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I.

A.

Historical Sketch of the Company


HISTORY OF THE BIR
Spanish Era
During the 17th and 18th centuries, the Contador de' Resultas served as the
Chief Royal Accountant whose functions were similar to the Commissioner of
Internal Revenue. He was the Chief Arbitrator whose decisions on financial matters
were final except when revoked by the Council of Indies. During these times, taxes
that were collected from the inhabitants varied from tribute or head tax of one gold
maiz annually; tax on value of jewelries and gold trinkets; indirect taxes on tobacco,
wine, cockpits, burlas and powder. From 1521 to 1821, the Spanish treasury had to
subsidize the Philippines in the amount of P 250,000.00 per annum due to the poor
financial condition of the country, which can be primarily attributed to the poor
revenue collection system.
American Era
In the early American regime from the period 1898 to 1901, the country was
ruled by American military governors. In 1902, the first civil government was
established under William H. Taft. However, it was only during the term of second
civil governor Luke E. Wright that the Bureau of Internal Revenue (BIR) was created
through the passage of Reorganization Act No. 1189 dated July 2, 1904. On August 1,
1904, the BIR was formally organized and made operational under the Secretary of
Finance, Henry Ide (author of the Internal Revenue Law of 1904), with John S. Hord
as the first Collector (Commissioner). The first organization started with 69
employees, which consisted of a Collector, Vice-Collector, one Chief Clerk, one Law
Clerk, one Records Clerk and three (3) Division Chiefs.
Following the tenure of John S. Hord were three (3) more American collectors,
namely: Ellis Cromwell (1909-1912), William T. Holting (1912-1214) and James J.
Rafferty (1914-1918). They were all appointed by the Governor-General with the
approval of the Philippine Commission and the US President.
During the term of Collector Holting, the Bureau had its first reorganization
on January 1, 1913 with the creation of eight (8) divisions, namely: 1) Accounting, 2)
Cash, 3) Clerical, 4) Inspection, 5) Law, 6) Real Estate, 7) License and 8) Records.
Collections by the Real Estate and License Divisions were confined to revenue
accruing to the City of Manila.

In line with the Filipinization policy of then US President McKinley, Filipino


Collectors were appointed. The first three (3) BIR Collectors were: Wenceslao
Trinidad (1918-1922); Juan Posadas, Jr. (1922-1934) and Alfredo Yatao (1934-1938).
On May 1921, by virtue of Act No. 299, the Real Estate, License and Cash
Divisions were abolished and their functions were transferred to the City of Manila.
As a result of this transfer, the Bureau was left with five (5) divisions, namely: 1)
Administrative, 2) Law, 3) Accounting, 4) Income Tax and 5) Inspection. Thereafter,
the Bureau established the following: 1) the Examiner's Division, formerly the
Income Tax Examiner's Section which was later merged with the Income Tax Division
and 2) the Secret Service Section, which handled the detection and surveillance
activities but was later abolished on January 1, 1951. Except for minor changes and
the creation of the Miscellaneous Tax Division in 1939, the Bureau's organization
remained the same from 1921 to 1941.
In 1937, the Secretary of Finance promulgated Regulation No. 95,
reorganizing the Provincial Inspection Districts and maintaining in each province an
Internal Revenue Office supervised by a Provincial Agent.
Japanese Era
At the outbreak of World War II, under the Japanese regime (1942-1945), the
Bureau was combined with the Customs Office and was headed by a Director of
Customs and Internal Revenue.
Post War Era
On July 4, 1946, when the Philippines gained its independence from the
United States, the Bureau was eventually re-established separately. This led to a
reorganization on October 1, 1947, by virtue of Executive Order No. 94, wherein the
following were undertaken: 1) the Accounting Unit and the Revenue Accounts and
Statistical Division were merged into one; 2) all records in the Records Section under
the Administrative Division were consolidated; and 3) all legal work were centralized
in the Law Division.
Revenue Regulations No. V-2 dated October 23, 1947 divided the country into
31 inspection units, each of which was under a Provincial Revenue Agent (except in
certain special units which were headed by a City Revenue Agent or supervisors for
distilleries and tobacco factories).
The second major reorganization of the Bureau took place on January 1, 1951
through the passage of Executive Order No. 392. Three (3) new departments were
created, namely: 1) Legal, 2) Assessment and 3) Collection. On the latter part of
January of the same year, Memorandum Order No. V-188 created the Withholding
Tax Unit, which was placed under the Income Tax Division of the Assessment
2

Department. Simultaneously, the implementation of the withholding tax system was


adopted by virtue of Republic Act (RA) 690. This method of collecting income tax
upon receipt of the income resulted to the collection of approximately 25% of the total
income tax collected during the said period.
The third major reorganization of the Bureau took effect on March 1, 1954
through Revenue Memorandum Order (RMO) No. 41. This led to the creation of the
following offices: 1) Specific Tax Division, 2) Litigation Section, 3) Processing
Section and the 4) Office of the City Revenue Examiner. By September 1, 1954, a
Training Unit was created through RMO No. V-4-47.
As an initial step towards decentralization, the Bureau created its first 2
Regional Offices in Cebu and in Davao on July 20, 1955 per RMO No. V-536. Each
Regional Office was headed by a Regional Director, assisted by Chiefs of five (5)
Branches, namely: 1) Tax Audit, 2) Collection, 3) Investigation, 4) Legal and 5)
Administrative. The creation of the Regional Offices marked the division of the
Philippine islands into three (3) revenue regions.
The Bureau's organizational set-up expanded beginning 1956 in line with the
regionalization scheme of the government. Consequently, the Bureau's Regional
Offices increased to (8) eight and later into ten (10) in 1957. The Accounting Machine
Branch was also created in each Regional Office.
In January 1957, the position title of the head of the Bureau was changed from
Collector to Commissioner. The last Collector and the first Commissioner of the BIR
was Jose Aranas.
A significant step undertaken by the Bureau in 1958 was the establishment of
the Tax Census Division and the corresponding Tax Census Unit for each Regional
Office. This was done to consolidate all statements of assets, incomes and liabilities of
all individual and resident corporations in the Philippines into a National Tax Census.
To strictly enforce the payment of taxes and to further discourage tax evasion,
RA No. 233 or the Rewards Law was passed on June 19, 1959 whereby informers
were rewarded the 25% equivalent of the revenue collected from the tax evader.
In 1964, the Philippines was re-divided anew into 15 regions and 72
inspection districts. The Tobacco Inspection Board and Accountable Forms
Committee were also created directly under the Office of the Commissioner.
Marcos Administration
The appointment of Misael Vera as Commissioner in 1965 led the Bureau to a
"new direction" in tax administration. The most notable programs implemented were
the "Blue Master Program" and the "Voluntary Tax Compliance Program". The first
3

