Commissioner Tan-Torres pointed out, “With the system in place and the cooperation of all the contracting parties, the collection of documentary stamp tax and value added tax on the motor vehicle insurance policies will be maximized.”

Quezon City, 20 January 2010 – As part of efforts to establish a closer working relationship and collaboration, the Land Transportation Office (LTO) and Insurance Commission (IC) have agreed to work closely together with the Bureau of Internal Revenue in establishing a system for the effective collection of all insurance policy related taxes due to the BIR by signing a Memorandum of Agreement (MOA) today at the BIR National Training Center in Quezon City.

Under the MOA, the LTO and the IC have agreed to support the BIR thru the use of a system known as the Enhanced Certificate of Cover Verification Facility (ECOCVF) that can verify registration of motor vehicles covered under the Comprehensive Insurance and Compulsory Third Party Liability (CTPL) by proof of Certificates of Cover (COCs), thereby ensuring the timely and effective collection of taxes due on these insurance policies on motor vehicles. This facility shall also provide interconnectivity / sharing of information among the Parties.

The MOA also embodied the operational arrangement reached by the Parties whereby IC shall perform, host, manage and maintain its COC Gateway (ICG) which, in turn, shall interconnect with LTO’s ECOCVF for subsequent verification of COCs and collection of taxes, fees, and charges due to the BIR.

The IC shall also require/mandate accredited insurance companies to submit/file COCs on Comprehensive Insurance policies and Compulsory Third Party Liability Insurance policies into the ICG.

The BIR for its part shall have access to the ICG and ECOCVF to determine COC issuances and the amount of taxes due/paid to the government. It can also obtain reports generated from the ICG and ECOCVF for purposes of industry analysis and tracking.

The three offices vowed to make proper coordination and cooperation to perform and deliver all that are necessary to carry out the provisions and intent of the MOA.

The MOA was signed by Assistant Secretary Arturo C. Lomibao of LTO, Commissioner Eduardo T. Malinis of IC, and Commissioner Joel L. Tan-Torres of BIR.

Commissioner Tan-Torres pointed out, “With the system in place and the cooperation of all the contracting parties, the collection of documentary stamp tax and value added tax on the motor vehicle insurance policies will be maximized.”