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EFPS mandatory or not?

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EFPS mandatory or not?

Post by ideasnco on Mon Mar 02, 2009 5:18 pm

In aid of clarification and to shed light to my confusion.

Several times before, I had experienced bidding from agencies, some that requires EFPS filing, some doesn't. In my query to the GPPB, they advised me and told me that it is mandatory as it says in the EO 398, that only those who comply with the provisions guided by the RR 3-2005, can and are the only ones that can transact with the Government (although this is just another requirement there are several more).

However, to some accounts, I have experienced with some local and sub-agencies (PE's) that are not aware, following these provisions as compared to the National Agencies.

Can anyone please tell me if this provision is mandatory or an option.

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Re: EFPS mandatory or not?

Post by engrjhez® on Mon Mar 02, 2009 8:25 pm

It is very clear in the GPPB Circular:

http://www.gppb.gov.ph/issuances/Circulars/2005/02-2005.pdf

...that the "Submission of Tax Returns and “Tax Clearance for purposes of E.O. 398” as Eligibility Requirements for the Procurement of Goods, Infrastructure Projects and Consulting Services, in compliance with Executive Order No. 398, Revenue Regulation No. 03-2005, and Revenue Memorandum Circular No. 16-2005" is MANDATORY to:

Heads of Departments, Bureaus, Offices and Agencies of the National Government; Government-Owned or Controlled Corporations (GOCCs), Government Financial Institutions (GFIs), including State Universities and Colleges (SUCs); and Local Government Units (LGUs)

I think it's almost near to ALL in government procurement.
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EFPS filed thru electronic filing issue

Post by ideasnco on Mon Mar 02, 2009 10:29 pm

Thank you sir for the insight.

I have another concern, because the EO 398 is made mandatory to secure timely and correct tax payments to the government, however, there is this process that is prescribed by the BIR which is the EFPS or electronic filing which is stated in the RR 3-2005. This is available to mostly accredited banks by the BIR, in which probably made or developed so that there may no other misrepresentation of datas in the tax returns and vat payments and also for the BIR to easily access the filing of the tax obligations by the supposed contractor participating in the government biddings.

This EFPS or e-filing is the process wherein the tax returns and vat returns are generated from the the web portal made by the BIR for the tax payers and for those aspiring and existing government contractors specifically for the purpose or the EO 398.

Is this also mandatory or just an option?

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Re: EFPS mandatory or not?

Post by engrjhez® on Mon Mar 02, 2009 11:52 pm

Based on the relevant provisions of RR 03-2005:

2.0 General Provisions

2.1 Latest Tax Returns as Pre-Condition for Participation.

2.1.1 EO 398 provides... (definition)

2.1.2 The above returns must be duly stamped and received by BIR and duly validated with the tax payments made thereon except in cases provided for in 4.2.2 below.

2.1.3 Returns filed with AABs or thru EFPS with corresponding reference numbers shall be deemed duly stamped and received by the Bureau of Internal Revenue (BIR).


But Section 4.2.2 (as mentioned above) refers to the Interim procedure up to April 30, 2005 only.

So this answers your query. Filing thru eFPS is MANDATORY (see Section 4.1 and 4.2.1 of the link below)
http://www.gppb.gov.ph/laws_rules08/laws/BIR-RR_3-2005.pdf

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Thanks

Post by ideasnco on Fri Mar 06, 2009 4:43 pm

Thank you sir for the crystal clear answer. My last question would be, if the BAC doesn't follow such requirement,could a bidder (a supposed compliant to the EFPS filing) tell the BAC or remind the BAC about these certain provisions? Because this i guess is not a suggestion, this is a rule to follow in the Bid proceeding.

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Re: EFPS mandatory or not?

Post by engrjhez® on Fri Mar 06, 2009 8:57 pm

Yes you could - or more proper, YES YOU SHOULD. Unfortunately, the agency bestowed in strictly enforcing the requirement for procurement purposes is the BIR, not the BAC. The eFPS filing is not directly associated with eligibility requirements:

As per GPPB Circular 02-2005, procuring entities are now mandated to require the submission of Tax Returns and Tax Clearance pursuant to Executive Order No. 398, Series of 2005. Only then, the mandatory conditions of eFPS can be enforced - in securing that Tax Clearance.
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Should the BAC ignore these provisions

Post by ideasnco on Fri Mar 06, 2009 11:07 pm

Should the BAC ignore these provisions, what are our other options so that we could ensure only BIR/EFPS compliants are allowed to join the bidding?

