MANILA – The Bureau of Internal Revenue (BIR) has launched a sweeping crackdown on contractors linked to alleged anomalous flood control projects, warning that those found guilty of tax evasion or underpayment will be barred from future government deals and face suspended payouts on existing contracts.
BIR Commissioner Romeo Lumagui Jr. said the agency is moving in step with President Ferdinand “Bongbong” Marcos Jr.’s probe into irregular public works, ordering all field offices to audit the tax records of implicated contractors.
“The BIR will undertake a parallel investigation of contractors implicated in irregular flood control projects. We will support the President’s crusade by auditing the tax returns and payments of these entities,” Lumagui said on Tuesday.
“Should any contractor be found to have underpaid or evaded taxes, the BIR will not issue an updated tax clearance to them. The contractor will be disqualified from participating in future government procurements, and the final settlement of their existing government contracts will be suspended,” he added.
The order enforces Revenue Regulation No. 17-2024, which mandates contractors to secure an updated tax clearance before the closeout of any government project—separate from the clearance required at the bidding stage. Without it, contractors risk delayed payments, tax liens, and disqualification from future projects.
Lumagui stressed that those earning from taxpayer-funded projects must shoulder their fair share of taxes.
“Sisiguraduhin ng BIR na nagbabayad ng tamang buwis ang lahat ng contractor sa bansa,” he said. “Kumikita sila sa mga proyektong pinopondohan ng buwis mula sa milyon-milyong Pilipino at mga negosyo—hindi katanggap-tanggap kung hindi sila magbabayad ng tamang buwis. Kung may kilala kayong contractor na hindi nagbabayad ng tamang buwis, isumbong agad sa BIR.”
The commissioner further warned that firms behind “ghost” projects—declared completed but never built—will face tougher sanctions.
“If the BIR, through certification or endorsement from the appropriate government agencies, confirms that a flood control project is a ghost project, we will disallow all related cost and expense claims. No project means no deductible expense. A tax deficiency assessment will be issued accordingly,” Lumagui said./PN
