Title X, Chapter II – Crimes, Other Offenses and Forfeitures

SECTION 253.  General Provisions. –

(a)        Any person convicted of a crime penalized by this Code shall, in addition to being liable for the payment of the tax, be subject to the penalties imposed herein: Provided, That payment of the tax due after apprehension shall not constitute a valid defense in any prosecution for violation of any provision of this Code or in any action for the forfeiture of untaxed articles.

(b)       Any person who willfully aids or abets in the commission of a crime penalized herein or who causes the commission of any such offense by another shall be liable in the same manner as the principal.

(c)        If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the sentence without further proceedings for deportation. If he is a public officer or employee, the maximum penalty prescribed for the offense shall be imposed and, in addition, he shall be dismissed from the public service and perpetually disqualified from holding any public office, to vote and to participate in any election. If the offender is a Certified Public Accountant, his certificate as a Certified Public Accountant shall, upon conviction, be automatically revoked or cancelled.

(d)       In the case of associations, partnerships or corporations, the penalty shall be imposed on the partner, president, general manager, treasurer, officer-in-charge, and employees responsible for the violation.

(e)        The fines to be imposed for any violation of the provisions of this Code shall not be lower than the fines imposed herein or twice the amount of taxes, interests and surcharges due from the taxpayer, whichever is higher.

SEC. 254.         Attempt to Evade or Defeat Tax. – Any person who willfully attempts in any manner to evade or defeat at any tax imposed under this Code or the payment thereof shall, in addition to other penalties provided by law, upon conviction thereof, be punished with a fine of not less than Five hundred thousand pesos (P500,000) but not more than Ten million pesos (P10,000,000), and imprisonment of not less than six (6) years but not more than ten (10) 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. (As amended by RA No. 10963 (December 19, 2017)).

SECTION 255.  Failure to File Return, Supply Correct and Accurate Information, Pay tax, Withhold and Remit Tax and Refund Excess Taxes Withheld on Compensation. – Any person required under this Code or by the rules and regulations promulgated thereunder to pay any tax, make a return, keep any record, or supply such correct and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation, at the time or times required by law or rules and regulations shall, in addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less than Ten thousand pesos (P10,000) and suffer imprisonment of not less than one (1) year but not more than ten (10) years.

Any person who attempts to make it appear for any reason that he or another has in fact filed a return or statement, or actually files a return or statement and subsequently withdraws the same return or statement after securing the official receiving seal or stamp of receipt of an internal revenue office wherein the same was actually filed shall, upon conviction therefore, be punished by a fine of not less than Ten thousand pesos (P10,000) but not more than Twenty thousand pesos (P20,000) and suffer imprisonment of not less than one (1) year but not more than three (3) years.

SECTION 256.  Penal Liability of Corporations. – Any corporation, association or general co-partnership liable for any of the acts or omissions penalized under this Code, in addition to the penalties imposed herein upon the responsible corporate officers, partners, or employees, shall, upon conviction for each act or omission, be punished by a fine of not less than Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000).

SECTION 257.Penal Liability for Making False Entries, Records or Reports, or Using Falsified or Fake Accountable Forms. –

(A)       Any financial officer or independent Certified Public Accountant engaged to examine and audit books of accounts of taxpayers under Section 232 (A) and any person under his direction who:

• (1)        Willfully falsifies any report or statement bearing on any examination or audit, or renders a report, including exhibits, statements, schedules or other forms of accountancy work which has not been verified by him personally or under his supervision or by a member of his firm or by a member of his staff in accordance with sound auditing practices; or
• (2)        Certifies financial statements of a business enterprise containing as essential misstatement of facts or omission in respect of the transaction, taxable income, deduction and exemption of his client; or

(B)       Any person who:

