House OKs P1M cap for tax fraud informants
THE House of Representatives has approved on third and final reading a bill that would increase to P10 million the P1 million cap for rewards to be granted informants of tax frauds, violations of revenue and customs laws and smuggling.
The immediate passage of House Bill (HB) No. 9306 has been sought by House ways and means chairman and Albay Rep. Joey Sarte Salceda, one of the main sponsors of the measure.
“The principle of the law should be simple. Reward the good and punish the bad. Helping us punish the bad is a good that should be rewarded well, given the risks,” Salceda said.
Authored by Magdalo party-list Rep. Manuel D.G. Cabochan, HB 9306 provides a comprehensive and rationalized grant of rewards to informers for the discovery of violations of internal revenue and customs laws.
“The measure will also help us improve tax collection efficiency, which will be crucial to economic recovery as we strengthen existing revenue streams. Passing new tax laws will be very hard in a recovering economy. The next best thing is to plug loopholes and catch tax cheats,” Salceda said.
Salceda noted that “during periods of economic recovery, tax-to-GDP (gross domestic product) tends to recover with the economy itself. Add momentum to tax collection, and we will be able to fund resiliency-building measures.”
Originally filed as HB 883, the approval of the proposed measure was sought by Cabochan who blamed the amendment of 1959 vintage Republic Act 2338 as among the factors that discouraged tax informers and whistleblowers from cooperating with the Bureau of Internal Revenue and Bureau of Customs
RA 2883 has been amended by RA 8424 or the National Internal Revenue Code and RA 108634 or the Customs Modernization and Tariff Act by reducing to ten percent the 25 percent share of informants from the amount reward they could are entitled to receive.
Under HB 9306, informers will be entitled to ten percent of revenues, surcharges or fees recovered and fine or penalty collected or P10 million in reward, whichever is lower.
Whistleblowers of information that are instrumental in the discovery and seizure of smuggled goods are entitled to 20 percent of the actual proceeds from the sale of the smuggled and confiscated goods or P10 million, whichever is lower.
The proposed measure also grants the person falsely accused of violating tax laws the right to file criminal or civil action against the informant of the wrong information.
