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[av_heading heading=’ABOVE THE LAW ‘ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” av-medium-font-size=” av-small-font-size=” av-mini-font-size=” admin_preview_bg=”]
BY AYIN DREAM D. APLASCA
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ONE OF the things I did these past few days was to update my Tax Identification Number because of a change of employment status and nature.
There is a requirement for practicing professionals like lawyers and doctors to attend a seminar about tax-related concerns in connection with their practice.
As I waited for my turn to be assessed, I read few announcements posted on the information board. One topic that caught my attention was about the danger of evading payment of taxes. And I guess this is a good discussion to let people know the dangers of evading taxes and how can this be avoided.
There is an altruistic feeling when we pay our taxes because we become useful citizens of our country. We contribute something to the lifeblood of the government. However, there are requirements that we overlook, with malice or not, in paying our taxes that leads to bad consequences.
One (or should I say two) of these consequences is tax evasion (and tax avoidance). But mind you, only one of these will land you in jail. Still, it’s not good news.
Tax evasion is a crime. It involves purposely not filing your return and paying what you owe as taxes to the Bureau of Internal Revenue (BIR).
A taxpayer commits tax evasion when there is arbitrary non-report of income, over-declaration of expenses, fictitious expenses, claiming personal expenses as business expenses, borrowing of invoices and receipts, and non-filing of returns. There are many more of these.
These will lead to civil penalties to the imposition of a 50 percent surcharge and criminal penalties resulting to imprisonment and/or imposition of a fine upon conviction by the judicial courts. It depends on the severity of the case.
The National Internal Revenue Code (NIRC) also provides that a person found guilty of tax evasion is subject to imprisonment of not less than two years but not more than four years.
The BIR will also have the power to assess and collect the tax which can be extended to 10 years from the date of discovery of the fraud case. It should be bore in mind that fraud cases cannot be subject of a compromise.
Tax avoidance, on the other hand, involves the legal arrangement of one’s economic activity in order to lower the tax liability. It uses different methods and strategies to lower the amount of taxes owed to the government. This is applicable through a tax deferral plan and charitable donations to an approved entity.
“Nothing in this world can be said to be certain, except death and taxes.” This line was once said by Benjamin Franklin, one of the founding fathers of the United States. As far as we are concerned, this is true.
Learn this from the experts. To know more about this, you may consult an accountant and tax professionals to save money.
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(Atty. Ayin Dream D. Aplasca practices her profession in Iloilo City. She may be reached thru ayindream.aplasca@gmail.com/PN)
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