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BIR poises tax evasion raps vs 20 brokerage firms

The Bureau of Internal Revenue (BIR) has unearthed what may be a tax evasion case against 20 stock brokerage firms.


Confidential bureau documents show that as of October last year, the firms have piled up a combined tax deficiency amounting to P926 million.


Meanwhile, BIR Commissioner Dakila B. Fonacier took exception to reports that the bureau has not been investigating the so-called BW scam. In fact, he said that in the process of the investigation, the probable tax violations were unearthed.


"The BIR is in the process of gathering data," the same industry sources said, adding that the trading tape that the bureau examined in relation to the BW probe revealed the possible anomaly. "The bureau will be undertaking a separate investigation on this."


Aside from the transactions in 2000, the bureau is also looking back at the 1999 public offerings for possible anomalies particularly in violation of the capital gains tax and DST.


It will also be looking at unusually huge over-the-counter (OTC) transactions during the IPOs launched in the last two years.


"The BW scam is just the tip of the iceberg. It (BW scam) is one of the many possible tax evasion cases in the stock exchange (Philippine Stock Exchange). It so happened that the BW Resources issue was a celebrated one due to the various ‘celebrities’ behind the company," the same sources said.


In a communique addressed to Finance Sec. Jose T. Pardo, Fonacier said the amount involved in possible tax evasions cases may reach P984 million.


Meanwhile, the BIR submitted to the Department of Finance (DOF) a list of its recommended tax reform proposals for possible implementation this year.


It would be divided into two categories, the substantive and the administrative reforms.


The substantive tax-related reforms are: (1) return of banks and financial institutions to the gross receipt tax (GRT) with a uniform tax rate; (2) an increase in the minimum gross receipts ceiling for common carriers under Section 117 of the Tax Code; (3) the imposition of a presumed minimum gross receipts (MGR) ceiling for motels; and (4) an increase in manufacturer’s and importer’s bond to 20 percent of the amount of excise tax paid or due for the preceding year.


The administrative tax-related reforms are: (1) remittance of withholding taxes on the 10th day of the following month for all taxpayers; (2) replacement of the quarterly value-added tax (VAT) declaration with an annual VAT return; (3) synchronization of the filing deadlines of the quarterly income tax returns of corporate and individual taxpayers; and, (4) setting of filing deadline for VAT and percentage tax returns on the 20th day of the month.

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