THE Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Order (RMO) 3-2009, launching “Oplan Kandado,” a program that involves the strengthening of BIR’s imposition of prescribed administrative sanctions for non-compliance with certain essential requirements, such as the issuance of receipts, filing of returns, declaration of taxable transactions, taxpayer registration and paying the correct amount of taxes as mandated by the norms/standards of a particular industry or line of business.

The said RMO provides the policies and procedural guidelines in the conduct of surveillance operations and the enforcement of the administrative sanction of suspension and temporary closure of business.

Valentine's 2009 blog

The issuance of invoices and official receipts is among the compliance requirements targeted under the program.

Under the Tax Code of 1997, all persons subject to internal revenue tax are required to issue an invoice for each sale of goods and an official receipt for services rendered valued at P25 or more.

For VAT-registered taxpayers, invoices and official receipts are required for all transactions. Failure to issue invoices/receipts is a ground for suspension of business operations and temporary closure of the business establishment.

Likewise, failure to issue invoices/receipts could also be a basis for assessing undeclared revenues if the revenues declared in the income tax or VAT returns are less than the revenues estimated from the surveillance operations.

The conduct of the surveillance operations may be made in any of the following ways: covert surveillance, overt surveillance or short-duration surveillance.

As a general rule, all surveillance activities shall be covered by mission orders to be issued by the authorized revenue official. No surveillance activities shall be conducted and no apprehension shall be effected unless a mission order has been issued. (Source: Punongbayan & Araullo)