A tax is a fee charged or levied by the government on a specific product, income,

or activity. It can be classified into two types namely, direct and indirect tax. If tax is
levied directly on personal or corporate income, then it is a direct tax. If tax is levied on
the price of a good or service, then it is called an indirect tax.

Overall, the purpose of taxation is to finance government expenditure for its

governmental functions. Such as to finance public goods and services, like street
lighting and street cleaning. Since public goods and services do not allow a non-payer
to be excluded, or allow exclusion by a consumer, there cannot be a market in the good
or service, and so they need to be provided by the government or a quasi-
government agency, which tend to finance themselves largely through taxes.

In the Philippines, tax system is a combination of the global and schedular

systems of taxation. Domestic and resident taxpayers are taxed on a worldwide income.
Non-resident taxpayers are taxed on Philippine-source income. While a corporation is
levied at a flat rate, individuals are taxed at progressive rates. On the other hand, the
local government units (LGUS) are empowered to impose local taxes and grant tax
exemptions and incentives for business activities within their areas of jurisdiction.

In this paper, the group aims to identify five rampant Issues on the Philippine tax
system which involve the individual and corporate taxpayers. This paper aims to
classifify 5 different issues and propose 5 different solutions for each of the issues.
Each of the issues will be presented as something that would affect the economy
greatly, discussed to find worthwhile solutions to problems and analyzed to find further
instances to what these solutions can do to the government, the public and its economic
standing.
Sin Tax Bill: Constitutional or Not?

The proposed legislation seeking to impose higher excise taxes on liquor and
tobacco products, more popularly known as the sin tax bill, is one of the most
controversial pieces of legislation that ever crossed the halls of Congress (Lim, 2012).
House Bill 5727, or the Sin Tax Bill, aims to restructure the existing taxes imposed on
alcohol and tobacco goods. Duties on these products are potential revenue sources
which will help fund the Universal Health Care Program of the administration. Likewise,
higher taxes and consequently higher costs are seen as a deterrent to the consumption
of “sin” products, whose adverse effects are mostly borne by the poorer segments of
society. According to Philippine senate, the new law is created to promote health by
discouraging vice and to collect more revenue for healthcare and is expected to bring
an additional P40 billion to the government’s coffers.

However, in the senate’s version of sin tax law, it applies a unitary rate on alcohol
and cigarette products, regardless of their retail price. Let us assume, for example, that
the unitary rate is P10 and the cheapest cigarette or alcohol brand costs P1 while the
premium brand costs P10. Since the rate is unitary, both classes will be subjected to
the P10 unitary rate. In practical terms, the unitary rate means that the poor man (who
will cater to the cheaper brand) will have to pay P11, 91 percent of which is excise tax,
while the rich man (who will cater to the expensive brand) will pay P20, only 50 percent
of which is excise tax. In addition to this, due to high level of tax imposed on tobacco
and alcohol products, it is more likely to attract smugglers entering in the nation. What
could be the best solution for this?

Solutions
 Removal of the Sin tax law

In this case, solution 1 is to scrap the law itself. As stated by Lim (2012) in one of
his articles posted in the world wide web,on its face, the tax measure, in its current form,
appears to have discriminatory effect against the poor who will bear the larger tax
burden. It appears regressive in nature, and seeks to impose higher burden on those
who are in the lower brackets of economic class and status. It is against the principle of
taxation which should be in accordance to theoretical justice. In addition to this, there is
a profound consequences on the lives and livelihood of more than three million tobacco
workers, planters and their families. Due to high tax levied upon the tobacco and alcohol
industry, owners have no choice but to reduce the cost of their production. And by
reducing the cost of their production, that means that they need to reduce the number of
workers they had.
PCart or the Peoples Coalition Against Regressive Taxation has consistently
insisted that the Aquino regime is laying down a regressive system of taxation hidden
behind its universal healthcare program. They said that it does not have any qualms
about the government’s program as long as it will truly serve the poor majority of our
countrymen. The group, on the other hand, said that the sin tax bill is the opposite of
such an objective.
Our Constitution now embodies this basic principle of taxation when it expressly
provides in Article VI, Section 28, par. (1) that: “[t]he rule of taxation shall be uniform
and equitable. The Congress shall evolve a progressive system of taxation.” In tax
parlance, although the absolute value of tax collected is the same, there is a higher
burden of taxation on the less fortunate members of society due to the higher
percentage of tax relative to their ability to pay. Based on Adam Smith’s Canons of
Taxation, taxes should be in accordance to “theoretical justice,” which means that the
tax system “should be fair to the average taxpayer and based upon his ability to pay”
(Vitug & Acosta, Tax Law and Jurisprudence, 2006). Sin tax law violates this principle
by discriminating those belonging to the lower-income bracket of the population.
Furthermore, it defies the constitutional directive that all sectors of the country shall be
given optimum opportunity to develop. It gives prejudice on the lives of the workers on
the tobacco and alcohol industry due to high imposition of tax. Ironically, it triggers a
high possibility that workers in tobacco and alcohol industry will be dismissed from their
service. This law is against the constitutional objective to have an expanding
productivity as the key to raising the quality of life for all, especially the underprivileged
(Lim, 2012). As stated by Ilagan, one of the senators in the philippine government, “The
justification of the bill that its passage would stop or lessen smoking or drinking, will not
happen, because the moment people are addicted to smoking or drinking, no amount of
legislation could lessen that. And if you increase the tax rates, only the poor will be
affected, because the rich will say we can afford it so they will continue drinking and
smoking just the same. It will be the poor who will really suffer because they will be
burdened with additional tax.”

