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 TaxÂ AuditÂ ProgramÂ forÂ itsÂ LargeÂ TaxpayersÂ andÂ MetroÂ ManilaÂ RevenueÂ RegionsÂ (RRs)Â like Caloocan,Â ManilaÂ (excludingÂ taxpayersÂ underÂ Romblon,Â PalawanÂ andÂ OccidentalÂ Mindoro), Quezon City and Makati City.Â The RMOs aim to implement a quality short VAT audit to correct taxpayerÂ errorsÂ andÂ violationsÂ inÂ theÂ mostÂ recentÂ VATÂ returnsÂ filedÂ withÂ theÂ endÂ inÂ viewÂ of improving VAT compliance in the subsequent VAT returns filing and payment.
UnderÂ theÂ saidÂ RMOs,Â aÂ VATÂ AuditÂ Team,Â composedÂ ofÂ aÂ VATÂ Audit Â ManagerÂ andÂ Revenue Officers will audit/investigate the 1stÂ and 2ndÂ quarter VAT returns of 2012 of Large Taxpayers and NCR taxpayers and every quarter thereafter except for VAT returns with tax credit/refund claimsÂ orÂ thoseÂ underÂ auditÂ byÂ theÂ SpecialÂ InvestigationÂ DivisionsÂ (SIDs)Â andÂ theÂ National Investigation Division (NID).
Any of the following criteria will be applied in selecting VAT taxpayers for audit:
1.Â Â Â Â Â TaxpayersÂ whoseÂ VATÂ complianceÂ isÂ belowÂ theÂ establishedÂ 2010Â andÂ 2011Â industryÂ benchmarks, whichever is available;
2.Â Â Â Â Â Taxpayers whose VAT returns for the succeeding quarters show substantial decrease inÂ tax payment;
3.Â Â Â Â Â TaxpayersÂ whoseÂ VATÂ returnsÂ reflectÂ substantialÂ inputÂ taxesÂ fromÂ importationsÂ and localÂ purchases,Â suchÂ asÂ whenÂ theÂ totalÂ purchasesÂ claimedÂ exceedÂ 75%Â ofÂ theÂ total sales;
4.Â Â Â Â Â Taxpayers with no VAT return filed in any quarter or all the quarters in 2011;
5.Â Â Â Â Â Taxpayers who are reporting/filing â€œNo Operationsâ€ Returns;
6.Â Â Â Â Â TaxpayersÂ with a history of declaring excess input tax carry over for all the quarters of 2011;
7.Â Â Â Â Â Taxpayers who have not submitted their Summary List of Sales (SLS) or Purchases (SLP) 9.Â Taxpayers identified to have significant under-declaration of sales as a result of the TaxÂ Compliance Verification Drive and/or other programs of the Bureau;
8.Â Â TaxpayersÂ filingÂ exemptÂ VATÂ returnsÂ dueÂ toÂ availmentÂ ofÂ taxÂ incentivesÂ orÂ tax exemptions; and
9.Â Â 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:Â Revenue Region No.Â 5-CaloocanÂ CityÂ onÂ SeptemberÂ 19,2012Â atÂ the ValenzuelaÂ CityÂ AuditoriumÂ fromÂ 9:00-12:00Â PMÂ andÂ 1:00-5:00Â PM;Â RevenueÂ RegionÂ No.Â 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 â€“ Manila on September 25,2012 at the 8th Floor Building II of the Manila Region from 9:00 â€“ 12:00 PM and 1:00-5:00 PM.