Businessmen WHO fail to keep the value-added tax billing as a separate item in their sales invoice or official receipt are liable to a fine of up to P50,000 and a jail term of up to four years.
The Bureau of Internal Revenue has issued Revenue Regulations No. 18-2011, which prescribes the penalties for violating Sections 264 and 113 of the Tax Code.
These sections pertain to guidelines on the proper preparation of the invoice and receipt of the output tax following the sale of goods and services.
“Failure or refusal to comply … shall, upon conviction, for each act or omission, be punished by a fine of not less than P1,000 but not more than P50,000,” the regulation stated.
Those found delinquent may be imprisoned for “not less than two years, but not more than four years,” for each count, it added.
Earlier, the BIR said VAT collection could grow by 14 percent this year amid efforts to strengthen its campaign against tax cheats.
The BIR is striving to collect P196.2 billion in VAT for 2011 from the P172.2 billion reported last year.
As of the end of September, the BIR had filed with the Department of Justice at least 67 tax-evasion complaints through its Run after Tax Evaders (RATE) program.
In undertaking the RATE initiative, the agency said it had been receiving much-needed help from third-party informants and whistle blowers, apart from the regular lifestyle check on suspected delinquents.
According to the BIR, the VAT system itself has helped improved its ability to track erring taxpayers because it provides a paper trail.
VAT-registered taxpayers provide the BIR with a list of their suppliers and their tax payments. In particular, large companies declare their suppliers and the VAT payments credited to them.
Also, the VAT trail has led to the filing of several tax-evasion cases against celebrity endorsers because companies are required to submit the names of suppliers and the amount of their transactions with them.