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BIR PRIORITIES

* Exceed BIR revenue target of


P 845 Billion for 2008
* Improve taxpayer satisfaction and
compliance
Volume 10 No. 8
* Improve taxpayer and taxfiler base

BIR clarifies taxability of insurance


companies
undertakings that have evolved and shall refer to those incurred costs
By Aileen Marquez expanded through the years from which are exclusively related or other-
THE BIR HAS clarified the taxability generation of premiums from insurance wise considered indispensable to the
of insurance companies with res- contracts to conduct of other ancillary creation of the revenue from their
pect to the proper computation of services. business activity as an insurance
their Minimum Corporate Income For purposes of computing the company, including the generation of
Tax (MCIT), Business Tax and gross income on the sale of services, investment income not subject to final
Documentary Stamp Tax (DST). which shall be the basis of the 2% taxes.
The clarification was initially MCIT of life and non-life insurance The said direct costs and revenue-
made through the issuance of Reve- companies, the gross revenue shall related deductions shall be limited to the
nue Memorandum Circular (RMC) include direct premium and reinsurance following: salaries, wages and other
No. 30-2008 last April 1. The Circular assumed (net of returns and cancel- employee benefits of personnel directly
was subsequently amended by RMC lations); miscellaneous income; invest- engaged in underwriting, claims and
No. 59-2008 last August 23 as a result ment income not subject to final tax; BIR clarifies ... to p. 2
of the dialogues and consultations released reserve; and all other items
held by top BIR officials with repre-
sentatives of the insurance industry.
treated as gross income under Section
32 of the Tax Code, as amended.
BIR adopts new
The said Circulars were issued to The costs of services or direct cost procedures to
help insurance companies understand and identifiable direct revenue-related
the taxability of their various business deductions of insurance companies stop spurious
Aspe takes oath as full-fledged input tax claims
Deputy Commissioner By Eleonor Capili

IN ORDER TO stop the illegal use of


Official Receipts/Sales Invoices (OR/SI)
of dissolved business establishments
in claiming input taxes, the BIR issued
Revenue Memorandum Circular (RMC)
No. 56-2008 last August 20 to clarify the
procedures on the processing of appli-
cation for cancellation of business
registration.
Pursuant to the Circular, upon filing
of the duly accomplished Notice of
Closure or Cessation of Business, the
OATH TAKING. DCIR Nelson M. Aspe (middle) takes his oath as full-fledged BIR Deputy Commissioner before Finance
Secretary Margarito B. Teves and Commissioner Lilian B. Hefti last August 28 at the BIR Executive Conference Room. taxpayer shall submit to the BIR, for
evaluation, the establishments list of
Margarito B. Teves last August 28 at inventory of goods, supplies and capital
By Raul Agcaoili
the BIR Executive Conference Room goods; list of unused ORs, SIs and other
before the start of the monthly accounting forms; and list of certificates,
AFTER MORE THAN a year of per- executive meeting with the Secretary. permits, notices, etc. issued to the
forming in an Officer-In-Charge The ceremony was witnessed by taxpayer by the BIR.
capacity, DCIR Nelson M. Aspe finally Commissioner Lilian B. Hefti, the Upon effectivity of the closure or
took his oath as full-fledged Deputy Deputy Commissioners and other cessation of business, the taxpayer shall
