REVENUE REGULATIONS NO. 5 - 2009

SUBJECT : REVERTING THE VENUE FOR THE FILING OF RETURNS AND PAYMENT OF CAPITAL GAINS TAX, CREDITABLE WITHHOLDING TAX AND DOCUMENTARY STAMP TAX DUE ON SALE, TRANSFER OR EXCHANGE OF REAL PROPERTY OF LARGE TAXPAYERS TO THE PLACE WHERE THE PROPERTY IS LOCATED

TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED
________________________________________________________________________

SECTION 1. SCOPE. – Pursuant to Section 244 of the National Internal Revenue Code of 1997, as amended, in relation to Sections 27(A), 27(D)(5), 57(A), 57(B), 196 and 245(j) thereof, these Regulations are hereby promulgated in order to revert the venue for the filing of returns (i.e., capital gains tax returns, creditable withholding tax returns, and documentary stamp tax returns) and payment of taxes due on onerous transfers of real properties owned by large taxpayers to the Authorized Agent Banks (AABs) located within the Revenue District Office (RDO) having jurisdiction over the place where the property being transferred is located.

SEC. 2. POLICY STATEMENT. – Pursuant to the provisions of Revenue Regulations No. 8-98, the venue for the filing of returns and payment of taxes due on onerous transfers of real properties for all taxpayers, including large taxpayers, is generally determined by the place where the property being transferred is located.

Sometime last year, Revenue Regulations No. 4-2008 was promulgated effectively amending Revenue Regulations No. 8-98 but only in respect to the venue for the filing of returns and payment of taxes of real estate transactions of large taxpayers. This amendment was envisioned to improve the efficiency in servicing the needs of the large taxpayers by centralizing the processing of their real estate transactions in the concerned Large Taxpayers Office where they are registered, thereby doing away with the procedure of having to secure the Certificate Authorizing Registration (CAR)/Tax Clearance Certificate (TCL) from the various RDOs where the respective real properties are located. However, during implementation and with the recent delisting and enlisting of taxpayers who are to be classified as large taxpayers, it has been recognized that such differing rule has caused confusion to those who have been de-classified as large taxpayers, as well as those who have be recently enlisted as such.

In order to provide uniformity in the processing of real estate transactions of taxpayers, whether large or non- large taxpayers, and that ocular inspection of the subject real property can be performed expediently prior to the issuance of the CAR/TCL, the venue for the filing of tax returns and payment of the taxes due thereon (i.e., CGT/CWT/Regular Income Tax/DST) on real properties owned by large taxpayers, including securing of CAR/TCL, is hereby reverted to the jurisdiction of the concerned RDO where the real property concerned is located.

SEC. 3 . TIME AND PLACE OF PAYMENT OF CAPITAL GAINS TAX (CGT) AND DOCUMENTARY STAMP TAX (DST) ON THE SALE, EXCHANGE OR DISPOSITION OF REAL PROPERTIES CLASSIFIED AS CAPITAL ASSETS. - Within thirty (30) days following each sale, exchange or disposition of lands and/or buildings which are not actually used in the business of a corporation and are treated as capital assets, the Capital Gains Tax Return (BIR Form No. 1706) shall be filed by the seller or the buyer and payment of taxes made to an AAB located within the RDO having jurisdiction over the place where the property being transferred is located based on the gross selling price or fair market value as determined in accordance with Section 6(E) of the Tax Code, whichever is higher, of such lands and/or buildings. The corresponding Documentary Stamp Tax Return (BIR Form No. 2000-OT) shall be filed within five (5) days after the close of the month when the taxable document was made, signed, accepted or transferred, and the tax due thereon shall be paid at the same time the aforesaid return is filed with the AAB having jurisdiction over the place where the property being transferred is located based on the consideration contracted to be paid for such realty or on its fair market value determined in accordance with Section 6(E) of the Tax Code, whichever is higher. The above rules apply whether the seller/transferor thereof is a large taxpayer or a non- large taxpayer.

These rules on the venue for the filing of the returns and payments of taxes due on real properties onerously disposed shall likewise apply in cases of taxable foreclosure sales.

SEC. 4. TIME AND PLACE OF PAYMENT OF CREDITABLE WITHHOLDING TAX (CWT) AND DOCUMENTARY STAMP TAX (DST) ON THE SALE, EXCHANGE OR DISPOSITION OF REAL PROPERTIES CLASSIFIED AS ORDINARY ASSETS. - Creditable withholding taxes (CWT) deducted and withheld by the withholding agent/buyer on the sale, transfer or exchange of real property classified as ordinary asset, shall be paid by the withholding agent/buyer upon filing of the CWT Return (BIR Form No. 1606) with the AAB located within the RDO having jurisdiction over the place where the property being transferred is located within ten (10) days following the end of the month in which the transaction occurred subject, however, to the specific rules prescribed by RR 2-98, as amended, and the rules prescribed under the EFPS regulations, in case the taxpayer is an EFPS taxpayer.

The corresponding Documentary Stamp Tax Return (BIR Form No. 2000-OT) shall be filed within five (5) days after the close of the month when the taxable document was made, signed, accepted or transferred, and the tax due thereon shall be paid at the same time the aforesaid return is filed with the AAB having jurisdiction over the place where the property being transferred is located based on the consideration contracted to be paid for such realty or on its fair market value determined in accordance with Section 6(E) of the Tax Code, whichever is higher.

The above rules apply whether the seller/transferor thereof is a large taxpayer or a non- large taxpayer. These rules on the venue for the filing of the returns and payments of taxes due on real properties onerously disposed shall likewise apply in cases of taxable foreclosure sales.

SEC. 5. ISSUANCE OF CERTIFICATE AUTHORIZING REGISTRATION (CAR) / TAX CLEARANCE CERTIFICATE (TCL). — Upon presentation of the Capital Gains Tax Return or Creditable Withholding Tax Return and Documentary Stamp Tax Return with a bank validation evidencing full payment of the capital gains tax or the expanded creditable withholding tax and documentary stamp tax due on the sale, transfer, barter, exchange or other disposition of real property classified as capital or ordinary asset, as the case may be, the RDO of the revenue district office where the property being transferred is located shall issue the corresponding Certificate Authorizing Registration (CAR) or Tax Clearance Certificate (TCL) for the registration of the real property in favor of the transferee.

