BIR and AMLC join forces to tackle tax evasion and money laundering

The Bureau of Internal Revenue (BIR) is intensifying its efforts to combat tax evasion and money laundering through closer collaboration with the Anti-Money Laundering Council (AMLC).

BIR Commissioner Romeo D. Lumagui Jr. emphasized the need for this strengthened partnership in light of the increasingly sophisticated methods used by tax evaders.

On August 29, Lumagui met with AMLC Executive Director Matthew M. David and other officials to discuss strategies for enhancing interagency cooperation.

This collaboration aims to better address the challenges posed by complex tax evasion schemes, such as the use of "ghost receipts," which allow buyers to illegally reduce their tax liabilities by inflating expenses through shell companies that generate fake receipts.

“Tax evaders are now using sophisticated ways of evading taxes and storing their illegal wealth,” Lumagui stated, highlighting the importance of the joint effort.

He further noted that the cooperation between BIR and AMLC will pave the way for future investigations into both tax evasion and money laundering, ensuring that all sources of income, whether legal or illegal, are taxed according to the law.

The BIR and AMLC are uniquely positioned to tackle these issues together, with each agency bringing complementary expertise in identifying and prosecuting tax evaders and money launderers. This partnership is seen as a critical step in bolstering the integrity of the country's financial system.

In a related development, AMLC Executive Director David announced plans to implement an artificial intelligence (AI) system designed to improve the detection and monitoring of money laundering activities.

The AI project, which is currently in development, is expected to be completed by the end of this year. Once operational, the system will represent a significant portion of AMLC’s budget, underscoring the agency's commitment to strengthening its anti-money laundering capabilities.

The move to adopt AI technology follows a June report from the Financial Action Task Force (FATF), which placed the Philippines on its "grey list," highlighting the urgent need for enhanced measures to counter money laundering and terrorism financing.

The partnership between BIR and AMLC, along with the introduction of advanced AI tools, marks a significant step forward in the fight against financial crime in the Philippines.