Commissioner for the BIR Operations top revenue officials. submit and/or surrender to the BIR
Group. DCIR Aspe is a CPA-lawyer who (through the Revenue District Office
The oath taking ceremony was
administered by Finance Secretary Aspe takes... to p. 2 BIR adopts... to p. 2
2 NATIONAL
BIR clarifies ...from p. 1 business activities of life insurance on life insurance subject to Premium
benefits, actuary and policy owner companies for business tax (whether Tax and not VAT. The said RMC also
services; commissions on direct writings/ premium tax, Value-Added Tax [VAT] or clarified that the re-issuance fees,
reinsurance; cost of facilities directly Gross Receipts Tax [GRT]) and DST was renewal fees as well as penalties paid
utilized in providing the service such as clarified, particularly those pertaining to to the life insurance company are
depreciation or rental of equipment used the following types of income: direct likewise considered as income of the
and cost of supplies; inspection and writings/premiums; management fees, life insurance company for services
medical fees; claims, losses, maturities and rental income, or other income/fees; and rendered to customers and, therefore,
benefits net of reinsurance recoveries; investment income realized from the subject to VAT or Percentage Tax,
additions required by law to reserve fund; investment of premium earned and those whichever is applicable.
and reinsurance ceded. realized from the investment of funds The RMCs likewise clarified the
Investment expenses shall not form obtained from others. The manner of taxability of other financial services/
part of the direct cost nor a deductible apportionment of investment income to products sold by the life insurance
expense in the determination of the net determine which portion is exempt and companies, namely: the Variable Unit
taxable income. However, investment which portion is subject to the GRT was Link and the Premium Deposit Fund, as
expenses relating to investment income also clarified. well as the taxability of non-life in-
that has not been subjected to final tax, In RMC No. 59-2008, it was empha- surance companies insofar as the
although not forming part of the direct sized that premium on Health and business taxes and DST are concerned.
cost, shall be allowed as deduction to Accident Insurance, whether received (For more details, see full text of
arrive at the taxable income. by a life or non-life insurance com- RMC Nos. 30-2008 and 59-2008 at
The taxability of the various pany, shall be considered as premium www.bir.gov.ph)
Aspe takes...from p. 1 served as Chief of Staff at the Office conduct of campaign for the imple-
joined the BIR in 1989 as Revenue of the DCIR, Operations Group for mentation of the Expanded VAT Law.
Examiner at the Value-Added Tax Divi- five years and as Regional Director DCIR Aspe also serves as the
sion. Because of his competence and of RR 8- Makati for almost a year. Director of the Philippine Institute of
dedication to the revenue service, he rose DCIR Aspe was a member of the Certified Public Accountants (PICPA),
from the ranks and assumed various VAT Review Committee and has been Eastern Metro Manila Council; Direc-
important positions in the Bureau. actively involved in the drafting of tor of the CPA-Lawyers Association of
Prior to his designation as OIC- various important Revenue Regulations the Philippines; and Director of the BIR
Deputy Commissioner, Atty. Aspe issued by the BIR, as well as in the CPA-Lawyers Society.

