REVENUE MEMORANDUM ORDER NO. 5-2012 issued on March 30, 2012 prescribes the revised guidelines, policies procedures in the conduct of performance benchmarking method, amending for this purpose Revenue Memorandum Order (RMO) No. 4-2006. Benchmarking Program/Activities in the Regional/District offices shall cover as many types of taxpayers by industry as may be applicable. Large Taxpayers, however, may later be fully covered by the Benchmarking Program/Activities. Benchmarking shall be done separately for corporate and individual taxpayers. Benchmarking Committee shall be created, chaired by the Deputy Commissioner for Operations. The Assistant Commissioners (ACIRs) of Assessment Service, Policy and Planning Service, Large Taxpayers Service (LTS) and the Proponent Regional Director for Benchmarking Program shall be called as Project Directors, and shall serve as committee members with responsibilities specified in the Order. Said committee shall be responsible for reporting and recommending the appropriate actions that may be taken and/or sanctions that may be imposed against taxpayers or any other person found to be supplying/submitting false or fabricated data purportedly to meet the benchmark requirements. The Assistant Commissioner (ACIR), LTS or the Head Revenue Executive Assistants, in the absence of the former, the LTS Audit Division Chiefs, the Regional Directors and all Revenue District Officers (RDOs) shall cause the implementation of the Benchmarking Program and activities under their respective jurisdictions. For the Large Taxpayers, however, the Benchmarking Program shall initially be limited to the gathering and profiling of data and setting the benchmark for taxpayers under their jurisdiction. The RDOs, in close coordination with their respective Regional Directors, shall have the responsibility of ensuring the timely conduct of tax profiling and benchmarking. The benchmarking cycle shall be strictly followed and shall be completed within the required timeframe. In cases where Letters of Authority have been issued to taxpayers, the LT Audit Division Chiefs and RDOs concerned shall take into consideration the established benchmark in the industry where the subject taxpayer belongs before considering the case closed and terminated. Any downtrend deviation from the benchmark shall be fully explained and such data shall form part of the inputs in the revision of final benchmark rates. All issues and concerns raised by taxpayers in the implementation of this program that call for immediate action shall be the responsibility of the implementing office. Reports of action taken thereon must be furnished the Benchmarking Committee. Taxpayers whose tax compliance is below the duly established and approved benchmark shall be classified as follows: Classifications Risk to Revenue/Gap to Benchmark High Risk Taxpayers Over 30% below benchmark Middle Risk Taxpayers 16% to 30% below benchmark Low Risk Taxpayers 15% or less below benchmark Taxpayers classified as high risk shall be the top priority target for enforcement actions, such as surveillance, CRM/POS Post Evaluation, Oplan Kandado, inventory stocktaking and audit. The Benchmarking Committee shall be responsible for reporting and recommending the appropriate actions that may be taken and/or sanctions that may be imposed against taxpayers or any other person found to be supplying/submitting false or fabricated data purportedly to meet the benchmark requirements. The industry benchmark may be revised every two (2) years from approval hereof or when a law is passed changing the rate of Value-Added Tax and Income Tax, whichever comes first, or as may be directed by the Commissioner. The guidelines and procedures in the conduct of benchmarking as well as the data and/or reports required to be submitted by the LTS (Audit Divisions and LTDOs), Regional and District offices are specified in the Order.