program was adopted to curb the abuses of both the taxpayers and BIR personnel,
while the second program was designed to encourage professionals in the private and
government sectors to report their true income and to pay the correct amount of taxes.
It was also during Commissioner Vera's administration that the country was
further subdivided into 20 Regional Offices and 90 Revenue District Offices, in
addition to the creation of various offices which included the Internal Audit
Department (replacing the Inspection Department), Administrative Service
Department, International Tax Affairs Staff and Specific Tax Department.
Providing each taxpayer with a permanent Tax Account Number (TAN) in
1970 not only facilitated the identification of taxpayers but also resulted to faster
verification of tax records. Similarly, the payment of taxes through banks (per
Executive Order No. 206), as well as the implementation of the package audit
investigation by industry are considered to be important measures which contributed
significantly to the improved collection performance of the Bureau.
The proclamation of Martial Law on September 21, 1972 marked the advent
of the New Society and ushered in a new approach in the developmental efforts of the
government. Several tax amnesty decrees issued by the President were promulgated to
enable erring taxpayers to start anew. Organization-wise, the Bureau had also
undergone several changes during the Martial Law period (1972-1980).
In 1976, under Commissioner Efren Plana's administration, the Bureau's
National Office transferred from the Finance Building in Manila to its own 12-storey
building in Quezon City, which was inaugurated on June 3, 1977. It was also in the
same year that President Marcos promulgated the National Internal Revenue Code of
1977, which updated the 1934 Tax Code.
On August 1, 1980, the Bureau was further reorganized under the
administration of Commissioner Ruben Ancheta. New offices were created and some
organizational units were relocated for the purpose of making the Bureau more
responsive to the needs of the taxpaying public.
Aquino Administration
After the People's Revolution in February 1986, a renewed thrust towards an
effective tax administration was pursued by the Bureau. "Operation: WalangLagay"
was launched to promote the efficient and honest collection of taxes.
On January 30, 1987, the Bureau was reorganized under the administration of
Commissioner Bienvenido Tan, Jr. pursuant to Executive Order (EO) No. 127. Under
the said EO, two (2) major functional groups headed and supervised by a Deputy
Commissioner were created, and these were: 1) the Assessment and Collection Group;
and 2) the Legal and Internal Administration Group.
4

With the advent of the value-added tax (VAT) in 1988, a massive campaign
program aimed to promote and encourage compliance with the requirements of the
VAT was launched. The adoption of the VAT system was one of the structural reforms
provided for in the 1986 Tax Reform Program, which was designed to simplify tax
administration and make the tax system more equitable. It was also in 1988 that the
Revenue Information Systems Services Inc. (RISSI) was abolished and transferred
back to the BIR by virtue of a Memorandum Order from the Office of the President
dated May 24, 1988. This transfer had implications on the delivery of the
computerization requirements of the Bureau in relation to its functions of tax
assessment and collection.
The entry of Commissioner Jose Ong in 1989 saw the advent of the "Tax
Administration Program" which is the embodiment of the Bureau's mission to
improve tax collection and simplify tax administration. The Program contained
several tax reform and enhancement measures, which included the use of the
Taxpayer Identification Number (TIN) and the adoption of the New Payment Control
System and Simplified Net Income Taxation Scheme.
Ramos Administration
The year 1993 marked the entry into the Bureau of its first lady
Commissioner, LiwaywayVinzons-Chato. In order to attain the Bureau's vision of
transformation, a comprehensive and integrated program known as the ACTS or
Action-Centered Transformation Program was undertaken to realign and direct the
entire organization towards the fulfillment of its vision and mission.
It was during Commissioner Chato's term that a five-year Tax
Computerization Project (TCP) was undertaken in 1994. This involved the
establishment of a modern and computerized Integrated Tax System and Internal
Administration System.
Further streamlining of the BIR was approved on July 1997 through the
passage of EO No.430, in order to support the implementation of the computerized
Integrated Tax System. Highlights of the said EO included the: 1) creation of a fourth
Revenue Group in the BIR, which is the Legal and Enforcement Group (headed by a
Deputy Commissioner); and 2) creation of the Internal Affairs Service, Taxpayers
Assistance Service, Information Planning and Quality Service and the Revenue Data
Centers.

Estrada Administration

With the advent of President Estrada's administration, a Deputy Commissioner


of the BIR, Beethoven Rualo, was appointed as Commissioner of Internal Revenue.
Under his leadership, priority reform measures were undertaken to enhance voluntary
compliance and improve the Bureau's productivity. One of the most significant reform
measures was the implementation of the Economic Recovery Assistance Payment
(ERAP) Program, which granted immunity from audit and investigation to taxpayers
who have paid 20% more than the tax paid in 1997 for income tax, VAT and/or
percentage taxes.
In order to encourage and educate consumers/taxpayers to demand sales
invoices and receipts, the raffle promo "Huminging Resibo, Manalong Libo-Libo"
was institutionalized in 1999. The Large Taxpayers Monitoring System was also
established under Commissioner Rualo's administration to closely monitor the tax
compliance of the country's large taxpayers.
The coming of the new millennium ushered in the changing of the guard in the
BIR with the appointment of DakilaFonacier as the new Commissioner of Internal
Revenue. Under his administration, measures that would enhance taxpayer
compliance and deter tax violations were prioritized. The most significant of these
measures include: full utilization of tax computerization in the Bureau's operations;
expansion of the use of electronic Documentary Stamp Tax metering machine and
establishment of tie-up with the national government agencies and local government
units for the prompt remittance of withholding taxes; and implementation of
Compromise Settlement Program for taxpayers with outstanding accounts receivable
and disputed assessments with the BIR.
Memoranda of Agreement were also forged with the league of local
government units and several private sector and professional organizations (i.e. MAP,
TMAP, PCCI, FFCCCI, etc.) to help the BIR implement tax campaign initiatives.
In September 1, 2000, the Large Taxpayers Service (LTS) and the Excise
Taxpayers Service (ETS) were established under EO No. 175 to reinforce the tax
administration and enforcement capabilities of the BIR. Shortly after the
establishment of said revenue services, a new organizational structure was approved
on October 31, 2001 under EO No. 306 which resulted in the integration of the
functions of the ETS and the LTS.
In line with the passage of the Electronic Commerce Act of 2000 on June 14,
the Bureau implemented a Full Integrated Tax System (ITS) Rollout Acceleration
Program to facilitate the full utilization of tax computerization in the Bureau's
operations. Under the Program, seven (7) ITS back-end systems were released in
stages in RR 8 - Makati City and the Large Taxpayers Service.
Arroyo Administration