In the case of sale or transfer of ordinary assets, it shall be the responsibility of the RDO issuing the CAR/TCL to notify the RDO having jurisdiction over the place of business of the seller to conduct an immediate post-audit of the Quarterly Income Tax Return and the Quarterly VAT Return of the seller to ensure that correct taxes (i.e., income tax, value added tax (if applicable), and documentary stamp tax) have been fully paid on that sale of real properties considered as ordinary assets of the company.

Furthermore, the Revenue Office in the RDO issuing the CAR/TCL shall indicate on the reverse side of all the copies of the document of sale or exchange or transfer the details of information indicated in the CAR, to wit: CAR Number, Date of CAR, Title Number of the Property, Classification of the Property, Location of the Property, Area of the Property, Selling Price, Fair Market Value, Type of Taxes Paid (i.e., whether capital gains tax or expanded withholding tax, documentary stamp tax, Amount of Taxes Paid, the Official Receipt Number/Validation Number and the Date of the Official Receipt/Date of Payment/Date of Validation. Thus, before the CAR/TCL is released to the taxpayer, all the copies of the document of sale/exchange or transfer shall first be presented to the assigned revenue officers who shall indicate at the back of said documents the information contained in the CAR/TCL as herein required.

The CAR/TCL shall be signed by the Revenue District Officer of the district having jurisdiction over the place where the property is located. The CAR/TCL as issued by the RDO shall have a validity period of one (1) year for purposes of presenting the same to the Register of Deeds. In case of failure to present the same to the Register of Deeds within the one-year validity period, the same may still be revalidated, but the total period of validity cannot exceed two years counted from the date of issuance of the CAR/TCL. Revalidation shall be done by stamping the phrase “Revalidated on _______, to expire on __________”, after validating the authenticity and validity of the old CAR/TCL sought to be revalidated. Thus, given the periods set herein, the CAR/TCL, upon issuance, shall have to be presented to the Register of Deeds within a maximum period of not more than two (2) years; otherwise, the CAR/TCL shall be deemed permanently expired and therefore of no effect. New returns and proof of tax payments shall be needed to produce a new CAR/TCL.

In no instance shall the Register of Deeds honor a CAR/TCL with erasures or alterations.

SEC. 6. VALIDITY OF REVENUE REGULATIONS NO. 24-2002. – The provisions of Revenue Regulations No. 24-2002 prescribing the information to be periodically submitted by the Land Registration Authority (LRA), the Register of Deeds and the Assessor’s Office to the Bureau of Internal Revenue relative to the transfers of real properties; the specific information that must be annotated, either by the RDO or the Register of Deeds, to certain documents; and the manner of issuance, recording and monitoring of the Certificate Authorizing Registration (CAR), in order to ensure that all internal revenue taxes due on transfers of real property have been paid and remitted to the Government, as well as the responsibility of the Register of Deeds as provided for in the said Regulations, shall all remain valid and effective.

SEC. 7. TRANSITORY PROVISION. –The following rules shall apply with respect to real estate sale transactions of large taxpayers prior to the effectivity of these Regulations:

(1) For real estate sale transactions of large taxpayers on “cash basis” or “deferred-payment sale not on installment plan basis,” (i.e., payments in the year of sale exceed 25% of the selling price) where the capital gains tax or expanded creditable withholding tax, as well as documentary stamp tax returns have already been filed with and taxes due thereon, if any, have already been paid to the concerned LTS Office, the corresponding CAR/TCL shall remain to be processed and issued by the said LTS Office even upon issuance of these Regulations;

(2) For real estate sale transactions of large taxpayers on “installment basis,” (i.e., payments in the year of sale do not exceed 25% of the selling price):

(a) Where there is already full payment of the full consideration of the real property bought under installment basis, and the corresponding returns have already been filed and taxes due thereon, if any, have already been fully paid to the concerned LTS Office, the corresponding CAR/TCL shall remain to be processed and issued by the said LTS Office even upon issuance of these Regulations;

(b) Where there is no full payment yet of the full consideration of the real property bought under installment basis as of the effectivity of these Regulations, the remaining installment payment of taxes due as of the effectivity hereof shall begin to accrue to the RDO where the property is located, which shall be responsible for processing and issuing the TCL/CAR.

Pertinent documents submitted as well as tax returns relative to prior tax payments made to the concerned LTS Office shall then be endorsed by said concerned LTS Office to the RDO where the property is located, which shall consolidate the same with those filed with and paid to its District Office for purposes of determining whether there has been full payment of the taxes due and full compliance with the documentary requirements laid down by law and regulations prior to the issuance of the CAR/TCL.

SEC. 8. REPEALING CLAUSE. - All revenue rules and regulations and parts thereof inconsistent with the provisions of these Regulations are hereby amended, modified, or revoked accordingly.

SEC. 9. EFFECTIVITY CLAUSE. - These Regulations shall take effect fifteen (15) days after publication in any newspaper of general circulation.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE REGULATIONS NO. 4 – 2009

SUBJECT : Amending the Provisions of Section 24 of Revenue Regulations No. 3-2006 Pertaining to the Incremental Revenue Under Republic Act No. 9334

TO : All Internal Revenue Officials and Others Concerned

_______________________________________________________________________________________

SECTION 1. SCOPE. – Pursuant to the provisions of Section 244, in relation to Section 245 of the National Internal Revenue Code (NIRC) of 1997, as amended, these Regulations are hereby promulgated to amend certain provisions of Section 24 of Revenue Regulations No. 3-2006 pertaining to the allocable share of the Philippine Health Insurance Corporation and the Department of Health in the annual incremental revenue in accordance with the provisions of Republic Act No. 9334.

