BIR eases requirements for public infrastructure contracts

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has simplified the requirements for contractors of public infrastructure projects, in another effort to improve the ease of doing business in the country and to expedite the disbursement of funds.

In a memorandum order, Internal Revenue Commissioner Caesar Dulay revoked the provisions of RMO 12-2015, which prescribed the requirements needed to be filed by contractors for the release of their payments on government projects.

The old issuance laid out the procedures for the implementation of a memorandum of agreement between the Department of Finance (DOF) and the Department of Public Works and Highways (DPWH).

Under the old issuance, contractors of infrastructure projects are required to submit BIR Form 0217 and other documents to ensure that the correct taxes are paid on their income from government transactions.

“Recently, however, concerns have been raised that there is duplication in the requirements being submitted by contractors to the BIR and the DPWH, i.e. BIR Form 0217 and the documentary requirements for Final Billing under Department Order No. 148 series of 2018,” the memo said.

The BIR said these procedures are causing inconvenience and additional burden on the part of contractors, as well as the DPWH, which assumes additional functions as it prepares some of the documents required under RMO 12-2015.

“The concern raised is that this impedes the prompt disbursement of funds for final payment to contractors and contravenes Republic Act 11032 (Ease of Doing Business and Efficient Government Service Delivery Act of 2018) on the adoption of simplified requirements and procedures that will expedite business and non-business related transactions in the government,” the agency said.

Furthermore, the BIR clarified that a tax clearance from the bureau is enough to prove the full and timely payment of taxes, especially of those contractors transacting with the government.

To address these concerns, the BIR is no longer requiring contractors to submit BIR Form 0217 for the release of their payments from the DPWH.

“The provision of RMO No. 12- 2015 on the filing of an Application for Contractor’s Final Payment Release Certificate (BIR Form No. 0217) and presentation of the said certificate duly approved by the BIR to the DPWH as a requirement…is hereby revoked and shall no longer be enforced,” the memo said.

Meanwhile, Dulay also issued Revenue Regulation 10-2019, which provides the new format for the “Notice to the Public” to be exhibited at business establishments.

The BIR said the new form should be posted by businesses in areas conspicuous to the public to remind buyers to require the seller to issue an official receipt or sales invoice. This would also improve the government’s revenue collection through strengthened enforcement, the bureau said.