Following the momentous events of EDSA II in January 2001, newly-installed


President Gloria Macapagal-Arroyo appointed a former Deputy Commissioner, Atty.
Ren G. Baez, as the new Commissioner of Internal Revenue.
Under Commissioner Baez's administration, the BIRs thrust was to
transform the agency to make it taxpayer-focused. This was undertaken through the
implementation of change initiatives that were directed to: 1) reform the tax system to
make it simpler and suit the Philippine culture; 2) reengineer the tax processes to
make them simpler, more efficient and transparent; 3) restructure the BIR to give it
financial and administrative flexibility; and 4) redesign the human resource policies,
systems and procedures to transform the workforce to be more responsive to
taxpayers' needs.
Measures to enhance the Bureau's revenue-generating capability were also
implemented, the most notable of which were the implementation of the Voluntary
Assessment Program and Compromise Settlement Program and expansion of
coverage of the creditable withholding tax system. A technology-based system that
promotes the paperless filing of tax returns and payment of taxes was also adopted
through the Electronic Filing and Payment System (eFPS).
With the resignation of Commissioner Baez on August 19, 2002, Finance
Undersecretary Cornelio C. Gison was designated as interim BIR Commissioner.
Eight days later (on August 27, 2002), former Customs Commissioner, Guillermo L.
Parayno, Jr. was appointed as the new Commissioner of Internal Revenue (CIR).
Barely a month since his assumption to duty as the new CIR, Commissioner
Parayno offered a Voluntary Assessment and Abatement Program (VAAP) to
taxpayers with under-declared sales/receipts/income. To enhance the collection
performance of the BIR, Commissioner Parayno adopted the use of new systems such
as the Reconciliation of Listings for Enforcement or RELIEF System to detect underdeclarations of taxable income by taxpayers and the electronic broadcasting system to
enhance the security of tax payments. It was also under Commissioner Paraynos
administration that the BIR expanded its electronic services to include the web-based
TIN application and processing; electronic raffle of invoices/receipts; provision of epayment gateways; e-substituted filing of tax returns and electronic submission of
sales reports. The conduct of special operations on high profile tax evaders, which
resulted to the filing of tax cases under the Run After Tax Evaders (RATE) Program
marked Commissioner Paraynos administration as well as the conduct of Tax
Compliance Verification Drives and accreditation and registration of cash register
machines and point-of-sale machines. To improve taxpayer service, the Bureau also
established a BIR Contact Center in the National Office and eLounges in Regional
Offices.

On October 28, 2006, Deputy Commissioner for Legal and Inspection Group,
Jose Mario C. Buag was appointed as full-fledged Commissioner of Internal
Revenue. Under his administration, the Bureau attained success in a number of key
undertakings, which included the expansion of the RATE Program to the Regional
Offices; inclusion of new payment gateways, such as the Efficient Service Machines
and the G-Cash and SMART Money facilities; implementation of the Benchmarking
Method and installation of the Bureaus e-Complaint System, a new e-Service that
allows taxpayers to log their complaints against erring revenuers through the BIR
website. The Nationwide Rollout of Computerized Systems (NRCS) was also
undertaken to extend the use of the Bureaus Integrated Tax System across its noncomputerized Revenue District Offices. In 2007, the National Program Support for
Tax Administration Reform (NPSTAR), a program funded by various international
development agencies, was launched to improve the BIR efficiency in various areas of
tax administration (i.e. taxpayer compliance, tax enforcement and control, etc.).
On June 29, 2007, Commissioner Buag relinquished the top post of the BIR
and was replaced by Deputy Commissioner for Operations Group, Lilian B. Hefti,
making her the second lady Commissioner of the BIR. Commissioner Hefti focused
on the strengthening of the use of business intelligence by embarking on data
matching of income payments of withholding agents against the reported income of
the concerned recipients. Information sharing between the BIR and the Local
Government Units (LGUs) was also intensified through the LGU Revenue Assurance
System, which aims to uncover fraud and non-payment of taxes. To enhance the
Bureaus audit capabilities, the use of Computer-Assisted Audit Tools and Techniques
(CAATTs) was also introduced in the BIR under her term.
With the resignation of Commissioner Hefti in October 2008, former BIR
Deputy Commissioner for Legal and Enforcement Group, Sixto S. Esquivias IV was
appointed as the new Commissioner of Internal Revenue. Commissioner Esquivias
administration was marked with the conduct of nationwide closure of erring business
establishments under the OplanKandado Program. A Taxpayer Feedback
Mechanism (through the eComplaint facility accessible via the BIR Website) was also
established under his term where complaints on erring BIR employees and taxpayers
who do not pay taxes and do not issue ORs/invoices can be reported. In 2009, the
Bureau revived its HandangMaglingkod Project where the best frontline offices
were recognized for rendering effective taxpayer service.
When Commissioner Esquivias resigned in November 2009, Senior Deputy
Commissioner, Joel L. Tan-Torres assumed the position of Commissioner of Internal
Revenue. Under his administration, Commissioner Tan-Torres pursued a high
visibility public awareness campaign on the Bureaus enforcement and taxpayers
service programs. He institutionalized several programs/projects to improve revenue
collections, and these include Project R.I.P (Rest in Peace); intensified filing of tax
evasion cases under the re-invigorated RATE Program; conduct of Taxpayers

Lifestyle Check and development of Industry Champions. Linkages with various


agencies (i.e. LTO, SEC, BLGF, PHALTRA, etc.) were also established through the
signing of several Memoranda of Agreement to improve specific areas of tax
administration.
P-Noy Aquino Administration
Following the highly-acclaimed inauguration of President Benigno C. Aquino
III on June 30, 2010, a former BIR Deputy Commissioner, Atty. Kim S. JacintoHenares, was appointed as the new Commissioner of Internal Revenue. During her
first few months in the BIR, Commissioner Henares focused on the filing of tax
evasion cases under the RATE Program, in compliance with the SONA
pronouncements of President Aquino.

