BIR sets tougher fines, penalties for tax evasion

The Bureau of Internal Revenue (BIR) has jacked up the fines and extended the jail term for those who will be found guilty of tax evasion as mandated by the Tax Reform for Acceleration and Inclusion (TRAIN) Act. Finance Secretary Carlos Dominguez III and Internal Revenue Caesar Dulay set the updated penalties under the TRAIN Law through Revenue Regulations (RR) 13-2021, which the BIR published on Thursday.

For attempts to evade or defeat income taxes, the fine was increased to between P500,000 and P10 million. Previously, the fine slapped on those convicted by court for tax evasion was only P30,000 to P100,000.Imprisonment, meanwhile, will range from six to 10 years, longer than two to four years previously.

“The fine and penalty shall be in addition to other penalties provided for by law. The conviction or acquittal obtained for violation shall not be a bar to the filing of a civil suit for the collection of taxes,” the BIR said.

The BIR is slapping the same fines and jail time to those who will print fraudulent and unauthorized receipts as well as commercial or sales invoices.

It also said corporate taxpayers who failed to transmit sales data to the BIR’s electronic sales reporting system would be penalized with one-tenth of 1 percent of the annual net income reflected in the taxpayer’s audited financial statements in the second year after the current taxable year, or P10,000, whichever was higher, for every day of violation.

Firms that will fail to submit sales data for 180 days during a taxable year will also be permanently closed, the BIR said, although “the penalty shall not apply if the failure to transmit is due to force majeure or any causes beyond the control of the taxpayer.”

As for those who used, bought, possessed, sold or offered, installed, transferred, updated, upgraded, kept or maintained “sales suppression devices” which prevented, modified or deleted electronic records to avoid tax payments, the fine is P500,000 to P10 million plus two to four years of imprisonment.

“The maximum penalty shall apply in case of cumulative suppression of electronic sales record in excess of the amount of P50 million which shall be considered as economic sabotage,” the BIR said.

RR 13-2021 also listed down the range of penalties for various violations of the fuel marking program, which was aimed at eliminating oil smuggling. The BIR said faking fuel marking test results will be slapped with imprisonment of between one year and two-and-a-half years.

“The additional penalties of revocation of the license to practice his profession in case of a practitioner and the closure of the fuel testing facility, may also be imposed at the instance of the court,” the BIR added. INQ