The Bureau of Internal Revenue (BIR) is set to examine the Value-Added Tax (VAT) returns of Large and NCR taxpayers in its bid to enhance compliance and increase revenue collection with the issuance of two (2) Revenue Memorandum Orders (RMOs).
Revenue Memorandum Order Nos. 19 and 20-2012 specifies the pilot of the 2012 Value-Added Tax Audit Program for its Large Taxpayers and Metro Manila Revenue Regions (RRs) like Caloocan, Manila (excluding taxpayers under Romblon, Palawan and Occidental Mindoro), Quezon City and Makati City. The RMOs aim to implement a quality short VAT audit to correct taxpayer errors and violations in the most recent VAT returns filed with the end in view of improving VAT compliance in the subsequent VAT returns filing and payment.
Under the said RMOs, a VAT Audit Team, composed of a VAT Audit  Manager and Revenue Officers will audit/investigate the 1st and 2nd quarter VAT returns of 2012 of Large Taxpayers and NCR taxpayers and every quarter thereafter except for VAT returns with tax credit/refund claims or those under audit by the Special Investigation Divisions (SIDs) and the National Investigation Division (NID).
Any of the following criteria will be applied in selecting VAT taxpayers for audit:
1.     Taxpayers whose VAT compliance is below the established 2010 and 2011 industry benchmarks, whichever is available;
2.     Taxpayers whose VAT returns for the succeeding quarters show substantial decrease in tax payment;
3.     Taxpayers whose VAT returns reflect substantial input taxes from importations and local purchases, such as when the total purchases claimed exceed 75% of the total sales;
4.     Taxpayers with no VAT return filed in any quarter or all the quarters in 2011;
5.     Taxpayers who are reporting/filing “No Operations†Returns;
6.     Taxpayers with a history of declaring excess input tax carry over for all the quarters of 2011;
7.     Taxpayers who have not submitted their Summary List of Sales (SLS) or Purchases (SLP) 9. Taxpayers identified to have significant under-declaration of sales as a result of the Tax Compliance Verification Drive and/or other programs of the Bureau;
8.  Taxpayers filing exempt VAT returns due to availment of tax incentives or tax exemptions; and
9.  Such other taxpayers selected by the head of the VAT Audit Team subject to approval by the Regional Director.
Meanwhile, additional VAT briefings will be conducted for taxpayer awareness on the following dates and places: Revenue Region No. 5-Caloocan City on September 19,2012 at the Valenzuela City Auditorium from 9:00-12:00 PM and 1:00-5:00 PM; Revenue Region No. 7-Quezon City on September 20,2012 at the UP Bahay Alumni, UP Campus Diliman, Q.C. from 9:00-12:00 PM and Revenue Region No. 6 – Manila on September 25,2012 at the 8th Floor Building II of the Manila Region from 9:00 – 12:00 PM and 1:00-5:00 PM.
