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NOTES IN ORGANIZATION AND FUCTIONS OF THE BUREAU OF INTERNAL REVENUE

1. Powers and Duties of the Bureau of Internal Revenue

The Bureau of Internal Revenue is under the control and supervision of the Department
of Finance and its powers and duties include the assessment and collection of all
national internal revenue taxes, fees and charges; the enforcement of all forfeitures,
penalties and fines; and the execution of judgments in all cases decided in its favor
by the Court of Tax Appeals and the ordinary courts.

2. Chief officials of the Bureau of Internal Revenue

The Bureau of Internal Revenue is headed by a chief known as the Commissioner, with
4 assistants known as the Deputy Commissioners.

3. Powers of the Commissioner

a. Power of the Commissioner to interpret tax laws and to decide tax cases
b. Power of the Commissioner to obtain information; and to summon and to take
testimony of persons (Authority to administer oath)
c. Power of the Commissioner to make assessments and prescribe additional
requirements for tax administration to and enforcement

4. Power of the Commissioner to make assessments and prescribe additional

requirements for tax administration to and enforcement, includes:

a) Authority to examine returns and determine tax due

b) Authority to conduct inventory-taking, surveillance and to prescribe presumptive
gross sales and receipts
c) Authority to terminate taxable period
d) Authority to prescribe real property values
e) Authority to inquire into bank deposit accounts

Authority to Terminate Taxable Period

When it comes to the knowledge of the Commissioner that a taxpayer is retiring from
business subject to tax; is intending to leave the Philippines; intending to remove his
property from the Philippines; or intending to hide or conceal his property; or is
performing any act tending to obstruct the proceedings for the collection of the tax,
the Commissioner may declare the tax period of such taxpayer terminated at any
time and shall send the taxpayer a notice of such decision, together with a request
for the immediate payment of the tax for the period so declared terminated and the
tax for the preceding year or quarter, and shall be subject to all the penalties, unless
paid within the time fixed in the demand made by the Commissioner.

Authority to Prescribe Real Property Values

The Commissioner is authorized to divide the Philippines into different zones or areas
and shall determine the fair market value of real properties located in each zone or
area.

For purposes of computing any internal revenue tax, the value of the property is
whichever is the higher of:

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1) The fair market value as determined by the Commissioner, or

2) The fair market value as shown in the schedule of values of the Provincial and
City Assessors

Authority to inquire into Bank Deposit Accounts

Notwithstanding any contrary provision of Republic Act No. 1405 ( Bank Secrecy Law)
and other general or special laws, the Commissioner is authorized to inquire into the
bank deposits of:
1) A decedent to determine his gross estate, and
2) Any taxpayer who has filed an application for compromise of his tax liability by
reason of financial incapacity to pay his tax liability

In case a taxpayer files an application to compromise the payment of his tax liabilities
on his claim that his financial position demonstrates a clear inability to pay the tax
assessed, his application shall not be considered unless he waives in writing his
privilege under Republic Act No. 1405 or under other general or special laws, and
such waiver shall constitute the authority of the Commissioner to inquire into the bank
deposits of the taxpayer.

Issuances and rulings of the Bureau of Internal Revenue

Revenue Regulations (RRs) are issuances signed by the Secretary of Finance, upon
recommendation of the Commissioner of Internal Revenue that specify, prescribe or
define rules and regulations for the effective enforcement of the provisions of the
National Internal Revenue Code (NIRC) and related statutes.

Revenue Memorandum Orders (RMOs) are issuances that provide directives or

instructions; prescribe guidelines, and outline processes, operations, activities,
workflows, methods and procedures necessary in the implementation of stated
policies, goals, objectives, plans and programs of the Bureau in all areas of
operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the
Commissioner of Internal Revenue with respect to the provisions of the Tax Code and
other tax laws, as applied to a specific set of facts, with or without established
precedents, and which the Commissioner may issue from time to time for the purpose
of providing taxpayers guidance on the tax consequence duly issued RMRs;
otherwise, the Rulings are null and void ab initio.

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and
applicable portions, as well as amplifications, of laws, rules, regulations and
precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official

announcements of the Commissioner of Internal Revenue that consolidate the
Bureau of Internal Revenue position on certain specific issues of law or administration
in relation to the provisions of the Tax Code, relevant tax laws and other issuances for
the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other
stakeholders relative to clarification and interpretation of tax laws.

5. Delegation of power

The Commissioner may delegate the powers vested in him under the Tax Code to any
or such subordinate officials with the rank equivalent to a division chief or higher. The
following powers of the Commissioner may not be delegated:

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a) The power to recommend the promulgation of rules and regulations by the

Secretary of Finance;

b) The power to issue rulings of first impression or to reverse, revoke or modify any
existing ruling of the Bureau;

c) The power to compromise or abate any tax liability; Provided, however, That
assessments issued by the regional offices involving basic deficiency taxes of
P500,000 or less, and minor criminal violations, discovered by regional and district
officials, may be compromised by a regional evaluation board which shall be
composed of the Regional Director as Chairman, the Assistant Regional Director,
the heads of the Legal, Assessment a d Collection Divisions and the Revenue
District Officer having jurisdiction over the taxpayer, as members;

d) The power to assign or reassign internal revenue officer to establishments where

articles subject to excise tax are produced or kept.

