Sl'rlntp 
SIXTEENTH CONGRESS OF THE 
) 
{Jt}fh;(' uf t~-I! ;;rrlrhH~ 
REPUBLIC OF TIlE PIULlPPlNES ) 
fjrstRegular Session 
) 
'13 
JUL 16 P4 :34 
SENATE 
.~~~S_, 
N_o_,-==--_-7~_8~_"'9~ __ ~~ 
__ ~~R_E_' '~_'_1_" _B_V:-f- . 
Introduced by Senator Antonio "Sonny" F, Trillanes IV 
EXPLANATORY NOTE 
Republic Act No. 2338 otherwise known as the Infonner's Reward Law was enacted to help the Bureau 
of Intemal Revenue (BIR) and the Bnrean of Customs (BOC) mn after tax cheats, lax evaders, and 
smugglers. This law awards fifteen percent (15%) of the amount recovered to auy person who voluntarily 
gives definite infonnation to the BIR aud BOC on any tax fraud or smuggliug case which results to the 
recoveJY of revenues, surcharges or fees and/or conviction of the guilty party. 
However, this law was modified when the Tax Refonn Act of 1997 (RA 8424) was enacted. Section 282 
thereof provides that only a mere ten peJ'cent (10%) reward or Php I Million, whicheveJ' is lower, shall be 
given to IDlY tax informer. 
The new law effectively discourages tax infonners to report fraud involving Php 10 Million or more 
because no matter how big the tax fi'auds and liabilities are involved in a case, an infonner would only get 
a maximum ofPhp I Million. 
As a result, collection inefficiency or tax enforcement aud administration by the BIR aud BOC have 
deteriorated. Meanwhile, collection goals and targets are not attained while the so-called "vaunted drive" 
of the govenunent to improve tax collections, administration IDld enforcement has yet to bear fruit. 
Tax collection during the term of President Arroyo, declined to a low of 12 percent, from the 18 
percent of fonner President Fidel Ramos.! President Aquino himself, when he ran for office, 
vowed to recover the P150-billion amtualleakage in the collection of taxes. It is hoped that with 
the passage of this bill, revenue collection will be reflective of the President's laudable vision of 
"Daang Matuwid". 
In view of the foregoing, passage ofthis bill is earnestly sought. 
,T LLANESIV 
Senator 
t Noynoy vows to recoup P150~bilhon unnllfli tax leakage. hlfonnatl0n letneved from l.l1tu;llw\ .... w prulstm.comfbusllless/552286/noYl1oy-Vo\Vs-
reeoup-p1 50-bllhon-unnual-tax-Ieakage on 6/26/2013 
1 


.§ 1111l.lt" 
SIXTEENTH CONGRESS OF THE 
) 
tfi)lflrr.llf HII' 'l~-ul'rtJru 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
'13 
JUL 16 P4 :34 
SENATE 
S. NO. _--,-7-",<8-",9_ 
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
AN ACT 
CONSOLIDATING THE LAWS GRANTING REWARDS TO INFORMERS OF 
VIOLATIONS OF INTERNAL REVENUE AND CUSTOMS LAWS, REPEALING FOR 
THIS PURPOSE SECTION 282 OF THE NATIONAL INTERNAL REVENUE CODE OF 
1997, SECTION 3513 OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, 
AND FOR OTHER PURPOSES 
Be it enacted in the Senate and the House of Representatives of the Philippines m Congress 
assembled: 
1 
SECTION 1. Any person, except internal revenue or customs officials or employees, 
2 
or any public official or employee~ or said officials' or employees' relative within the third 
3 
degree of consanguinity or affinity, who voluntarily gives definite and sworn information, not 
4 
yet in the possession of the Bureau ofInternal Revenue (BIR) or the Bureau of Customs (BOC), 
5 
stating facts personally known to him which could lead to the discovery of fraud upon the 
6 
internal revenue or customs laws, or violation of any provision thereof, thereby resulting in the 
7 
recovery of revenues, surcharges and fees and/or the conviction of the guilty party and/or the 
8 
imposition of any fine or penalty, shall be rewarded in a sum equivalent to ten percent (10%) of 
9 
the revenues, surcharges or fees actually recovered and/or fine penalty imposed and actually 
10 
collected. The same amount of reward shall also be given to infonners in cases where the 
11 
violator has offered to compromise the violation of law committed by him and his offer has 
12 
been accepted by the Commissioner on Internal Revenue or the Commissioner of Customs, as 
13 
the case may be, and in such case, the ten percent (10%) reward fixed herein shall be based on 
14 
the amount agreed upon in the compromise and actually collected from the violator, Provided 
15 
further, That should no revenues, surcharges or fees and/or fine or penalty is actually recovered 
16 
or collected in accordance with law, such persons should not be entitled to a reward: Provided 
17 
finally, That the information required shall not refer to a case already pending or previously 
1 


