MALACAÑANG
ManilaBY THE PRESIDENT OF THE PHILIPPINES
EXECUTIVE ORDER No. 422 April 26, 2005
ENHANCING AND AMENDING CERTAIN PROVISIONS OF EXECUTIVE ORDER NO. 399, REQUIRING THE BUREAU OF INTERNAL REVENUE TO ESTABLISH A PROGRAM TO PROMOTE OPTIMUM TAX COMPLIANCE
WHEREAS, recognizing the need to establish a program to increase tax collections by providing taxpayers with incentives to voluntarily declare and pay higher taxes and reducing administrative costs from audits and investigations conducted by the Bureau of Internal Revenue, Executive Order No. 399 was issued on the 17th of January, 2005, instructing the Commissioner of Internal Revenue to establish a program to be known as the "No Audit Program" (NAP);
WHEREAS, in order to attain the objectives set forth in the establishment of the NAP, there is a need to further enhance the conditions under which taxpayers liable for business income tax shall exempted from audit and/or investigation;
WHEREAS, Executive power is vested in the President under Section 1, Article VII of the Constitution and under Section II, Chapter 3, Book II of...
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Executive Orders
Enhancing and Amending Certain Provisions of Executive Order No. 399, Requiring The Bureau of Internal Revenue to Establish a Program to Promote Optimum Tax Compliance
Executive Order No. 422
Summary of Executive Order No. 422
Enhancing and Amending Certain Provisions of Executive Order No. 399, Requiring the Bureau of Internal Revenue to Establish a Program to Promote Optimum Tax Compliance
- Recognizes the need to establish a program to increase tax collections by providing taxpayers with incentives to voluntarily declare and pay higher taxes and reducing administrative costs from audits and investigations conducted by the Bureau of Internal Revenue. (Section 1)
- Amends Section 2 of Executive Order No. 399, Series of 2005, regarding the conditions under which taxpayers liable for business income tax shall be exempted from audit and/or investigation under the "No Audit Program" (NAP):
- To be exempted from audit and/or investigation, the following thresholds must be met: (Section 1)
- Growth rate of income tax payment for the current tax year compared with the previous tax year must be at least 20%. (Section 2(a))
- Ratio of income tax payment to gross sales/receipts for the current taxable year must be at least equal to that of the previous taxable year. (Section 2(b))
- Ratio of net value added tax or business tax actually paid to gross sales/receipts for the current taxable year must be at least equal to that of the previous taxable year, or the benchmark of the industry, as set by the Commissioner of Internal Revenue, whichever is higher. (Section 2(c))
- Revokes, repeals, and/or modifies all executive orders, rules, regulations, and issuances or parts thereof that are inconsistent with the provisions of this executive order. (Section 2)
- Takes effect immediately. (Section 3)
Enhancing and Amending Certain Provisions of Executive Order No. 399, Requiring the Bureau of Internal Revenue to Establish a Program to Promote Optimum Tax Compliance
- Recognizes the need to establish a program to increase tax collections by providing taxpayers with incentives to voluntarily declare and pay higher taxes and reducing administrative costs from audits and investigations conducted by the Bureau of Internal Revenue. (Section 1)
- Amends Section 2 of Executive Order No. 399, Series of 2005, regarding the conditions under which taxpayers liable for business income tax shall be exempted from audit and/or investigation under the "No Audit Program" (NAP):
- To be exempted from audit and/or investigation, the following thresholds must be met: (Section 1)
- Growth rate of income tax payment for the current tax year compared with the previous tax year must be at least 20%. (Section 2(a))
- Ratio of income tax payment to gross sales/receipts for the current taxable year must be at least equal to that of the previous taxable year. (Section 2(b))
- Ratio of net value added tax or business tax actually paid to gross sales/receipts for the current taxable year must be at least equal to that of the previous taxable year, or the benchmark of the industry, as set by the Commissioner of Internal Revenue, whichever is higher. (Section 2(c))
- Revokes, repeals, and/or modifies all executive orders, rules, regulations, and issuances or parts thereof that are inconsistent with the provisions of this executive order. (Section 2)
- Takes effect immediately. (Section 3)