Business Taxes Figure _ .

Current Business Taxes Cycle

Community Tax Certificate

Barangay Clearance

Taxpayer

Barangay Captain

Sanitary Inspector
th

Treasurer

Barangay Clearance Barangay Clearance

Sanitary Permit
Assesment of tax and Signing of approval

4 Quarter Official Receipt

Sworn Statement

Community Tax Certificate

Application for Business License and Permit File

Sanitary Permit (copy) Barangay Clearance (copy) Sworn Statement (copy)

Sworn Statement

Sworn Statement Taxpayer Record file

Application for Business License and Permit File

Issuance Official Reciept upon Payment

Official Receipt 2

Update of Taxpayer Record File

Taxpayer Record File

Cash
Reconcile Cah Receipt and OR's Cashier
Cash
Official Receipt 3

Bureau of Fire Protection

Prepare Statement of Reconciliation 1

Prepare Statement of Reconciliation

Prepare Statement Reconciliation 2

Cash Collection Summary 1

Accounting Department

Cash

Prepare Cash Collection Summary

OR3

Cash

Check and Deposit Collection

Deposit Slip

Bank

Statement of Reconcilliation File

Official Receipt File

Cash Collection File

Current Business Tax Cycle In order to pay for the business tax due, the payer must be able to comply the following documents from corresponding government agencies and personnel: Sworn Statement and 4th Quarter Official Receipts is mandatory. Barangay Clearance Brangay Captain Sanitary Permit Sanitary Inspector Community Tax Certificate Treasurers Office 4th Quarter Official Receipts Sworn Statement

When these documents are completed, tax payers can fill-out their application forms to be submitted to the MTO. This whole process would take about ten to fifteen minutes depending on the availability of personnel. After completion of the following documents, the next step is assessment of amount of the tax due. During this procedure, taxpayer can decide whether to renew or not their business permit. After submission of the required documents, assessment and approval will follow and the same personnel are in charge. Documents will be kept regarding tax payers company and other information related. Overall, this process will take about thirty to forty-five minutes, depending on assessment time and availability of personnel. Payment of tax will be remitted to the treasurer after payment to cashier. Settlement of the cash receipts and OR will follow. After which, preparation of Reconciliation is then handed by the treasurer and one copy of which is being submitted to the accounting department. The next step is preparation of cash collection summary. It is a formal document presented as an evidence of cash receipts. Afterward s, it is then deposited to the bank. The third process could take at least an hour or more. The following table will show the breakdown of activities and the time to be consumed per task. All transactions are being recorded except during holidays and events. There will be no posting of payments. The whole process is suspended until due time.

Table _. Breakdown of Activities in the Current Business Cyle Activity Obtaining of Application Form (MTO) Submission of Form (MTO) Assessment and Approval Issuance of Receipt Reconciliation of Cash Receipts and OR Preparation of Statement of Reconciliation Preparation of Cash Collection Summary Checking and Depositing of Cash Total time Duration (Minutes) 5 10 45 10 15 15 20 20 2 hours and 20 minutes

Figure_. Suggested Business Tax

Community Tax Certificate
Sanitary Permit

Barangay Clearance

Fire Clearance

Sworn Statement

Barangay Clearance

th Sanitary Permit 4 Quarter Official

Receipt

Sworn Community Tax Certificate Fire Clearance Statement

4 Quarter Official Receipt

th

All Verified Requirements

Application for Business License and Permit

Statement of Account

Fire Clearance (copy) Sworn Statement (copy) Sanitary Permit (copy)

Statement of Account

1 Official Receipt 2

Singed Statement of Account

Official Receipt
Singed Statement of Account

Cash
Cash Collection Summary 1

Prepare Statement of Reconciliation 1

Cash Collection Summary 1

Cash
OR3
Cash Collection Summary 1

Cash
Deposit Slip

Cash
OR3
Prepare Statement Reconciliation 2

The following are negative impact s of negligence and over reliance to the employees:
The proponents would like to give solution for the listed problems by empowering the procedure in achieving internal control

Cash deposits

Transaction was delayed causing the failure to track down amount and deposited to the total receipt released. There is no assurance of having the same amount or account balances. Failure of segregation of duties

It could be fast and easy to do the job if each employee has different task/s to perform. Preparation of Cash Collection Summary

It would be better if this task was done by the cashier. Any wrong statement can be detected on the reconciliation. The proponents recognizes the effort and efficiency of the present system however, the proponent would like to respond on some problems observed. Same procedure will be applied to the suggested cycle. However the verification of the documents upon acceptance and separation of assessment of the amount of tax and signing the approval will be changed on the process. Next, the tax payer will pay the due. This process would take about thirty to thirty five minutes. The next is to have a signed Statement of Account from the office of the Mayor. This process would take about ten minutes. In securing accounts, reconciliation is made. Here, it utilized cash summary collection prepared by the cashier, cash and ORs. After the account is verified to be balance, the treasurer will check and deposit the cash. This process would take only about twenty six minutes.

