Prepared by:

JohnRonald Y. Alcaraz
 WHAT IS TAX EVASION?
• Tax evasion is an illegal attempt to defeat the
imposition of taxes by individuals, 
corporations, trusts, and others. Tax evasion
often entails the deliberate misrepresentation
of the taxpayer's affairs to the tax authorities
to reduce the taxpayer's tax liability, and it
includes dishonest tax reporting, such as
declaring less income, profits or gains than
the amounts actually earned, or overstating
deductions.
 WHAT IS TAX EVASION?
• Under SEC. 254. of National Internal Revenue Code of 1997.
 Attempt to Evade or Defeat Tax. - Any person who willfully attempts in
any manner to evade or defeat any tax imposed under this Code or the
payment thereof shall, in addition to other penalties provided by law,
upon conviction thereof, be punished by a fine not less than Five
hundred thousand pesos (P500,000) but not more than Ten million pesos
(P10,000,000) and suffer imprisonment of not less than six (6) years but
not more than Ten (10) years: Provided, That the conviction or acquittal
obtained under this Section shall not be a bar to the filing of a civil suit
for the collection of taxes.
 HISTORY OF TAX
• The first record of organized taxation
comes from Egypt around 3000 B.C., and
is mentioned in numerous historical
sources including the Bible. Chapter 47,
verse 33 of the Book of Genesis describes
the tax collection practices of the Egyptian
kingdom, explaining that the Pharaoh
would send commissioners to take one-
fifth of all grain harvests as a tax.
 HISTORY OF TAX
• Tax practice continued to develop as Greek civilization
overtook much of Europe, North Africa and the Middle East
in the centuries leading up to the Common Era. The Rosetta
Stone, a clay tablet discovered in 1799, was a document of
new tax laws decreed by the Ptolemaic Dynasty in 196 B.C.
Named after its leader Ptolemy V, this kingdom was a
product of Alexander the Great’s legendary conquest of
huge swaths of territory, resulting in a melding of Ancient
Greek and other languages. The text of the Rosetta Stone
was therefore written in both Greek and Egyptian
hieroglyphic script, and its discovery served as a
breakthrough in decoding one of the oldest forms of written
language.
 HISTORY OF TAX
• From the Roman age and through medieval European history, new taxes on
inheritance, property and consumer goods were levied, and often played a role in
war, either by funding them or provoking them.

