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BIR Chief Lumagui files tax rap vs. Fake Receipts by “Ghost” Corps worth ₱25.5B

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Bureau of Internal Revenue Commissioner Romeo D. Lumagui, Jr. led the filing of criminal complaints before the Department of Justice against four (4) “ghost” corporations causing the government to lose an estimated 25.5 Billion of taxes. They are in violation of Sections 254, 255, and 267 of the National Internal Revenue Code of 1997, as amended (Tax Code).

“We are just getting started. 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. I have set my marching orders to the BIR Legal Group to file criminal charges against the individuals behind these companies. The taxpayers and businesses who used these fictitious receipts will be audited by our examiners. I assure the whole force of the BIR that I will be with them in every step of the way. We have a list of both buyers and sellers of these fictitious receipts. Our main goal here is to put these fraudulent activities into a halt with the high hopes of increasing voluntary tax compliance”, Commissioner Lumagui said.

The case against these 4 corporations stemmed from the December 2022 raid conducted by Commissioner Lumagui himself at a condominium unit in Quezon City. This led to the seizure of thousands of fictitious receipts.

After the raid, subsequent investigation showed that these ghost corps do not have any legitimate business activity. The companies were only established for the sole purpose of selling fictitious sales invoices and/or receipts to their buyers for the latter’s claim of false and anomalous purchases. As a result of these companies’ fraudulent tax schemes, the government is losing an estimated total deficiency income tax amounting to ₱17.63 Billion and total deficiency value added tax amounting to ₱7.91 Billion, for taxable years 2019-2021, inclusive of surcharges and interests.

“Gusto ko pong iparating sa publiko, lalo na sa mga mamamayan na nagbabayad ng kanilang tamang buwis, ang importansya nang lahat ng mga aktibidades na ginagawa ng aming ahensya lalo na ang pag-iigting ng enforcement activities namin. Hindi ko hahayaan na ang mga ganitong katiwalian ay magpatuloy, susupilin namin ito hangga’t sa aming makakaya”, the Commissioner guaranteed.

Intensification of BIR enforcement activities is one of the areas of concern of Commissioner Lumagui.

In early November 2022, being the Deputy Commissioner for Operations, he led the raid of a Manila warehouse containing millions worth of illegal vape products. In early December 2022, a tax evasion case was filed worth ₱1.2 Billion before the DOJ against five (5) individuals behind the raided warehouse. In the same month, the BIR raided the aforementioned condominium where a syndicate selling fictitious receipts was operating.

In the last week of January 2023, the Commissioner himself orchestrated and supervised the nationwide raid by BIR regional officials in twenty-one (21) provinces and sixty-nine (69) cities that targeted warehouses and stores where illicit cigarettes were sold or stored. The most recent nationwide enforcement activity was last February 2023, during the filing of tax evasion cases against seventy-four (74) erring individuals and corporate taxpayers with total tax liabilities, inclusive of increments, amounting to approximately ₱3.58 Billion.

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