[Ask the Tax Whiz] What are the consequences of evading taxes?

Some may think that they can save money by taking illegal alternative paths instead of paying the right taxes. But did you know that you’ll spend way more than the money you thought you could save if you get caught? Compensating for serious offenses like this takes a toll not just on one’s finances, but more so on one’s reputation.

In June, the Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 13-2021 to implement the penalty provisions for certain violations of the tax code, especially tax evasion.

Can I be imprisoned if I am found to be evading taxes?

Yes. Taxpayers who are found guilty of evading taxes may face imprisonment of not less than 6 years but not more than 10 years and will be fined not less than P500,000 but not more than P10 million.

Aside from the ones stated above, can other penalties be imposed?

The fine and the imprisonment mentioned are just additional penalties on top of the main sanction for taxpayers who are evading taxes. The BIR’s final amount of assessment will also be subjected to a 50% surcharge and daily 12% interest rate computed until the date of payment of the assessment.

Is it true that the BIR publishes or announces the taxpayers who are convicted tax evaders?

Yes. The names of taxpayers proven guilty of evading taxes will be published and circulated either via the BIR’s website, newspaper/s, and/or articles. So aside from the fines, penalties, and imprisonment, the violation would basically affect the reputation of the taxpayer or the business.

Proper compliance is key to avoiding problems with the BIR. Stay up-to-date on the latest regulations, ensure proper documentation, submit requirements on time, and file the right taxes. Going against tax laws and skirting processes will only get you in bigger trouble. If you want to keep your business worry-free, fix tax issues, or save money from taxes, seek support from the experts. Visit https://www.acg.ph today!

– 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.