BIR adopts ...from p. 1 destroyed/cancelled documents and BIR searches ...from p. 5


where the taxpayers head office is warned them that they shall be held
Search.
registered) all unused ORs, SIs and liable if the said documents are sub-
Said revenuers were nominated
other accounting forms, for destruc- sequently used as a source of spurious
based on their outstanding performance/
tion. Likewise, all BIR-issued Notices, input taxes.
contribution to the revenue service;
Permits, Certificate of Registration, etc. The BIR will issue another RMC to
behavioral performance (i.e. commitment
shall also be surrendered, for circularize the names of taxpayers who
to public service, professionalism, just-
cancellation. have ceased business operations. (For
more details, see full text of RMC No. ness and sincerity, responsiveness to
Commissioner Lilian B. Hefti direc-
ted taxpayers to properly dispose the 56-2008 at www.bir.gov.ph) public and simple living); reliability and
consistency of performance, and other
128 Bacolod ...from p. 3 skills and customer assistance skills to similar circumstances or considerations
training program for the Collection further improve their delivery of service in favor of the nominee.
Group and Assessment Group, res- to taxpayers. From the 16 official nominees, the
pectively, which both started last The GCRO topnotchers who were top eight (8) nominees shall be deter-
February. recognized during the graduation mined by the Preliminary Board of
The pool of lecturers, led by ceremony are Arlen Amarador, Gene Judges consisting of the Commissioner,
Regional Director Rodita Galanto and Rose Gallo and Ma. Riza Ramos (for the Deputy Commissioners of Operations
Assistant Regional Director Aynie Collection Group); and Ma. Anna Liza Group and Resource Management
Mandajoyan, discussed various Valencia, Grace Rikelle Lapu-os and Group and other officials authorized by
topics in taxation, such as collection Monina Mata (for the Assessment
and audit procedures for Income Tax, Group). the Commissioner.
Percentage Tax, Value-Added Tax, Assistant Commissioner Leonor The 8 finalists shall then be referred
Transfer Tax, Excise Tax and Docu- Villalon-Rogers from the Bureaus to the Final Board of Judges (FBJ) to be
mentary Stamp Tax. Human Resource Development Service constituted by TMAP. The FBJ shall
The participants were also trained graced the graduation ceremony as select 1 winner, which shall be an-
on how to improve their communication guest speaker. (By Lizelda Lofranco) nounced and awarded on October 21.
REGIONAL 3
Bacolod region recognizes top taxpayers
and withholding agents
By Lizelda Lofranco
RR 12, BACOLOD CITY The Regional
Office recognized its top taxpayers and
withholding agents during the regional
celebration of the BIR 104th founding
anniversary held last August 8 at the
Provincial Multi-Purpose Gymnasium in
Bacolod City.
The awardees are top taxpayers of
the four Revenue District Offices
(RDOs) of RR 12, namely: RDO Nos. 76
Victorias City, 77 Bacolod City, 78
TOP TAXPAYER: Ramon E. Kilayko ( 3rd from left) receives the Plaque of Recognition from BIR officials (L-R) Revenue
Binalbagan and 79 Dumaguete City. District Officer (RDO) Jonah Ruth Alonte, Asst. Commissioner Leonor Villalon-Rogers, OIC-Regional Director Rodita
The taxpayer-awardees were selected Galanto, OIC-Asst. Regional Director Aynie Mandajoyan and OIC-Asst. RDO Lily Lopez.
because of their correct and timely Management Corporation; and ACM Province of Negros Occidental;
payment of taxes and/or remittance of Commodities, Inc. Department of Public Works and
withholding taxes, which contributed The Top Withholding Agents in Highways, 4th Engineering District; and
significantly to the regions good the private sector were VCM Rural Department of Education - Negros
collection performance in CY 2007. Electric Service Cooperative, Inc.; Oriental.
Awarded as Top Individual Tax- Mandalagan Commodities, Inc.; Negros Regional Director Rodita Galanto
payers were Isidoro Be; Ramon and Occidental Electric Co.; and Siliman led the awarding ceremony, together
Yolando Kilayko; Benjamin Jalandoni; University. The Top Withholding with Assistant Commissioner Leonor
and Sylvia Uy. The Top Corporate Agents in the government sector were Villalon-Rogers, Asst. Regional Director
Taxpayers were Sagay Central, Inc.; City Government of Sagay; Department Aynie Mandajoyan and the four
Va l l a c a r Tr a n s i t , I n c . ; G a n e t of Education - Negros Occidental; Revenue District Officers of the region.