SECTION 2. AMENDING PROVISIONS. – Section 24 of RR No. 3-2006 is hereby amended to read as follows:

“ SEC. 24. INCREMENTAL REVENUE UNDER THE ACT. – For purposes of allocation of the two and one- half percent (2.5%) of the annual incremental revenue collection under the Act, each in favor of the Philippine Health Insurance Corporation (PHIC) and the Department of Health (DOH) for the next five (5) years from the date of

effectivity of the Act, the BIR and the BOC shall submit to the Department of Finance (DOF), on or before April 30 of the year immediately following the year of collection, a sworn report of their respective annual incremental revenue collected from locally manufactured and imported alcohol and tobacco products, respectively, that were remitted to the Bureau of Treasury. The said sworn report shall be submitted by the DOF to the Department of Budget and Management (DBM), copy furnished the PHIC and the DOH, on or before May 31 of each year.

For purposes of these Regulations, the incremental revenue shall be equivalent to the amount of actual collection of excise taxes from locally manufactured and imported alcohol and tobacco products for the year under consideration in excess over that of the immediately preceding year for the next five (5) years from the date of effectivity of the said Act or starting January 2005 until December 2009.”

SECTION 3. EFFECTIVITY. – These Regulations shall take effect after fifteen (15) days following publication in leading newspapers of general circulation.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE REGULATIONS NO. 3 - 2009

SUBJECT : AMENDING FURTHER REVENUE REGULATIONS (RR) NO. 9-2001, AS AMENDED BY RR NO. 2-2002, RR NO. 9-2002, RR NO. 26-2002, RR NO. 5-2004, and RR No. 10-2007 EXPANDING THE EFPS COVERAGE TO INCLUDE THE TOP 20,000 PRIVATE CORPORATIONS DULY IDENTIFIED UNDER RR NO. 14-2008.

TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED.

SECTION. 1. SCOPE. — Pursuant to the provisions of Section 244 of the National Internal Revenue Code of 1997 (Code), in relation to Section 27 of Republic Act No. 8792, otherwise known as the "Electronic Commerce Act,” these Regulations are hereby promulgated to amend Section 3 of RR No. 9-2001, as last amended by RR No. 10-2007, by further expanding the coverage of taxpayers who shall file and/or pay through the EFPS to include the top 20,000 private corporations duly identified under RR No. 14-2008.

SEC. 2. COVERAGE. - SEC. 3 of RR No. 9-2001, as last amended by RR No. 10-2007, is hereby further amended to read as follows:

"Section 3. Coverage. —

“xxx xxx xxx

“3.2 Non-large taxpayers. — The following Non-Large Taxpayers including their branches located in the computerized revenue district offices shall file their returns and pay their taxes thru EFPS, to wit:

“3.2.1 The volunteering two hundred (200) or more Non-Large Taxpayers

xxx xxx xxx

“3.2.2 Non-large taxpayers belonging to the top 20,000 private corporations duly identified under RR No. 14-2008 and notified by the Commissioner as such shall make use of the EFPS in filing their returns and in paying their taxes due thereon. Returns of said non-large taxpayers shall include those of their branches, provided, they are located in the computerized revenue district offices. The provisions hereof shall apply to returns to be filed starting April 1, 2009.

3.3. Other Taxpayers —

xxx xxx xxx”

SEC. 3. REPEALING CLAUSE. — The provisions of other revenue issuances inconsistent herewith are hereby repealed, modified or amended accordingly.

SEC. 4. EFFECTIVITY CLAUSE. — These Regulations shall take effect on April 1, 2009, or after fifteen (15) days following publication in a newspaper of general circulation, whichever comes later.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval by :

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE MEMORANDUM ORDER No. 12-2009

SUBJECT: Enjoining the Strict Implementation of the Penalty Provisions for the Non-Submission of Quarterly Summary Lists of Sales and Purchases

TO: All Revenue Officers and Employees of the Large Taxpayers Service, its Divisions and District Offices, Regional Directors, Revenue District Officers and Other Internal Revenue Officers Concerned

I. BACKGROUND

The Value Added Tax System, as it is being implemented in the Philippine setting, calls for the submission of Summary Lists of Sales and Purchases, wherein taxpayers declare their taxable sales and purchases for prescribed periods. Such submission is mandated under Revenue Regulations (RR) No. 8-2002 (June 13, 2002), and as incorporated in RR No. 16-2005 (October 19, 2005), as amended.

A review of the degree of taxpayer compliance with these regulations has disclosed, however, that less than thirty percent (30%) of registered VAT taxpayers who are required to submit such information have actually complied with this requirement. Further inquiry into this issue has shown that, in general, these taxpayers prefer to forego the submission of such data, and instead, simply pay the very modest compromise penalty of One thousand pesos (P1,000.00).

These findings show that violation of RR No. 8-2002 is rapidly becoming rampant, and as such, the Bureau is effectively rendered unable to verify an increasingly large volume of taxable sales and purchases. The revenue foregone under such circumstances is virtually incalculable, and would have served to significantly reduce the Bureau’s collection shortfalls in recent years. Moreover, such incidences are a troubling indication of indirect tax evasion, if not outright tax avoidance, by an increasingly larger proportion of business taxpayers.

In this regard, the Bureau must take the necessary steps to strongly exhort taxpayers to increase their voluntary compliance with this basic requirement of the tax system.

II. OBJECTIVE

This Order is being issued to:

1. Strengthen enforcement activities and operations against non-compliant taxpayers;

2. Strictly implement the penalty provisions for the non-submission of the Summary Lists of Sales and Purchases; and,

3. Increase voluntary compliance of taxpayers and enhance revenue collections.

III. POLICIES
1. Every failure by a taxpayer who, under established revenue rules and regulations, is required to submit the required Summary List of Sales and/or Summary List of Purchases in the prescribed format for a particular period, or submits erroneous / incomplete / falsified information in a particular Summary List, shall be considered as grounds for the issuance of a Subpoena Duces Tecum by the Bureau office concerned to the taxpayer, mandating the immediate submission of the said documents.

2. Upon submission of the required Summary Lists in compliance with the Subpoena Duces Tecum, the concerned taxpayer shall also be required to pay a compromise penalty in the amount of Ten thousand pesos (P10,000), for each non-submission of the required Summary Lists of Sales and Purchases.