• (1)        Not being an independent Certified Public Accountant according to Section 232(B) or a financial officer, examines and audits books of accounts of taxpayers; or
• (2)        Offers to sign and certify financial statements without audit; or
• (3)        Offers any taxpayer the use of accounting bookkeeping  records for internal revenue purposes not in conformity with the requirements prescribed in this Code or rules and regulations promulgated thereunder; or
• (4)        Knowingly makes any false entry or enters any false or fictitious name in the books of accounts or records mentioned in the preceding paragraphs; or
• (5)        Keeps two (2) or more sets of such records or books of accounts; or
• (6)        In any way commits an act or omission, in violation of the provisions of this Section; or
• (7)        Fails to keep the books of accounts or records mentioned in Section 232 in a native language, English or Spanish, or to make a true and complete translation as required in Section 232 of this Code, or whose books of accounts or records kept in a native language, English or Spanish, and found to be at material variance with books or records kept by him in another language; or
• (8)        Willfully attempts in any manner to evade or defeat any tax imposed under this Code, or knowingly uses fake or falsified revenue official receipts, Letters of Authority, certification authorizing registration tax Credit certificates Tax Debit Memoranda and other accountable forms shall, upon conviction for each act or omission, be punished by a fine or not less than Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000) and suffer imprisonment of not less than two (2) years but not more than six (6) years.

If the offender is a Certified Public Accountant, his certificate as a Certified Public Accountant shall be automatically revoked or cancelled upon conviction.

In the case of foreigners, conviction under this Code shall result in his immediate deportation after serving sentence, without further proceedings for deportation.

SECTION 258.  Unlawful Pursuit of Business. – Any person who carries on any business for which an annual registration fee is imposed without paying the tax as required by law shall, upon conviction for each act or omission, be punished by a fine of not less than Five thousand pesos (P5,000) but not more than Twenty thousand pesos (P20,000) and suffer imprisonment of not less than six (6) months but not more than two (2) years: Provided, That in the case of a person engaged in the business of distilling, repacking, compounding or manufacturing any article subject to excise tax, he shall, upon conviction for each act or omission, be punished by a fine of not less than Thirty thousand pesos (P30,000) but not more than Fifty thousand pesos (P50,000) and suffer imprisonment of not less than two (2) years but not more than four (4) years.

SECTION 259.  Illegal Collection of Foreign Payments. – Any person who knowingly undertakes the collection of foreign payments as provided under Section 67 of this Code without having obtained a license therefore, or without complying with its implementing rules and regulations, shall, upon conviction for each act or omission, be punished by a fine of not less than Twenty thousand pesos (P20,000) but not more than Fifty thousand pesos (P50,000) and suffer imprisonment of not less than one (1) year but not more than two (2) years.

SEC. 260.         Unlawful Possession of Cigarette Paper in Bobbins or Rolls, Etc. – It shall be unlawful for any person to have in his possession cigarette paper in bobbins or rolls, cigarette tipping paper or cigarette filter tips, without the  corresponding authority therefor issued by the Commissioner. Any person, importer, manufacturer of cigar and cigarettes, who has been found guilty under this Section, shall, upon conviction for each act or omission, be punished by a fine of not less than One million five hundred thousand pesos (P1,500,000.00) but not more than Fifteen million pesos (P15,000,000.00) and imprisonment for a term of not less than six (6) years and one (1) day but not more than twelve (12) years. (As amended by RA No. 11346 (July 25, 2019)).

SECTION 261.  Unlawful Use of Denatured Alcohol. – Any person who for the purpose of manufacturing any beverage, uses denatured alcohol or alcohol especially denatured to be used for motive power or withdrawn under bond for industrial uses or alcohol knowingly misrepresented to be denatured to be unfit for oral intake or who knowingly sells or offers for sale any beverage made in whole or in part from such alcohol or who uses such alcohol for the manufacture of liquid medicinal preparations taken internally, or knowingly sells or offers for sale such preparations containing as an ingredient such alcohol, shall upon conviction for each act or omission be punished by a fine  of not less than Twenty thousand pesos (P20,000) but not more than One hundred thousand pesos (P100,000) and suffer imprisonment for a term of not less than six (6) years and one (1) day but not more than twelve (12) years.