Cebu region participates in 128 Bacolod


job fair revenuers
By Judith Mondigo finish General
RR 13, CEBU CITY The region
participated in the Career and Entre-
Course for ROs
preneurship Fair organized by JobsDB
Philippines, Inc. Cebu last July 10 and RR 12, BACOLOD CITY The region
11 at SM City Cebu. culminated its conduct of the General
The said Fair aimed to provide job Course for Revenue Officers (GCRO)
opportunities for the unemployed and JOB FAIR. Manning the BIR booth during the Career and with a graduation ceremony held last
Entrepreneurship Fair held last July 10 and 11 at SM City-
to encourage more people to enter into Cebu are (L-R) Amelia Montero, Alan Bayawa, Samuel
August 7.
entrepreneurship to spur the estab- Capada and Marivic Meoso. A total of one hundred twenty-eight
lishment of small- and medium-scale distributed flyers on the Bureaus (128) revenuers composed of 73
businesses in the region. Premyo Sa Resibo (PSR) raffle promo Collection and Seizure Agents and 55
Revenue officials and employees and other tax information materials as Revenue Officers from the Assessment
from the Taxpayer Service Section of part of their tax campaign activities for Division, Special Investigation Division
Revenue District Office Nos. 80 the year. and Revenue District Offices of
Mandaue City, 81 Cebu City North, 82 Regional Director Jose Tan and Victorias, Bacolod, Binalbagan and
Cebu City South and 83 Bulacao, Asst. Regional Director Teresita Dizon Dumaguete City attended the course.
Talisay City manned a booth where expressed optimism that through the The GCRO is a training package
jobseekers and entrepreneurs submitted BIRs participation in the Fair, the region being conducted to hone the collection
their applications for Taxpayer Iden- will be able to expand its taxpayer base and audit skills of revenuers assigned
tification Number (TIN) and registration as well as reach out to more taxpayers, in tax assessment and collection
requirements for business. which will eventually lead to increased positions. It is an 87-hour and 178-hour
During the Fair, revenuers also tax collections. 128 Bacolod ... to p. 2
4 FEATURES
New Revenue Issuances
RR No. 8-2008 Clarifies that the RMC No. 51-2008 Circularizes CSC RMC No. 57-2008 Notifies the loss of
transactions of Bangko Sentral ng Memorandum Circular No. 03, s. 2001 2 sets of unused BIR Form No. 2524
Pilipinas entered into in the exercise of entitled Revised Policies on Merit Revenue Official Receipt
its governmental/regulatory authority Promotion Plan
are outside of the coverage of the RMC No. 58-2008 Clarifies the time
Gross Receipts Tax RMC No. 52-2008 Circularizes Memo- within which to reckon the redemption
randum Circular No. 04, s. 2005 entitled period on foreclosed asset and the
RMO No. 28-2008 Prescribes the Amendment to Policy No. 12 of CSC period within which to pay Capital Gains
policies, guidelines and procedures in MC No. 3, s. 2001 and Clarification of Tax or Creditable Withholding Tax and
the reporting, recording, and monito- the Functions and Responsibilities of Documentary Stamp Tax on the foreclo-
ring of attendance of revenue officials the Personnel Selection Board sure of real estate mortgage by those
and employees governed by the General Banking Law
RMC No. 53-2008 Notifies the loss of of 2000, as well as the venue for the
RMC No. 43-2008 Authorizes the 1 pad of unused Accountable Form No. payment of these taxes
manual filing of tax returns of tax- 51 (AF51)
payers enrolled in Electronic Filing RMC No. 59-2008 Amends certain
and Payment System (eFPS) due to RMC No. 54-2008 Circularizes the list portions of RMC No. 30-2008 on the
technical problems encountered of Tax Credit Certificates and Dis- taxability of insurance companies for
bursement Vouchers for tax refunds Minimum Corporate Income Tax, Busi-
RMC No. 44-2008 Circularizes the full issued for the month of July 2008 ness Tax and Documentary Stamp Tax
text of Department Order No. 9-08 purposes
relative to the implementing rules and RMC No. 55-2008 Provides the dead-
regulations on the accessibility of line of corporate taxpayers for the filing RMC No. 60-2008 Notifies the loss of
taxpayer information between the BIR of 2nd Quarter Income Tax return and several Revenue Official Receipts-BIR
and the LGUs for tax collection pur- clarifies the procedure in the filing of Form No. 2524
poses tax returns, among others
RMC No. 61-2008 Encourages par-
RMC No. 45-2008 Circularizes the list RMC No. 56-2008 Clarifies the proce- ticipation to the celebration of the 19th
