Sometime this year, Revenue Regulations No. 6-2007 was promulgated  specifically for the purpose of updating and aligning the policies  and procedures on the advance payment of  VAT on  the sale  of refined sugar  with  certain  pertinent  laws, proclamations   and  orders  such  as  RA  9337;  EO  18; Sugar  Order No. 1, issued every crop year to allocate the volume of and classifying cane sugar produced each 2006-2007.

This  revenue issuance  was  intended to  replace   all  existing  revenue issuances on the matter  by  providing  therein    a  comprehensive  and  substantive of updated policies and procedures for the advance payment of value added tax set on the sale of  refined sugar, including  those  made by  a duly accredited and registered agricultural  cooperative of  good  standing.  In the said revenue  issuance, policies and procedures  were  also  laid  down  as  to  the  classification of sugar  and sugar products.   A monitoring  system  has  likewise been  provided  for the  processing of raw sugar into refined sugar intended  for the World Market ( œD  sugar)  or classified as œE  sugar or œA  sugar and the withdrawal thereof from the sugar refineries/ mills. Furthermore,  provision has likewise been made therein for the tax treatment of raw sugar processed into refined sugar intended for the World Market ( œD  sugar) or classified  as œE   sugar  or œA   sugar.

However,  in view of the abovementioned   substantive  changes  introduced by  Revenue Regulations No. 6-2007 on the existing policies and procedures, it  was subsequently recognized  that more  time  is needed   in order to effectively implement the  intended purposes of  said Regulations.

Thus, Revenue Regulations No. 6-2007 was consequently suspended by Revenue Regulations No. 11-2007. As stated in the Regulations, the purpose of the suspension  is to give both the Bureau of Internal Revenue and the representatives of the sugar industry ample time to thresh out unclear provisions embodied therein and to introduce a more improved version of the Regulations that will  properly address the problems of the sugar  industry and collect the correct taxes due from them.

As such, the suspension of Revenue Regulations No. 6-2007 by Revenue Regulations No. 11-2007 effectively reverts the  observance  of policies and procedures on  the advance payment  of VAT on the sale of  refined  sugar  to those enunciated by Revenue Regulations No. 29-2002 as amended by Revenue Regulations No. 2-2004, Revenue Regulations No. 4-2004, Revenue Regulations No. 16-2005, and Revenue Regulations No. 4-2007. Thus, the provisions of the aforementioned Regulations shall apply  until  such  time  that  a much  improved  version of Revenue Regulations  No. 6-2007 is  issued.  Correspondingly,  the  rate of  advance VAT to be paid  shall be at  the  rate of twelve percent  (12%)   pursuant to  Republic Act No. 9337,  as amended, and as implemented by Revenue Regulations No. 16-2005, as amended by Revenue Regulations No. 2-2007 and Revenue Regulations No. 4-2007.

All internal revenue officers and others concerned are hereby enjoined to give this  Circular  as  wide  a publicity  as possible.

Adopted: 12 Sept. 2007