EXECUTIVE ORDER NO. 38
EXECUTIVE ORDER NO. 38 - DIRECTING
THE AUDIT OF ASSESSMENTS, REVENUES AND RECEIPTS OF THE BUREAU OF
INTERNAL REVENUE
WHEREAS,
public office is a public trust and public officers shall at all times
be accountable to the people.
WHEREAS, there is an urgent need to enhance the efficiency and
effectiveness of tax collections in order to support the budget through
an audit of tax assessment performance, the records of which constitute
public records open for inspection upon the order of the President in
accordance with R.A. 8474:
WHEREAS, while the audit function is vested by the Constitution in the
Commission on Audit full implementation has yet to be made thereon;
WHEREAS, it is a highly desirable public policy to conduct an
assessments and revenue audit of the Bureau of Internal Revenue;
NOW THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the
Philippines, by virtue of the powers vested in me by Article VII
Section 1 of Constitution and the laws, do hereby order:
Section 1. Effective immediately, the Department of
Finance and the Bureau of Internal Revenue shall adopt measures and
general audit procedures, in coordination with the Commission on Audit,
to facilitate the conduct of audit of assessments, revenues, and
receipts, consistent with the following guidelines/parameters:
(a)
The audit and examination of COA, to be conducted on final tax
assessments, shall be a performance audit, and on post-audit basis.
Audit of controverted assessments shall await final determination of
the appropriate authority.
(b) Except in
cases of fraud and patent abuse of discretion, no duplication of
assessment shall be made on the taxpayer: provided, that prior report
to and concurrence thereon is obtained from the Commissioner of
Internal Revenue, and that only the BIR shall make contact with the
taxpayer upon prior clearance of the Commissioner of Internal
Revenue.
(c)
Confidentiality of tax information and records shall be observed, and
no COA auditor shall divulge to any person, in any manner than as may
be allowed by law, information regarding the business, income, estate,
secrets, operations, style of work, apparatus, strategies, or other
sensitive and confidential data acquired by said COA auditor in the
performance of duties.
(d) COA
auditors shall not contact any BIR examiner whose assessment or work is
to be audited or is undergoing audit. No audit observation memorandum
or notice of charge shall be issued, and subject to a preliminary
discussion or clarification of initial audit findings, only a final
audit report shall be made to the Commissioner of Internal Revenue or
his duly designated subordinate representative(s).
(e) In
addition to the Commissioner on Internal Revenue, only the following
shall, on strictly confidential basis, be provided the final audit
report after approval by the Commission on Audit: the Secretary of
Finance, the COA Chair and Commissioners, the Office of the President,
and Congress, unless ordered by the proper court or the President of
the Philippines.
(f) Audit
shall be conducted based on taxpayer records in the custody of BIR or
other government offices.
(g) Except for
confirmatory letters and verifications of actual tax payments as
required by generally accepted auditing standards, auditors’
communications with, or visiting places of business or examining books
of accounts or records of, taxpayers is prohibited.
*Sec. 3. This Executive Order takes effect
immediately. All rules, regulations, or other administrative issuances
inconsistent herewith are hereby superseded, repealed or modified
accordingly.
Sec. 4. Violations of these guidelines, or the
rules and procedures adopted pursuant hereto, shall be dealt with in
accordance with law.
DONE in the City of Manila,
this 30th day of October in the year of Our Lord, Nineteen Hundred and
Ninety-Eight.
* Copied verbatim from documents obtained directly
from the Malacañang records (missing Sec. 2).