By Elijah Joseph C. Tubayan
ALL APPLICATIONS for tax clearance required of prospective bidders for government contracts can soon be filed in regional offices of the Bureau of Internal Revenue (BIR).
Revenue Regulation 18-2018, signed by Finance Secretary Carlos G. Dominguez III on Jul. 27 and published in a newspaper on Monday, said that tax clearance applications required by Republic Act No. (RA) 9184, or the Government Procurement Reform Act, and Executive Order No. 398 — which requires “timely and complete payment of taxes as a precondition for entering into and as a continuing obligation in contracts with the government” — “shall be manually filed with the Collection Division of the Revenue Regional Office” where taxpayers concerned are registered, or with the “concerned office under the Large Taxpayers Service.”
Previously, the tax clearance applications were lodged with the Office of the Accounts Receivable and Monitoring Division at the BIR’s National Office in Quezon City.
The new revenue regulation will take effect on Aug. 21, 15 calendar days from publication yesterday.
The regulation also noted that manual filing will be done “until such time that an on-line application for this purpose has been made available for use of prospective bidders.”
“This is in line with the bureau’s objective of extending utmost and unequivocal service to its stakeholders pursuant to its commitment to the mechanisms of ‘Ease of Doing Business’ in this country to enable the taxpayers cope with the ever-changing dynamics and demands of the business community for the benefit of the bureau and the taxpayers,” the regulations read.
The new regulations also said that “For those which were previously issued tax clearance for bidding purposes, the requested tax clearance shall only be issued if they are found to be regular eFPS (Electronic Filing and Payment System) users from the time of enrollment up to the time of filing of application.”
The regulations added that “regular usage of eFPS shall not apply to new applicants,” adding that “[t]he submission of the new applicant’s latest income tax and business tax returns not filed and paid through the Bureau’s eFPS shall suffice.”
Sought for comment, Lina P. Figueroa, Tax Advisory and Compliance principal at P&A Grant Thornton, said in a mobile phone message: “Devolving the application and approval to the region will be beneficial especially to contractors in the provinces.”
“I hope the regions are less clogged.”
Eleanor L. Roque, vice-president of the Tax Management Association of the Philippines, said in a separate text message: “Changing the issuing agency to the regional level will ease up the processing time as, presumably, the regional office will be able to issue the clearance faster.”
She also cited benefits for first-time tax clearance applicants.
“In the past, first time applicants were required to show that they are already eFPS filers, which is not always the case,” Mr. Roque said.
“Since this requirement has been relaxed, first time applicants will be able to secure the clearance faster.”
She added that the new requirements will give smaller contractors a chance to participate in government contracts.
Other requirements for a tax clearance include: not having unpaid annual registration fees, not having open valid “stop-filer” cases, not identified as a taxpayer who “cannot be located”, not having pending criminal information filed in any court arising from tax-related cases and not having delinquent accounts.
Tax clearances provide official validation of full, timely payment of taxes to the BIR.
RA 9184’s implementing rules and regulations enumerate other requirements for prospective bidders as a registration certificate; mayor’s or business permit, or its equivalent document; Philippine Contractors Accreditation Board license and registration; and audited financial statements.
By Elijah Joseph C. Tubayan