WHEREAS, the government is determined to minimize, if not eradicate, smuggling and other practices that defraud the government of its revenues;

WHEREAS, in pursuance thereof, it is incumbent upon all branches, subdivisions, instrumentalities and agencies of the government, including government-owned or controlled corporations and local government units, to ensure that the correct amount of taxes and duties due on equipment procured by the government are duly paid;

WHEREAS, the President may direct that such prior payment of all taxes and duties due on equipment procured by the government be required pursuant to the President ™s constitutional powers of control over all executive departments, bureaus, and offices, general supervision over local governments, and to ensure that the customs and internal revenue laws are faithfully executed and enforced;

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order:

Section 1. All branches, subdivisions, instrumentalities and agencies of the government, including government-owned or controlled corporations and local government units, are hereby directed to require the presentation of tax receipt(s) from the supplier/importer of equipment supplied/sold to the Government before the payment thereof is effected by the concerned government agency. The tax receipt from the Bureau of Customs or the Bureau of Internal Revenue which constitutes proof of payment of the taxes, duties and other charges paid therefor, shall, as far as practicable, indicate the exact specification and/or serial numbers of the equipment procured by the government.

Sec. 2. Prequalification requirements, in any form of purchase or procurement of equipment for the government, must include the demand from all suppliers to submit or present to the Resident Auditor (COA) of the concerned government agency, the tax receipt(s) corresponding to the procured equipment, for authentication or verification and in order to ascertain the proof of proper payment of all the taxes and duties and other charges. Payments for the said equipment, allowed or made without the required tax and duty receipt(s), shall render all officials and employees responsible therefor administratively liable and punishable in accordance with the existing Civil Service laws, rules and regulations, without prejudice to the filing of criminal charges when so warranted.

Sec. 3. The Department of Finance, in consultation with the Department of Budget and Management, the Bureau of Customs and the Bureau of Internal Revenue, shall issue and promulgate the necessary rules and regulations to implement the provisions of this Administrative Order.

Sec. 4. All orders, circulars and memoranda which are inconsistent with this Administrative Order are deemed revoked or modified accordingly.

Sec. 5. This Administrative Order shall take effect immediately

Done in the City of Manila, this 21st day of November, in the year of Our Lord, nineteen hundred and ninety.


By the President:
(Sgd.) CATALINO MACARAIG, JR.
Executive Secretary