3. In the event that a taxpayer should continue to fail to submit the required Summary Lists in compliance with a duly-issued Subpoena Duces Tecum, such non-submission shall be tantamount to failure to supply correct and accurate information under Section 255 of the National Internal Revenue Code. Consequently, the Revenue District Officer concerned shall initiate the necessary administrative and judicial action with the end in view of imposing the corresponding administrative and criminal penalties in accordance with the said Section, to wit:

SEC. 255. 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 rules and 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 rules and regulations shall, in addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less than Ten thousand pesos (P10,000) and suffer imprisonment of not less than one (1) year but not more than ten (10) years.

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 punished by a fine of not less than Ten thousand pesos (P10,000) but not more than Twenty thousand pesos (P20,000) and suffer imprisonment of not less than one (1) year but not more than three (3) years. (Italics and underscoring supplied.)

4. In the case of corporations that fail to submit their Summary Lists of Sales and Purchases, the corporate officers and employees of the corporation concerned shall be held criminally liable for such failure, in accordance with Section 256 of the Tax Code, as stated hereunder:

SEC. 256. Penal Liability of Corporations. -
Any corporation, association or general co-partnership liable for any of the acts or omissions penalized under this Code, in addition to the penalties imposed herein upon the responsible corporate officers, partners, or employees shall, upon conviction for each act or omission, be punished by a fine of not less than Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000). (Italics supplied.)

IV. REPEALING CLAUSE
All other issuances and / or portions thereof that are inconsistent herewith are hereby repealed, modified or amended accordingly.

V. EFFECTIVITY
This Order shall take effect immediately.

(Original Signed)

SIXTO S. ESQUIVIAS IV

Commissioner of Internal Revenue

REVENUE REGULATIONS NO. 2-2009

SUBJECT : AMENDING FURTHER SECS. 2.57.2 AND 2.58 OF REVENUE REGULATIONS NO. 2-98, AS AMENDED, SUBJECTING TO CREDITABLE WITHHOLDING TAX THE INTEREST PORTION OF THE REFUND OF METER DEPOSITS BY MERALCO AND OTHER DISTRIBUTION UTILITIES TO RESIDENTIAL AND NON-RESIDENTIAL ELECTRICITY CONSUMERS/ CUSTOMERS.

TO : ALL INTERNAL REVENUE OFFICERS AND OTHERS CONCERNED.

SECTION 1. SCOPE. - Article 8 of the “Magna Carta for Residential Electricity Consumers” promulgated by the Energy Regulatory Commission (ERC) on June 17, 2004, with respect to the payment of meter deposit by residential electricity consumers, provides as follows:

“Article 8. Exemption from Payment of Meter Deposit - All consumers shall be exempt from payment of meter deposits since private distribution utilities have incorporated the cost of these electric watthour meters in their rate base. Electric cooperatives shall use their respective Reinvestment Funds to procure electric watthour meters for their consumers. “In cases of loss and/or damage to the electric meter due to the fault of the customer, he shall bear the replacement of the cost of meter.” (emphasis supplied)

Corollarily, a similar exemption from the payment of meter deposit was subsequently granted to non-residential electricity consumers when ERC issued ERC Resolution No. 2005-10RM, dated January 18, 2006, otherwise known as the “Distribution Services and Open Access Rules (DSOAR)”.

Article 3.4.2 of DSOAR, states:

“3.4.2 NON-RESIDENTIAL ELECTRICITY CUSTOMERS

“For the establishment of credit, non-residential electricity customers shall submit a bill deposit to guarantee payment of bills.

xxx xxx xxx

“The bill deposit shall be refunded within one month from the termination of the service provided that all bills have been paid.

xxx xxx xxx

“All customers shall be exempt from the payment of meter deposits. In cases of loss and/or damage to the electric meter due to the fault of the customer, the customer shall bear the full replacement cost of the meter. Within 90 days following the effectivity of the DSOAR, all DUs shall submit a proposal to ERC on the methodology and timeline for the refund of all existing meter deposits.” (emphasis supplied. )

On June 4, 2008, after having conducted public consultations with several distribution utilities (DUs) and various consumer groups on the subject of how to go about with the refund of meter deposits of those electricity consumers from their respective DUs, ERC came up with ERC Resolution No. 8, Series of 2008, approving and adopting the “Rules Governing the Refund of Meter Deposits to Residential and Non-Residential Consumers”. Said rules, among others, ha ve provided the DUs with guidelines and parameters for the refund of meter deposits pertinent to each type of consumer (i.e., residential and/or non-residential consumer) as well as the applicable interest rates and formulae to be used in determining the corresponding interest to be paid . A timeline for the duration of the refund period is also found in Section 1 of Article IV thereof which stipulates that “The refund of meter deposits and its applicable interest must be completed by the DUs not longer than sixty-six (66) months from the effectivity of these Rules”.

In view of the impending refunds of the meter deposits and the corresponding amount of interest that had accrued thereon by the DUs to their residential and nonresidential customers, these Regulations are hereby promulgated, pursuant to the provisions of Section 244 in relation to Section 57(B) of the National Internal Revenue Code of 1997, as amended, and the above rules promulgated by ERC , in order to include said interest payments as one of those income payments subject to creditable withholding tax under Sec. 2.57.2 of Revenue Regulations No. 2-98, as amended. This is with the aim of ensuring that the fair amount due to the Government, by way of taxes due from such interest income, is already secured and collected at the time such interest payments are made, as well as provide a mechanism by which to discourage the income recipients thereof from not declaring such receipt of interest income for tax purposes.

