P25.5-B tax raps filed vs 4 corporations for issuing fake receipts to ‘ghost’ BIR

Bureau of Internal Revenue

MANILA, Philippines — A P25.5-billion worth of tax cases were filed on Thursday before the Department of Justice (DOJ) against four ghost corporations encouraging clients to “ghost” the Bureau of Internal Revenue (BIR), causing government losses for the past three years.

“The financial magnitude of this syndicate issuing fictitious receipts is alarming. They are profiting from businesses through convincing their clients to ‘ghost’ our tax authority,” BIR Commissioner Romeo D. Lumagui Jr. said.

Lumagui said the agency is now hot on the trail of the individual taxpayers and businesses using the fictitious receipts and vowed to file charges against them soon.

“We have a list of both buyers and sellers of these fictitious receipts. Our main goal here is to put these fraudulent activities to a halt with the high hopes of increasing voluntary tax compliance,” Lumagui said.

The four so-called corporations were the subject of a December 2022 raid led by Lumagui himself at a condominium unit in Quezon City, leading to the seizure of thousands of fictitious receipts. These corporations are Buildforce Trading Inc, Crazykitchen Foodtrade Corp., Decarich Supertrade Inc., Redington Corporation. BIR said they have been operating for more than three years.

Lumagui said further investigation showed that these corporations do not have any legitimate business activity and that they were established only to sell fictitious sales invoices and/or receipts to their buyers for the latter’s claim of false and anomalous purchases.

He said the fake receipts were used by businesses as corresponding deductions in their expenses and value-added tax (VAT).

“As a result of these companies’ fraudulent tax schemes, the government is losing an estimated total deficiency income tax amounting to P 17.63 billion and total deficiency value added tax amounting to P 7.91 billion, for taxable years 2019-2021, inclusive of surcharges and interests,” Lumagui lamented.

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JPV/abc