Law Summary
Low Compliance and Impact on Tax Administration
- Less than 30% of required taxpayers comply with the submission requirement.
- Many taxpayers prefer paying a minimal penalty rather than submit data.
- Non-compliance impedes the Bureau’s ability to verify taxable transactions, leading to significant revenue losses.
- Such practices indicate indirect tax evasion or tax avoidance by businesses.
Enforcement Objectives
- Strengthen enforcement against non-compliant taxpayers.
- Strictly implement penalties for failure to submit the required summaries.
- Increase voluntary compliance and thereby enhance revenue collections.
Enforcement Policies for Non-Submission
- Failure to submit required Summary Lists or submission of erroneous, incomplete, or falsified data justifies issuance of a Subpoena Duces Tecum compelling immediate submission.
- Upon submission after subpoena, a compromise penalty of Ten Thousand Pesos (P10,000) per non-submission applies.
Consequences of Continued Non-Compliance
- Persistent refusal to submit after subpoena equates to failure to supply accurate information under Section 255 of the National Internal Revenue Code.
- Triggers administrative and criminal proceedings, including:
- Fine of not less than Ten Thousand Pesos (P10,000).
- Imprisonment from one to ten years.
- Additional penalties apply for fraudulent acts related to filing or withdrawing returns.
Corporate Liability
- Corporations failing to submit Summary Lists expose their officers and employees to criminal liability.
- Section 256 of the Tax Code provides penalties including:
- Corporate fines ranging from Fifty Thousand Pesos (P50,000) to One Hundred Thousand Pesos (P100,000) per offense.
Repealing Clause
- Any prior issuances inconsistent with this Order are repealed, modified, or amended accordingly.
Immediate Effectivity
- The Order takes effect immediately upon issuance by the Commissioner of Internal Revenue on April 28, 2009.