Any person who shall unlawfully recover or attempt to recover by distillation or other process any denatured alcohol or who knowingly sells or offers for sale, conceals or otherwise disposes of alcohol so recovered or redistilled shall be subject to the same penalties imposed under this Section.

SEC. 262.         Shipment or Removal of Liquor or Tobacco Products under False Name or Brand or as an Imitation of any Existing or Otherwise Known Product Name or Brand. – Any person who ships, transports or removes spirituous, compounded or fermented liquors, wines or any manufactured products of tobacco under any other than the proper name or brand known to the trade as designating the kind and quality of the contents of the cask, bottle or package containing the same or as an imitation of any existing or otherwise known product name or brand or causes such act to be done, shall, upon conviction for each act or omission, be punished by a fine of not less than One million five hundred thousand pesos (P1,500,000.00) but not more than Fifteen million pesos (P15,000,000.00) and imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years. (As amended by RA No. 11346 (July 25, 2019)).

SEC. 263.         Unlawful Possession or Removal of Articles Subject to Excise Tax without Payment of the Tax. – Any person who owns and/or is found in possession of imported articles subject to excise tax, the tax on which has not been paid in accordance with law, or any person who owns and/or is found in possession of imported tax-exempt articles other than those to whom they are legally issued shall be punished by:

(a)        A fine of not less than One hundred thousand pesos (P100,000.00) but not more than Two hundred thousand pesos (P200,000.00) and imprisonment of not less than sixty (60) days but not more than one hundred (100) days if the appraised value, to be determined in the manner prescribed in Republic Act No. 10863, otherwise known as the ‘Customs Modernization and Tariff Act (CMTA),’ including duties and taxes, of the articles does not exceed Two hundred fifty thousand pesos (P250,000.00): Provided, That if the appraised value, including duties and taxes, does not exceed Ten thousand pesos (P10,000.00) the penalty shall only be a fine in the amount of Twelve thousand pesos (P12,000.00);

(b)       A fine of not less than One million pesos (P1,000,000.00) but not more than Two million pesos (P2,000,000.00) and imprisonment of not less than two (2) years but not more than four (4) years if the appraised value, to be determined in the manner prescribed in Republic Act No. 10863, otherwise known as the ‘Customs Modernization and Tariff Act (CMTA),’ including duties and taxes, of the articles exceeds Two hundred fifty thousand pesos (P250,000.00) but does not exceed Five hundred thousand pesos (P500,000.00);

(c)        A fine of not less than Three million pesos (P3,000,000.00) but not more than Four million pesos (P4,000,000.00) and imprisonment of not less than four (4) years but not more than (6) years, if the appraised value, to be determined in the manner prescribed in Republic Act No. 10863, otherwise known as the ‘Customs Modernization and Tariff Act (CMTA),’ including duties and taxes of the articles is more than Five hundred thousand pesos (P500,000.00) but does not exceed One million pesos (P1,000,000.00);

(d)       A fine of not less than Ten million pesos (P10,000,000.00) but not more than Twenty million pesos (P20,000,000.00) and imprisonment of not less than ten (10) years but not more than twelve (12) years, if the appraised value, to be determined in the manner prescribed in Republic Act No. 10863, otherwise known as the ‘Customs Modernization and Tariff Act (CMTA),’ including duties and taxes, of the articles exceeds One million pesos (P1,000,000.00);

Any person who is found in possession of locally manufactured articles subject to excise tax, the tax on which has not been paid in accordance with law, or any person who is found in possession of such articles which are exempt from  excise tax other than those to whom the same is lawfully issued shall be punished with a fine of not less than (10) times the amount of excise tax due on the articles found but not less than One million pesos (P1,000,000.00) and imprisonment of not less than five (5) years but not more than eight (8) years.

Any manufacturer, importer, owner or person in charge of any article subject to excise tax who removes or allows or causes the unlawful removal of any such articles from the place of production or bonded warehouse, upon which the excise tax has not been paid at the time and in the manner required, and any person who knowingly aids or abets in the removal of such articles as aforesaid, or conceals the same after illegal removal shall, for the first offense, be punished with a fine of not less than ten (10) times the amount of excise tax due on the articles but not less than Fifty million pesos (P50,000,000.00) and imprisonment of not less than five (5) years but not more than eight (8) years.

