Tax clearance now a requisite to do business with DPWH

By Joel R. San Juan, BusinessMirror

Posted at May 17 2014 09:23 AM | Updated as of May 17 2014 05:23 PM

MANILA – The Department of Public Works and Highways (DPWH) has issued an order requiring contractors and suppliers to present a tax clearance as a prerequisite for prospective bidders.

In issuing Department Order 47, DPWH Secretary Rogelio Singson ordered the inclusion of tax clearance as one of the Class “A” documents in determining the eligibility of the department’s prospective bidders in compliance with Government Procurement Policy Board Resolution 21-2013.

Singson said the requirement would help in the assessment of the capacity contractors and suppliers seeking to do business with the department.

“This requirement application will certainly expose the real capacity of contractors in handling major projects of the department,” Singson said.

In order to ensure that prospective bidders are aware of the new policy, Singson directed Bids and Awards Committee in central, regional and district offices to discuss this documentary requirement in the bidding of goods, infrastructure projects and consulting services under the amended Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184, otherwise known as Government Procurement Reform Act.

The tax clearance issued by the Bureau of Internal Revenue also indicates the current assets and liabilities of the taxpayers, in relation to the computation of Net Financial Contracting Capacity of prospective bidders.

Prior to the approved GPPB Resolution, Section 23.1 (a) and 24.1 (a) of IRR under RA 9184, Clause 12.1 of the Instruction to Bidders (ITB) of the Philippine Bidding Document (PBD) only entails registration certificate from Securities and Exchange Commission, Department of Trade and Industry for sole proprietorship, or Cooperative Development Authority for cooperatives and Mayor’s permit, where the prospective bidder is located as Class “A” document requirements.

Also previously, Section 34.2 (a) of the IRR of RA 9148, Clauses 29.2, 28.2 and 27.2 of the ITB of the PBD require the submission of tax clearance only after post-qualification of a bidder with the lowest calculated bid or highest rated bid.

It can be recalled that the Department of Finance (DOF) has issued a similar directive requiring importers to be cleared by the Bureau of Internal Revenue before they are accredited to import through the Bureau of Customs.

The DOF said the new policy is intended to “close loopholes” in the government’s efforts to stop various smuggling activities.