REVENUE MEMORANDUM ORDER NO. 2-2018 issued on January 10, 2018 prescribes
the guidelines and procedures in implementing Republic Act (RA) No. 10693, otherwise
known as “Microfinance Non-Government Organizations (NGOs) Act”.
Microfinance NGOs with duly issued Certificate of Accreditation from the
Microfinance NGO Regulatory Council (or “Council”) shall be eligible to avail of the 2%
gross receipt tax on income from microfinance operations in lieu of all national taxes. The
preferential tax treatment shall be accorded only to NGOs whose primary purpose is
microfinance and only on their microfinance operations catering to the poor and lowincome individuals.
The preferential rate of 2% tax based on gross receipts from microfinance
operations should only refer to lending activities and insurance commission, which are
bundled and forming integral part of the qualified lending activities of the Microfinance
All other income by the Microfinance NGOs, which are not generated from the
lending activities and insurance commissions, shall be subject to all applicable taxes.
Duly registered and accredited Microfinance NGOs, as well as their clients, shall
be required to have a Taxpayer Identification Number (TIN) while the Microfinance NGOs
already registered with the BIR shall update their registration with the concerned Revenue
District Office (RDO) using BIR Form No. 1905 to reflect their accreditation as
Every Microfinance NGO shall maintain books of accounts and other pertinent
records and shall be subject to periodic examination by revenue enforcement officers of
the BIR. In case Microfinance NGO engages in other businesses, it shall maintain
separate books of accounts for the same.
Every Microfinance NGO shall apply for Authority to Print (ATP) Receipts/Invoices
(BIR Form No. 1906). In case Microfinance NGO engages in other business, it shall apply
for ATP for use of the other business.
Microfinance NGOs shall use BIR Form No. 2551M (Monthly Percentage Tax
Return) in filing and paying the 2% preferential tax rate. They shall be constituted as a
withholding agent for the government if they act as an employer and that any of their
employees received compensation income subject to Withholding Tax on compensation,
or if they make payments to individuals or corporations subject to Withholding Taxes
Considering that the new ATC PT118 is not yet reflected/included in the existing
BIR Form No. 2551M in the eFPS and eBIRForms, taxpayers are directed to file and pay
manually via over the counter of the AABs until the time that the revised BIR Form No.
2551M with the new ATC is uploaded/included in the eFPS and eBIRForms.