The mere unexplained possession of articles subject to excise tax, the tax on which has not been paid in accordance with law, shall be punishable under this Section. (As amended by RA No. 11346 (July 25, 2019)).

SEC. 263-A.     Selling of Heated Tobacco Products and Vapor Products at a Price Lower Than the Combined Excise and Value-Added Taxes. – Any person who sells heated tobacco products and vapor products at a price lower than the combined excise and value-added taxes shall be punished with a fine of ten (10) times the amount of excise tax plus value-added tax but not less than One hundred thousand pesos (P100,000.00), and imprisonment of not less than two (2) years but not more than four (4) years.

‘If there is a question on whether a nicotine product is a heated tobacco product or vapor product for purposes of taxation under this Section, the proper tax classification thereof shall be resolved through revenue regulations issued by the Secretary of Finance. (As amended by RA No. 11346 (July 25, 2019)).

SECTION 264.  Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, Violations Related  to the Printing of such Receipts or Invoices and Other Violations. –

(a)        Any person who, being required under Section 237 to issue receipts or sales or commercial invoices, fails or refuses to issue such receipts or invoices, issues receipts or invoices that do not truly reflect and/or contain all the information required to be known therein, or uses multiple or double receipts or invoices, shall, upon conviction for each act or omission, be punished by a fine of not less than One thousand pesos (P1,000) but not more than Fifty thousand pesos (P50,000) and suffer imprisonment of not less than two (2) years but not more than four (4) years.

(b)       Any person who commits any of the acts enumerated hereunder shall be penalized with a fine of not less than Five hundred thousand pesos (P500,000) but not more than Ten million pesos (P10,000,000.00), an imprisonment  of not less than six (6) years but not more than ten (10) years:

• (1)        Printing of receipts or sales or commercial invoices without authority from the Bureau of Internal Revenue; or
• (2)        Printing of double or multiple sets of invoices or receipts;
• (3)        Printing of unnumbered receipts or sales or commercial invoices, not bearing the name, business style, Taxpayer Identification Number, and business address of the person or entity; or
• (4)        Printing of other fraudulent receipts or sales or commercial invoices. (As amended by RA No. 10963 (December 19, 2017)).

SEC. 264-A.     Failure to Transmit Sales Data Entered on Cash Register Machine (CRM)/Point of Sales System (POS) Machines to the BIR’s Electronic Sales Reporting System. – Any taxpayer required to transmit sales data to the Bureau’s electronic sales reporting system but fails to do so, shall pay, for each day of violation, a penalty amounting to one-tenth of one percent (1/10 of 1%) of the annual net income as reflected in the taxpayer’s audited financial statement for the second year preceding the current taxable year for each day of violation or Ten thousand pesos (P10,000), whichever is higher; Provided, That should the aggregate number of days of violation exceed one hundred eighty (180) days within a taxable year, an additional penalty of permanent closure of the taxpayer shall be imposed: Provided, further, That if the failure to transmit is due to force majeure or any causes beyond the control of the taxpayer the penalty shall not apply. (As amended by RA No. 10963 (December 19,2017)).

SEC. 264-B.      Purchase, Use, Possession, Sale or Offer to Sell, Installment, Transfer, Update, Upgrade, Keeping or Maintaining of Sales Suppression Devices. – Any person who shall purchase, use possess, sell or offer to sell, install, transfer, update, upgrade, keep, or maintain any software or device designed for, or is capable of: (a) suppressing the creation of electronic records of sale transactions that a taxpayer is required to keep under existing tax laws and/or regulations; or (b) modifying, hiding, or deleting electronic records of sales transactions and providing a ready means of access to them, shall be punished by a fine of not less than Five hundred thousand pesos (P500,000) but not more than Ten million pesos (P10,000,000), and suffer imprisonment of not less than Two (2) years but not more than four (4) years: Provided, That a cumulative suppression of electronic sales record in excess of the amount of Fifty million pesos (P50,000,000) shall be considered as economic sabotage and shall be punished in the maximum penalty provided for under this provision. (As amended by RA No. 10963 (December 19, 2017)).

