DEBIT CREDIT

Conclusion

IN the tax campaign kick-off event of the Bureau of Internal Revenue Revenue Region 7B east National Capital Region held last week, BIR Commissioner Romeo Lumagui mentioned that the BIR was pursuing with vigor the “Official Receipt for sale” racket. This matter was discovered by the National Bureau of Investigation and BIR inspectors who raided in December 2022 the office of Brenterprise International Incorporated (Brenterprise) at a condominium building in eastwood City. Brenterprise allegedly was printing and selling fake ORs to conniving taxpayers. These scheming business enterprises were then able to decrease their tax liabilities as they used these fake documents to pad their income tax expenses and value-added tax (VAT) input credits. These have resulted in tax collection losses amounting to billions of pesos, as per BIR estimate.

In the raid, the NBI confiscated several computers and documents containing information on these nefarious activities of Brenterprise. However, my investigation disclosed that the NBI is not fully sharing the information with the BIR, perhaps due to jurisdictional turf issues. The heads of these two agencies should agree on closer coordination and full information sharing between the BIR and NBI. The investigation of this irregularity should seamlessly proceed so that criminal cases against the perpetrators can be filed.

In the investigation, the main challenge of the BIR and NBI is being able to secure the evidence required to criminally prosecute the masterminds and taxpayers who skirted the provisions of the Tax Code. We are all aware of various instances in the past where the courts have dismissed criminal tax cases for the failure of government prosecutors to present evidence beyond reasonable doubt.

Thus, it is a must that the BIR and NBI exert all efforts and resources to investigate this case. The BIR may proceed in creating a task force of dedicated and competent staff, consisting of lawyers, certified public accountants (CPA), and information technology (IT) personnel to ferret out the nuances of this syndicate. A multi-disciplined approach can be pursued, with CPAs conducting forensic accounting and auditing of available records, BIR lawyers developing an ironclad criminal case from the onset of the initial investigation, and IT experts providing support on using big data analytics tools in uprooting evidence. This task force could also conduct an audit of the various companies of the owner of Brenterprise to get a comprehensive perspective of the business of the “OR for sale” mastermind. Apparently, this mastermind is engaged in various businesses, including esports, restaurants, technology, and manufacturing. This BIR task force should be under the close watch of the BIR Commissioner so that it can deliver results the soonest time possible. Commissioner Lumagui may also consider using a portion of his intelligence fund for this purpose.

The NBI and BIR can consider availing themselves of the benefits of the “Witness Protection” program to induce witnesses to provide vital information about the case. The witnesses that can be tapped include the officers and staff of Brenterprises, the taxpayers who were purchasing the fake ORs, and even the external auditors of these taxpayers. While some of these people can go scot-free or get reduced penalties for their involvement, the BIR and NBI should proceed full speed in investigating and prosecuting the many others who were involved in this crime. An example should be shown that the crime of faking ORs does not pay.

The BIR can retrieve the records of similar cases that it handled in the past. In my previous articles, I mentioned two of these cases, namely Tyco Information Solutions Inc. and Gammon Metal Products Inc. These two have been decided by the courts