Requesting Entity: Tax Clearance under Section 34.2 of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184
Issues Concern: Intramuros Administration
Whether the BAC may accept a certification issued by the BIR that the Tax Clearance is being processed to be released on a certain date, in lieu of the required Tax Clearance in Section 34.2 of the IRR.
[T]he requirement under Section 34.2 of the IRR of RA 9184 for the submission of Tax Clearance is based on Executive Order (EO) No. 398. Section 1 of EO 398 requires the submission of Tax Clearance issued by the BIR to prove full and timely payment of taxes of all persons desiring to enter into or participate in any contract with government.
Considering the foregoing, there is no doubt that EO 398 specifically requires the submission of Tax Clearance issued by the BIR, which should be in the form defined in RR 3-2005. Thus, a certification stating that the Tax Clearance is being processed and will be later released is not in compliance with Section 34.2 of the IRR of RA 9184.
Whether the BAC may exercise its discretion in extending the deadline for submission of Tax Clearance on the basis of the BIR certification, and whether the BAC has the discretion to not strictly follow the rule under Section 34.2 of the IRR on the forfeiture of bid security and disqualification of the bidder upon its failure to submit the requirements or a finding against the veracity of the documents.
Section 34.2 of the IRR of RA 9184 is mandatory, and not discretionary, and this is clear from the wordings of the provision. Hence, there must be compliance with the documentary requirements enumerated in Section 34.2 of the IRR before a bidder may be considered post-qualified. Based on this provision, the inability of the bidder to submit the requirements on time, or if there is a finding against the veracity of the submitted documents, would necessarily result to forfeiture and disqualification. The intention of the rule is clear, that is, to forfeit the bid security and disqualify the bidder for failure to comply with Section 34.2 of the IRR.