B.

PRINCIPAL ORGANIZERS OF BIR

10

C.

OBJECTIVES OF BIR
The duties of the Bureau of Internal Revenue are:
Assessment and collection of all internal revenue taxes, fees and charges;

Enforcement of all forfeitures, penalties, and fines connected therewith,


including the execution of judgments in all cases decided in its favor by the
Court of Tax Appeals and the ordinary courts;

It shall also be bound to administer supervisory and police powers conferred to


it by the National Internal Revenue Code and special laws.

MISSION
The Bureau of Internal Revenue is committed to collect taxes for nationbuilding through excellent, efficient and transparent service, just and fair
enforcement of tax laws, uplifting the life of every Filipino.
VISION
The Bureau of Internal Revenue is an institution of service excellence, a
partner in nation-building, manned by globally competitive professionals with
integrity and patriotism.

GUIDING PRINCIPLE
"Service Excellence with Integrity and Professionalism"

CORE VALUES

God-fearing

Innovativeness

Accountability

Integrity

11

Competency

Transparency Patriotism

12

II.

Nature of BIR

The Bureau of Internal Revenue (BIR) or Kawanihan ng Rentas Internas is an

attached agency of Department of Finance. BIR collects more than one-half of the total
revenues of the government. The Bureau of Internal Revenue shall be under the
supervision and control of the Department of Finance and its powers and duties shall
comprehend the assessment and collection of all national internal revenue taxes, fees, and
charges, and the enforcement of all forfeitures, penalties, and fines connected therewith,
including the execution of judgments in all cases decided in its favor by the Court of Tax
Appeals and the ordinary courts. The Bureau shall give effect to and administer the
supervisory and police powers conferred to it by this Code or other laws.

A.

BIR SERVICES

The services of the Bureau of Internal Revenue are the processing, assessment

and collection of the various kinds of taxes. For this, here is the list of the numerous forms
used in the execution of their functions.

F
ORM
NO.

1
702

1
701

FORM TITLE

DESCRIPTION

FILING
DATE

This return is filed annually


This return
by every corporation, partnership no
is filed, with or
matter how created or organized, without payment, on
joint stock companies, joint
or before the 15th
accounts, associations, governmentday of the fourth
owned or controlled corporations, month following the
agencies and instrumentalities.
close of the
taxpayer's taxable
year.

Annual Income
This return is filed
This return
Tax Return For Selfis filed on or before
Employed Individuals,
annually by the following
April 15 of each
Estates and Trusts
year covering
(Including those with
individuals regardless of
income for the
both Business and
preceding taxable
Compensation Income)
amount of gross income:
year.
Annual Income
Tax Return For
Corporation,
Partnership and Other
Non-Individual
Taxpayer

1.

resident

citizen

engaged in trade, business,


or practice of profession

within and without the


Philippines.

2. A resident alien, nonresident citizen or nonresident alien individual


engaged in trade, business
or practice of profession
within the Philippines.

1
700

Annual Income
Tax Return For
Individuals Earning
Purely Compensation
Income (Including
Non-Business/NonProfession Income)

This

return

is

filed

annually by every resident


citizen

deriving

compensation income from

The return is
filed on or before
April 15 of each
year covering
income for the
preceding taxable
year.

all sources, or resident


alien
citizen

and
with

non-resident
respect

to

compensation income from


within the Philippines.

2110

1
600WP

Remittance
Return of Percentage
Tax on Winnings and
Prizes Withheld by
Race Track Operators

Application for
Abatement or
Cancellation of Tax,
Penalties and/or
Interest

This application form shall


be filed by Taxpayer (whether
individual, estate and trust or
corporation) or the taxpayer's
authorized representative to indicate
his/its
offer
for
abatement/cancellation
of
tax/penalties/interest.

This return shall be in filed


in triplicate by operators of race
tracks for remittance of withholding
of percentage tax on race horse
prizes and winnings on horse racing
bets.

The
withholding tax
return shall be
filed/and the tax
paid within twenty
(20) days from the

Monthly
Remittance Return of
Income Taxes
Withheld on
Compensation

Monthly
Remittance Return of
Creditable Income
Taxes Withheld
(Expanded)

1
604CF

Annual
Information Return of
Income Tax Withheld
on Compensation and
Final Withholding
Taxes

601C

601E

2
200 A;
2200
AN;
2200 M;
2200 P;
2200 T

Excise Tax
Returns

This return is filed by every


Withholding Agent (WA)/payor who
is either an individual or nonindividual, required to deduct and
withhold taxes on compensation
paid to employees.

This return is filed by every


Withholding Agent (WA)/payor who
is either an individual or nonindividual, required to deduct and
withhold taxes on income payments
subject to Expanded / Creditable
Withholding Taxes.

This return is filed by every


employer
or
withholding
agent/payor who is either an
individual, estate, trust,partnership,
corporation, government agency and
instrumentality, government-owned
and controlled corporation, local
government unit and other juridical
entity required to deduct and
withhold taxes on compensation
paid to employees and on other
income payments subject to Final
Withholding Taxes.
BIR Form No. 2200 A -

date the tax was


deducted and
withheld.

On or before
January 31 of the
year following the
calendar year in
which the
compensation
payment and other
income payments
subject to final
withholding taxes
were paid or
accrued.

The return

Excise Tax Return for

is filed and

AlcoholProducts

the excise
tax paid by

BIR Form No. 2200 ANExcise Tax Return for


Automobiles & NonEssential Goods

BIR Form No. 2200 M Excise Tax Return for

the
manufactur
er or
producer
before
removal of

Mineral Products

domestic
products

BIR Form No. 2200 P -

from place

Excixe Tax Return for

of

Petroleum Products

production.

BIR Form No. 2200 T -

Excise Tax Return for


Tobacco Products

2
000-OT

Documentary
Stamp Tax
Declaration/Return
(One Time
Transactions)

This return shall be filed in


triplicate by the following
person making, signing,
issuing,

accepting

or

transferring the document


or

facility

The return
shall be filed and
the tax paid within
(5) days after the
close of the month
when the taxable
document was
made, signed,
issued, accepted or
transferred.

evidencing

transaction:
18

1.

