BIR Programs for Tax Evaders in the Philippines

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Tax Evasion is the process of manipulation in accounts, disclosure of unreal expenses for deductions. It is also by showing personal expenditure as business expenses and overstatement of tax credit or exemptions suppression. Tax evaders had happily succeeded with their utmost objective to pay least taxes. They came in various ways such as arbitrary non-reporting of income, and over-declaration of expenses.

The purpose of this article is to show readers the different process mandated by BIR for Tax Evaders.

Run After Tax Evaders (RATE)

This is a joint program of the BIR together with the Department of Justice (DOJ). It investigates, prosecutes and convict tax evaders for their criminal and other violations of the Tax Code.

Oplan Kandado

The program intended to punish erring tax-payers by temporarily shutting down business operations of tax-payers. It is based on specific grounds such as failure to issue VAT receipt/invoice and failure to file VAT return.

Tax Compliance Verification Drive

This program is where BIR visits business establishments of tax-payers to verify compliance of tax-payers with registration.

Bench-Marking

BIR develops industry bench-marks based on the relationships of tax payments and gross sales declared on tax returns using its internal database for the purpose. Notably, benchmarking in the Philippines is not in itself a tax audit in the Philippines but only a means that may lead to tax assessment.

Tax-payers Reconciliation System (TRS)

This program is where BIR caught tax evaders through the use of tax returns, reports and attachments. filed with them and a third-party information such as importation details from the Bureau of Customs (BoC).

Transfer Pricing.

This would cover tax-payers who would mobilize goods or services from among its group of related companies to minimize the impact of taxation on the inter-company sales of goods and services. BIR prescribes guidelines for transfer pricing and associated companies must transfer goods or services by and between among them at arm’s length transactions so that it will reveal the true amount of taxable income.

Source: https://taxacctgcenter.ph/bir-tax-programs-for-tax-evaders-in-the-philippines/