REVENUE MEMORANDUM ORDER NO. 3-2011 issued on February 1, 2011 prescribes the
following policies and guidelines in the audit of CY 2010 tax returns by the Revenue District
a. All taxpayers are considered as possible candidates for audit.
b. Priority shall be given to the following taxpayers who render professional services:
• Accountants; and
• Other Professionals.
c. Last Priority status for Income Tax audit shall be accorded to those taxpayers with an
effective Income Tax rate of eighteen percent (18%) (Gross Income X 18%).
Taxpayers with the following effective VAT rate are also last in the priority for VAT
• 3% or higher for sale of goods; and
• 6% for sale of service.
An exception to the Last Priority status shall be those taxpayers where there are
findings/suspicions of under-declaration of sales/revenues.