Every

natural

or

juridical person, resident or


non-resident,

for

sale,

barter, exchange or other


onerous
shares

of

domestic

disposition

of

stock

in

corporation,

classified as capital asset,


not traded in the local stock

exchange

1
900

Application to
Use Loose-Leaf /
Computerized Books
of Accounts and/or
Accounting Records

This

form

is

to

accomplished

by

be
all

taxpayers who intend to

Before
actual use of Looseleaf / Computerized
Books of Accounts
and / or Accounting
Records.

apply for authority to use


either

Loose-Leaf

Computerized

Books

Accounts

/
of

and/or

Accounting Records.

1
901

Application for
Registration for SelfEmployed and Mixed
Income Individuals,
Estates/Trusts

This

form

accomplished
employed

to
by

and

income

be
self-

mixed

individuals,

estates/trusts
starting

is

On or before
commencement of
new business or
before payment of
any tax due or
before filing a
return.

doing/just
business,

or

opening a new branch for


registration.

605

Quarterly
Income Tax Return for
Self-employed

701Q

Payment Form

This form is to be

This form
accomplished every time a taxpayer
shall be
pays taxes and fees which do not
accomplished:
require the use of a tax return such 1 Every time a tax
as second installment payment for payment or penalty
income
tax,
deficiency
tax, is due or an advance
delinquency tax, registration fees, payment is made;
penalties,
advance
payments, 2. Upon receipt of a
deposits, installment payments, etc.
demand letter /
assessment notice
and/or collection
letter from the BIR;
This return shall be filed in

triplicate by the following

Individuals, Estates,
and Trusts (Including
Those with both
Business and
Compensation Income)

individuals regardless of
amount of gross income:

1)

resident

citizen

engaged in trade, business,


or practice of profession
within and without the
Philippines.

2) A resident alien, nonresident citizen or nonresident alien individual


engaged in trade, business
or practice of profession
within the Philippines.

3) A trustee of a trust,
guardian

of

minor,

executor/administrator

of

an estate, or any person


acting in any fiduciary
capacity for any person,
where such trust, estate,
minor,
engaged
business.

or
in

person

is

trade

or

1
703

Annual Income
Information Return for
Non-Resident
Citizens / OCWs and
Seamen (for foreignsourced income)

This
information return is
filed in triplicate by Non- filed not later than
the April 15 of the
resident
citizens
and year following the
taxable year in
Overseas Contract Workers
which the income
was earned.
(OCWs),
including
This information return is

qualified Filipino seamen,


on income derived from
sources abroad.

An individual citizen of the


Philippines who is working
and deriving income from
abroad

as

an

overseas

worker is taxable only on


income
within
Income
within

from
the

Philippines.

from
the

sources

sources
Philippines

should be filed in either


Form 1700 or Form 1701.

1
704

Improperly
Accumulated Earnings
Tax Return

This form is to be filed by


every
domestic
corporation
classified
as
closely-held
corporation except banks and other
non-bank financial intermediaries,
insurance
companies,
taxable
partnerships, general professional
partnerships, non- taxable joint
ventures and enterprises duly
registered with the Philippine
Economic Zone Authority (PEZA)

The return
shall be filed within
15 days after the
close of the year
immediately
succeeding
taxpayer's covered
taxable year.

1
706

Capital Gains
Tax Return for
Onerous Transfer of
Real Property
Classified as Capital
Asset (both Taxable
and Exempt)

under R.A. 7916.


However, filing of the
return is no longer required
when the real property
transaction involves the
following:
- it is not classified as a
capital asset
- not located in the

- Filed
within thirty (30)
days following each
sale, exchange or
disposition of real
property - In case of
installment sale, the
return shall be filed
within thirty (30)
days following the
receipt of the 1st
downpayment and
within thirty (30)
days following each
subsequent
installment payment

Philippines
- disposition is gratuitous
- disposition is pursuant to
the Comprehensive
Agrarian Reform

To be filed with the RDO


having jurisdiction over the
place where the property
being

transferred

is

located.

Capital Gains
Tax Return for
Onerous Transfer of
Shares of Stocks Not
Traded Through the
Local Stock Exchange

707

Annual Capital

This return is filed by a


Filed within
natural or juridical person, resident thirty (30) days after
or non-resident, who is not exempt
each cash sale,
under existing laws for the sale, barter, exchange or
barter, exchange or other onerous other disposition of
disposition intended to transfer shares of stock not
ownership of shares of stocks in traded through the
domestic corporation classified as
local stock
capital assets, not traded through the
exchange
local stock exchange.

This return is filed by every

For

707 A

Gains Tax Return for


Onerous Transfer of
Shares of Stock Not
Traded Through the
Local Stock Exchange

1
902

Application for
Registration For
Individuals Earning
Purely Compensation
Income, and NonResident Citizens /
Resident Alien
Employee

natural or juridical person, resident


individual
or non-resident, who is not exempt taxpayers, this final
under existing laws for sale, barter, consolidated return
exchange or other disposition of is filed on or before
shares of stock in a domestic
April 15 of each
corporation, classified as capital
year covering all
assets, not traded through the local stock transactions of
stock exchange.
the preceding
taxable year.

This form is to be
Filed within
ten (10) days from
accomplished by an old or
the date of
employment, or
new employee whether before the payment
of any tax due or
resident citizen or nonbefore filing of a
return, or
resident citizens
earning
declaration is
required.
purely
compensation
income.

To be accomplished with
the

RDO

having

jurisdiction

over

the

taxpayer's

residence

or

place of employment.

1
903

Application for
Registration for
Corporations/
Partnerships
(Taxable/Non-Taxable)

This

form

is

accomplished

to

be
by

Corporations, Government
Owned

or

controlled

corporations, Partnerships,
Government Agencies and
Instrumentalities,
and

Local

(GAI's)

Government

On or before
commencement of
business or before
payment of any tax
due/ before filing a
return.

Units (LGU's).

1
904

Application for
Registration for OneTime Taxpayer and
Persons Registering
under E.O. 98
(Securing a TIN to be
able to transact with
any Government
Office)

This

form

is

to

be

accomplished by one-time
taxpayer

and

persons

Before
payment of any tax
due/before filing of
return or before the
issuance of TIN
under E.O.98.

registering and applying


for a TIN (E.O. 98).

