QuestionsQuestions (BIR REVENUE REGULATION NO. 4-94)
It was issued to implement Republic Act No. 7642 by providing rules for the application of the increased penalties for tax evasion under the National Internal Revenue Code (NIRC), particularly pursuant to Section 245 of the NIRC as amended, in relation to Section 14 of RA 7642.
Only the regular courts may impose such fines; BIR regulations cannot directly impose criminal fines.
The fine shall not be lower than the amount of fines prescribed in RR 4-94, or twice the amount of taxes, interests, and surcharges due—whichever is higher.
Upon conviction for each act or omission, the entity may be fined not less than PHP 50,000 but not more than PHP 100,000, in addition to penalties imposed on responsible corporate officers/partners/employees. For associations/partnerships/corporations, the penalty is imposed on the partner, president, general manager, branch manager, treasurer, officer-in-charge, and employees responsible for the violation.
Fine of not less than PHP 30,000 but not more than PHP 100,000, and imprisonment of not less than 2 years but not more than 4 years.
Fine of not less than PHP 10,000 but not more than PHP 20,000, and imprisonment of not less than 1 year but not more than 3 years.
Carrying on any business for which a privilege tax is imposed but without paying the tax required by law; for each act/omission, fine PHP 5,000–PHP 20,000 and imprisonment 6 months–2 years. Special higher penalties apply for distilling/rectifying/repacking/compounding/manufacturing excisable articles: fine PHP 30,000–PHP 50,000 and imprisonment 2–4 years.
It refers to carrying on any business without prior registration as a VAT or NON-VAT taxpayer, as the case may be.
For each act/omission: fine PHP 20,000–PHP 50,000 and imprisonment 1–2 years, when a person knowingly undertakes collection of foreign payments under Section 60 of the NIRC without the required license and/or without complying with implementing regulations.
Fine PHP 5,000–PHP 10,000 and imprisonment 1–2 years.
As an act done with evil intent or legal malice and without justifiable excuse. For statutory offenses requiring notice of demand, it also connotes deliberate or stubborn refusal to pay the tax after a notice of demand.
For each act/omission: fine PHP 30,000–PHP 50,000 and imprisonment 2–6 years.
Any person not an independent CPA who engages in the enumerated acts/omissions (including knowingly making false entries, using fictitious names, keeping multiple sets, violating Section 256, or failing to keep/translate books as required). For each act/omission: fine PHP 30,000–PHP 50,000 and imprisonment 2–6 years.
They are punished by fine PHP 50,000–PHP 100,000 and imprisonment 10–15 years, plus additional penalty of perpetual disqualification to hold public office, vote, and participate in public elections.
Examples include: extortion or willful oppression using office; demanding/receiving unauthorized sums or fees; willfully neglecting to give receipts; conspiring/colluding to defraud the revenue; permitting violations through neglect or design; making/signing false entries or certificates/returns; allowing unauthorized retrieval of returns; failing to report known violations/fraud; and demanding/accepting sums for compromise/settlement without legal authority.
For imported articles: penalties vary by appraised value (including duties and taxes): (1) up to PHP 1,000—fine PHP 1,000–PHP 2,000 and imprisonment 60–100 days; (2) over PHP 1,000 but not exceeding PHP 50,000—fine PHP 10,000–PHP 20,000 and imprisonment 2–4 years; (3) over PHP 50,000 but not exceeding PHP 150,000—fine PHP 30,000–PHP 60,000 and imprisonment 4–6 years; (4) over PHP 150,000—fine PHP 50,000–PHP 100,000 and imprisonment 10–12 years.
It states that since privilege fixed taxes were abolished with VAT, “unlawful pursuit of business” is committed by carrying on business without registering as a VAT or NON-VAT taxpayer. It clarifies that the old privilege-tax concept is replaced by the VAT/NON-VAT registration requirement for penalty purposes.