RMO No. 38-2014: Prescribes the uniform policies and guidelines on the implementation of cash disbursements for tax refunds thru the Trust Receipts Fund

Key points

1. Source of refund payments. Covered refund claims are paid from the BIR’s Trust Receipt Account. The Revenue Accounting Division asks the Bureau of the Treasury to transfer funds from the General Fund to that account once it receives the claim amounts from the Accounting Division.
2. Delinquent tax liabilities. Outstanding delinquent tax liabilities must be fully settled before a refund claim is approved. For claims already pending, the liabilities are determined and deducted from the claim before processing continues.
3. Accounting of payments. Refund payments, net of delinquent liabilities, are deducted from current-year revenue collections of the BIR offices with jurisdiction over the claimants, by tax type. The liabilities deducted are recognized as revenue collection for those offices.
4. 75-day processing. Approved claims are processed and the check released within seventy five (75) days. The period runs from receipt of the redemption request by the Finance Service for an NPS, receipt by the Miscellaneous Operations Monitoring Division for TCC cash conversion, and receipt of complete documents by the Finance Service or regional Finance Divisions for other refund claims.
5. Disbursement vouchers. National Office processing divisions prepare vouchers for VAT monetization, TCC cash conversion and refunds of taxpayers under the Large Taxpayers Service and VAT Credit Audit Division. Offices under the Regional Office prepare them for Regional Office taxpayers, and the Appellate Division prepares them for final and executory legal decisions.
6. Related rules. Joint Circular No. 1-97 of the COA, DBM and DOF on the Trust Receipt Account must be strictly observed. So must the certification rules in RMO No. 29-2014 and RMC No. 70-2014 on outstanding tax liabilities.

Who is affected

• Taxpayers claiming tax refunds, NPS redemption or TCC cash conversion
• BIR offices processing refund claims

Deadlines and effectivity

• Check release: within seventy five (75) days from the start dates stated in the Order