RMO No. 25-2014: Prescribes the revised procedures, policies and guidelines, including enhancement in the format, for the preparation of “Reports on Drastic Changes in Collection Performance” (BIR Form Nos. 1771A to 1771C)

Summary

RMO No. 25-2014 prescribes revised procedures and an enhanced format for the Reports on Drastic Changes in Collection Performance (BIR Form Nos. 1771A to 1771C), which are one basis for evaluating the collection performance of the Bureau and its implementing offices.

Key points

1. What is a drastic change. It is an increase or decrease of at least 15% in collections per major tax type (Income Tax, Value-Added Tax, Excise Tax, Percentage Tax and other taxes) compared with the same period of the previous year. Explanations are also required when actual collection is above or below the assigned goal by 7.5%.
2. Taxpayer-level and GDP analysis. If analysis per taxpayer and tax type shows specific transactions contributing substantially more or less than 15% of the previous year’s collections, the reason must be included. Analysis must also relate collections to expected and actual GDP growth by sector (agriculture, industry, services).
3. Possible causes. Causes include legislative measures, BIR administrative measures, external economic factors, changes in transaction volume, business closures, corporate re-organizations, calamity rehabilitation programs, and fortuitous events such as fire, flood, typhoon or earthquake.
4. Who files and how often. The Revenue District Office and the Large Taxpayers audit and field divisions (including Large Taxpayers Division – Makati/Cebu) fill out the revised forms monthly. Each report goes to the next office level for review and validation.
5. Validation and use. Reasons are validated by the Collection Performance Monitoring Division (CPMD) with the Research and Statistics Division (RSD). The analysis is one basis for evaluating officials and employees for lateral attrition purposes.
6. Return and resubmission. Reports with baseless reasons or reasons not in line with the Order are returned within two (2) days from receipt. The implementing office resubmits within three (3) days from receipt.

Who is affected

• Revenue District Offices
• Large Taxpayers audit and field divisions
• Collection Performance Monitoring Division
• Research and Statistics Division

Deadlines and effectivity

• Issued July 21, 2014
• Forms accomplished monthly
• Returned reports: 2 days to return, 3 days to resubmit

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.