SEC. 2. AMENDMENTS TO SEC. 2.57.2 OF REVENUE REGULATIONS NO. 2-98, AS AMENDED. - Sec.2.57.2 of Revenue Regulations No. 2-98, as amended, is hereby further amended, to read as follows:

"Sec. 2.57.2. Income payments subject to creditable tax and rates prescribed thereon. — Except as herein otherwise provided, there shall be withheld a creditable income tax at the rates herein specified for each class of payee from the following items of income payments to persons residing in the Philippines:

xxx xxx xxx

“(U) MERALCO Payments on the following:

“(1) MERALCO Refund arising from Supreme Court Case G.R. No. 14814 of April 9, 2003 to customers under Phase IV as approved by ERC – On gross amount of refund given by MERALCO to Customers with active contracts as classified by MERALCO – Twenty Five Percent (25%); To Customers with terminated contracts – Thirty Two Percent (32%); and

(2) Interest income on the refund of meter deposits determined, computed and paid in accordance with the “Rules to Govern Refund of Meter Deposits to Residential and Non-Residential Customers”, as approved by the Energy Regulatory Commission under Resolution No. 8, Series of 2008, dated June 4, 2008 implementing Article 8 of the Magna Carta for Residential Electricity Consumers and ERC Resolution No. 2005-10 RM (otherwise known as DSOAR) dated January 18, 2006, exempting all electricity consumers from the payment of meter deposit .

On gross amount of interest whether paid directly to the customers or applied against customer’s billings:

(i) Residential and General Service customers whose monthly electricity consumption exceeds 200 kwh as classified by MERALCO - Ten percent (10%)

(ii) Non-Residential customers - Ten percent (10%)

(V) Interest income on the refund paid either through direct payment or application against customers’ billings by other electric Distribution Utilities (DUs) in accordance with the rules embodied in ERC Resolution No. 8, Series of 2008, dated June 4, 2008, governing the refund of meter deposits which was approved and adopted by ERC in compliance with the mandate of Article 8 of the Magna Carta for Residential Electricity Consumers and Article 3.4.2 of DSOAR, exempting all electricity consumers, whether residential or non-residential, from the payment of meter deposit .

On gross amount of interest whether paid directly to the customers or applied against customer’s billings:

(i) Residential and General Service customers whose monthly electricity consumption exceeds 200 kwh as classified by the concerned DU - Ten percent (10%)

(ii) Non-Residential – Twenty percent (20%)

SEC. 3 RETURNS AND PAYMENT OF TAXES WITHHELD AT SOURCE. - Sec. 2.58(A)(2) of Revenue Regulations No. 2-98, as amended by Revenue Regulations 8-2005, is hereby further amended to read as follows:

"Sec. 2.58. RETURNS AND PAYMENT OF TAXES WITHHELD AT SOURCE. -

“(A) Monthly return and payment of taxes withheld at source —

“(1) WHERE TO FILE —

xxx xxx xxx

“(2) WHEN TO FILE —

xxx xxx xxx

“ MERALCO and other Distribution Utilities (DUs) required to withhold taxes pursuant to Sec.2.57.2 (U) and (V) above shall submit a Monthly Alphalist of Payees (MAP) (Annex "A" ) for each calendar quarter, which shall be electronically attached to the monthly remittance return of the calendar quarter (e.g. BIR Form 1601-E for the quarter ending March with attached MAP for January, February, March). It shall contain an alphalist of customers from whom taxes have been withheld for the return period and in whose behalf, the taxes were remitted under BIR Form No. 1601-E showing the total amount of income and taxes withheld and remitted.

“xxx xxx xxx

“xxx xxx xxx”

SEC. 4. REPEALING CLAUSE. - The provisions of any revenue regulations, revenue memorandum orders or circulars or any other revenue issuance inconsistent herewith are hereby repealed, amended, or modified accordingly.

SEC. 5. EFFECTIVITY CLAUSE. — These Regulations shall take effect fifteen (15) days following publication in a newspaper of general circulation.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE REGULATIONS NO. 1-2009

SUBJECT: Rules and Regulations Implementing Republic Act No. 9442, entitled “An Act Amending Republic Act 7277, Otherwise Known as the Magna Carta for Persons with Disability,” Relative to the Tax Privileges of Persons with Disability and Tax Incentives for Establishments Granting Sales Discount

TO: All Internal Revenue Officers and Others Concerned

________________________________________________________________________

SECTION 1. SCOPE. – Pursuant to the provisions of Section 244 of the Tax Code of 1997, as last amended by Republic Act No. 9504, in relation to Sec. 5 of Republic Act No. 9442, these Regulations are hereby promulgated to implement the tax privileges of persons with disability and tax Incentives for establishments granting twenty percent (20%) sales discount under Sections 32 and 33 of R.A. 7277, as amended by R.A. 9442, otherwise known as the “Magna Carta for Persons with Disability,” and at the same time amending Section 6.6.12 of the Implementing Rules and Regulations of R.A. 9442, as jointly promulgated by the Department of Social Welfare and Development (DSWD), Department of Finance (DOF), Department of Education (DepEd), Department of Agriculture (DA), Department of Transportation and Communications (DOTC), Department of Trade and Industry (DTI), Department of Health (DOH), Department of Tourism and Department of Interior and Local Government.

SEC. 2. DEFINITION OF TERMS. – For purposes of these Regulations, the following terms and phrases shall be defined as follows:

a. Act – shall refer to Republic No. 7277, as amended by Republic Act No. 9442 otherwise known as the “Magna Carta for Persons with Disability.”

b. Person with disability – shall refer to an individual suffering from restriction or different abilities, as a result of mental, physical or sensory impairment to perform an activity in a manner or within the range considered normal for human being.

c. Disability – shall mean a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individuals; a record of such an impairment; or being regarded as having such an impairment.

d. Benefactor – shall refer to any person, whether related or not to the person with disability, who takes care of him/her as a dependent.

e. Dependent – shall refer to a person with disability, whether minor or of legal age, and who is a Filipino citizen, who may or may not be related to his benefactor and who is living with and dependent upon such benefactor for his/her chief support.

f. Sales discount – shall refer to the actual discount, or that discount which in no case shall exceed 20% of the gross selling price of goods sold or services rendered to persons with disability by certain business establishments enumerated under the Act and these Regulations.

g. Establishment – shall refer to any entity, public or private, duly licensed and/or authorized by the national government agencies or by the local government units to operate.

