Question & AnswerQ&A (EXECUTIVE ORDER NO. 68)
The purpose is to adopt a VAT TCC Monetization Program that allows qualified VAT-registered taxpayers to receive the cash equivalent of their outstanding VAT Tax Credit Certificates (TCCs).
Section 112 (A) of Republic Act No. 8424 (Tax Reform Act of 1997), as amended, and Section 106 (e) of the Tariff and Customs Code of the Philippines (TCCP), as amended.
Qualified persons are VAT-registered taxpayers with outstanding VAT Tax Credit Certificates issued under the cited laws.
1) Collect in advance from a trustee bank a discounted cash value of their TCCs; 2) Collect the full cash value of the TCCs upon a maturity date determined by the BIR or BOC.
The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) are responsible for verification.
The program covers a five-year period from 2012 to 2016.
The Department of Budget and Management (DBM), Department of Finance (DOF), Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), Government Financial Institutions (GFIs), and the Commission on Audit (COA).
GFIs serve as trustee banks, establish special trust accounts for the purpose of monetizing outstanding VAT TCCs.
DBM must ensure that the funding requirement for the monetization program is included in the National Expenditure Program (NEP) from 2012 to 2016 and release the appropriated funds upon request of the DOF.
BIR and BOC shall no longer issue VAT Tax Credit Certificates for refund unless applied for by the VAT taxpayer pursuant to existing laws.
The Commission on Audit (COA) has the power and duty to examine all transactions relative to the program.
The other provisions not affected shall remain valid and subsisting as per the separability clause.
It took effect immediately upon publication in a newspaper of general circulation.