of Tax Credit Certificates and Disburse- dure on the handling of taxpayers National Statistics Month in October
ment Vouchers for tax refunds issued application for cancellation of business 2008
for the month of May 2008 registration and issues warning on the
use of Official Receipts/Sales Invoices RMC No. 62-2008 Notifies the loss of
RMC No. 46-2008 Clarifies issues of dissolved businesses for purposes 4 sets of unused BIR Form No. 1954 -
concerning common carriers by air and of claiming input taxes Certificate Authorizing Registration
their agents relative to the revenue and
receipt from transport of passengers,
goods/cargoes and mail and from
excess baggage Happy
Happy Birthday
Birthday
RMC No. 47-2008 Prescribes the
procedures in handling taxpayers
Chief Pedro D. Ramos Aug. 01 RDO Isidro T. Casals, Jr. Aug. 15
request for transfer of registration RDO Cynthia T. Cabuguas Aug. 01 RDO Nerissa C. Agraam Aug. 15
Chief Ruth C. Bagaloyos Aug. 02 OIC-Chief Renato L. Ruiz Aug. 15
OIC-Chief Simeon D. Abella Jr. Aug. 02 OIC-RDO Evangeline S. Abanilla Aug. 15
RMC No. 48-2008 Circularizes the list Asst. Chief Oswaldo C. Adornado
ARDO Carlos G. Tambal
Aug. 04
Aug. 04
RDO Ramon T. King Jr. Aug. 17
Chief Nelly S. Ibo Aug. 18
of Tax Credit Certificates and Disburse- Chief Nona P. Gatbonton Aug. 05 OIC-RDO Roberto S. Bucoy Aug. 18
OIC-RDC Head Victor O. Baylon Aug. 05
ment Vouchers for tax refunds issued OIC-Asst. Chief Rhoda A. Virganio Aug. 05
Asst. Chief Gregoria A. Pacho
OIC-Chief Alice SA Gonzales
Aug. 19
Aug. 20
for the month of June 2008 OIC-Chief Bobby U. Labajo
OIC-Asst. Chief Nicanor S. Ventura
Aug. 06
Aug. 06
Chief Evelyn M. Albano Aug. 21
Asst. Chief Yolanda C. Magsumbol Aug. 22
OIC-Asst. Chief Bernardo D. Gomez Aug. 06 Chief Oscar R. Maalac Aug. 24
OIC-Chief Cynthia A. Fuentes Aug. 08 OIC-Chief Erotida M. Sibal Aug. 24
RMC No. 49-2008 Clarifies the com- RDO Gerry O. Dumayas Aug. 10 ARDO Danilo G. Lino Aug. 24
position of the National Evaluation ARDO Ester M. Campos
OIC-Reg. Dir. Ma. Nieva A. Guerrero
Aug. 10
Aug. 12
OIC-RDO Maria Thelma F. Pulhin
OIC-RDO Noel B. Gonzales
Aug. 25
Aug. 27
Board OIC-ARDO Benjamin B. Virtucio Aug. 12 OIC-Asst. Chief Lizabel M. Valderama Aug. 28
Chief Claire F. Corpus Aug. 13 ARDO Roger G. Cadavas Aug. 29
RDO Ramer D. Narvaez Aug. 13 OIC-Asst. Reg. Dir. Teresita M. Dizon Aug. 30
RMC No. 50-2008 Notifies the loss of Chief Marcelina P. Tawanna
Asst. Reg. Dir. Mamapok G. Diro
Aug. 14
Aug. 15
OIC-ACIR Jaime B. Santiago
Asst. Chief Ariel M. Calabia
Aug. 31
Aug. 31
triplicate copy from one set of unused Chief Asuncion E. Bernades Aug. 15 Asst. Chief Neil U. Cordero Aug. 31
BIR Form No. 2320 Tax Credit Certi-
ficate with Serial No. 012832
BIR searches for Exemplary Revenue Employee
displayed outstanding the Revenue Regions and ployee of the BIR for at least
By Beverly Samia Revenue District Offices
work performance and seven (7) years at the time of
dedication to duty. within Metro Manila, nomination; must be rated
THE BIR, in partnership The Search is open to including the BIR National Very Satisfactory under the
with the Tax Management all BIR employees, exclu- Office and the Large Tax- PMS for the immediately pre-
Association of the Philip- ding those who are holding payers Service (excluding ceding six consecutive per-
pines (TM-AP) launched Division Chief/Revenue LTDO-Cebu). Subsequently, formance rating periods prior
last June 26 the Search for District Officer positions the Search shall cover the to their nomination con-
Exemplary Revenue Emplo- and above. However, in the areas outside Metro Manila. ducted during the last three
yee of 2008 to recognize initial conduct of the To qualify for the Search, years; must not have been
BIR employees who have Search, it shall cover only the nominee must be an em- charged under a criminal
information pending in court
or must not have any pen-
ding criminal and/or admi-
nistrative case/charge; and
must not have been adjudged
guilty/liable in any admi-
nistrative or criminal case.
Based on the nomina-
tions received by the
Search Committee, sixteen
(16) revenuers were offi-
cially nominated to the

BIR searches ... to p.2

Rowena G. Altura
Editor-in-Chief
Silverio C. Sante
Managing Editor
Eleonor F. Capili
News Editor
Mary Aileen F. Marquez
Writer
Beverly C. Samia
Brando Ador C. Bautista
Layout Artists

The BIR Monitor is the


official newsletter of the
Bureau of Internal Revenue
published by the
Corporate Communications
Division, under the
supervision of the Policy
and Planning Service.

Editorial Office: Room 903,


BIR National Office,
Agham Road, Diliman,
Quezon City
Tel/Fax No. 426-2190