(MANILA BULLETIN)




The House Committee on Ways and Means approved on Tuesday, May 9 a bill criminalizing tax racketeering. Albay 2nd district Rep. Joey Salceda sponsored House Bill (HB) No.7653 during Tuesday's committee proceedings. Salceda chairs the panel. Salceda’s proposal defines tax racketeering as “attempts to engage in any coordinated scheme or operation to repeatedly or consistently evade or defeat any tax imposed under this code through the fraudulent use of receipts". “Such nefarious activities must be defined and criminalized since it constitutes economic sabotage, following the doctrine that taxes are the lifeblood of the state," the Bicolano said in his sponsorship speech. The full title of HB No.7653 reads, "An Act defining the crime of tax racketeering, adding for the purpose a Section 157-A to the National Internal Revenue Code, as amended, and for other purposes." It seeks to make the act of “coordinated” tax fraud a separate crime with graver penalties under the National Internal Revenue Code, as amended. The House tax panel, however, deleted the provision in Salceda’s proposal which would have made the offense non-bailable. Salceda pushed for higher penalties for the offense, citing that even if the Bureau of Internal Revenue (BIR) tries to catch incidents of large-scale tax fraud, “It will not have a proportional deterrent effect.” “Despite these efforts, however, they will be charged with crimes that ordinary or smaller tax violators can be charged with. That is because the Tax Code enumerates various forms of tax evasion as criminal liabilities, but does not address the systematic and coordinated scheme to evade taxes,” Salceda said. “The measure seeks to provide stiffer penalties depending on a person’s degree of participation in the offense as deterrent to the commission of such crime. We must remember that other than uncollected revenues, investigating and prosecuting tax crimes place added burden not only to tax collection agencies but to our courts as well,” he added. In order to cure questions of constitutionality of making the offense non-bailable, the Bicolano proposed that the prescribed penalty be increased to reclusion perpetua. However, during the discussion of the committee, members moved to retain the original 17-to-20-year penalty, and keep the offense bailable. Salceda acceded to the request but also pointed out that “at least the bill provides a stronger deterrent.” The bill also penalizes accomplices in government with perpetual disqualification from public office in addition to 10-17 years in prison. “They cannot operate without friends in high places. So, that has to be punished more stiffly, as well.” The tax code current penalizes tax fraud through fake receipts with a two year prison term, but Salceda emphasized that “these pertain to individual crimes, not syndicated efforts to defraud the government.”