SEC. 3. SALES DISCOUNTS WHICH MAY BE CLAIMED BY PERSONS WITH DISABILITY. - Persons with disability shall be entitled to claim at least twenty percent (20%) discount from the following establishments relative to the sale of goods or services for their exclusive use or enjoyment, viz:

1. Hotels and similar lodging establishments and restaurants;

2. Sports and recreation centers;

3. Theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement;

3. All drugstores regarding purchase of medicine;

4. Medical and dental privileges in government facilities, such as but not limited to diagnostic and laboratory fees (e.g., x-rays, computerized tomography scans and blood tests) subject to guidelines to be issued by the DOH, in coordination with the Philippine Health Insurance Corporation (Philhealth);

5. Medical and dental privileges in private facilities, such as but not limited to diagnostic and laboratory fees (e.g., x-rays, computerized tomography scans and blood tests), including professional fees of attending doctors, subject to guidelines to be issued by the DOH, in coordination with Philhealth; and

6. Domestic air and sea transportation based on the actual fare except promotional fare. If the promotional fare discount is higher than the 20% discount privilege, the person with disability may choose the promotional fare and should no longer be entitled to the 20% discount privilege; and

7. Land transportation privileges in bus fares such as ordinary, aircon fares and on public railways such as LRT, MRT, PNR, and such other similar infrastructure that will be constructed, established and operated by public or private entity. Toll fees of skyways and expressways are likewise subject to at least 20% discount, however, this privilege can be availed only by a person with disability owning the vehicle.

SEC. 4. AVAILMENT BY ESTABLISHMENTS OF SALES DISCOUNTS AS DEDUCTION FROM GROSS INCOME. - Establishments granting sales discounts to persons with disability on their sale of goods and/or services specified under Section 3 above shall be entitled to deduct the said sales discount from their gross income subject to the following conditions:

1. The sales discounts shall be deducted from gross income after deducting the cost of goods sold or the cost of service;

2. The cost of the sales discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted;

3. Only that portion of the gross sales exclusively used, consumed or enjoyed by the person with disability shall be eligible for the deductible sales discount;

4. The gross selling price and the sales discount must be separately indicated in the sales invoice or official receipt issued by the establishment for the sale of goods or services to the person with disability;

5. Only the actual amount of the sales discount granted or a sales discount not exceeding 20% of the gross selling price or gross receipt can be deducted from the gross income, net of value added tax, if applicable, for income tax purposes, and from gross sales or gross receipts of the business enterprise concerned, for VAT or other percentage tax purposes; and shall be subject to proper documentation under pertinent provisions of the Tax Code of 1997, as amended;

6. The business establishment giving sales discount to qualified person with disability is required to keep separate and accurate records of sales, which shall include the name of the person with disability, ID Number, gross sales/receipts, sales discount granted, date of transactions and invoice number for every sale transaction to person with disability; and

7. All establishments mentioned in Section 3 above which granted sales discount to persons with disability on their sale of goods and/or services may claim the said discount as deduction from gross income.

SEC. 5. PROHIBITION ON AVAILMENT OF DOUBLE DISCOUNTS. -

The foregoing privileges granted to person with disability shall not be claimed if the said person with disability claims a higher discount as may be granted by the commercial establishment and/or under other existing laws or in combination with other discount program/s. Thus, a person with disability who is at the same a senior citizen can only claim one 20% discount on a particular sales transaction.

SEC. 6. BASIS OF COMPUTATION OF VALUE-ADDED TAX ON SALE OF GOODS OR SERVICES TO PERSONS WITH DISABILITY. – VAT on sale of goods or services with sales discounts granted by business establishments enumerated under Section 3 hereof shall be computed in accordance with the following illustration:

Amount of sale (without the VAT)	P100.00
Less: 20% sales discount	20.00
Vatable sale	P 80. 00
Plus: 12% VAT (based on P80)	9.60
Total amount to be paid by the person with disability	P 89.60
	=====

SEC. 7. NON-AVAILMENT OF THE “HEAD OF FAMILY” STATUS BY BENEFACTORS OF PERSONS WITH DISABILITY. –

Although the Act provides that a benefactor of persons with disability whose civil status is “single” shall be considered as “head of family” and therefore shall be entitled to the personal exemption of P25,000 under Section 35(A) of the Tax Code, said single benefactor can no longer avail the “head of family” status in view of the elimination of the terms “head of family” and “his/her dependents” for purposes of availing the personal exemption of P25,000 in view of the amendment brought about by R. A. No. 9504 under Section 35(A) and (B) of the Tax Code of 1997. Section 2.79(I)(1)(a) and (b) of RR 10-2008, which implements R.A. No. 9504, provides as follows:

“Sec. 2.79. Income Tax Collected at Source on Compensation Income. -

“x x x x x x

“(I) Right to Claim Withholding Exemptions. - x x x The withholding exemptions to which an employee is entitled depends upon his status and the number of dependents qualified for additional exemptions. Each employee shall be allowed to claim the following amount of exemptions, with respect to compensation paid on or after July 6, 2008.

“(1) Personal and additional exemptions.-

“(a) Basic personal exemptions.-

“Individual taxpayers REGARDLESS OF STATUS are entitled to P50,000 personal exemption.

“(b) Additional exemptions for taxpayers with dependents.- An individual, WHETHER SINGLE OR MARRIED, shall be allowed an additional exemption of Twenty-five thousand pesos (P25,000) for each qualified dependent child, provided that the total number of dependents for which additional exemptions may be claimed shall not exceed four (4) dependents. The additional exemptions for qualified dependent children shall be claimed by only one of the spouses in the case of married individuals.

“A dependent means a legitimate, illegitimate 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.”

(Emphasis supplied.)

Thus, effective July 6, 2008 (the effectivity date of R.A. No. 9504 and of RR 10-2008), individual taxpayers are just classified as either “single” or “married” entitled to a uniform amount of personal exemption.

However, for the calendar year 2008, the personal and additional exemptions applicable shall be as follows:

a. For the period from January 1 to July 5, 2008, single taxpayers are entitled to P10,000.00, head of family at P12,500.00, each married individuals at P16,000.00, and for each qualified dependent child, not exceeding four (4) children, P4,000.00, computed on a pro-rata basis of the full-year exemptions under the old law.

b. For the period from July 6 to December 31, 2008, the pro-rated personal exemption shall be P25,000.00, regardless of status, and P12,500 for each qualified dependent child, not exceeding four (4) children, as additional exemption.

