[Ask the Tax Whiz] What are common violations under RATE?

How is the Run After Tax Evaders (RATE) program different from the other enforcement programs of the Bureau of Internal Revenue (BIR)? What is its purpose?

Unlike the other programs of the BIR which are designed for revenue generating purposes as a means to achieve the bureau’s collection goal, the RATE program seeks to identify and prosecute high-profile tax evaders.

RATE generates the maximum deterrent effect by impressing on the public that tax evasion is indeed a crime and violators will be caught and punished.

There are so many possible mistakes or unintentional errors in tax compliance. How do we know if an error would result in a tax evasion case? What are the common violations under the RATE program?

An individual or corporation may be charged with tax evasion if they committed a violation of the provisions of the National Internal Revenue Code of 1997.

Here are the common violations which may trigger investigations under RATE:

Seriously, this is really scary and bad for our business. How can we know more about RATE? How can we avoid being investigated by the BIR? Please help us.

You can visit the BIR website to know more about the program. You may also watch the replay of the “BIR IN ACTION Live” episode about it here.

All businesses undergo an external audit at least once a year to make sure they comply with accounting standards. This is conducted by an independent auditor.

In the same way, it is recommended that businesses, whether a sole proprietorship or corporation, conduct an annual tax review or tax health check to make sure they have fully complied with all tax rules and regulations. This would mitigate risk exposures and potential deficiency tax assessment. For a free tax assessment, email us at consult@acg.ph or use the QR code in the infographic for initial profiling.

– Rappler.com

Mon Abrea, CPA, MBA, is the co-chair of the Paying Taxes-EODB Task Force. With the TaxWhizPH mobile app as his brainchild, he was recognized as one of the Outstanding Young Persons of the World, an Asia CEO Young Leader, and one of the Ten Outstanding Young Men of the Philippines because of his tax advocacy and expertise. Currently, he is the chairman and CEO of the Asian Consulting Group and trustee of the Center for Strategic Reforms of the Philippines – the advocacy partner of the Bureau of Internal Revenue, Department of Trade and Industry, and Anti-Red Tape Authority on ease of doing business and tax reform. Visit www.acg.ph for more information or email him at mon@acg.ph and download the TaxWhizPH app for free if you have tax questions.