EO No. 68: Monetization program of VAT tax credit certificates
PRESIDENT Aquino issued Executive Order (EO) No. 68 adopting a monetization program to give qualified VAT-registered taxpayers the cash equivalent of their outstanding tax credit certificates (TCCs) under the following options: a. Collect in advance from a trustee bank a discounted cash value of their TCCs; or b. Collect the full cash value of the TCCs upon a certain maturity date, to be determined by the Bureau of Internal Revenue (BIR) or the Bureau of Customs (BOC), as the case may be, pursuant to the implementing rules and regulations that will be issued to implement the Executive Order.
The VAT TCC monetization program shall cover outstanding VAT TCCs issued pursuant to Section 112 (A) of RA 8424, as amended, and outstanding VAT component of drawback TCCs issued pursuant to Section 106 (e) of the TCCP, as amended.
The program will be spread over a five-year period from 2012 to 2016. The funding requirement for this purpose shall be included in the National Expenditure Program (NEP) covering these years.
The Department of Budget and Management (DBM) shall ensure that the funding requirement for the monetization program of outstanding VAT TCCs is included in the NEP from 2012 to 2016 based on the request made by the Department of Finance (DOF). Once approved, the DBM shall release the amounts appropriated for this purpose in the General Appropriations Act (GAA) upon the request of DOF.
The DOF shall direct the BIR and the BOC to verify the outstanding VAT TCCs and, subject to existing laws, rules and regulations, perform the following functions: i. Provide the confirmation letter of the national government to acknowledge that the outstanding VAT TCCs constitute an obligation of the Republic of the Philippines; ii. Favorably endorse to the national government agency concerned or to the Bangko Sentral ng Pilipinas (BSP), as the case may be, the application to secure the necessary financial features required in the issuance of investment certificates to improve the net proceeds of the beneficiaries; iii. Make arrangements with trustee bank on the requirements for the opening of a special account; and iv. Make available the facilities of the Bureau of Treasury (BTr), including, but not limited to, Registry of Scripless Securities, the Automated Debt Auction Processing System, and such other facilities as may be required for the auctioning process in the implementation of the VAT TCC monetization program.
The BIR or the BOC shall issue the Notice of Payment Schedule to VAT TCC holders upon verification of the outstanding VAT TCCs. On the other hand, the Government Financial Institutions (GFIs) shall serve as trustee banks for purposes of monetizing the outstanding VAT TCCs. A special trust account shall be established by the GFIs for the purpose. The Commission on Audit (COA) shall have the power and duty to examine the recording of all transactions relative to the monetization of outstanding VAT TCCs.
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