Philippines lost P300 billion to ‘ghost receipts’ over past 20 years

The foregone revenues due to the proliferation of ghost receipts have reached more than P300 billion to date over the past 20 years, the Bureau of Internal Revenue has said.

“The investigations on those buying ghost or fake receipts are ongoing. We have filed cases already and in the coming weeks more cases will be filed against those buying ghost receipts,” BIR Commissioner Romeo Lumagui Jr. told reporters in a chance interview.

The BIR chief said that if the total amount of ghost receipts issued to date at P1.3 trillion will be divided by the 25% income tax and 12% value-added tax, the resulting amount would be P370 billion.

“With ghost receipts, if you compute the total purchases… calculate the VAT and then the income tax, that amount [P370 billion] came out as revenue loss,” Lumagui said.

The taxman’s chief said the problem with ghost receipts has been ongoing for almost 20 years “all across different sectors.”

He said over 100 “ghost corporations” had been created to sell ghost receipts.

Lumagui said ghost receipts are “receipts being issued by ‘ghost corporations’ to falsify transactions.

“Ghost corporations are registered with the SEC (Securities and Exchange Commission). So these are true corporations but they do not have real products or services for their customers. They sell their receipts to legitimate businesses,” he said.

“Now, these receipts are used by buyers of ghost receipts to fabricate expenses and use as supporting evidence and their input VAT. The buyers’ purpose is to reduce their income tax and VAT through ghost receipts,” he added.

The BIR, in June, filed a criminal complaint against three companies for alleged tax evasion as the respondents bought fake or ghost receipts to reduce their tax liabilities.

In May, the taxman also filed criminal complaints against four ghost corporations that sold fake receipts to legitimate businesses, which in turn used them to evade taxes resulting in a revenue loss of P25.5 billion. —NB, GMA Integrated News