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re: Should the BAC ignore these provisions

Post by engrjhez® on Fri Mar 06, 2009 11:51 pm

As for me, the BAC shouldn't. But the BAC also couldn't hammer it down either.

You may want to open that topic in the DRAFT IRR discussions. Very Happy
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Re: EFPS mandatory or not?

Post by engrjhez® on Sat Mar 07, 2009 11:03 pm

As a general rule, eFPS filing (as I mentioned earlier) is MANDATORY. However, the GPPB issued a circular (June 20, 2005) exempting "low level of government procurement" in response to Q-7 of RMC 16-2005.

During the 5th GPPB Regular Meeting held on 26 May 2005, the members of the Board unanimously agreed to issue a circular clarifying the concept of the term "low level of government procurement" in relation to Revenue Memorandum Circular 16-2005 (RMC 16-2005) and Republic Act 9184.

As stated in GPPB Circular 05-2005, for purposes of RMC 16-2005, "low level of government procurement" shall be understood to mean any government procurement project with an Approved Budget for the Contract of not more than Fifty Thousand Pesos (Php50,000
).

Of course this should fall under alternative methods.
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eFPS unavailability

Post by paf on Wed May 13, 2009 4:12 pm

While it is clear that filing through eFPS is mandatory, what happens
if technical problems with BIR has been encountered on a specific date which forces the company to do manual filing?

We were disqualified from a tender despite submitting papers (memorandum from BIR on eFPS unavailability on particular dates) supporting our manual filing. As a matter of fact, a memorandum this year, for April 13, 2009 was issued by the Deputy Commissioner of Information Systems Group, regarding eFPS unavailability for said date. This required all companies to conduct manual filing on that particular date.

Despite this memorandum however, the govt agency still disqualified us on
our failure to submit BIR-eFPS, reference to RA 9184. Therefore, is there a GPPB circular that can help us? Can you provide the link for our reference?

-paf
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Re: EFPS mandatory or not?

Post by engrjhez® on Wed May 13, 2009 6:11 pm

paf wrote:While it is clear that filing through eFPS is mandatory, what happens if technical problems with BIR has been encountered on a specific date which forces the company to do manual filing?
...Despite this memorandum however, the govt agency still disqualified us on our failure to submit BIR-eFPS, reference to RA 9184. Therefore, is there a GPPB circular that can help us? Can you provide the link for our reference?
No need for further GPPB Circular. All legal remedies were already provided for under the IRR of RA.9184.

If the BAC have disqualified you despite of the memorandum issued by the BIR, they may have a very good and valid reason in deciding such. Some issues that may have affected the decision are the dates of filing, reasonableness of claims, or misrepresentations (if any); Only when you filed a MF can the BAC issue a written statement of their grounds for your disqualification. Very Happy
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eFPS unavailability

Post by paf on Wed May 13, 2009 7:25 pm

After we had filed a letter for reconsideration, the response of the agency's BAC was still disqualification due to no eFPS presented for year end (by the way, all our quarterlies were eFPS except for the year-end that was manually stamped because of BIR's eFPS unavailability). In summary, our year-end manually stamped by BIR but accompanied with BIR's memorandum of eFPS unavailability for same year-end date, was not considered by the BAC.

So I'm looking for any recommendation and documentation, as we foresee possible issues with other agencies regarding manually filed BIR due to BIR's eFPS unavailability for the particular date we filed on.
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Re: EFPS mandatory or not?

Post by shobe on Thu May 14, 2009 11:34 am


Dear Paf:

I was surprised as to how the BAC responded to your motion for reconsideration. I honestly think that your office has a good chance in case you opt to file a protest.

First: Obviously, the non-submission of the eFPS was through no fault of your own.

Second: No less than another government agency has declared through a memorandum the impossibility of having the submission of the said electronically filed requirement.

Third: The rationale behind EO 398 is for the timely and correct payment of taxes to the government. As you have pointed out in your previous post it was only the BIR, through RR 3-2005, which prescribed the electronic filing system. Considering that there was a memorandum, which pointed out the unavailability of having the payment of taxes through eFPS, issued by no less than the institution which prescribed the said requirement, it is my opinion that you should not have been disqualified.

