996 and CSC Resolution No. 96-2242; 1. The availment of special privileges shall be limited as follows: a. Paternity leave superseded by RA 8187 b. Funeral/mourning leave on the occasion of the death of a member of the immediate family of the employee c. Graduation leave on the occasion of the employee's, his/her spouse's or children's graduation

d. Enrollment same as graduation leave e. Wedding/anniversary leave on the occasion of the employee's wedding and/or wedding anniversary, to be enjoyed on the actual date of marriage or anniversary f. Birthday leave on the occasion of the employee's actual birthday g. Hospitalization leave by reason of the hospitalization of the employee or any member of his/her immediate family h. Accident leave by reason of an accident involving the employee or any member of his/her immediate family i. Relocation leave by reason of the occurrence of such calamities or disasters personally affecting the employee such as flood, earthquake, typhoon, or fire. 2. The term "immediate family" as used herein shall include "any relative within the first degree of consanguinity or affinity, living under the same roof and dependent upon the employee for support". 3. These privileges shall be enjoyed only by those who have rendered six (6) months of continuous, satisfactory service. Casual or emergency employee or laborers may enjoy these privileges after they have rendered at least six months' service in the aggregate. 4. Teachers are not covered by this Circular. 5. All Collective Negotiation Agreements (CNAs) granting more than what is under this Circular are hereby amended accordingly. September 23, 1996 (Sgd.) CORAZON ALMA G. DE LEON Chairman (Sgd.) RAMON P. ERENETA, JR. (Sgd.) THELMA G. GAMINDE Commissioner Commissioner Attested by: (SGD.) CARMENCITA GISELLE E.B. BRINGAS" Board Secretary VI C o p y r i g h t 1 9 9 6 C D T e c h n o l o g i e s A s i a I n c. 11-18-96 Revenue Memorandum Circular No. 52-96 November 18, 1996 REVENUE MEMORANDUM CIRCULAR NO. 52-96 TO : All Revenue Officials and Employees and others concerned SUBJECT : Suspending Government Office Hours in the National Capital Region and Olongapo City from November 22 to 26, 1996 except for Law Enforcement Agencies and the Bureau of Customs and the Bureau of Internal Revenue For the information and guidance of all revenue officials and employees, quoted hereunder is Memorandum Circular No. 151 dated November 12, 1996 from Malacanang, by the President of the Philippines. "Except for law enforcement agencies and the Bureau of Customs and Internal Revenue, regular office hours for all government offices, including government owned and controlled corporations, in the National Capital Region, and Olongapo City are hereby

suspended from November 22 to 26, 1995. Heads of agencies in the areas covered by this Order shall, however, maintain adequate workforces to serve the general public and attend to matters which are critical to the operations of their agencies. All government offices in these areas shall resume normal services at the start of business hours on 27 November 1996. DONE in the City of Manila, this 12th day of November in the year of Our Lord, Nineteen Hundred and Ninety-Six. (SGD.) FIDEL V. RAMOS By the President: (Sgd) RUBEN D. TORRES" Executive Secretary All revenue officials and employees are enjoined to give this circular as wide a publicity as possible. ESTELITA C. AGUIRRE Acting Commissioner PROCLAMATION NO. 919 DECLARING THE PERIOD 22 TO 23 AND 25 TO 26 OF NOVEMBER 1996 AS SPECIAL NON-WORKING HOLIDAYS IN THE NATIONAL CAPITAL REGION AND OLONGAPO CITY WHEREAS, the Philippines will be hosting the Asia Pacific Economic Cooperation meetings in Manila and Subic on November 22 to 26, 1996, which event has been acknowledged as the major economic and diplomatic event in the region; WHEREAS, the delegates and observers from seventeen participating economies and the international media will be in Metro Manila and Subic during the scheduled meeting dates; WHEREAS, there is a need to ensure a free and unhampered flow of traffic in the said areas to maximize the productive hours of the delegates; WHEREAS, the regular heavy traffic conditions cannot otherwise be eased if normal working schedules are observed; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby declare the period November 22 to 23 and 25 to 26 as special non-working holidays in the National Capital Region and Olongapo City, except for the following: a. Banks b. Hotels and restaurants c. Utility companies d. Construction companies, and e. Manufacturing companies To ensure efficient traffic management during this period, the Metro Manila Development Authority and the Philippine National Police are hereby tasked to adopt measures as may be needed for the purpose, including the establishment of Special APEC Friendship Lanes along the APEC routes. DONE in the City of Manila, this 12 day of November in the year of Our Lord, Nineteen Hundred and Ninety-Six.

MEMORANDUM CIRCULAR NO. 151 SUSPENDING GOVERNMENT OFFICE HOURS IN THE NATIONAL CAPITAL REGION AND OLONGAPO CITY FROM NOVEMBER 22 TO 26, 1996 Except for law enforcement agencies and the Bureau of Customs and the Bureau of Internal Revenue, regular office hours for all government offices including government owned and controlled corporations, in the National Capital Region, and Olongapo City are hereby suspended from November 22 to 26, 1995. Heads of agencies in the areas covered by this Order shall, however, maintain adequate workforces to serve the general public and attend to matters which are critical to the operations of their agencies. All government offices in these areas shall resume normal services at the start of business hours on 27 November 1995. DONE in the City of Manila, this 12th day of November in the Year of Our Lord, Nineteen Hundred and Ninety-Six.