Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
Nineteenth Congress 
First Regular Session 
House Bill No. __________ 
__________________________________________________________________________ 
Introduced by Representative JOEY SARTE SALCEDA 
__________________________________________________________________________ 
AN ACT 
DEFINING THE CRIME OF TAX RACKETEERING, ADDING FOR THE 
PURPOSE A SECTION 157-A TO THE NATIONAL INTERNAL REVENUE CODE, 
AS AMENDED, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
According to estimates by tax authorities, as much as P100 billion in revenues are being 
evaded due to the padding of deductions and input tax credits through the systematic and 
fraudulent use of fake receipts and other records.  
In March 17, 2023 alone, the Bureau of Internal Revenue announced the filing of 
charges for evasion of taxes worth P25.5 billion against corporations using fictitious receipts, 
following a December 2022 raid on the corporations Buildforce Trading Inc, Crazykitchen 
Foodtrade Corp., Decarich Supertrade Inc., Redington Corporation. BIR alleges that these 
corporations have been operating for more than three years. 
These corporations do not have any legitimate business activity, and were set only to 
sell fictitious sales invoices or receipts to their buyers for the latter’s claim of false and 
anomalous purchases. These receipts or invoices are called “ghost receipts,” and economists 
have called the practice “ghosting the tax authority1.” 
According to the BIR, the fraudulent operations of these corporations have resulted in 
some P17.63 billion in foregone income taxes and total deficiency value added tax amounting 
to P7.91 billion, for taxable years 2019-2021. 
1 Carrillo, Paul E. and Donaldson, Dave and Donaldson, Dave and Pomeranz, Dina and Singhal, 
Monica, Ghosting the Tax Authority: Fake Firms and Tax Fraud (July 2022). NBER Working Paper 
No. w30242, Available at SSRN: https://ssrn.com/abstract=4165314 or 
http://dx.doi.org/10.2139/ssrn.4165314 
March 16, 2023
5:35 pm
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While the crime of tax evasion is punished under the Tax Code, it does not define the 
systematic and coordinated evasion of taxes, which in every essential manner is economic 
sabotage, going by the doctrine that taxes are the lifeblood of the State. 
Schemes such as these should be distinguished from the usual attempt to evade taxes 
precisely because they constitute a systematic attempt to dismantle the credibility of the entire 
tax system, and could not be committed without networks of accomplices across the business 
sector and among tax authorities.  
Because of the scale of their operations, unlike individual acts of tax evasion, 
systematic attempts to use fictitious transactions to evade taxes could completely undermine 
the tax system.  
This Act proposes to define the offense of tax racketeering as “any coordinated scheme 
or operation to repeatedly or consistently evade or defeat any tax imposed under this Code 
through the fraudulent use of receipts, returns, and other records, with a minimum amount of 
Ten Million Pesos (P10,000,000.00) in taxes avoided or attempted to be avoided.” 
This Act also defines being a principal in such an offense as non-bailable, and subject 
to 17 to 20 years in prison. Taxpayers who benefit from tax racketeering, including those who 
purchase fake receipts, shall be punished as accessories. Meanwhile, public officials who 
facilitate such activities shall be charged as accomplices and punished with perpetual 
disqualification from public office. 
The stiffer penalties aim to be a deterrent to the commission of such crimes, as well as 
a tool for tax authorities to be able to prosecute such offenses in a manner distinct from usual 
tax evasion. 
In view of the foregoing, the approval of this measure is urgently sought. 
JOEY SARTE SALCEDA 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
Nineteenth Congress 
First Regular Session 
House Bill No. __________ 
__________________________________________________________________________ 
Introduced by Representative JOEY SARTE SALCEDA 
__________________________________________________________________________ 
AN ACT 
DEFINING THE CRIME OF TAX RACKETEERING,  ADDING FOR THE 
PURPOSE A SECTION 157-A TO THE NATIONAL INTERNAL REVENUE CODE, 
AS AMENDED, AND FOR OTHER PURPOSES 
SEC. 1. A new Section 157-A is hereby inserted after Section 157 of the National 
Internal Revenue Code, as amended, to read as follows: 
SEC. 157-A. Tax racketeering. Any person who engages or attempts to engage 
in any coordinated scheme or operation to repeatedly or consistently evade or 
defeat any tax imposed under this Code through the fraudulent use of receipts, 
returns, and other records, with a minimum amount of Ten Million Pesos 
(P10,000,000.00) in taxes avoided or attempted to be avoided, shall, in 
addition to other penalties provided by law, upon conviction thereof, suffer 
imprisonment of not less than seventeen (17) years but not more than twenty 
(20) 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:
Provided further, that offenses punished under this section shall be non-
bailable.
In the case of corporations, nongovernment organizations, associations, 
cooperatives, or single proprietorships engaged in tax racketeering, the 
penalties under this section shall be imposed on the officers and on employees 
and individuals without whose participation the offense could not be 
committed. 
Accomplices, or persons who cooperate in the execution of the offense 
punished under this section shall, in addition to other penalties provided by 
law, upon conviction thereof, suffer imprisonment of not less than ten (10) 
years but not more than seventeen (17) years. 
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Persons who having knowledge of the commission of the crime, and without 
having participated therein, either as principals or accomplices, take part 
subsequent to its commission of tax racketeering, including as taxpayers 
profiting from the activities punished under this section shall, in addition to 
other penalties provided by law, upon conviction thereof, suffer imprisonment 
of not less than six (6) years but not more than ten (10) years. 
 
Any public official who aids and abets the commission of the offense punished 
under this Section shall, in addition to being charged as an accomplice, suffer 
the penalty of perpetual disqualification from any public office. 
 
SEC. 2. Separability Clause. – If any provision of this Act is held invalid or 
unconstitutional, the other provisions not affected thereby shall remain in full force and effect. 
 
SEC. 3. Repealing Clause. – All laws, presidential decrees, executive orders, rules and 
regulations and other issuances or parts thereof which are inconsistent with the provisions of 
this Act are hereby repealed, amended or modified accordingly. 
 
SEC. 4. Effectivity. -- This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in at least two (2) newspapers of general circulation in the Philippines. 
 
Approved,