Albay Rep. Joey Sarte Salceda, chair of the House ways and means committee, said he has committed to the Bureau of Internal Revenue (BIR) to propose a measure the will punish the selling and issuance of fake receipts to pad gross expense and creditable input value added tax.
“Ghosting is non-bailable,” Salceda said, during a hearing of the House appropriations committee, stressing that such offense—according to global tax experts, is called “ghosting the tax authority.”
“In support of attaining the revenue goals of the Bureau, we will draft that measure today,” Salceda told BIR OIC- Deputy Commissioner Maridur Rosario, who represented the Bureau in the briefing by the Development Budget Coordinating Committee Tuesday.
“We will draft legislation so that selling and buying receipts to pad your deductible expenses or input VAT is non-bailable, using the lifeblood doctrine. Tax ghosting is non-bailable.”
Salceda said they will introduce legislation penalizing both the buyer and seller for tax fraud.
“Right now, the tax code imposes penalties and surcharges only on those who use fake receipts for tax fraud. Section 248 of the Tax Code imposes, in addition to the tax required to be paid, a penalty equivalent to twenty-five percent (25 percent) of the amount due.
That’s not a lot,” Salceda added.
“That penalty is not enough of a deterrent, and if my conversation with DepCom Rosario is right, it’s still unclear whether the seller of fake receipts and other accessories to the crime are liable.”
Salceda explained that tax experts call the practice “ghosting the tax authority,” because “ghost companies” issue fake receipts to taxpayers to defraud the tax collection agency. Sometimes, Salceda adds, receipts from expenses not considered valid expenses are used to pad deductibles.