Part three
The “Official Receipts for Sale” tele-tax-novela continues. I continue the chronicle of the other characters, starting with the masterminds. They are the brains of this syndicate involved in the intricate process of fabricating ORs and other business documents that are to be sold to buyers and businesses for tax evasion purposes. These masterminds derive millions of pesos from selling these fake ORs, which, from my sources, fetch a price of around 2 percent of the face value of the amount indicated in the ORs.
From these sources, coming from both “Marites” friends and retired and active BIR officials, these ORs for sale syndicates have been going on for some years already in various parts of the country. My research of tax court records shows that there have been cases previously filed by the Bureau of Internal Revenue (BIR) against taxpayers who were investigated to have used fake ORs bearing the names of fictitious suppliers in claiming business deductions from their income. One such case involves Tyco Information Solutions Inc. This company was convicted by both the Supreme Court (G.R. Nos. 241422-23) and the Court of Tax Appeals (CTA) Case No. 8592) in using these bogus ORs as tax deductions and credits in their tax returns as early as 2006. With the passage of time since these masterminds had been operating, apparently undeterred, the government has lost billions of pesos of tax revenues from these nefarious practices. According to the estimate of BIR Commissioner Romeo Lumagui, the government has been losing taxes amounting to around P25 billion for taxable years 2019 to 2021 from the fraudulent transactions from the four companies named as respondents in the criminal cases filed by the BIR in March 2023. This indeed is tax evasion and malpractice at its very worst.
Now comes the “Master” of the masterminds. Beginning with the raid conducted by agents of the National Bureau of Investigation(NBI) at the office of this “Master” mastermind in November 2022, the government enforcement offices are now vigorously pursuing the investigation and eventual prosecution of this individual. Said “Master” mastermind is also the subject of a manhunt by the NBI for his arrest on charges of drug smuggling, and an investigation by the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission for allegations of irregular financial transactions of one of his companies.
This “Master” mastermind is the alleged owner of several businesses, including a major esports organization engaged in electronic gaming in the Asian region, a cargo shipping company, an online company catering to people playing to earn digital gems that they can use to pay for goods or services at participating stores, and the company whose office was raided by the NBI for printing and selling the fake ORs. I am wondering whether this “Master” mastermind is paying dutifully his tax obligations for his legitimate and illegitimate businesses.
I am also keenly awaiting the outcome of the BIR’s and other enforcement agencies’ investigation and prosecution of these “Master” masterminds and other masterminds who may be proliferating out there. How long will this tele-tax-novela tickle our interest and attention? Will this tax novela be a long-playing series or will this end abruptly (and surprisingly)?
Let us await the twists and turns of this enthralling story.
To be continued.
Joel L. Tan-Torres was the former Dean of the University of the Philippines Virata School of Business. Previously, he was the Commissioner of the Bureau of Internal Revenue, the chairman of the Professional Regulatory Board of Accountancy, and partner of Reyes Tacandong & Co. and the SyCip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Board Examination of May 1979. He is now back to his tax practice with his firm JL2T Consulting. He can be contacted at joeltantorress@yahoo.com