The Department of Finance (DOF), through its Revenue Operations Group (ROG), has assisted the national government in implementing several regulations related to the Bayanihan To Heal As One Act (Republic Act (RA) No. 11469 or the Bayanihan 1) and Bayanihan To Recover As One Act (RA 11494 or the Bayanihan 2) to provide relief to sectors hardest hit by the economic shock triggered by the COVID-19 pandemic.
In a report to Finance Secretary Carlos Dominguez III, Tionko said the DOF and the Bureau of Internal Revenue (BIR) issued 34 Revenue Regulations (RRs) last year, most of which were related to the provisions of the Bayanihan laws, Tionko said.
“Among others, we also issued the RR implementing the tax provisions under the Real Estate Investment Act of 2009, the RR implementing Section 1 of RA 11467 providing VAT (value-added tax) exemption on the sales and importation of drugs and medicines prescribed for diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, and kidney diseases, and the RR prescribing the guidelines and procedures for the submission of BIR Form No. 1709, or transfer pricing documentation and other supporting documents,” she noted.
Last year, the DOF and Bureau of Customs (BOC) issued 13 Customs Administrative Orders (CAOs) to implement several provisions of the Customs Modernization and Tariff Act (CMTA), which include the rules on seizure and forfeiture proceedings, export cargo clearance formalities, express shipments, and dispute settlement.
Two CAOs were implemented to operationalize provisions found under Bayanihan 1 and 2, while one (1) was issued to redefine the jurisdictional limits of the customs districts of Zamboanga and Cagayan de Oro, Tionko said.
In November last year, the DOF, along with the Department of Health (DOH), and Department of Budget and Management (DBM); BIR; and the Philippine Health Insurance Corp. (Philhealth), issued Joint Memorandum Circular (JMC) No. 003-2020, which outlines the Implementing Rules and Regulations (IRR) on Heated Tobacco Products (HTPs) and Vapor Products.
The JMC provides for technical standards and requirements on the application and issuance of graphic health warnings, and bans the sale of such products to persons below 21 years old.
Under the JMC, the manufacture, importation, sale and distribution of vapor products with flavoring other than plain tobacco or plain menthol is also prohibited.
Aside from these accomplishments, the DOF-ROG also consulted with multilateral institutions, such as the Asian Development Bank (ADB) and the Organization for Economic Cooperation and Development (OECD), as well as with local and foreign digital service providers, in its efforts to study the feasibility of imposing the VAT on digital transactions.
“These consultations led to the drafting of a legislative proposal which clarifies the power to impose VAT on non-resident digital service providers whose services are consumed in the Philippines. We worked closely with the BIR and the House Committee on Ways and Means to ensure that the bill reflects our compliance with international best practices and current international guidelines on cross-border transactions subject to VAT,” Tionko said.
In the area of tax transparency, Tionko said the DOF-ROG re-engaged in the Automatic Exchange of Information (AEOI) Pilot Project with the Australian Taxation Office (ATO), ADB, and the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum).
“The ATO, ADB, and the Global Forum committed to provide a number of technical assistance programs to prepare the Philippines to implement AEOI in the near future,” Tionko said.
She said the DOF-ROG was also able to finally get the approval of the Civil Service Commission (CSC) on the proposed draft Amended IRR of the Attrition Act of 2005 in December 2020 after extensive discussions with the CSC for over two years.