SEC. 265.         Offenses Relating to Stamps. – Any person who commits any of the acts enumerated hereunder shall, upon conviction thereof, be punished by a fine of not less than Ten million pesos (P10,000,000.00) but not more than Five hundred million pesos (P500,000,000.00) and imprisonment of not less than five (5) years but not more than eight (8) years:

• (a)        Making, importing, selling, using or possessing without express authority from the Commissioner, any die for printing or making stamps, labels, tags or playing cards;
• (b)       Re using previously affixed stamps, erasing the cancellation marks of any stamp previously used, or altering the written figures or letters or cancellation marks on internal revenue stamps;
• (c)        Possessing false, counterfeit, restored or altered stamps, labels or tags or causing the commission of any such offense by another;
• (d)       Selling or offering for sale any box or package containing articles subject to excise tax with false, spurious or counterfeit stamps or labels or selling from any such fraudulent box, package or container as aforementioned; or
• (e)        Giving away or accepting from another, or selling, buying or using containers on which the stamps are not completely destroyed.

Provided, That the cumulative possession of false/ counterfeit/recycled tax stamps in excess of the amount of Fifty million pesos (P50,000,000.00) shall be punishable by a fine of Five hundred million pesos (P500,000,000.00) or up to ten (10) times the value of the illegal stamps seized, whichever is higher, and imprisonment of not less than (10) years but not more than fifteen (15) years:

Provided, finally, That if the cumulative value of false/counterfeit/recycled tax stamps does not exceed Ten thousand pesos (P10,000.00), the penalty shall only be a fine in the amount of Twelve thousand pesos (P12,000.00). (As amended by RA No. 11346 (July 25, 2019)).

SEC. 265-A.     Offenses Relating to Fuel Marking. – All offenses relating to fuel marking shall, in addition to the penalties imposed under Title X of the NIRC, as amended, Section 1401 of Republic Act No. 10863, otherwise known as the ‘Customs Modernization and Tariff Act (CMTA),’ and other relevant laws, be punishable as follows:

(a)        Any person who is found to be engaged in the sale, trade, delivery, distribution or transportation of unmarked fuel in commercial quantity held for domestic use or merchandise shall, upon conviction, suffer the penalties of:

• (1)        For the first offense, a fine of Two million five hundred thousand pesos (P2,500,000);
• (2)        For the second offense, a fine of Five million pesos (P5,000,000.00); and
• (3)        For the third offense, a fine of Ten million pesos (P10,000,000) and revocation of license to engage in any trade or business.

(b)       Any person who causes the removal of the official fuel marking agent from marked fuel, and the adulteration or dilution of fuel intended for sale to the domestic market, or the knowing possession, storage, transfer or offer for sale of fuel obtained as a result of such removal, adulteration or dilution shall be penalized in the same manner and extent as provided for in the preceding Subsection.

(c)        Any person who commits any of the acts enumerated hereunder shall, upon conviction, be punished by a fine of not less than One million pesos (P1,000,000) but not more than Five million pesos (P5,000,000), and suffer imprisonment of not less than four (4) years but not more than eight (8) years:

