COLLECTION MANUAL - CHAPTER II (RECONCILIATION OF COLLECTION)
CM 200 OVERVIEW
Tax collection reports are indicative of performance of the BIR as a revenue agency. As the major source of revenue of the National Government, proper revenue accounting and appropriate data reconciliation should be maintained to preserve the integrity of collection reports. Towards this end, the BIR seeks to maintain an effective system of control over collection reporting to provide reasonable assurance that collection information is reliable.
The following are the major issues and concerns in the reconciliation of national internal revenue collections:
- AAB and BIR reconciliation issues. Since collection of national internal revenue taxes is primarily through the banking system, the AABs ate the BIRs primary data source. There should be an accurate reconciliation of possible discrepancies in the AAB collections and remittances – involving validation data from the Collection and Bank Reconciliation (CBR) System and the Consolidated Report of Daily Collection (CRDC). Issues on the remittance of tax collections such as possible of non-remittance and over/under remittance of AABs and validation of data to check probable non-uploading, late uploading or double uploading must be addressed.
- BIR-BTr reconciliation issues. The collection figure of the Bureau of Treasury (BTr) is the basis for the evaluation of the performance of the BIR.A such, the reconciliation between the BIR collection reports and the BTr records of remittance in its books of accounts is crucial in reporting collection. Validation is needed particularly with respect to timing difference as well as probable discrepancies due to unreported collections or inaccurate reporting especially for those other than through the AABs e.g. Revenue Official Receipts (RORs), checkless payments of the BSP, direct crediting of the BTr, Tax Remittance Advice (TRA), Special Allotment Release Order (SARO).
- Internal reconciliation issues. The districts must accurately report the collections from all channels and modes of payment and should be able to reckon with all sources particularly those not captured by the Integrated Tax System (ITS). Another concern for reconciliation in the BIR is the validation of the reports among the district offices and other units of collection for erroneous claims of collection of payments of out-of-district collections, one-time transactions, etc. There is a need to ensure proper crediting of collection performance to the appropriate office, through proper recording and attribution of the collection for each district or office. This is important in achieving the equitable allocation of the share in the BIR target of the Revenue Regional Offices and their Revenue District Offices (RDOs), as well as the Large Taxpayer Services (LTS) and the Large Taxpayer District Offices (LTDOs).
This Chapter discusses the reconciliation processes to be undertaken by different offices in the BIR in order to address the following objectives, among others:
- To ensure the integrity of the monthly BIR collection report (BIR Form No. 12.09)
- To determine whether all the agents of the BIR in the collection of taxes are correctly submitting collection reports and actually remitting all the collected taxes.
- To ensure that all the taxes collected by the BIR are accurately and timely recorded by the BTr in its Books of Accounts.
- To properly account the collection of each Revenue District Office so that their respective performance can be timely evaluated on a fair and objective manner.