Table _. Activity of Suggesteed Business Cycle Activity Obtaining of Application Form (MTO) and Submission of Form (MTO) Verification of Documents Duration (Minutes) 10 Rationale It was merged due to the same process was handled by same personnel To ease assessment and rejection of invalid and wrong documents Signing and approval is separated This is to established clear separation of duties This is practiced to due to emphasize of authorization Includes updating of taxpayers file Additional documents is required (cash collection summary) Rearranged only from the process Verification of balanced accounts The time estimated is for the checking of cash only

10

Assessment of Tax Signing of Treasurer Approval from the office of the Mayor issuance of Receipt Reconciliation of Cash Receipt and ORs Preparation of Cash Summary Preparation of Statement of Reconciliation Checking and Depositing of Cash Total Time

15 5 10 10 5

7 7 7 1 hour and 26 minutes

The five days is given to complete required documents and payments requires eighty six minutes

Table _. Comparative Analysis on Business Taxes Activity Current Obtaining of Application Form (MTO) and Submission of Form (MTO) Verification of Documents Assessment of Tax Signing of Treasurer Approval from the office of the Mayor issuance of Receipt Reconciliation of Cash Receipt and ORs Preparation of Cash Summary Preparation of Statement of Reconciliation Checking and Depositing of Cash Total Time 10 15 15 20 20 2 hours and 20 minutes 15

Duration (Minutes) Suggested 10

Time saving 5

45

10 15 5 10 10 5 7 7 7 1 hour and 26 minutes

20

10

10 8 13 13

The proponent considers the appropriate mix of time and internal control. There is no significant difference in the period of time in the two system however procedures became more efficient, thus making it more customer friendly.

Use Case Analysis

Figure_. Use Case Analysis

Brgy. Captain

Sanitary Inspector

Office of the Mayor

Treasurer

Bureau of Fire Protection

Treasurer
Issue

Pay Tax Due Cashier

Received Documents

Submit 4 Quarter OR Secure Sworn Statement

th

Submit Required Documents

Taxpayer

Business Permit
Application

Release Business Permit

Assess and Approval of Application

Assessment of Value Property

Reconcile Collection

Reconcile Cash on Hand and Book Post to Ledger

Office of the Mayor

Municipal Treasurer

Local Assessor
Record Transaction

Deposit Collection

Bank

The table below summarizes the use case, its description and the corresponding actors involves for the integrated system. Table _. Use Case Narrative Use Case Name Issue Required Documents Description Taxpayers go to different offices to acquire and accomplish forms and documents required to the application process Actors Barangay Captain Sanitary inspector Office of the Mayor Treasurer Bureau f Fire and Protection Taxpayer/ applicant

Submit 4th Quarter official Receipt Securing Sworn Statement

Submission of 4th quarter receipts of his/her business Taxpayer securing sworn statement declaring his/her property Filling of business permit Submission of required documents for assessment and approval process (treasurer) Evaluation and assessment of declared property Inspection of required documents and approval of application Payment of tax due to cashier Remittance of daily collection Adjustment and reconciling value of cash received and recorded on the book Posting transaction on Ledger Treasurer filling up deposit slip and delivering the collection on the bank

Taxpayer Taxpayer

Business Permit Application Submission of required documents Assessment of Value Property Assessment and Approval

Taxpayer

Taxpayer Municipal Treasurer Local Assessor

Municipal Treasurer Taxpayer Cashier Cashier Municipal Treasurer Cashier

Pay Tax Due Remittance of Collection Reconcile Cash on Hand and per Book Post to Ledger Depositing Collection

Cashier

Bank Municipal Treasurer

Record Transaction Release of Business Permit

Recording of transaction Office of the Mayor releasing the approved business permit after completion of requirements and fees

Municipal Treasurer Office of the Mayor Taxpayer