By: Atty. Rey Christian M. Guintibano on January 23,2025

In its mandate to enforce tax laws and enhance compliance, the Bureau of Internal Revenue (“BIR”) is empowered to conduct the Tax Compliance Verification Drive (“TCVD”), more commonly known as “tax mapping.” TCVD is the BIR’s effort to expand its tax base, enhance tax compliance, and consequently boost its tax collection. Lately, the BIR has been very aggressive in its tax mapping drive.

TCVD allows the BIR to conduct physical inspections of business establishments to ensure compliance with basic tax requirements, prescribed under Title IX of Tax Code, specifically Sections 232 to 246 of the Code. The BIR Revenue Officers (“ROs”) can thus verify whether establishments have registered with the BIR, paid their annual registration fees, issued proper receipts or invoices, registered cash registers or POS machines, and maintained duly authorized and updated books of accounts.

By doing so, the BIR aims to prevent tax evasion, encourage proper bookkeeping, and identify businesses that may be operating without complying with tax laws and regulations.

Revenue Memorandum Order (“RMO”) No. 31-2003 first laid down the guidelines for the Modified Tax Compliance Verification Drive (“MTCVD”) which “calls for an Information Drive prior to the conduct of the TCVD itself so that businesses can be in compliance and avoid being caught in violation of BIR business rules and regulations.” RMO No. 09-2006, which was issued in 2006, finally prescribed the guidelines and procedures which ROs must comply with in the conduct of the actual TCVD itself.

RMO No. 09-2006 requires ROs to be clothed with a written Mission Order, issued and signed by their respective Regional Directors, and to identify themselves to the establishment or the taxpayer. The Mission Order should contain the exact names of the ROs who compose the Tax Mapping Team to tax map, as well as the specified area on the specified date or time when the tax mapping is to be conducted. The RO must also explain the purpose of the visit and the objectives of tax mapping. While RMO No. 09-2006 required the Tax Mapping Team to issue a “Reminder Letter” to all business establishments being tax mapped, this requirement of a reminder letter was removed by RMO No. 022-18.

During the inspection, the ROs verify the taxpayer’s compliance with tax laws and regulations. As a standard part of compliance, the RO will check if the business establishment has (1) the Certificate of Registration (BIR Form No. 2303), (2) notice to issue invoices, (3) authority to print or ATP, (4) proper invoicing and issuance of receipts, (5) registration of sales machines (CRM, POS, CAS), and (6) proper maintenance and registration of books of accounts.

Previously, there was a requirement for taxpayers to show proof of payment of the annual registration fee as evinced by BIR Form No. 0605. However, under Revised Memorandum Circular (“RMC”) No. 91-2024, the BIR has ceased the collection of such fee as of January 2024, pursuant to the Ease of Paying Taxes Act (“EOPTA”).

If there are any violations, the ROs record such violations in the Taxpayer’s Information Sheet (“TIS”) and a Violation Checklist. In cases where an establishment is found to be unregistered, the taxpayer is required to register with the BIR within 24 hours. For violations such as unauthorized use of receipts or accounting systems, the ROs must issue an Apprehension Slip.

Once the inspection is completed, the Tax Mapping Team will post a sticker as proof that the establishment has been tax-mapped, using the following color-coding scheme: yellow for the first visit, red for the second visit, and green for the third visit.

Taxpayers are reminded to remain compliant with tax laws and regulations, as well as to be mindful of their rights during tax mapping activities. The ROs, on the other hand, should only act within their authority, as specified in the Mission Order, and should be mindful of taxpayer’s rights, especially their right to due process. If there are deviations from the prescribed procedures, taxpayers can claim violation of their rights or defects in the tax mapping process.

Rey Christian M. Guintibano is an Associate of Mata-Perez, Tamayo & Francisco (MTF Counsel).
He acknowledges the contribution of Mr. Joshua Rizlan A. Simbillo in this article. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com.