Ghost receipts to haunt scheming businesses

BUSINESS owners have been urged by the Bureau of Internal Revenue to stop the illicit practice of using ghost receipts to evade the payment of taxes.

BIR Commissioner Romeo Lumagui Jr. said the bureau will haunt business entities that use the practice.
“I would like to remind business owners: stop this practice. Do not use ghost receipts. Pay the correct taxes to help our country,” Lumagui said, as he cautioned business owners against attempting to evade taxes.
The BIR, he said, would not hesitate to file criminal charges against erring parties. “The BIR will work with the DOJ in filing criminal cases of tax evasion against those using ghost receipts,” he also said.
The BIR’s campaign against ghost receipts is part of its Fearless and Aggressive Enforcement Activities program, which targets tax evasion and fraud.

Under Section 255 of the National Internal Revenue Code (NIRC) of 1997, any person found guilty of tax evasion may be punished by a fine of not less than P500,000 but not more than P10 million. Guilty parties also face imprisonment of not less than six years but not more than ten years. When the offender is a corporation, the penalty is imposed on the responsible officers.

At the same time, Lumagui announced that the BIR has issued new rules streamlining the value-added tax (VAT) refund process, a key reform under the CREATE MORE Act, to make the Philippines a more attractive destination for investors.

Republic Act No. 12066, or the CREATE MORE Act, amended the National Internal Revenue Code and provides greater tax relief and incentives for businesses, particularly exporters. To implement this, the BIR on April issued Revenue Memorandum Circular (RMC) No. 37-2025 to lessen the documentary requirements for VAT refund claims.

“We’re hoping that it will encourage foreign investors to do business here in the Philippines,” Lumagui said.
Under the new guidelines, certified true copies of invoices or receipts may now be submitted in place of original documents. Proofs of SEC or DTI registration, as well as import entry documents, will no longer be required. For claims involving amortized input VAT on capital goods, prior certifications from the Bureau of Customs may be reused if already submitted in past filings.

For VAT refund claims starting April 1, 2025, exporters are no longer required to submit actual proof of shipment, such as bills of lading. Instead, the BIR will rely on a certification from the Export Marketing Bureau of the DTI, following a newly signed agreement between the two agencies.

Lumagui said the BIR continues to assess what other processes can be streamlined to make the country more business-friendly in keeping with the directives of President Ferdinand Marcos Jr.

Aside from reducing red tape, the CREATE MORE Act also reverts several transactions, such as certain sales of goods and services, from the 12 percent VAT rate under the TRAIN law back to zero percent VAT, thus restoring eligibility for VAT refunds.