Tax Clearance Certificate

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Tax Clearance Certificate

Post by rtdd on Wed Jul 25, 2012 3:49 pm

Good afternoon.

I would like to inquire if the required “tax clearance per Executive Order No. 398, Series of 2005”, must be VALID at the time of the bidding for the Project which is from the time of the submission and opening of bids including the post-qualification stage and up to the award of the Project. We required an Income Tax Return (ITR) for year 2010, since we conducted the bidding last February 2012. Is it right that a VALID tax clearance for the year 2012 is a separate mandatory requirement; hence, a tax clearance prior to the submission of bid for the Project cannot be considered VALID.

Will the subsequent submission or validation during post-qualification that the bidders applied for or have been issued updated Tax Clearance Certificate be legally allowed/acceptable under the existing procurement law?

Hope for your immediate reply.

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Re: Tax Clearance Certificate

Post by engrjhez® on Wed Jul 25, 2012 4:08 pm

rtdd wrote:Good afternoon.

I would like to inquire if the required “tax clearance per Executive Order No. 398, Series of 2005”, must be VALID at the time of the bidding for the Project which is from the time of the submission and opening of bids including the post-qualification stage and up to the award of the Project. We required an Income Tax Return (ITR) for year 2010, since we conducted the bidding last February 2012. Is it right that a VALID tax clearance for the year 2012 is a separate mandatory requirement; hence, a tax clearance prior to the submission of bid for the Project cannot be considered VALID.

Will the subsequent submission or validation during post-qualification that the bidders applied for or have been issued updated Tax Clearance Certificate be legally allowed/acceptable under the existing procurement law?

Hope for your immediate reply.

It appears that you are requiring, as an eligibility requirement, to submit tax clearance (am I right?). If so, then the procdure may be little bit outdated.

Under the Revised IRR which took effect 03 September 2009, the submission of tax clearance during the post qualification:

34.2. Within three (3) calendar days from receipt by the bidder of the notice from the BAC
that the bidder has the Lowest Calculated Bid or Highest Rated Bid, the bidder shall
submit the following documentary requirements to the BAC:

a) Tax clearance;

b) Latest income and business tax returns;

c) Certificate of PhilGEPS Registration; and

d) Other appropriate licenses and permits required by law and stated in the
Bidding Documents.

Failure to submit the above requirements on time or a finding against the veracity of
such shall be ground for the forfeiture of the bid security and disqualify the bidder
for award. (emphasis supplied)
This means that the said document must be valid at the time of submission for post qualification, and not necessarily at the time of bid opening. Smile
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Tax Clearance Certificate

Post by rtdd on Wed Jul 25, 2012 4:40 pm

Thank you sir for your immediate reply.

Actually sir we required the submission of Tax Clearance Certificate as requirement for the conduct of post-qualification. We sent notice to the LCB last February 21, 2012. It submitted the requirements on February 24, 2012. However, the Tax Clearance is only valid until December 31, 2011.

We post-disqualified based on the expired tax clearance. The bidder in its motion for reconsideration stated that the tax clearance and the tax returns to be submitted must pertain to year 2010 and there is nothing in the bidding document about a "VALID" tax clearance.

We would like to verify if the business tax returns and the tax clearance are two separate mandatory requirements. Therefore, the tax clearance should be valid during post-qualification.

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Re: Tax Clearance Certificate

Post by alpha1 on Wed Jul 25, 2012 5:31 pm

The Tax Clearance that bidder must submit should cover the FY 2011 which means that the validity should cover the current year 2012.



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