• Other cradles of civilization, such as ancient China, also levied taxes under the
authority of a strong centralized government. The Chinese T’ang and Song
Dynasties employed a methodical census record to track their populace and impose
the proper taxes on them. These funds and materials were then used to support
armies and construct canals for transportation and irrigation, among other projects. 
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Spanish Era
During the 17th and 18th centuries, the Contador de' Resultas served as the Chief Royal
Accountant whose functions were similar to the Commissioner of Internal Revenue. During
these times, taxes that were collected from the inhabitants varied from tribute or head tax of
one gold maiz annually; tax on value of jewelries and gold trinkets; indirect taxes on tobacco,
wine, cockpits, burlas and powder. From 1521 to 1821, the Spanish treasury had to subsidize
the Philippines in the amount of P 250,000.00 per annum due to the poor financial condition of
the country, which can be primarily attributed to the poor revenue collection system.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
American Era
In the early American regime from the period 1898 to 1901, the country was ruled by
American military governors. In 1902, the first civil government was established under
William H. Taft. However, it was only during the term of second civil governor Luke E.
Wright that the Bureau of Internal Revenue (BIR) was created through the passage of
Reorganization Act No. 1189 dated July 2, 1904. On August 1, 1904, the BIR was formally
organized and made operational under the Secretary of Finance, Henry Ide (author of the
Internal Revenue Law of 1904), with John S. Hord as the first Collector (Commissioner). The
first organization started with 69 employees, which consisted of a Collector, Vice-Collector,
one Chief Clerk, one Law Clerk, one Records Clerk and three (3) Division Chiefs.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Japanese Era
At the outbreak of World War II, under the Japanese regime
(1942-1945), the Bureau was combined with the Customs Office
and was headed by a Director of Customs and Internal Revenue.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Post War Era
On July 4, 1946, when the Philippines gained its independence from the United States, the
Bureau was eventually re-established separately. This led to a reorganization on October 1,
1947, by virtue of Executive Order No. 94, wherein the following were undertaken: 1) the
Accounting Unit and the Revenue Accounts and Statistical Division were merged into one; 2)
all records in the Records Section under the Administrative Division were consolidated; and 3)
all legal work were centralized in the Law Division.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Marcos Administration
• The appointment of Misael Vera as Commissioner in 1965 led the Bureau to a "new direction"
in tax administration. The most notable programs implemented were the "Blue Master
Program" and the "Voluntary Tax Compliance Program". The first program was adopted to
curb the abuses of both the taxpayers and BIR personnel, while the second program was
designed to encourage professionals in the private and government sectors to report their true
income and to pay the correct amount of taxes.
• The proclamation of Martial Law on September 21, 1972 marked the advent of the New
Society and ushered in a new approach in the developmental efforts of the government.
Several tax amnesty decrees issued by the President were promulgated to enable erring
taxpayers to start anew. Organization-wise, the Bureau had also undergone several changes
during the Martial Law period (1972-1980).
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Aquino Administration
• After the People's Revolution in February 1986, a renewed thrust towards an effective tax
administration was pursued by the Bureau. "Operation: Walang Lagay" was launched to
promote the efficient and honest collection of taxes.
• On January 30, 1987, the Bureau was reorganized under the administration of Commissioner
Bienvenido Tan, Jr. pursuant to Executive Order (EO) No. 127. Under the said EO, two (2)
major functional groups headed and supervised by a Deputy Commissioner were created,
and these were: 1) the Assessment and Collection Group; and 2) the Legal and Internal
Administration Group.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Ramos Administration
• The year 1993 marked the entry into the Bureau of its first lady Commissioner, Liwayway
Vinzons-Chato. In order to attain the Bureau's vision of transformation, a comprehensive and
integrated program known as the ACTS or Action-Centered Transformation Program was
undertaken to realign and direct the entire organization towards the fulfillment of its vision
and mission.
• It was during Commissioner Chato's term that a five-year Tax Computerization Project
(TCP) was undertaken in 1994. This involved the establishment of a modern and
computerized Integrated Tax System and Internal Administration System.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Estrada Administration
• With the advent of President Estrada's administration, a Deputy Commissioner of the BIR,
Beethoven Rualo, was appointed as Commissioner of Internal Revenue. Under his leadership,
priority reform measures were undertaken to enhance voluntary compliance and improve the
Bureau's productivity. One of the most significant reform measures was the implementation of
the Economic Recovery Assistance Payment (ERAP) Program, which granted immunity from
audit and investigation to taxpayers who have paid 20% more than the tax paid in 1997 for
income tax, VAT and/or percentage taxes.
• In order to encourage and educate consumers/taxpayers to demand sales invoices and receipts,
the raffle promo "Humingi ng Resibo, Manalo ng Libo-Libo" was institutionalized in 1999.
The Large Taxpayers Monitoring System was also established under Commissioner Rualo's
administration to closely monitor the tax compliance of the country's large taxpayers.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Arroyo Administration
• Following the momentous events of EDSA II in January 2001, newly-installed President
Gloria Macapagal-Arroyo appointed a former Deputy Commissioner, Atty. René G. Bañez,
as the new Commissioner of Internal Revenue.
• Under Commissioner Bañez's administration, the BIR’s thrust was to transform the agency
to make it taxpayer-focused. This was undertaken through the implementation of change
initiatives that were directed to: 1) reform the tax system to make it simpler and suit the
Philippine culture; 2) reengineer the tax processes to make them simpler, more efficient and
transparent; 3) restructure the BIR to give it financial and administrative flexibility; and 4)
redesign the human resource policies, systems and procedures to transform the workforce to
be more responsive to taxpayers' needs.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
P-Noy Aquino Administration
• Following the highly-acclaimed inauguration of President Benigno C. Aquino III on June
30, 2010, a former BIR Deputy Commissioner, Atty. Kim S. Jacinto-Henares, was appointed
as the new Commissioner of Internal Revenue on July 2, 2010.
• During her first few months in the BIR, Commissioner Henares focused on the filing of tax
evasion cases under the Run After Tax Evaders (RATE) Program, in compliance with the
SONA pronouncements of President Aquino. She also continued the closure of erring
business establishments under the “Oplan Kandado” Program.
 HISTORY OF TAX/BIR IN THE
PHILIPPINES
Duterte Administration
• After the inauguration of President Rodrigo Roa Duterte on June 30, 2016, Atty. Caesar R.
Dulay was appointed as the new Commissioner of Internal Revenue.
• It was during Commissioner Dulay’s term that significant revisions in the tax laws were
passed and implemented by the BIR through the issuance of Revenue Regulations and other
revenue issuances. The first revision was made under the Tax Reform for Acceleration and
Inclusion or TRAIN Act (per RA No. 10963), which took effect on January 1, 2018. This
was followed by the passage of the Corporate Recovery and Tax Incentives for Enterprises
(CREATE) Act per RA No. 11534, which took effect on April 11, 2021. A Tax Amnesty
Program (per RA No. 11213) was also implemented covering tax delinquencies and unpaid
Estate Tax.
 BUREAU OF INTERNAL REVENUE