To be accomplished with
the

RDO

having

jurisdiction over the place


where property is located
for one time taxpayer; or
place

of

residence

for

applicants under E.O. 98.

1
905

Application for
Registration
Information Update for
Updating /
Cancellation of
Registration /
Cancellation of TIN /
New Copy of TIN card
/ New copy of
Certificate of
Registration

This

form

accomplished

is

to
by

be
all

taxpayers who intend to


update/change any data or
information, e.g. transfer
of business within the same
RDO, change in registered
activities, cancellation of
business registration due to
closure

of

business

or

transfer to other district, or

Filed each
time taxpayer needs
to register the
change in
registration such as
but not limited to
change in registered
activities, change in
tax type details etc.
except those
changes to be filed
under Form 2305;
replacement of lost
TIN Card / lost
Certificate of
Registration or
cancellation or
registration and/or
TIN.

replacement of lost TIN


Card/

Certificate

of

Registration.

To be accomplished with
the

RDO

having

jurisdiction
taxpayer,

over

the

whether

Head

Office or branch.

1
906

Application for
Authority to Print
Receipts and Invoices

This

form

is

to

be

accomplished

by

all

taxpayers

everytime

Filed each
time taxpayer needs
to print receipts and
invoices.

printing of receipts and


invoices is needed.

To be accomplished with
the

RDO

jurisdiction

having
over

Head

Office or branch.

1
907

Application for
Permit to Use Cash
Register
machines/Point-of-Sale
Machine

This

form

is

accomplished

to
by

be
all

taxpayers who intend to


use

Cash

Machines

in

Register
lieu

of

Official Receipts/ Invoices,


or Cash Register Machine

Filed each
time taxpayer will
use a new cash
register machine
unit or point-of-sale
machine unit.

used as cash depository; or


Point-of-Sale Machine in
lieu of Official/ Invoices.

1
701-AIF

1
702-AIF

2
304

2
305

Account
Information Form
(AIF) for Selfemployed Individuals,
Estates and Trusts
(engaged in trade and
business)

A revised form designed in


This form is
line with the BIR Integrated Tax
filed on or before
System (ITS) to be used as
April 15 of each
attachment to BIR Form No. 1701
year covering
and to be accomplished by selfincome for the
employed individuals, estates and
preceding taxable
trusts engaged in trade and business,
year
which shall contain the taxpayer's
business profile information and
other relevant data to be lifted from
the Audited Financial Statements.
BIR Form 1701 AIF is not,
however, required for individual
taxpayers who orpted for Optional
Standard Deduction (OSD).

Account

A revised form designed in

Filed
Information Form
line with the BIR Integrated Tax
together with the
(AIF) For Corporations System (ITS) to be used as Annual Income Tax
and Partnerships in
attachment to BIR Form No. 1702
Return - on or
General
and to be accomplished by before the 15th day
corporations and partnerships which of the fourth (4th)
contains the taxpayer's business month following the
profile information and other close of the calendar
relevant data to be lifted from the or fiscal year, as the
Audited Financial Statements.
case may be.

Certificate of
A
Certificate
to
be
Payor must
Income Payment Not accomplished and issued by a Payor furnish the payee on
Subject to Withholding to recipients of income not subject or before January 31
Tax (Excluding
to withholding tax. This Certificate
of the year
Compensation Income) should be attached to the Annual following the year
Income Tax Return - BIR Form in which the income
1701 for individuals, or BIR Form payment was made.
1702 for non-individuals.

Certificate of
A
Certificate
to
be

File this
Update of Exemption accomplished and issued in case of form with the RDO
and of Employer's and increase or decreases in exemption, where the taxpayer
Employee's
change of status, change in the is registered, within
Information
person of employer, change in the ten (10) days after
type of employment, acquiring
such change or
employment after having registered event. (This form is

306

307

Certificate of
Final Income Tax
Withheld

Certificate of
Creditable Tax
Withheld at Source

as engaged in business or exercise


given to the main
of profession, change in the working
employer, copy
status of the spouse, execution of
furnished the
the "waiver to claim the Additional
secondary
Exemption" by the husband, or
employer).
revocation of the previously
executed "waiver to claim the
Additional Exemption" by the
husband.

A
Certificate
to
be
To be issued
accomplished and issued by a
to payee on or
Payor/WA to each recipient of before January 31 of
income subjected to final tax. The the year following
column amount of payment should
the year in which
indicate the total amount paid and
income payment
the total taxes withheld and remitted was made. However
during the period.
upon request of the
payee the payor
must furnish such
statement to the
payee
simultaneously with
the income
payment.
For EWT - This Certificate
For
in turn should be attached
to

the

Quarterly/Annual

Percentage
Tax On

Income Tax Return - BIR

Governmen

Forms 1701Q / 1701 for

t Money

individuals, or BIR Form

Payments -

1702Q/

1702

for

non-

To be

individuals, in which case,

issued to

the amount of withholding

the payee

tax shall be allowed as a

on or

tax

credit

against

the

before the

income tax liability of the

10th day of

income recipient in the

the month

taxable quarter or year in

following

which the income was

the month

earned or received.

in which
withholdin

For Percentage Taxes on


Government

g was

Money

made.Upon

Payments - This Certificate

request of

is to be attached to the

the payee,

Quarterly Percentage Tax


return

(BIR

Form

however,

No.

the payor

2551M and 2551Q).

must

For VAT Withholding -

furnish

This Certificate is to be

such

attached to the Monthly

statement

(BIR

to the

Form No. 2550M) and

payee

VAT

Declaration

Quarterly

VAT

simultaneo

Return

usly with

(BIR Form No. 2550Q).

the income
payment.

For VAT
Withholdin
g - To be
issued to
the payee

on or
before the
10th day of
the month
following
the month
in which
withholdin
g was
made.

2
316

Certificate of
Compensation
Payment / Tax
Withheld For
Compensation
Payment With or
Without TAx Withheld

Certificate

to

be

accomplished and issued to


each employee receiving
salaries, wages and other
forms or remuneration by
each employer indicating

To be issued
to payee on or
before January 31 of
the succeeding year
in which the
compensation was
paid, or in cases
where there is
termination of
employment.

therein the total amount


paid and the taxes withheld
therefrom

during

the

calendar year.

