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The Bureau of Internal Revenue (BIR), under the leadership of Commissioner Romeo D. Lumagui, Jr., has intensified its efforts to combat tax evasion schemes, particularly the use of "ghost receipts," through its Run After Fake Transactions (RAFT) program. This initiative recently led to the Department of Justice (DOJ) filing criminal charges against Hilmarc's Construction Corporation and its key officers.
DOJ Files Charges Against Hilmarc's Construction Corporation
On February 26, 2025, the DOJ filed eight criminal informations before the Court of Tax Appeals against Hilmarc's Construction Corporation and its corporate officers—Efren M. Canlas, Robert B. Henson, and Cristina Elisse F. Canlas—for violations of Sections 254 and 255 of the National Internal Revenue Code (NIRC). These sections pertain to attempts to evade or defeat tax and failure to supply correct and accurate information, respectively. The charges stem from the alleged use of ghost receipts to fraudulently reduce tax liabilities.
The Ghost Receipts Scheme
Ghost receipts are fictitious invoices issued for non-existent transactions. Businesses use these fake receipts to claim unwarranted deductions in their income tax returns and input tax credits in their value-added tax (VAT) returns, thereby illegally reducing their tax obligations. In the case of Hilmarc's, the company allegedly utilized receipts from ghost companies—Everpacific Incorporated and Unimaker Enterprises, Inc.—to falsely inflate expenses and claim input VAT credits for the taxable years 2013 and 2014.
Financial Implications and Legal Consequences
The fraudulent activities attributed to Hilmarc's resulted in significant revenue losses for the government. The DOJ has indicated that, in addition to facing criminal charges, Hilmarc's is liable for basic tax deficiencies amounting to ₱176,363,284.77. Justice Secretary Jesus Crispin "Boying" C. Remulla emphasized that such acts of tax evasion deprive citizens of essential services funded by tax revenues.
BIR's RAFT Program and Technological Advancements
The BIR's RAFT program is central to its strategy to eliminate the use of ghost receipts. In collaboration with the Ateneo de Manila University's Department of Mathematics, the BIR has developed an algorithm capable of detecting potential users of ghost receipts through data analytics. This technological advancement allows the BIR to identify and investigate suspicious transactions more efficiently, reducing reliance on physical raids.
Ongoing Efforts and Future Actions
The BIR's commitment to combating tax evasion extends beyond the Hilmarc's case. The agency has identified approximately 30,000 corporations and sole proprietors suspected of purchasing ghost receipts. Under the RAFT program, the BIR has filed cases against multiple ghost corporations with estimated tax liabilities totaling ₱25.5 billion and several corporate buyers and their officers, accounting firms, and certified public accountants with estimated liabilities of ₱17.9 billion. Legal proceedings against 69 respondents are currently underway at the DOJ, covering estimated tax liabilities of ₱1.8 billion.
Conclusion
The collaborative efforts between the BIR and DOJ underscore a robust commitment to enforcing tax laws and ensuring compliance among taxpayers. The case against Hilmarc's Construction Corporation serves as a stern warning to other entities engaging in similar fraudulent practices. Through programs like RAFT and strategic partnerships with academic institutions, the BIR is enhancing its capabilities to detect and prosecute tax evasion, thereby safeguarding the nation's revenue and ensuring that public services are adequately funded.
Ross is known as the Pambansang Blogger ng Pilipinas - An Information and Communication Technology (ICT) Professional by profession and a Social Media Evangelist by heart.
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