BIR to probe companies selling fake receipts

BIR to probe companies selling fake receipts

by Ina Reformina, ABS-CBN News

Posted at 08/19/2011 1:24 AM | Updated as of 08/19/2011 1:24 AM
 
MANILA, Philippines - The Bureau of Internal Revenue (BIR) will investigate a modus operandi identified as one of the main reasons why the value-added tax (VAT) has been under-performing.

In a news conference at the Department of  Justice(DOJ) on Thursday, BIR Commissioner Kim Henares said the bureau has identified at least 4 companies selling fake receipts to corporations and enterprises so that these corporations can substantially underdeclare their income and thus, evade the payment of correct taxes.

This developed as the BIR filed tax evasion charges against Gammon Metal Products, Incorporated, a duly-registered domestic corporation engaged in the manufacture of metal, plastic, electrical and industrial products.

Gammon's president, Joaquin Chua, was also charged.

Gammon was charged for willful attempt to evade or defeat tax and deliberate failure to supply correct and accurate information in its income tax returns (ITR) and VAT returns for taxable years 2007 and 2008.

The corporation's total tax liability is pegged at P1.7 billion, inclusive of surcharges and interests.

While Gammon filed its ITRs for said taxable years, it was discovered by the BIR that some of its suppliers did not file any tax return for 2007 and 2008 and, in fact, these suppliers were non-existent.

"Moreover, Gammon failed to substantiate its claim of purchases from said suppliers when asked by the BIR, prompting the latter to disallow the VAT input taxes claimed by the company from said purchases in question," the BIR's fact sheet on the Gammon case read.

"Said failure to substantiate purchases from simulated transactions with sham companies resulted to over-claim of VAT input taxes, and thus, substantial underdeclarations of taxable income in the years 2007 and 2008."

Henares said the BIR will coordinate with the Philippine National Police(PNP) and National Bureau of Investigation(NBI) in locating the companies/suppliers behind the sale of fake sales invoices.

"I'd like also to forewarn taxpayers [that] this is just the tip of the iceberg, this modus operandi. What we discovered is that there seems to be a syndicate of this type. They register with the bureau, they sell receipts. What the businesses do is buy the receipts, not the goods," Henares said.

"Ang pakiusap ko sa mga negosyante, wala naman kami problema na kumita sila, magbayad lang sila ng tamang buwis. Huwag nila i-defraud ang government... This is not just peanuts, we're talking about over P1 billion," she added.

"We're saying that because of this magnitude, I believe that the underperformance of VAT is because of all this. Other reasons for the underperformance are smuggling and non-issuance of receipts," Henares said.

The case against Gammon is the 60th case filed by the BIR under its revitalized Run After Tax Evaders(RATE) program under the Aquino administration.

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