Fourth: Under the rules on statutory construction:
Intent of law paramount; too literal interpretation discouraged.
The spirit, rather than the letter of a law determines its construction; hence, a statute must be read according to its spirit and intent. The too literal interpretation of the law leads to absurdity which the Court cannot countenance. A too-literal reading of the law constrict rather than fulfill its purpose and defeat the intention of its authors. That intention is usually found not in ‘the letter that killeth but in the spirit that vivifieth’.

P.S
If you go over the following governmental issuances, the phrase “no fault” has been used whereby either the government or the contractor has been legally excused in certain cases. Your office may want to quote these in case you want to pursue your case:

1. Section 32 of EO 40;
2. Section 4.9 Circular 01-2009 GPPB
3. III (e) of GPPB Resolution 18-2004

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Re: EFPS mandatory or not?

Post by paf on Thu May 14, 2009 2:20 pm

many thanks shobe for your advise and references provided!
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Re: EFPS mandatory or not?

Post by shobe on Thu May 14, 2009 6:11 pm

You're welcome paf Very Happy
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Re: EFPS mandatory or not?

Post by RDV @ GP3i on Thu May 21, 2009 7:05 pm

paf wrote:After we had filed a letter for reconsideration, the response of the agency's BAC was still disqualification due to no eFPS presented for year end (by the way, all our quarterlies were eFPS except for the year-end that was manually stamped because of BIR's eFPS unavailability). In summary, our year-end manually stamped by BIR but accompanied with BIR's memorandum of eFPS unavailability for same year-end date, was not considered by the BAC.

So I'm looking for any recommendation and documentation, as we foresee possible issues with other agencies regarding manually filed BIR due to BIR's eFPS unavailability for the particular date we filed on.

Maybe through these posts, GPPB would issue soon a GPPB Circular so that procuring entity's BACs are guided that if EFPS could not complied due to technical problems in the BIRs system (which a BIR Deputy Commissioner admitted in our AIM class on procurement professionalization), then manually-filed tax returns would not be declared non-responsive.

The problem is basically the lack of knowledge of most BACs on a technical problem in the BIR beyond the control of the individual bidders but to their own prejudice. The BACs, on the other hand, are only faithfully implementing the existing guidelines, in the absence of subsequent inssuance, without even validating with the BIR if there is really such a technical problem (system is clogged).

In the meantime that there is no such GPPB Circular, what the BACs could do is to ask from the bidders for BIR certification allowing them manual filing, so that they will be reconsidered as responsive.
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Re: EFPS mandatory or not?

Post by Alpha on Tue Dec 13, 2011 11:28 am

It is clear in the RR 3-2005 that filing of tax returns through EFPS is mandatory. However, the latest Philippine Bidding Documents (4th Ed.) for Goods provides under BDS 29.2(b) that the BAC could specify whether "Bidders have option to submit manually filed tax returns or tax returns filed through the Electronic Filing and Payments System (EFPS)".

Can the BAC still require both manually or electronically filed tax returns as provided under the 4th Ed. of PBD for Goods?

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Re: EFPS mandatory or not?

Post by engrjhez® on Tue Dec 13, 2011 1:41 pm

Alpha wrote:It is clear in the RR 3-2005 that filing of tax returns through EFPS is mandatory. However, the latest Philippine Bidding Documents (4th Ed.) for Goods provides under BDS 29.2(b) that the BAC could specify whether "Bidders have option to submit manually filed tax returns or tax returns filed through the Electronic Filing and Payments System (EFPS)".

Can the BAC still require both manually or electronically filed tax returns as provided under the 4th Ed. of PBD for Goods?

I think I have answered this issue in the past (circa 2009) >>> http://gppb.topicsolutions.net/t66-efps-mandatory-or-not?highlight=eFPS

In my opinion, eFPS is mandatory (at least for public biding) and the optional provision for non-eFPS filing may be accommodated when eFPS is 'down' or unavailable. The GPPB actually have issued a Circular way back 2005 indirectly clarifying exemptions for these >>> http://www.gppb.gov.ph/issuances/Circulars/2005/05-2005.pdf

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