Henceforth, a benefactor of a person with disability whose civil status is single could no longer be considered as “head of family” and therefore shall no longer be allowed to avail himself/herself the old P25,000 personal exemption as “head of family,” but rather he/she would be entitled to the new personal exemption of_P50,000 just like any other individual taxpayer, whether single or married, with or without qualified dependent.

On the other hand, the benefactor of a person with disability may only be entitled to claim the new additional exemption of P25,000 per qualified dependent child (not exceeding four) if the person with disability is his/her legitimate, illegitimate or legally adopted child, whether minor or of legal age. In other words, for purposes of additional exemption, the “benefactor” will not be entitled to the additional exemption unless that benefactor is a “parent” of the person with disability.

SEC. 8. PROOFS OF ENTITLEMENT TO THE PRIVILEGES BY PERSON WITH DISABILITY. – The privileges under the Act and in these Regulations available to persons with disability who are Filipino citizens may only be granted upon presentation of any of the following proof of his/her entitlement thereto:

1. An identification card issued by the city or municipal mayor or the barangay captain of the place where the person with disability resides; or

2. The passport of the person with disability concerned; or

3. Transportation discount fare Identification Card (ID) issued by the National Council for the Welfare of Disabled Persons (NCWDP).

However, upon the effectivity of the Implementing Rules and Regulations jointly promulgated by the different government agencies, NCWDP will already adopt the Identification Card issued by the Local Government Units (LGUs) for purposes of uniformity in the implementation. NCWDP will provide the design and specification of the identification card that will be issued by the LGUs.

SEC. 9. PENALTIES. –

(1) For the first violation of any provision of the Act and these Regulations, a fine of not less than Fifty thousand pesos (P50,000) but not exceeding One hundred thousand pesos (P100,000) or imprisonment of not less than six months but not more than two years, or both at the discretion of the court; and

(2) For any subsequent violation thereto, a fine of not less than One hundred thousand pesos (P100,000) but not exceeding Two hundred thousand pesos (P200,000) or imprisonment for not less than two years but not more than six years, or both at the discretion of the court.

(3) Any person who abuses the privileges granted herein shall be punished with imprisonment of not less than six months or a fine of not less than Five thousand pesos (P5,000), but not more than Fifty thousand pesos (P50,000), or both, at the discretion of the court.

(4) If the violator is a corporation, organization or any similar entity, the officials thereof directly involved shall be liable therefor.

(5) If the violator is an alien or a foreigner, he shall be deported immediately after service of sentence without further deportation proceedings.

(6) Upon filing of an appropriate complaint, and after due notice and hearing, the proper authorities may also cause the cancellation or revocation of the business permit, permit to operate, franchise and other similar privileges granted to any business entity that fails to abide by the provisions of the Act and these Regulations.

SEC. 10. SEPARABILITY CLAUSE. – If any portion or provision of these Regulations is declared unconstitutional, the remainder of these Regulations or any provision not affected thereby shall remain in force and effect.

SEC. 11. REPEALING CLAUSE. – All revenue regulations and other revenue issuances or parts thereof inconsistent with the provisions of these Regulations are hereby repealed or modified accordingly.

SEC. 12. EFFECTIVITY. – These Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in any two newspapers of general circulation, whichever comes earlier.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE MEMORANDUM ORDER No. 5-2009

SUBJECT : Prescribing the Policies and Guidelines in the Issuance of Letters of Authority by the Various Investigating Offices of the Bureau of Internal Revenue

TO : All Internal Revenue Officers and Others Concerned

I. BACKGROUND

The power to authorize the examination of any taxpayer, and the assessment of the correct amount of tax due, is vested in the Commissioner of Internal Revenue in accordance with the provisions of Section 6 of the National Internal Revenue Code of 1997, as amended (hereinafter referred to as the “Tax Code”), to wit:

SEC. 6. Power of the Commissioner to Make Assessments and Prescribe Additional Requirements for Tax Administration and Enforcement. –

(A) Examination of Returns and Determination of Tax Due. – After a return has been filed as required under the provisions of this Code, the Commissioner or his authorized representative may authorize the examination of any taxpayer and the assessment of the correct amount of tax: Provided, however, that failure to file a return shall not prevent the Commissioner from authorizing the examination of any taxpayer.

While the Commissioner is allowed to delegate such power to his authorized representative, such delegation has, in certain instances, given rise to the issuance of duplicate or multiple Letters of Authority (LAs) by more than one (1) Investigating Office of the Bureau of Internal Revenue (BIR) to the same taxpayer, for the same taxable period.

Such occurrences have therefore resulted in unwarranted confusion on the part of the taxpayers, and the unproductive utilization of much-needed resources on the part of the BIR. In this regard, and in order to forestall the undue increase of the taxpayer’s burden of compliance in the course of a tax investigation, as well as enhance the effectiveness of the BIR’s audit and investigation efforts, it is imperative that the issuance of multiple LAs be avoided, and that conflicts of jurisdiction between Investigating Offices be resolved in as expeditious a manner as possible.

This Order is being issued, therefore, to prescribe the policies and guidelines to be observed in determining the Investigating Office that shall have jurisdiction over the audit / examination of taxpayers, and in the resolution of conflicts of jurisdiction in on-going tax investigations.

II. POLICIES AND GUIDELINES

A. General Rules

1. It shall be the general rule that the Investigating Office –

a) Where the taxpayer is registered; or

b) Which has specific jurisdiction over a taxpayer, shall exercise primary jurisdiction over the conduct of an audit / investigation into the tax liabilities of the taxpayer for a given taxable period.

2. For purposes of this Order, the following Investigating Offices shall exercise primary jurisdiction in the conduct of audits / investigations, relative to Item A (1) of this Section:

For the Regional Offices:

• The Revenue District Offices – for taxpayers registered in the various Revenue Districts

For the Large Taxpayers Service (LTS):

• The Large Taxpayers (LT) Audit and Investigation Division I (LTAID-I) – for Regular Large Taxpayers

• The LT Audit and Investigation Division II (LTAID-II) – for Excise Taxpayers

• The LT District Office (LTDO) – Makati

• The LT District Office – Cebu

B. Exceptions to the General Rule on Primary Jurisdiction

1. The exception to the general rule on primary jurisdiction shall pertain directly to:

a) Cases where there is prima facie evidence of tax fraud; or,

b) Cases falling under the Run After Tax Evaders (RATE) Program.

