Philippines: New Rule for Tobacco Firms

Source from:  Business World  08/22/2013

THE BUREAU of Internal Revenue (BIR) wants tobacco firms to submit their official registry books online in a bid to enhance excise tax payment monitoring.

Revenue Memorandum Order (RMO) 23-2013, dated July 23 but released only last week, outlines guidelines for the implementation of the electronic official registry book (eORB) system, one of the BIR's priority projects for 2013.

The ORB records daily transactions of regulated raw materials, goods-in-process and finished products by manufacturers, producers, importers and dealers of articles subject to excise tax. Monthly transcripts have to be submitted the BIR's Large Taxpayers Service. These are currently filed manually.

The RMO states that electronic submission will be "for monitoring and reconciliation purposes to mainly uncover discrepancies on declarations that will increase revenue collection."

"The eORB System shall be initially implemented in the major tobacco companies identified by the BIR. Subsequently, a Notice of eORB Implementation shall be issued to other tobacco companies."

All manufacturers of cigarettes, cigars and cigarette papers, including traders and dealers of whole leaf tobacco and partially manufactured leaf, must file a written request for access to the system.

This must be accompanied by a duly notarized board resolution or an affidavit stating, among others, the names of authorized users.

Once the request is approved, the firms must enroll in the eORB system, after which they will receive an e-mail notice from the BIR. Enrolled firms can then download a stand-alone application that will allow them to create user accounts and input the required transaction data.

Companies can finalize transactions via the BIR website via an application that maintains the table values used by stand-alone program and allows the agency to receive the electronically submitted data. The Web-based application is also capable of generating compliance, discrepancy and collection reports.

Firms are required to finalize and submit their ORBs through the facility five days after the close of the covered month.

"[I]n cases where the taxpayer failed to use/maintain the eORB system as well as to submit the eORB form to this bureau ... the same constitutes a violation of Section 153 of the National Internal Revenue Code, as amended, upon which the penalty of P1,000 for each failure; provided that the aggregate amount to be imposed ... during a calendar year shall not exceed P25,000...," the RMO states.

The BIR likewise said that as part of efforts to improve excise tax administration via the use of information technology, the eORB system will eventually cover all concerned taxpayers.

Aside from tobacco products, excise taxes are also imposed on alcohol, petroleum and minerals, whether these are manufactured locally or imported. Enditem