THE government has lost at least P6.4 billion in revenues through a sales suppression scheme allegedly perpetrated by a software firm being operated by a 10-year employee of the Bureau of Internal Revenue (BIR) and his wife.
The BIR announced last Thursday that Commissioner Romeo D. Lumagui led the filing of a complaint for violation of Section 264-B of the National Internal Revenue Code of 1997 (Tax Code), as amended against BIR employee Aldwin Base, his wife Chiradee Base and relative Jelson Vargas.
The said provision penalizes the “purchase, use, possess, sell or offer to sell, install, transfer, update, upgrade and keep or maintain any software or device designed for or capable of modifying, hiding or deleting electronic records of sales transactions and providing a ready means of access to them.”
The provision imposes a penalty from P500,000 to P10 million and imprisonment of not less than two years but not more than four years.
The law also states that a cumulative suppression of electronic sales record in excess of the amount of P50 million shall be considered as economic sabotage and shall be punished in the maximum penalty provided under the same provision.
According to Lumagui, the Base couple are running the software management company identified as Basebyte Software Management and Consultancy Services (Basebyte). He further said that Basebyte is registered under the name of the BIR employee’s wife, being its sole proprietor.
However, Lumagui said the firm was being actively managed by Aldwin Base who is based in Legazpi City, Albay, and has been with the BIR for at least 10 years.
Based on its initial investigation, the software firm was responsible for installing a computer program that manipulates sales machines for the purpose of reducing the actual sales and evading payment of taxes.
So far, Lumagui said they have identified four business establishments that benefited from the illegal scheme. He added the BIR would soon be filing complaints against these entities.
The initial revenue loss from the tampered sales machine was computed to be approximately P 6.4 billion, according to the BIR chief.
It is still unknown how much the accused were being paid for installing the said software.
Lumagui said Base’s illegal activity was discovered while auditing the financial records of the four establishments, which prompted them to look into the software provider of the said businesses. The latter led them to the illegal activity of the accused.
He said the BIR is determining if other service providers are employing the same scheme in order to prevent further revenue losses on the part of the government.
The BIR chief said he has ordered the dismissal of Aldwin Base from the agency subject to confirmation of the Department of Finance.
“Filing of this criminal case against a corrupt BIR employee will be the foundation of my administration. It is unacceptable that our own employees are conspiring with tax evaders when they are the ones who should follow our plans and programs,” Lumagui said.
Lumagui also warned businesses against the tampering of sales machines as he vowed to intensify the BIR’s campaign against sales suppression in the coming days.
“I am warning them not to buy or use this kind of software to dupe the government because we have mechanisms to detect this illegal activity,” Lumagui added.
“Integrity and Professionalism in the institution and among the employees are at the core of my administration. I sincerely want to protect this institution [BIR] as well as all the employees in the revenue service,” Lumagui noted.
“However, a few bad apples remain in the basket. That is why I welcome all complaints against notorious BIR employees particularly all those who have evidently failed to uphold the BIR’s etiquette of integrity and professionalism,” he added. “I myself will lead the filing of criminal charges against them. I am serious in ridding the BIR of notorious officials.”