Tax Evasion Tax Evasion is the use by the taxpayer of illegal or fraudulent means to defeat or reduce the payment of a tax. It is punishable by law. Examples: Deliberate failure to report taxable income or property; deliberate reduction of income that has been received.
Run After Tax Evader is a program to investigate and prosecute individuals and/or entities engaged in tax evasion and other criminal violations of the National Internal Revenue Code (NIRC) of 1997. Any person, association, partnership and company found to have committed a violation of the provisions of the NIRC of 1997 may be charged under the RATE Program. But in the case of associations, partnerships or corporations, the penalty shall be imposed on the partner, president, general manager, branch manager, treasurer, officer-in-charge and employee/s responsible for the violation. Here are the fraudulent activities or criminal tax violations covered by the RATE program: a. failure to file tax return/s b. failure to pay taxes c. deliberate under-declaration of income by more than 30 percent of that declared per return d. deliberate overstatement of amount of deductions by more than 30 percent of actual deductions e. claiming “personal” expense as business expense f. claiming false deductions g. use of fake BIR documents e.g., Certificate of Authorizing Registration, Tax Clearance Certificate etc. h. failure to register with BIR i. keeping more than one set of books of accounts j. making false entries in the books and records A taxpayer proven guilty of tax evasion will face the following penalties under the tax code: 1. Civil penalties resulting to the imposition of a 50 percent 2. Criminal penalties resulting to the imposition of penal sanctions of imprisonment and/or fine upon conviction by the Judicial Courts; Caveat to taxpayers as power of the BIR to assess and collect the tax is extended to 10 years from the date of discovery of the fraud case and it cannot be the subject of a compromise as mandated by Section 204 of the NIRC of 1997. If you’re wondering where BIR is getting the information, here are some of their sources:
a. Routine audit examination of tax return/s by BIR; b. Confidential Information/s filed by informers under Section 282 of the NIRC of 1997; c. Information obtained by the BIR from third parties as authorized by Section 5(B) of the NIRC of 1997; d. Referrals from other government agencies; e. Newspaper reports.
Tax Avoidance Tax Avoidance is the use by the taxpayer of legally permissible means or methods in order to avoid or reduce tax liability. It is not punishable by law. Examples: Situations where a person refrains from engaging in some activity or enjoying some privilege in order to avoid the incidental taxation or to lower his tax bracket for a taxable year to avoid the higher rate of tax. Another examples: Practically every taxpayer engages in tax avoidance at some point in order to minimize his or her tax bill. For example, taxpayers who contribute to Individual Retirement Accounts (IRAs) before the April 15 tax deadline are engaging in tax avoidance because those contributions are deductible and thus lower their tax bills. Similarly, charitable contributions are tax-deductible and thus another way that taxpayers can lower their tax bills.
Distinction between Tax Evasion and Tax Avoidance Tax evasion should be applied to the escape from taxation accomplished by breaking the letter of the law for example deliberate omission to report a taxable item. Tax avoidance on the other hand, covers escape, accomplished by legal means which may be contrary to the intent of the sponsors of the tax law but nevertheless do not violate the letter of the law. So, Tax avoidance is completely legal—and extremely wise. Tax evasion, on the other hand, is an attempt to reduce your tax liability by deceit, subterfuge, or concealment. Tax evasion is a crime.
Case 1: The Bank Depositor: 1. The moral principle is being violated in this case is the trust between the depositor and the branch manager and also the responsibilities of the BSP officials. The action, implementation or performance of the branch manager and the officials from BSP was not in accordance with their duties because the branch manager did not
fulfilled his promise to the depositor that his deposit is very safe and income—generating. Likewise, the BSP did not also perform any action when the depositor filed letters of complaint to them. They did not carry out their respective functions uprightly and morally because of their immoral fraud to the depositor and the BSP officials did not respond to the complainant.
2. The moral implications of this case to the banking and finance industries are it will affect the trust and reputation of the banking and finance industries because of the various frauds and scam happens to other people.
Case 2: Big Mak Burger: 1. The unfair competition also unethical and not just illegal because unfair competition is doing business or something with the goal of profit or self interest without regards to others. It is not just or exactly illegal, at least not until a legal rule is explicitly made to prohibit it. There are rights and remedies on unfair competition that is provided in R.A 8293: SEC. 168. Unfair Competition, Rights, Regulation and Remedies 168.1. A person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights. 168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor. 168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition: (a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose; (b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or
(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.
2. THE LAW ON TRADEMARKS, SERVICE MARKS AND TRADE NAMES (R.A 8293)
SEC. 121. Definitions As used in Part III, the following terms have the following meanings: 121.1. "Mark" means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38, R.A. No. 166a) 121.2. "Collective mark" means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective mark; (Sec. 40, R.A. No. 166a) 121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise; (Sec. 38, R.A. No. 166a) 121.4. "Bureau" means the Bureau of Trademarks; 121.5. "Director" means the Director of Trademarks; 121.6. "Regulations" means the Rules of Practice in Trademarks and Service Marks formulated by the Director of Trademarks and approved by the Director General; and 121.7. "Examiner" means the trademark examiner. (Sec. 38, R.A. No. 166a) SEC. 122. How Marks are Acquired The rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law. (Sec. 2-A, R.A. No. 166a) SEC. 123. Registrability
123.1. A mark cannot be registered if it: (a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute; (b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof; (c) Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow; (d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of: (i) The same goods or services, or (ii) Closely related goods or services, or (iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion; (e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: Provided, That in determining whether a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark; (f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered wellknown in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use; (g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services; (h) Consists exclusively of signs that are generic for the goods or services that they seek to identify; (i) Consists exclusively of signs or of indications that have become customary or usual to designate the goods or services in everyday language or in bona fide and established trade practice; (j) Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services; (k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value; (l) Consists of color alone, unless defined by a given form; or (m) Is contrary to public order or morality.
123.2. As regards signs or devices mentioned in paragraphs (j), (k), and (l), nothing shall prevent the registration of any such sign or device which has become distinctive in relation to the goods for which registration is requested as a result of the use that have been made of it in commerce in the Philippines. The Office may accept as prima facie evidence that the mark has become distinctive, as used in connection with the applicant’s goods or services in commerce, proof of substantially exclusive and continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date on which the claim of distinctiveness is made.