2. In either instance, jurisdiction to conduct the appropriate audit / investigation shall rest with:

• The National Investigation Division (NID); or

• The Regional Special Investigation Divisions (SIDs).

C. Determination of Prima Facie Evidence of Tax Fraud

1. In the event that, following the conduct of prescribed preliminary investigation procedures, the NID / SID believes that prima facie evidence of tax fraud exists, it shall submit the case, together with a memorandum stating the justifications for the conduct of an audit / investigation for tax fraud (and the documentary evidence to support the allegation of fraud), through the Assistant Commissioner (ACIR), Enforcement Service (ES), to the Deputy Commissioner (DCIR) of the Legal and Inspection Group (LIG), for evaluation.

1.1. Upon promulgation of this Order, the National Office Tax Fraud Committee reconstituted under Revenue Special Order No. 5-2008 (dated January 8, 2008) shall be considered as dissolved, and the determination of prima facie evidence of fraud shall henceforth be undertaken by the DCIR-LIG.

2. If, upon careful evaluation of the merits of a case, the DCIR-LIG should determine that prima facie evidence of fraud exists, he shall submit the report of the NID / SID, bearing his signature recommending approval of the same, to the Commissioner, for final evaluation.

2.1. Each report must contain the following segment, where the Commissioner may indicate his decision:

APPROVED / DISAPPROVED
(Signature Over Printed Name)
Commissioner of Internal Revenue

3. In the event that the Commissioner should approve the conduct of an audit / investigation of a taxpayer by the NID / SID, the report bearing the Commissioner’s signature of approval, together with its supporting documents, shall be returned by the Office of the Commissioner to the Office of the DCIR-LIG, for transmittal to the Enforcement Service, for preparation of the appropriate LA and notification of the concerned Investigating Office which has primary jurisdiction over the taxpayer.

3.1. Upon receipt of the report that has been duly approved by the Commissioner, the ACIR – ES shall inform the Regional Office having jurisdiction over the Investigating Office concerned / ACIR – Large Taxpayers Service, using the pro forma notification provided in Annex “A” hereof, that:

• The case shall be considered as a tax fraud case to be investigated by the NID / SID; and

• Any LA issued by the Investigating Office to the concerned taxpayer for the same taxable period shall be deemed automatically cancelled.

A copy of the report approved by the Commissioner shall be attached to such notification.

3.2. In the event that the Investigating Office should determine that an LA has been issued to the taxpayer for the same taxable period, the same shall be considered as automatically cancelled and invalid, and the Head of the Investigating Office shall, upon receipt of the notification from the ACIRES, immediately direct the Revenue Officers concerned to cease all activities on the case.

3.2.1. In the event that no LA has yet been issued to the taxpayer for the aforesaid taxable period, the Revenue District Office (RDO) is hereby advised that it is precluded from issuing an LA for the taxpayer, covering the said taxable period.

3.3. Within five (5) days from its receipt of the notification from the ACIR-ES, the Investigating Office shall also:

• Inform the taxpayer of the change of jurisdiction in the audit / investigation of the case, through the issuance of a “Notice of Change of Jurisdiction” (Annex “B”);

• Transmit the entire docket of the case to the NID / SID;

• Furnish the Enforcement Service with a copy of the “Notice of Change of Jurisdiction” that has been duly received by the concerned taxpayer.

3.4. Upon receipt of the copy of the “Notice of Change of Jurisdiction” that was received by the taxpayer, the ACIR-ES shall prepare the appropriate LA mandating the audit / investigation of the taxpayer by the NID / SID, for the signature of the DCIR-LIG.

4. In the event that the Commissioner should not approve the conduct of a tax fraud investigation by the NID / SID against a particular taxpayer, the report, together with all supporting documents, shall be returned to the Office of the DCIR-LIG, for transmittal of the documentary evidence gathered by the NID / SID to the appropriate Investigating Office, in accordance with the general rule on primary jurisdiction stated in Item A(1) of this Section.

D. Resolution of Existing Conflicts of Jurisdiction

1. All issues concerning duplicate or multiple LAs issued to a single taxpayer for a particular taxable period prior to the promulgation of this Order shall be immediately elevated by the Offices that issued the LAs to the Office of the Commissioner, for review and evaluation.

1.1. Each case must be supported by a memorandum report prepared by the concerned Investigating Office and by the NID / SID, stating the justifications for the retention of jurisdiction thereat.

2. Each memorandum report must contain the following segment, where the Commissioner may indicate his decision in the case:

APPROVED / DISAPPROVED

(Signature Over Printed Name)

Commissioner of Internal Revenue

3. The decision of the Commissioner in a particular case shall be conveyed to the concerned Offices by the Office of the Commissioner, through the pro forma notification provided in Annex “C”, and the Head of the Office that shall give up jurisdiction of a particular audit / examination shall immediately direct the Revenue Officers concerned to cease all activities on the case, and shall, within five (5) days from its receipt of the notification of the decision of the Commissioner:

• Inform the taxpayer of the change of jurisdiction in the audit / investigation, through the issuance of a Notice of Transfer of Jurisdiction (Annex “D”); and

• Transmit the entire docket of the case to the Office that shall assume jurisdiction of the audit / investigation, for integration with their records of the case.

4. In all instances, the decision of the Commissioner shall be final and executory.

E. Crediting of Internal Revenue Collections from Audits / Investigations

1. All internal revenue collections generated from tax fraud / RATE investigations conducted by the NID / SIDs shall be credited to the Revenue District Office / LT Division or District Office having primary jurisdiction over the taxpayers concerned.

III. REPEALING CLAUSE
Any provision of any Order and / or pertinent revenue issuance(s) that is inconsistent with this Order is hereby revoked, modified or amended accordingly.

IV. EFFECTIVITY
This Order shall take effect immediately.

(Original Signed)

SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue