RMO No. 57-2019 — Revokes RMO No. 12-2015 relative to the updated procedures in the implementation of the Memorandum of Agreement between the DPWH and the DOF

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAUOF INT A DEC 02 2019 4:I0P.M KA ALREVENUE Y

November 28. 2019

REVENUE MEMORANDUM ORDER NO.57-201G

SUBJECT and the Department of Finance Revocation of RMO No. 12-2015 Updated Procedures in the Implementation of the Memorandum of Agreement hetween the Department of Public Works and Highways (DPWH)

TO All Regional Directors, Revenue District Officers and Others Concerned

BACKGROUND

0217 together with other the documentary requirements is the Bureau's standard approach meant to mechanism to monitor the withholding taxes paid by respective DPWH Central/Regional/ District Offices on their paynents to contractors that have transactions with national government. ensure that correct taxes are paid on their income from government transactions. This also provides a The requirement for contractors of government infrastructure projects to file BIR Form No.

being submitted by contractors to the BIR and the DPWH, i.e. BIR Form No. 02 17 and the documentary under RMO No 12-2015 result to undue inconvenience and additional burden on the part of the reguirements for Final Billing under Department Order No.148 series of 2018 implementing the Document Tracking Svstem for Civil Works (DoTS). respectively. These and other documents required contractor and the DPWH as the latter assumes additional functions in the preparation of some documents required by said RMO. Recently, however. concerns have been raised that there is duplication in the requirements

contractors and contravenes Republic Act (RA) No. I1032 ("Ease of Doing Business and Efficient Government Service Delivery Act of 20 18) on the adoption of simplified requirements and procedures that will expedite business and non-business related transaction in the government The concern raised is that this impedes the prompt disbursement of fund for final payment to

H OBJECTIVES

This Order is issued to:

submitted by contractors to the BIR and the DPWH: and To address the issues and concerns regarding the duplication of requirements being

2. Align the process for the release of the final payment for contractors with Republic Act (RA) No. I1032. ('Ease of Doing Business and Efficient Government Service Delivery Act of 20:8)

1

H. CLARIFICATORY PROVISIONS

Regulations No. 3-2005 and in compliance with Section 23.1. a) iii) of the 20 16 Implementing Rules In retrospect. Sections l. 3 and 6 of E.0 No. 398, s. 2005 dated July: 12, 2015 under Revenue

and Regulations of RA No. 9184 or the :The Government Procurement Reform Act". provides tha

payment of taxes especially of those contractors transacting with the governmeni. to wit: only the tax clearance from the Bureau of Internal Revenue shall be required to prove full amd timelyt

Sections 1. 3 and 6 of E.0 No. 398

or participate in any contract with the government. its department. bureaus, offices and agencies. including state universities and colleges, governnent-owned and/or controlled corporations, government financial institutions and local government units. shall. as a pre-condition. submit, along with their proposal and/or bid. a copy of their "Sec. l. All persons natural or juridical. local or foreign, desiring to enter into

latest income and business tax returns duiy stamped and received by the Bureau of Internal Revenue, and duly validated with the tax payments made thereon.

to prove full and timely payment of taxes.' They shall aiso submit tax clearance from the Bureau of Internal Revenue

XXX XXX XXX

contracts shall include a stipulation that the private contracting party shall pay taxes in full and on time and that failure to do so will entitle the government to suspend paymentt for any goods or service delivered by the private contracting party 'Sec. 3. To ensure continuing compliance with tax laws. all government

private contracting party to regularly present. within the duration of the contract, a tax clearance from the Bureau of Internal Revenue as well as a copy of the its income All government contracts shall likewise include a stipulation requiring the

and business tax returns duly validated with the tax payments made thereon.i (Emphasis supplied)

are inconsistent with this Executive Order are hereby revoked, amended or modified accordingly. "Sec. 6. All executive issuances, rules and regulations, or parts thereof, which

Section 23.1. a).i1D) of the2016.IRR of RA No. 9184

"Section 23. Eligibility Requirements for the Procurement of Goods and Infrastructure Projects

23.1 For purposes of determining the eligibility of bidders using the criteria stated in Section 23.4 of this IRR, only the following documents shall be required by the BAC, using the forms prescribed in the Bidding documents:

Re Class :- ^" documents

DEC Legat Documents

S X XX XXX XXX

Hii) Tax clearaace per F:.0. 398. s. 2005, as finally reviewed and approved by the Bureau of Internal Revenue (BIR). (Emphasis suppiied)

processing of their Final Billing/Payment. deems it unnecessary to further require filing/ submission of BIR Form No. 0217 under RMO No. 12- to two different agencies resulting to undue inconvenience and additional burden to contractors in the a mandatory requirement for the procurement (bidding) of infrastructure projects then. the Bureau 2015. Likewise. the attachments to BIR Form 0217 and the documentary requirements for Final Billing under the Department Order No.148 series of 2018 implementing the Document Tracking System for Civil Works (DoTS) show that there is duplication in the requirements being submitted by contractors Since a tax clearance serves as a proof of full and timely payment of taxes and that the same is

IV. REVOCATION CLAUSE

Contractor`s Final Payment Release Certificate (BIR Form No. 0217) and presentation of the said certificate duly approved by the BIR to the DPWH as a requirement for the release of the contractors fina! payment on their projects with the DPWH is hereby revoked and shall no longer be enforced In view of the foregoing. the provision of RM0 No. 12-2015 on the filing of an Application fot

V REPEALING CLAUSE

amended accordingly. All revenue issuances or portions thereof inconsistent herewith are hereby revoked and/or

V EFFECTIVITY

This Order shall take effect immediately

Q

CAESAR R. DULAY Commissioner of Internal Revenue

030 7 69

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DEC 02.2019 L:10PM

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RECORDS MGT. DIVISION