DPWH Requires Contractors to Include Tax Clearance as Eligibility Requirement

Friday, May 16, 2014

A Tax Clearance is now a prerequisite to contractors and suppliers of the Department of Public Works and Highways (DPWH) intending to do business.

Secretary Rogelio L. Singson thru Department Order 47 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 (GPPB) Resolution No. 21-2013.

To ensure that prospective bidders are aware of the Tax Clearance policy, Secretary 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. 9184 otherwise known as Government Procurement Reform Act (GPRA).

The Tax Clearance issued by Bureau of Internal Revenue (BIR) also indicates the current assets and liabilities of the taxpayers, in relation to the computation of Net Financial Contracting Capacity (NFCC) 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 (SEC), Department of Trade and Industry (DTI) for sole proprietorship, or Cooperative Development Authority (CDA) 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 Procurement Bidding Documents (PBD) require the submission of Tax Clearance only after post-qualification of a bidder with the Lowest Calculated Bid or Highest rated Bid.

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