BSP imposes stiffer penalties on erring authorized agent banks

Aside from carrying financial liabilities arising from various tax-related scams, government-accredited banks will have to face both civil and criminal liabilities for neglect or involvement in diversion, non-remittance or under-remittance of taxes.

A new revenue regulation issued by the Bureau of Internal Revenue (BIR) imposes additional liabilities and responsibilities to authorized agent banks (AABs) that have been accredited to receive tax payments.

In the new regulation, the BIR said AABs and their personnel would be held criminally liable for any diversion, non-remittance or under-remittance of taxes "through the fault or negligence" of the bank or its personnel.

The imposition of stiff penalties and liabilities under the new regulation was prompted by the discovery of a wide-spread tax diversion scam involving some AABs, whose check-clearing facilities were used to hijack checks that were supposed to go to the BIR.

The BIR still has not uncovered the full extent of the scam but initially, some P200 million worth of tax money have been found diverted to fictitious bank accounts, using the facilities of the Land Bank of the Philippines, one of the government’s AABs and official depository.

According to the BIR, accredited banks should be held liable for tax scams that are perpetrated within their premises and using their facilities since these crimes would not be possible if they were vigilant about following the proper procedures.

Aside from the civil and criminal liabilities, the BIR said accredited banks found negligent and at fault in any tax scam would also face financial liabilities that would require them to pay double the amount of taxes diverted or unremitted, plus the increments and penalties.

Former BIR Commissioner Rene Bañez first discovered the diversion scam when the bureau began looking into corporations that have suddenly stopped paying their taxes and discovered that they were paying taxes but their payments were being diverted to fictitious accounts.

To prevent this from happening again, the BIR also revised the procedures for paying taxes through accredited banks which are now required to submit a daily report.