2
000

Documentary
Stamps Tax
Declaration/ Return

This return is filed by the


following:
1.

In

The return
shall be

the

case

of

filed within

constructive affixture of

five (5)

documentary stamps, by

days after

the

person

making,

the close of

signing, issuing, accepting,

the month

or transferring documents,

when the

instruments,

loan

agreements

papers,

document

acceptances, assignments,

was made,

sales and conveyances of

signed,

the obligation, right or

issued,

property incident thereto

accepted or

wherever the document is

transferred

made,

and

taxable

signed,

accepted

or

issued,

transferred

or when
reloading a

when the obligation or

metering

right arises from Philippine

machine

sources or the property is

becomes

situated in the Philippines

necessary

at the same time such act is

or upon

done or transaction had;

remittance

2. by a metering machine

by revenue

user

the

collection

documentary stamp tax due

agents of

on the taxable document;

collection

and

from the

who

imprints

3. by a revenue collection

sale of

agent for remittance of sold

loose

loose documentary stamps.

stamps.

Monthly
Remittance Return of
Final Income Taxes
Withheld (On Interest
Paid on Deposits and
Yield on Deposit
Substitutes/Trusts/Etc.)

Monthly
Remittance Return of
Final Income Taxes
Withheld

602

601F

1
604E

1
606

This return is filed by all


banks,
non-bank
financial
intermediaries, finance corporations,
investment and trust companies and
similar institutions for final income
tax
withheld
on
interest
paid/accrued on deposit and yield or
any other monetary benefit from
deposit substitutes and from trust
fund and similar arrangements.

This return is filed by every


Withholding Agent (WA)/payor who
is either an individual or nonindividual, required to deduct and
withhold taxes on income payments
subject to Final Withholding Taxes.

Annual

This return is filed by every


Information Return of withholding agent/payor who is
Creditable Income
either an individual, estate, trust,
Taxes Withheld
partnership,
corporation,
(Expanded)/ Income
government
agency
and
Payments Exempt from instrumentality, government-owned
Withholding Taxes
and controlled corporation, local
government unit and other juridical
entity required to deduct and
withhold taxes on income payments
subject to Expanded Withholding
Taxes, or making income payments
not subject to withholding tax but
subject to income tax.

Withholding

This return is filed by every


Tax Remittance Return Withholding Agent/Buyer on the
(For Transactions
sale, transfer or exchange of real
Involving Real
property classified as ordinary asset.
Property other than
Capital Asset including
Taxable and Exempt)

This return
is filed on or before
the tenth (10th) day
following the end of
the month in which
the transaction
occurred.

B.

USES OF BIR SERVICES

The services of the Bureau of Internal revenue which involves the imposition,

regulation, assessment and collection of taxes are undoubtedly necessary for the
developments of the Philippines. Through the valuable services of this bureau, the
following advantages are obtained:
Government funds are obtained which will be used for various government
expenditures.
The government, together with its agencies and administrative units will have
the sufficient funds necessary for the execution of their programs and duties.

C.

IMPORTANCE OF BIR TO THE COMMUNITY

It is the policy of the state to provide basic services and uphold and protect the rights
of the people for a peaceful and dignified life. The realization of this policy, however,
requires adequate funding. Governments funds are mainly sourced from collections by
authorized government agencies from taxes, customs duties and fees for services
rendered. These collections are intended to finance the governments budgetary
requirements. Any deficiencies from collection are financed from domestic and foreign
borrowings.

The efficiency of the collection system, therefore is crucial in the performance of

governments functions particularly, in the implementation of government programs and


projects.

The collection function is being performed by several government agencies in charge

of collecting taxes, duties and other fees required under existing laws, rules and
regulations. One of the collection arms of the government is the Bureau of Internal
Revenue (BIR). Collections are undertaken either by the National Collecting Officers
(NCOs) or Local Treasurers (LTs) designated as such, and the Authorized Agent Banks
(AABs) in the case of the BIR. The role of BIR in the national collection system can best

be described by its Mission which is to raise revenues for the government through
effective and efficient collection of taxes, quality service to taxpayers, and impartial and
uniform enforcement of tax laws.

III.

A.

Organizational Set-Up of BIR


TYPE OF OWNERSHIP
The Bureau of Internal Revenue is a government agency, an administrative

unit of the government which is attached with the Department of Finance. Currently, Kim
Jacinto S. Henares serves its position as the Commissioner of Internal Revenue. The Bureau
of Internal Revenue shall be under the supervision and control of the Department of Finance
and its powers and duties shall comprehend the assessment and collection of all national
internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and
fines connected therewith, including the execution of judgments in all cases decided in its
favor by the Court of Tax Appeals and the ordinary courts.

B.

ORGANIZATIONAL CHART - GRAPHICAL

REGIONALDIRECTOR

ASST. REGIONAL
DIRECTOR

ARACELI

MARIDU

LEGAL DIVISION

MARIO A. SALDEVAR

ASSESSMEN
DIOGENES

COLLECTION
DIVISION

MARIVIC G. TULIO

REGIONAL INVESTIGATIVION DIVISION

TEODORO G. GALICIA

ADMINISTRATIVE AND H

OLIVIA

FINANCE D

MARIA ISABE

DISTRICT REVE

OFFI

RDO 29-Tondo, RDO 30-Binondo, RDO 31-Sta.Cruz, RDO 32-Quiapo-Sampaloc-Sta. Mesa- San Miguel, RDO 33-Intramuros-Ermita-Ma

ORGANIZATIONAL CHART - NARRATIVE


Bureau of Internal Revenue is spearheaded by its Commissioner, Kim S. JacintoHenares where National Office is located at Quezon City. Branches are allocated to
the country to collect taxes easily and one of its branches is the Regional District
Office of BIR Intramuros, Manila. It is headed by the Regional Director Araceli L.
Francisco and assisted by the Assistant Regional Director Maridur V. Rosario. Under
the Higher Office, there are six divisions having different tasks perform and nine
Regional District Offices that collects taxes directly from the taxpayers. To mention
the different chiefs of every division are Mario A. Saldevar of Legal Division,
Diogenes C. Villarubia of Assessment Division, Marivic G. Tulio of Collection
Division, Olivia E. Josue of Administrative and Human Resource Division, Teodoro
G. Galicia of Regional Investigation Division and Maria Isabel A. Ordono of
Finance Division. Then there are nine regional district offices namely RDO 29Tondo, RDO 30-Binondo, RDO 31-Sta.Cruz, RDO 32-Quiapo-Sampaloc-Sta. MesaSan Miguel, RDO 33-Intramuros-Ermita-Malate, RDO 34-Paco-Pandacan-Sta. AnaSan Andres, RDO 35-Romblon, RDO 36-Puerto Princesa and RDO 37-San Jose,
Occidental Mindoro.