6. Authority of Internal Revenue officers to make arrests and seizures

The Commissioner, the Deputy Commissioners, the Revenue Regional Directors, the
Revenue District Officers and other internal revenue officers have the authority to
make arrests and seizures for the violation of any penal law, rule or regulation
administered by the Bureau of Internal Revenue.

7. Collection agents (Internal revenue taxes)

a) The Commissioner of Customs and his subordinates with respect to the collection
of national internal revenue taxes on imported goods;
b) The head of the appropriate government office and his subordinates with respect
to the collection of energy tax;
c) Banks duly accredited by the Commissioner with respect to receipt of payments
of internal revenue taxes

8. Sources of revenue

a. Income tax
b. Estate and donor’s taxes
c. Value added tax
d. Other percentages taxes
e. Excise taxes
f. Documentary stamp taxes
g. Other taxes imposed and collected by the Bureau of Internal Revenue

THE BUREAU OF CUSTOMS

1. Composition:
a) One (1) Commissioner (appointed by the President upon the recommendation of
the Secretary of Finance.
b) Five (5) Deputy Commissioners (appointed by the President upon the
recommendation of the Commissioner of Customs)
1) Internal Administration Group
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2) Revenue Collection and Monitoring Group

3) Assessment and Operations Coordination Group
4) Management Information Systems and Technology Group
5) Intelligence & Enforcement Group

2. Mission and Vision

a) Vision: A modernized and efficient customs administration that every Filipino can
trust and be proud of.
b) Mission
1) To assess and collect lawful revenues efficiently.
2) To effectively curb illicit trade and all forms of customs fraud
3) To facilitate trade in a secured manner
4) To implement relevant technology for an efficient and effective customs
management aligned with the international customs best practices.
5) To promote professionalism and integrity in the service

3. Guiding Principles
a) Commitment to the delivery of high quality services to our transacting public
b) Enhanced use of modern management techniques such as electronic
transactions, compliance audit and risk management
c) Focus on personnel as the driving force in the achievement of our missions
d) Consideration of relevant international instruments, conventions, agreements such
as the Revised Kyoto Convention and others promulgated by WCO, WTO, APEC,
ASEM and ASEAN.

4. Values
a) Customs Administration are committed to:
• Professionalism and Integrity
• Transparency and Accountability
• Consistency and Simplicity
• Vigilance and Dynamism
• Be responsive to the needs of the community and industry

b) Customs personnel are committed to:

• Competent and Efficient
• Accountable and Responsible
• Honest and Dedicated
• Firm and Fair
• Helpful and Courteous
• Simple in lifestyle

THE PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA)

1. PEZA was enacted under Republic Act 7916. Signed into law by President Fidel V.
Ramos on February 21, 1995.

2. It is created to help promote investments in the export-oriented manufacturing

industry into the country by:
a) Assisting investors in registering and facilitating their business operations and
providing tax incentives
b) PEZA also assists investors who locate in service facilities inside selected areas in
the country (areas are called PEZA Special Economic Zones) which are usually
business process outsourcing and knowledge process outsourcing firms
c) Other activities also eligible for PEZA registration and incentives include
establishment and operation within special economic zones for tourism, medical
tourism, logistics and warehousing services, economic zone development and
operation and facilities providers

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3. Composition of PEZA Board:

a) Chairman – Secretary of the Department of Trade and Industry
b) Vice-Chairman – Director General (Chief Executive Officer) of PEZA

4. Members: Undersecretaries of:

• Dept. of Finance
• DOLE
• DILG
• DENR
• Dept. of Agriculture
• DPWH
• DOST
• Dept. of Energy
• Deputy Director General of the NEDA
• Representative from the labor sector
• Representative from the investors/business sector in the economic zone

THE BOARD OF INVESTMENTS (BOI)

1. The Philippine Board of Investments (BOI), an attached agency of Department of

Trade and Industry (DTI), is the lead government agency responsible for the
promotion of investments in the Philippines.

2. Taking the lead in the promotion of investments, BOI assists Filipino and foreign
investors to venture and prosper in desirable areas of economic activities. Investors
are welcome to experience the potentials of the booming Philippine Industry sectors.
Profitable business opportunities abound in the food processing, construction, metal
products, telecommunications, power and infrastructure projects among others.

3. Composition of the Board – The BOI shall be composed of seven (7) governors to be
appointed by the President of the Philippines:
a) Chairman – Secretary of Trade and Industry
b) Three (3) undersecretaries of Trade and Industry – Vice Chairman & Managing
Head – DTI Undersecretary for Industry and Investments
c) Three (3) representatives from other government agencies and the private sector
(term of 4 years)
d) Upon the expiration of his term, a governor shall serve as such until his successor
shall have been appointed and qualified
e) No vacancy shall be filled except for the unexpired portion of any term, and that
no one may be designated to be governor of the Board in an acting capacity but
all appointments shall be ad interim or permanent.

END

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