1 
investigated or examined by the Commissioner of Internal Revenue or the Commissioner of 
2 
Customs, or any of their deputies, agents or examiners, as the case may be, and that the reward 
3 
provided herein shall be paid under regulations issued by the Secretary of Finance. 
4 
The reward herein authorized shall be paid out of revenues, surcharges or fees and/or fine 
5 
or penalty actually recovered or. collected and accounted for in accordance with law as a result of 
6 
the information furnished by the informer. 
7 
8 
SEC. 2. (a) Applications for rewards granted herein amounting to One million pesos 
9 
(Php I ,000,000.00) and below shall be filed by the informer with the Office of the Commissioner 
10 
of the BIR or the Commissioner of the BOC, as the case may be, who shall render a final 
11 
disposition thereof. 
12 
(b) Applications for rewards granted herein amounting to more than One million pesos 
13 
(Php I ,000,000.00) shall, upon the approval of the reward, be automatically reviewed by the 
14 
Secretary of Finance. 
15 
(c) In both cases, the rewards granted shall be paid to the informer only after revenues, 
16 
surcharges or fees and/or fine or penalty actually recovered or collected in accordance with law, 
17 
and after all reports and documents required for the evaluation and approval of the claim for 
18 
informer's reward, including the endorsement by the Commissioner of the BIR of the 
19 
Commissioner of the BOC, as the case may be, shall have been submitted to the Department of 
20 
Finance (DOF) in the appropriate cases. 
21 
(d) The rewards of the informers shall be subject to income tax, collected as a final 
22 
withholding tax, at the rate of twenty percent (20%). 
23 
24 
SEC. 3. It shall be unlawfulfor any official or employee ofthe BIR, the BOC or the DOF 
25 
to disclose or reveal the name of any informer. The identity of the informer shall not be revealed 
26 
except (a) when the informer has given his written consent; or (b) when the information he has 
27 
provided is proven to be malicious or false. 
2. 


• -' 
1 
Disclosure of such confidential infonnation shall be punished by a fine of not less than 
2 
Five hundred thousand pesos (Php500,OOO.OO) but not more than One million pesos 
3 
(Php 1,000,000,00) and suffer imprisonment of not less than ten (l0) years but not more than 
4 
fifteen (IS) years and shall likewise suffer an additional penalty of perpetual disqualification to 
5 
hold public office, to vote and to participate in any public election. 
6 
Should the infonnation later turn out or be proven to be false or have b~en made only for 
7 
the purpose of harassing, molesting or in any way prejudicing the person so denounced, the 
8 
person so denounced shall be entitled to any action, criminal or civil, as the facts may warrant. 
9 
10 
SEC. 4. The following laws or provisions oflaws are hereby repealed: 
11 
(a) Section 282 of Republic Act No. 8424, the National Internal Revenue Code of 1997, as 
12 
amended; 
13 
(b) Section 3513 of the Tariff and Customs Code of the Philippines, as amended; 
14 
(c) Republic Act No. 2338 entitled, "An Act to Provide for Reward to Infonners of Violations of 
15 
the Internal Revenue and Customs Laws, as Amended"; and 
16 
(d) All other laws, decrees, executive orders, issuances and rules and regulations or parts thereof 
17 
that are contrary to and inconsistent with any provision of this Act are hereby repealed, 
18 
amended or modified accordingly. 
19 
20 
SEC. 5. If any part or provision of this Act is subsequently declared unconstitutional, the 
21 
va.\idity of the remaining provisions hereof which shall remain in full force and effect. 
22 
23 
SEC. 6. This Act shall take effect fifteen (15) days after its pUblication in the Official 
24 
Gazette or in a newspaper of general circulation, whichever comes first. 
Approved,