SENATOR Win Gatchalian urged the Bureau of Internal Revenue (BIR) to intensify its efforts to eliminate the proliferation of ghost and fake receipts, stating that such activities are denting government revenues and adversely affecting micro enterprises.
Gatchalian said ghost receipts pertain to receipts issued with no or fictitious underlying transactions. In other words, there is no actual sale that took place but a receipt was issued. Fake receipts, on the other hand, are receipts that are not duly authorized by the BIR as they are meant to understate the sales.
According to BIR Commissioner Romeo Lumagui, Jr., the estimated total value of ghost receipts issued has already reached P1.3 trillion. Based on the income tax and value-added tax rates of 25% and 12%, respectively, the government has lost at least P370 billion in revenues from the use of ghost receipts by various businesses.
“This is a serious issue. We are talking about a trillion peso-worth of fraudulent receipts going around the system, and it’s affecting not only government collection but also taxpayers who are doing honest business,” Gatchalian said, noting one particular case of the use of fake receipts was brought to his attention.
“They bought something but they were issued fake receipts. As a result, they can’t claim their input VAT because it was disapproved by the BIR,” he related, during a hearing on the proposed budget of the Department of Finance and its attached agencies.
While the BIR has already filed criminal cases against the buyers and sellers of ghost receipts, Gatchalian emphasized the need to further intensify the campaign to improve government revenue collection and protect small businesses that fall prey to sellers of ghost receipts or enterprises that issue fake receipts.
In June this year, the BIR filed criminal cases against buyers of ghost receipts that led to revenue loss amounting to P17.9 billion. The agency also filed cases against sellers of ghost receipts in March, including four “ghost” corporations that cost the government about P25.5 billion in revenue loss.
The legislator explained that for transactions involving large sums of money, it is usually challenging to prove the buyer’s innocence because such transactions usually involve banks and similar financial institutions.
“I just want to flag to the BIR that these things are happening and we are getting some information about them. Just submit to us a report on what the agency is doing in fighting ghost receipts and these types of fake receipts,” he told BIR officials.