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House panel approves bill on anti-tax racketeering

By Filane Mikee Cervantes

May 9, 2023, 5:22 pm

MANILA – A measure seeking to criminalize tax racketeering hurdled committee level at the House of Representatives.

In a hearing on Tuesday, the House Committee on Ways and Means approved the unnumbered substitute bill to House Bills (HB) 7583 and 7653, both of which seek to define the crime of tax racketeering and amend for this purpose the National Internal Revenue Code, as amended.

Tax racketeering involves engaging in any coordinated scheme or operation to evade or defeat any tax imposed under the tax code through the fraudulent use of receipts, returns and other records, with a minimum amount of PHP10 million.

In sponsoring the bill, committee chair Joey Salceda said such "nefarious activities" must be defined and criminalized since these constitute as economic sabotage, following the doctrine that "taxes are the lifeblood of the state.”

Salceda pushed for higher penalties on the offense, citing that even if the Bureau of Internal Revenue (BIR) tries to catch incidents of large-scale tax fraud, “it will not have a proportional deterrent effect.”

“Despite these efforts, however, they will be charged with crimes that ordinary or smaller tax violators can be charged with. That is because the Tax Code enumerates various forms of tax evasion as criminal liabilities, but does not address the systematic and coordinated scheme to evade taxes,” Salceda said.

During the meeting, the committee members moved to retain the original 17-to-20-year penalty, and keep the offense bailable.

The bill also penalizes accomplices in government with perpetual disqualification from public office in addition to 10-17 years in prison.

Salceda said the tax code currently penalizes tax fraud through fake receipts with a two-year prison term, but these pertain to individual crimes, not syndicated efforts to defraud the government.

Pending the passage of the bill, he called for the Department of Finance (DOF) and the BIR to organize an inter-agency task force that would prepare the Department Order on the implementation of the Run After Fake Transactions (RAFT) program.

BIR Commissioner Romeo Lumagui Jr. said this would help curb individuals committing tax evasion through ghost or fake receipts.

The panel also approved the tax provisions of the unnumbered substitute bill to HBs 6921, 7031, 7102, 7121, 7142, 7386, 7421, 7480, 7599, 7739, 3587 and 6457, which would provide for the modernization of the Philippine Institute of Volcanology and Seismology (Phivolcs).

The measure would allow the agency to accept loans, grants, bequests and donations from local and foreign sources to help fund the Phivolcs Modernization Fund.

The bill also exempts the Phivolcs from donor’s tax, as well as import duties, taxes and restrictions. (PNA)

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