tax evasion

[Ask the Tax Whiz] Can anyone report my business for tax evasion?

Mon Abrea
[Ask the Tax Whiz] Can anyone report my business for tax evasion?
The Philippine Tax Whiz answers top questions about being a BIR informant

Run After Tax Evaders (RATE) is one of the programs spearheaded by the Bureau of Internal Revenue (BIR), in partnership with the Department of Justice, to track down, investigate, and prosecute tax evaders for violating the Philippine Tax Code.

Cooperation of informants is highly valuable in tracing and investigating RATE cases. But how does this work? Who is eligible to report a tax evader? What is the price to pay and how much will informants receive? Are there benefits and risks in reporting probable violations of tax laws? 

In a nutshell, the program is a win-win situation for both informants and the BIR. For businesses, it can be a real threat if improper tax compliance is observed – especially those with unnecessary tax exposure.

How can informants notify the BIR of suspected violations under RATE?

If an individual or a corporation shows signs of noncompliance with tax laws, informants may immediately report to BIR hotline number (02) 8538-3200, email contact_us@bir.gov.ph, or report personally to the nearest BIR office.

Can anyone be an informant? Can government employees also report alleged violators?

Any person can give definite information that could lead to discovery of fraud, except internal revenue or customs officials or employees, any public official or employee, and relatives of aforementioned officials or employees within the third degree of consanguinity or affinity (parent, child, grandparent, grandchild, great-grandparent, great-grandchild, sister or brother, aunt or uncle, and niece or nephew).

How much is the reward if one becomes an informant of a possible tax evasion case?

There is an informer’s reward given to a person who will report suspected individuals or businesses violating tax laws. The reward is a sum equivalent to 10% of the surcharges, revenues, or fees recovered, and/or fine or penalty imposed and collected, or P1 million per case, whichever is lower.

Would an informant immediately be paid by the BIR? Where will the reward be sourced from?

The reward given to an informant will be paid out of revenues, surcharges, or fees, and/or the fine or penalty actually recovered or collected as a result of the information given.

The reward will be paid to the informant after the submission of the following to the Department of Finance:

  • revenues, surcharges, or fees, and/or the fine or penalty collected
  • reports and documents required for the evaluation and approval of the claim for informer’s reward, including endorsement of the internal revenue commissioner

Should an informant remain anonymous during and after the investigation? What would be the possible consequences of this action?

The identity of the informer will not be revealed except (a) when the informer has given written consent, or (b) when the information he or she has provided is proven to be malicious or false.

If the information turns out to be false or given only for the purpose of harassing, molesting, or in any way prejudicing a person, criminal or civil charges could be filed against the informer.

During the interview of BIR Assistant Commissioner James Roldan on BIR IN ACTION Live on June 21, he emphasized the current standing of RATE cases in the country within the term of Internal Revenue Commissioner Caesar Dulay, saying, “Under Commissioner Dulay, naka-848 cases na (we’ve had 848 cases) with an indicative tax amount of P86 billion nationwide.”

For more information about the RATE program, watch BIR IN ACTION Live on the BIR’s Facebook page or the TaxWhizPH YouTube channel.

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.

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