C.

JOB DESCRIPTION AND SPECIFICATION

Regional Director- is head of the regional district office; the one that
spearheads the transaction of different divisions. He analyses the accounts and
reports submitted by every divisions for reviews and signing purposes. He
communicates directly to the National Office for every performance and important
matter happened that come to his attention. He leads the BIR for performance
progress especially about attaining important BIR goal which is to collect reasonably
high tax collection yearly.

Assistant Regional Director- some various functions of the regional director


are also possesses. The assistant clears first some documents to be passed, reviewed
or signed by the director. They plan for meetings instructed by the director and also
head important memos coming from the National Office to the employees.

Legal Division Chief- deals with the legal instructions and to be made by the
BIR. Some taxpayers having trouble with their payments or credits usually pass
through screenings in different division. If they fail to comply with policies and the
Philippine law, legal division are the personnel who conduct evaluating the right
move against the troubled taxpayers.

Assessment Division Chief- every taxpayer, individual or corporations, has


different agenda of transactions in the BIR. Thus they are the persons who assess the
documents submitted by the clients. The division is usually deals for big transactions
and for small ones; they assigned employees in various district offices.

Collection Chief- focusing on collecting delinquent taxes from individuals


and businesses according to current tax laws. As with most federal jobs, revenue
officers must meet specific education requirements for employment. They check
documents whether taxpayers are fully paid or no obligations to the BIR then passes
tax certificates. If not, then they pass it to the special investigative division.

Administrative and Human Resource Chief- assists the needs of the whole
BIR. They file the documents, receive and transmit data from and to different
branches and National Office, provide forms, printed files, supplies and almost
check the condition and performance of the company to be presented to the Director.
And also he is the one who handle data of the employees. They recruit employees
and evaluate their performances to be reported to the Director. Also, they monitor
the performance of employees whether they are subject for promotion, transfer or
demotion. They also analyze staff members absences for payroll and leave matters.

Regional Investigation Chief- for further analysis of transactions of


taxpayers, they are the personnel who conduct investigation. They check the
documents passed by collection division with past files filed in the administrative
division, and then judges the matter. If no problem occurs, they tell the director first
then passes back to the collection division clearing the taxpayer. If there are
uncertainties, then they usually pass it to legal division for deep analysis.

Finance Chief- overall budgets the money they received from the National

Office from the DBM. They allocate BIR budget in acquiring materials and supplies, paying
bills and payroll and other activity of the company in annual basis. They pass reports monthly
to the Director to be review on.

IV.

The Job to Which You Are Assigned During


the Period of Your Employment Internship

1.) Description of the job/s.

During the period of my employment internship, I was assigned in Finance Division

under the supervision of Mr. Gerardo S. Caoagdan, Chief Revenue Officer. My job was to
process the monthly collections and deposits of various revenue collection officers from nine

regional district offices namely RDO 29-Tondo, RDO 30-Binondo, RDO 31-Sta.Cruz,
RDO 32-Quiapo-Sampaloc-Sta. Mesa- San Miguel, RDO 33-Intramuros-Ermita-Malate,
RDO 34-Paco-Pandacan-Sta. Ana-San Andres, RDO 35-Romblon, RDO 36-Puerto
Princesa and RDO 37-San Jose, Occidental Mindoro. I process it by making a Statement
of Monthly Collections(SMC). It has its own format provided by my supervisor. Under
the deposit, I write down its remittance advices, month collected, bank, date deposited
and amount from deposit payment slip. Then get its grand total. While under the
collection, its more complicated because it is classified into many categories. I need to
look one by one each amount in the table and classify which category it belongs through

its UACCS. If the UACCS is not given the consolidated statement of collection will be
my basis. Wherein its tax type, identifying its corresponding account code is needed, is
given and will be classified according to its account code. Ill get the total of each
category and then subsequently the grand total. After getting the total of collection and
deposit Ill calculate the discrepancy if it has. If the amount of collection is greater than
the deposit then its positive, and negative if the latter is greater.

2.) How did your training benefit you in preparation for future employment and for
personal development?

My training, indeed, is a great help in preparation for my future employment and for

personal development. As for future employment, I can say that if I would like to work
immediately after I graduate I can easily apply in the Finance Division of BIR. As for my personal
development, it benefit me in the sense that I learn how to socialize with your co-worker. I
realized also that as an employee you should have the initiative to greet your co-worker and
employer. And Ive also learn that if youre an employer you should learn how to have a good
relationship with your employee. I think one of it is by showing appreciation to their work. And if
you have issues with your employee you must talk with him/her and not confront him/her in front
of other employees.

3.) Did you learn any particular aspect of the operation of the Company which you
did not learn in College or you would not have understood or appreciated well if
you have not undergone this apprenticeship?

I can say that I havent learn how to process the collections of tax collectors in

College because in my taxation subject it only taught me how to get the tax due, taxable income,
donors tax- to make it short- the amount of tax to be paid. When I was in BIR I learned how to
process the collection and see if it in coincide in remittance of tax collector. And I also learned that
the expenses incurred and paid by tax collector due to work is also audited to see if its reasonable
and if it is so then they will have reimbursement.

4.) Your general comment on the value to you of this employment training.

Im really glad and grateful for being able to experience employment training. I might have

been scared or nervous in my first days of training but I was able to overcome it with the help of
other people. I got nervous because I was always thinking what if those who supervise me are
disappointed in my work or what if Im inefficient. But I realized through this more than 30 days
of training that its part of our work or even in our everyday lives. That we may not be good at

start or maybe there are times that we may not be good but what really matters is that we give our
best in learning things for us to do better. This first employment training is something that I
treasure because not only did I learn about the world outside my school or the application of
concept in real world but I was also able to know good people and make new friends.