The Bureau of Internal Revenue on Thursday asked the Department of Justice to prosecute a BIR employee and his wife for violation of the National Internal Revenue Code of 1997, following alleged P6.4 billion in revenue losses due to an alleged sales suppression scheme the couple is accused of.
In a complaint, the BIR through Commissioner Romeo D. Lumagui accused BIR employee Aldwin Base, his wife Chiradee Base, and relative Jelson Vargas of violating Section 264-B of the National Internal Revenue Code of 1997 (Tax Code), as amended.
This was after the government said it lost P6.4 billion in revenues through a sales suppression scheme allegedly perpetrated by a software firm being operated by Base, his wife, and Vargas.
Section 264-B 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.”
It imposes a penalty between P500,000 to P10 million and imprisonment of not less than two years but not more than four years.
It 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).
Lumagui noted 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, 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 and would soon be filing complaints against them.
The initial revenue loss from the tampered sales machine was computed to be approximately P6.4 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 investigate the software provider of the said businesses, which led them to the illegal activity of the accused.
According to the BIR chief, the bureau is determining if other service providers are employing the same scheme to prevent further revenue losses on the part of the government.
Lumagui said he has ordered the dismissal of Aldwin from the agency, which is 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.
He also warned businesses against tampering with their sales machines, saying that its campaign against sales suppression will be intensified 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. I myself will lead the filing of criminal charges against them. I am serious in ridding the BIR of notorious officials,” the BIR chief said.