• (1)        Making, importing, selling, using or possessing fuel markers without express authority;
• (2)        Making, importing, selling, using or possessing counterfeit fuel markers;
• (3)        Causing another person or entity to commit any of the two (2) preceding acts; or
• (4)        Causing the sale, distribution, supply or transport of legitimately imported, in-transit, manufactured or procured controlled precursors and essential chemicals, in diluted, mixtures or in concentrated form, to any person or entity penalized in Subsections (a), (b), or (c) hereof, including but not limited to, packaging,repackaging, labeling, relabeling or concealment of such transaction through fraud, destruction of documents, fraudulent use of permits, misdeclaration, use of front companies or mail fraud.
• (d)       Any person who willfully inserts, places, adds or attaches directly or indirectly, through any overt or covert act, whatever quantity of any unmarked fuel, counterfeit additive or chemical in the person, house, effects, inventory, or in the immediate vicinity of an innocent individual for the purpose of implicating, incriminating or imputing the commission of any violation of this Act shall, upon conviction, be punished by a fine of not less than Five million pesos (P5,000,000) but not more than Ten million pesos (P10,000,000), and suffer imprisonment of not less than four (4) years but not more than eight (8) years.
• (e)        Any person who is authorized, licensed or accredited under this Act and its implementing rules to conduct fuel tests, who issues false or fraudulent fuel test results knowingly, willfully or through gross negligence, shall suffer the additional penalty of imprisonment ranging from one (1) year and one (1) day to two (2) years and six (6) months.

The additional penalties of revocation of the license to practice his profession in case of a practitioner, and the closure of the fuel testing facility, may also be imposed at the instance of the court. (As amended by RA No. 10963 (December 19, 2017)).

SEC. 265-B.      Violations Committed by Manufacturers, Importers, Indentors, and Wholesalers of Any Apparatus or Mechanical Contrivance Specially for the Manufacture of Articles Subject to Excise Tax and Importers, Indentors, Manufacturers or Sellers of Cigarette Paper in Bobbins, Cigarette Tipping Paper or Cigarette Filter Tips. – Any violation of Section 164 of this Code, including mere possession of any apparatus or mechanical contrivance for the manufacture of cigarettes, cigarette paper, or cigarette tipping paper, for which no permit was obtained from the Commissioner shall be  punishable with a fine of not less than Fifteen million pesos (P15,000,000.00) but not more than Fifty million pesos (P50,000,000,00) and imprisonment of not less than twelve (12) years but not more than twenty (20) years. (As amended by RA No. 11346 (July 25, 2019)).

SECTION 266.  Failure to Obey Summons. – Any person who, being duly summoned to appear to testify, or to appear and produce books of accounts, records, memoranda or other papers, or to furnish information as required under the pertinent provisions of this Code, neglects to appear or to produce such books of accounts, records, memoranda or other papers, or to furnish such information, shall upon conviction, be punished by a fine of not less than Five thousand pesos (P5,000) but not more than Ten Thousand Pesos (P10,000.00) and suffer imprisonment of not less than one (1) year but not more than two (2) years.

SECTION 267.  Declaration under Penalties of Perjury. – Any declaration, return and other statements required under this Code, shall, in lieu of an oath, contain a written statement that they are made under the penalties of perjury. Any person who willfully files a declaration, return or statement containing information which is not true and correct as to every material matter shall, upon conviction, be subject to the penalties prescribed for perjury under the Revised Penal Code.

SECTION 268.  Other Crimes and Offenses. –

(A)       Misdeclaration or Misrepresentation of Manufacturers subject to Excise Tax. – Any manufacturer who, in violation of the provisions of Title VI of this Code, misdeclares in the sworn statement required therein or in the sales invoice, any pertinent data or information shall be punished by a summary cancellation or withdrawal of the permit to engage in business as a manufacturer of articles subject to excise tax.

(B)       Forfeiture of Property Used in Unlicensed Business or Dies Used for Printing False Stamps, Etc. – All chattels, machinery, and removable fixtures of any sort used in the unlicensed production of articles subject to excise tax shall be forfeited. Dies and other equipment used for the printing or making of any internal revenue stamp, label or tag which is in imitation of or purports to be a lawful stamp, label or tag shall also be forfeited. (C)       Forfeiture of Goods Illegally Stored or Removed. – Unless otherwise specifically authorized by the Commissioner, all articles subject to excise tax should not be stored or allowed to remain in the distillery, distillery warehouse, bonded warehouse or other place where made, after the tax thereon has been paid; otherwise, all such articles shall be forfeited. Articles withdrawn from any such place or from customs custody or imported into the country without the payment of the required tax shall likewise be forfeited.

(Manual encodiung credits: Magdaleno Abdon, Sept. 2020)