Salceda files House bill to define, criminalize tax racketeering
MANILA, Philippines —Albay Rep. Joey Salceda filed House Bill 7653 to define and penalize tax racketeering.
Announced on Friday, the legislation seeks to build upon existing tax evasion laws, further strengthening the Bureau of Internal Revenue’s (CIR) ability to combat and prosecute instances of widespread tax fraud.
“According to estimates by tax authorities, as much as P100 billion in revenues are being evaded due to the padding of deductions and input tax credits through the systematic and fraudulent use of fake receipts and other records,” Salceda said in a statement.
The bill would define tax racketeering as “any coordinated scheme or operation to repeatedly or consistently evade or defeat any tax imposed under this Code through the fraudulent use of receipts, returns, and other records, with a minimum amount of [P10,000,000.00] in taxes avoided or attempted to be avoided.”
Furthermore, the crime will be classified as non-bailable, and upon conviction, individuals may face a prison sentence ranging from 17 to 20 years.
“The stiffer penalties aim to be a deterrent to the commission of such crimes, as well as a tool for tax authorities to be able to prosecute such offenses in a manner distinct from usual tax evasion,” said Salceda.
According to Salceda, the BIR itself requested the bill.
Salceda cited data from the BIR, saying that the bureau has filed charges for evasion of taxes worth P25.5 billion against corporations using fake receipts.
“These corporations do not have any legitimate business activity, and were set only to sell fictitious sales invoices or receipts to their buyers for the latter’s claim of false and anomalous purchases. These receipts or invoices are called ‘ghost receipts’,” said the lawmaker.
The representative acknowledged that the crime is already punishable under the Tax Code. However, he emphasized that it does not define systematic and coordinated tax evasion.
“Schemes such as these should be distinguished from the usual attempt to evade taxes precisely because they constitute a systematic attempt to dismantle the credibility of the entire tax system and could not be committed without networks of accomplices across the business sector and among tax authorities,” Salceda said.
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