Government losing P370 billion from ghost receipts

MANILA, Philippines — The government is losing at least P370 billion in revenues from the proliferation of fake transactions through the use of ghost receipts by various businesses.

The Bureau of Internal Revenue (BIR) estimated that some P1.3 trillion in ghost receipts were issued by both small and large businesses.

Based on the income tax rate of 25 percent and value-added tax of 12 percent, the government forgoes at least P370 billion in revenues from such transactions.

Ghost corporations have no legitimate business activities and were established primarily for the purpose of selling fictitious sales invoices and ghost receipts to their buyers.

These buyers then use the fake receipts to claim false and anomalous purchases and illegally cut down their tax obligations.

BIR Commissioner Romeo Lumagui said the P370 billion remains a conservative estimate as the agency continues to investigate groups involved in ghost receipts.

“From there, we will be able to see which firms are buying from them. We will file more cases against them,” Lumagui told reporters on the sidelines of the BIR’s 119th anniversary late Tuesday afternoon.

Lumagui noted that the ghost receipts are proliferating across industries such as construction, food and general merchandise.

Following the BIR’s creation of a task force to run after fake transactions, the agency’s chief emphasized that many businesses have started to coordinate with them.

However, firms have yet to pay for their missed obligations.

“VAT was really hit so once they start paying the right taxes, we will be able to feel that (in terms of revenues) by the second half of the year,” Lumagui said.

BIR’s Run After Fake Transactions program aims to investigate and prosecute buyers, sellers and certified public accountants that are involved in the use of fake receipts.

Meanwhile, Finance Secretary Benjamin Diokno reminded the BIR that good revenue performance is crucial in achieving the government’s economic targets.

During the first semester, the BIR collected P1.22 trillion, up by 7.65 percent. However, this is 2.57 percent short of the P1.250-trillion target for the period.

“So much of our economic aspirations depend on the performance of BIR. Transparency and accountability are important,” Diokno said.