Supreme Court E-Library
Information At Your Fingertips

  View printer friendly version

Pursuant to Section 608 of the Tariff and Customs Code of the Philippines, as amended, the following procedure is hereby prescribed to facilitate the monetization and cash conversion of TCCs issued on VAT on importations.

I. OBJECTIVES

To implement the provisions of Executive Order No. 68-A, entitled Amending Executive Order 68 (s. 2012) which Established the Monetization Program of Outstanding  Value-Added  Tax Tax Credit Certificates;  as well as Joint Circular No. 002-2014, executed among the Department  of Finance (DOF), Department of Budget and Management (DBM), Bureau of Internal Revenue (BIR) and the Bureau  of  Customs  (BOC),  providing  guidelines  for  qualified  VAT-registered persons to receive the cash equivalent of their outstanding VAT TCCs, and Joint Circular No. 1-97 dated January 2, 1997;
 
II. COVERAGE

These rules shall cover all claims for:

1.     Monetization of Import VAT and VAT Drawback TCCs, outstanding as of 31 December 2012, which were approved for monetization pursuant to EO No. 68, series of 2012, and DOF-BOC-DBM Joint Circular No. 3-2012; and

2.     Cash  Conversion  of all other  VAT  TCCs  outstanding  as of 31 December 2012, which are not covered by the immediately  preceding subsection, and VAT TCCs issued after 31 December 2012.

III. OPERATIONAL PROVISIONS

1.     After due notice from BOC, holders of VAT Drawback  TCCs may apply for monetization  and  claim  the  corresponding  cash  equivalent  of  outstanding VAT   TCCs   as  of  31  December   2012,   subject   to  existing   budgeting, accounting and auditing law, rules and regulations;

2.     All VAT TCC holders who wish to avail the cash conversion  program  may apply at the Tax Credit Secretariat (“Secretariat”) with the submission of the following documents:

a.   Letter of Application

b.   Original TCC;

c.   Affidavit of the applicant, attesting that the TCC is authentic and that the amount thereof represents the remaining balance as of the date of the application; and

d.   Secretary’s Certificate/Proof of Authority of Authorized Representative.

3.     Upon   submission   of  the  complete   documents   needed   to  support   the application, the Secretariat shall endorse the same to Financial Management Office (FMO) for verification of authenticity and balance of the TCC, subject of the request for cash conversion;

4.     The FMO shall verify and issue a certification attesting to the authenticity of the TCC and the remaining balance thereof, in cases of partially utilized VAT TCCs, and return the docket to the Secretariat;

5.     The  Secretariat   shall  then  prepare  the  corresponding   endorsement   for signature of the duly designated Tax Credit approving Authority, authorizing payment  of cash.  The signed  resolution/endorsement  authorizing  payment shall be forwarded  to the Accounting  Division,  FMO for the preparation  of cash payment.

6.     Within forty-five (45) calendar days from presentation  of the notice referred above or submission of complete documents for cash conversion, BOC shall directly pay the amount equivalent  to the outstanding  balance of the TCC, net of any delinquent tax liability.
 
a.   For notices presented  or complete  documentary  applications  submitted on or before the 15th of the month, the 45-day processing period shall commence on the 16th of the immediately following month.

b.   For  notice  presented  or complete  documentary  applications  submitted after   the   15th    on   the   month,   the   45-day   processing   period   shall commence on the 16th of the immediately following month.

IV. MANNER OF PAYMENT

1.     The release of the cash equivalent of Import VAT TCCs and Drawback TCCs shall be subject to availability of funds appropriated for the purpose.

2.     The  procedure  in budget  execution  shall  be subject  to existing  budgeting laws, rules and regulations, in consultation with the DBM. TO initiate the implementation   of  the  monetization   and  cash  conversion   program,   the procedure  prescribed  under  Customs  Memorandum  Order  (CMO)  No. 28- 2014, on cash refund of input VAT, is hereby adopted.

V. CLEARANCE OF NO OUTSTANDING LIABILITY

1.     Claimants  shall  be  required  to  secure  a  Clearance  from  the  Collection Service  attesting  that subject  importer-claimant  has no outstanding  liability with the BOC, which Clearance shall be submitted to the Secretariat before preparation of the Endorsement authorizing payment.

2.     In cases where a particular claimant has determined liability/ies as borne by the records of the Collection Service, he shall be required to settle first his liabilities before his claim for VAT refund will be processed for payment.

VII. SUBMISSION OF QUARTERLY REPORTS

It shall be the duty of Accounting Division, FMO, to prepare and submit monthly reports   to  the  Commissioner   and  Tax  Credit  Approving   Authority,   on  the utilization of the amounts appropriated for payment of cash refund.

VIII. EFFECTIVITY

This Order shall take effect immediately upon signing thereof.