The Bureau of Internal Revenue (BIR) is an attached

agency of the Department of Finance. It is tasked to
assess and collect all national internal revenue taxes,
fees, and charges, and to enforce all forfeitures,
penalties, and fines connected therewith.
 TAX EVASION
BIR records first tax evasion cases against two Filipino bank
employees: 09/05/13
• The Bureau of Internal Revenue (BIR) filed two (2) criminal complaints with the Department
of Justice against ERWIN V. SALAVERIA and PORTIA Y. GONZALES for Willful Failure to
make/file Income Tax Return and pay tax for taxable year 2012, in violation of Section 255 of
the National Internal RevenueCode of 1997, as amended (Tax Code).
• SALAVERIA and GONZALES are registered taxpayers and Filipino nationals employed at the
Asian Development Bank (ADB) located within the jurisdiction of BIR Revenue District
Office (RDO) No. 41, Mandaluyong City. SALAVERIA registered with RDO No. 41,
Mandaluyong City on March 5, 2002 while GONZALES registered with RDO No. 51, Pasay
City on January 5, 2003.
STATUS OF RATE CASES FILED FROM
2005 TO DECEMBER 31, 2018
Run After Tax Evaders (R.A.T.E.)
• R.A.T.E.  complaint are complaint/s /denunciation on individuals
and/or entities engaged in tax fraud or evasion and other criminal
violations under the Tax Code.
• Pursuant to the Run Against Tax Evaders (RATE) Program, the
Bureau of Internal Revenue (BIR) is mandated to investigate
criminal violations of the National Internal Revenue Code of
1997, as amended and assist in the prosecution of criminal cases
that will generate the maximum deterrent effect, enhance
voluntary compliance, and promote public confidence in the tax
system.
• Public awareness in the filing of criminal tax cases against certain
individuals and corporations is essential since it demonstrates
BIR's commitment to ensuring that everyone is paying their fair
share of taxes.
 LAWS COVERED
• National Internal Revenue Code of 1997
• Republic Act No. 7642  (N ACT INCREASING THE PENALTIES FOR TAX
EVASION, AMENDING FOR THIS PURPOSE THE PERTINENT SECTIONS OF
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED) 1992
• Republic Act No. 8424 (AN ACT AMENDING THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES) This Act shall be
cited as the "Tax Reform Act of 1997".
• REPUBLIC ACT No. 10963 This Act shall be known as the "Tax Reform for Acceleration
and Inclusion (TRAIN)".
 FAMOUS TAX EVASION CASE
• Eight cases were filed against Marcos for failure to file
Bong Bong Marcos income tax returns and not paying tax dues.

• On July 27, 1995, the Quezon City Regional Trial Court

convicted Marcos in all eight cases, sentenced him to seven
years in prison and fined him P64,000.

• The CA acquitted Marcos of the tax evasion charges but

affirmed the guilty verdict on the failure to file income tax
returns.
He was ordered to pay a fine of P32,000 for not filing ITRs for
the period from 1982 to 1985.

• Marcos appealed the case to the Supreme Court only to

withdraw it later. He settled the fines on Oct. 31, 1997.
 FAMOUS TAX EVASION CASE
• In 2012, the BIR computed Pacquiao’s tax deficiencies for 2008
Manny Pacquiao and 2009 at P2.26 billion. This grew to P3.3 billion after penalties.
• The BIR accused Pacquiao of not declaring his dollar winnings
from his fights against Juan Manuel Marquez, David Diaz, and
Oscar de la Hoya in 2008; and Ricky Hatton and Miguel Cotto in
2009.
• Pacquiao appealed the BIR decision to the CTA, and in 2014, the
tax court said that the “amount sought to be collected was way
beyond the petitioner’s net worth.” According to case records,
Pacquiao’s declared net worth for those years “only amounted to
P1,185,984,697.”
 FAMOUS TAX EVASION CASE

Richard Gutierrez • Bureau of Internal Revenue (BIR) has filed charges against
actor Richard Gutierrez and his company RGUTZ
Productions Company for allegedly not paying right amount
of tax.
• He has undeclared sales in 2012 amounting P39.9 million as
his company of the same year did not file a yearly income tax
return and value added tax returns, thus, actor and his firm
has “an estimated aggregate deficiency tax liability for
taxable year 2012 in the total amount of P38.57 million”.
• And just recently, the Department of Justice (DOJ) has
dismissed the complaints due to lack and insufficient
evidence for the actor to be charged in court.
 RECOMMENDATIONS
• Reducing tax rates.
• Strengthen anti-corruption policies.
• Increase awareness among taxpayers by conducting seminars,
conferences and through media.
• Strict implementation of RATE Program (Run After Tax
Evaders)
• Proper/correct declaration of income
 END OF
PRESENTATION
THANK YOU!