BIR sets uniform compromise fines

MANILA, Philippines - The Bureau of Internal Revenue has laid down a uniform scale of compromise penalties to be applied for violation of tax laws and regulations.

BIR commissioner Kim Henares said the uniform application of compromise penalties is in line with efforts to curb if not eradicate tax evasion.

Compromise penalty refers to a certain amount of money which the taxpayer pays to compromise a tax violation and avoid criminal prosecution.

Accordingly, a taxpayer may offer a compromise penalty lower than the prescribed amount but which may only be accepted upon approval by the BIR commissioner  or the concerned deputy commissioner/assistant commissioner or regional director.

In the same way, such schedule of compromise penalties shall not prevent these BIR officials from accepting a compromise amount higher than what is prescribed.

Certain acts or violations commonly resorted to by taxpayers to evade payment of tax had been deleted from the coverage for falling under the definition of fraudulent means.

These include misrepresentation, willful failure to submit annual alpha list of payees and employees in the prescribed format, willful falsification of any report or statement on any examination or audit, knowingly making false entry in the books of accounts, keeping of two or more sets of books of accounts, willful attempt to evade any tax obligations, deliberately using fake receipts, letters of authority, and unlawful divulgence of any confidential information regarding the business.

Cases involving fraud would be referred to the concerned division having jurisdiction over the case for the institution of the corresponding criminal action, Henares said.

Some of the violations which can be subject of compromise penalty include failure to register; failure to pay and display the annual registration fee; failure to withhold taxes; failure to refund excess taxes withheld; any omission by a corporation which is penalized under the Tax Code; removal of liquor or tobacco products under false name or brand; and  unlawful possession of imported articles subject to excise tax.