 Amendment

As for solution 2, it is possible not to remove the law but instead amend or modify
the law itself. According to the provisions of the sin tax law, the revenues that will be
collected will go and increase the budget of the Universal Health Care program that
promotes better life and living to the Filipino Citizen. But one can see that it is not the
only problem in our society. Usually, youth have the habit to smoke and drink because
of lack of activities or opportunities in their life. They have nothing to do. Therefore,
adding some provisions in support to education and youth fostering program helping
them to recover and have a greater future will be a good investment not only for the
nation but also for themselves.
In addition, there should have a provision that will intensify or strengthen the
system in which will hinder or lessen the smuggling in the Philippines. It is a fact that the
rate of potentials smugglers in the nation will surely increase due to the imposition of
taxes on alcohol and tobacco product. Thereupon, there should be a strong foundation
for this law to became succesful.
Lastly, due to those workers that will lose their job because of the imposition of
the sin tax bill, there should be an amendment in the provisions of the bill that will give
incentives or benefits for those owners or workers in the tobacco or alcohol industry.
This is to help them recover or if not, regain their job as they used to have before. This
will also help prevent excessive unemployment happening in the country helping this
sector of the economy.

 Keeping and Maintaining the Sin tax law

 Keep the law as it is. As for this solution, we all know that before a bill becomes a
law, it undergoes through different vigorous proccesses that firmly justify and bolster its
accountability and reliability that it will be for the benefit of the majority. It was handed
down through different branches of the economy, studied, analyzed and revised for its
fortification. Votes we’re raised for a bill before it can be implemented as a law.
Therefore, if sin tax bill already becomes a law, this means that it is already verified and
made perfectly to provide greater good for the country itself. The main goal of this law is
to generate profit for the country and to stop the habit of smoking and drinking alcohol
beverage of the Filipino citizen. If high tax will be imposed on these goods, then their
price will also go up. Logically, if prices increases, people may think twice of buying that
product and may instead use it for something else or may just kept the money as their
savings.
The government is also expecting a 40 billion revenue from which the P23-billion
is intended for health care. The remaining 13 billion will also be divided to support itself
and other units like debt servicing, subsidies, and agriculture. Thereupon, keeping the
law as it is will not just help each of the citizen of the Philippines, but it will also be a
good asset in generating income for a better governmental functions.

 Imposition of Miriam Defensor Santiago’s version of Sin tax law

If the main aim of the government is to generate profits from tobacco and alcohol
and lessen the number of its users, then why not imposed instead Miriam Defensor
Santiago’s version of sin tax bill? Currently, the sin tax law was proposed by Senator
Franklin Drilon which aims to generate 40billion pesos as a revenue for the country. It is
estimated that the price of cigarettes will be from P1.00 going up to P2.50. On the other
hand, Santiago’s version is different. In her arrangement, it aims to generate 60-66
billion pesos from the taxes that will be imposed on these goods. It is estimated that the
price of cigarettes from P1.00 will be P10.00. However, due to almost 1000% increase
on tax on these goods, then smuggling will then be surely rampant. But, if there is
proper implementation of the law, and that if there is a proper system to stop the
smuggling in the Philippines, this version will surely help the economy gain or yield a
high amount of profit or if not, will prevent the smokers or alcohol drinkers, rich or poor,
to stop the habit and do it only once in a while. This will lessen the problem of the nation
in terms of poor health and discipline of the Filipino citizen.

 Creation of new law

Creation of new law that will support or strengthen the newly passed law which is
the sin tax law. The government specifically the legislative branch of it can create a law
that will generate a stronger assistance that will help sin tax law be better implemented.
An example of which is a system that will lessen the expected rampant smuggling in the
country that may hinder the generation of funds of the government. They can also
create a law that will help the workers of tobacco or alcohol industry that was laid off
due to reduction of cost in the production like job trainings or unemployment packages.
Also, they can create a specific law that of which those who will dispute the sin tax law
will not be tolerated and will be given an appropriate punishment. These also include
those that will use the money other than governmental functions and allocations of
budget. These creation of law, will in turn, will help the country achieve its goal in
imposing sin tax bill which is to generate profits properly and to create a program that
will support the Filipino citizen in the state.

The Need to Reform the Auditing System

By the end of the taxable year, all working individuals and corporations are to
declare all income received within the said year. Based on their revenue, they are to
use a tax table provided for reference in order to pay the correct amount of tax to be
filed and paid to the Bureau of Internal Revenue (BIR.) Once they have submitted the
requirements the following occur, taxpayers who have filed their income tax returns
either pay their taxes or do not. Also, in the portion of the taxpayers, who have paid the
amount, either pays the correct amount or not. Taxes are very important since it serves
as the lifeblood of the government and without it they would not be able to pay the debt
that the state owes to foreign countries and to provide subsidy, infrastructures, and
service to its people.
 For the past decades now and in response to this issue, the BIR audits
those whose amount of tax due are paid incorrectly in order to make sure that the
individual or corporation pays the correct amount. Although they are taking action to do
so, they only investigate individuals who have high income and limit it to 10 individuals
per taxable year; In addition, they audit the tax returns manually, which consumes a
large amount of time. Because of this, we lose an opportunity to gain more revenue for
the State.

Solutions

 Allocate funds for up-to-date auditing technology

In order to audit as much taxpayers as possible, the state should allocate as
funds in their budget for the BIR in order to increase productivity to be able to
determine individuals who the agency will get from in order to collect the correct
amount of tax.

 Hiring qualified staff members to audit

To increase productivity, the auditors should have the qualities and skills in
order to give accurate numbers for their tax due for the individual to pay the
remaining tax he owes to the state.

 Orientation/Training/Workshop for Auditing

The auditors should be well informed and continuously informed of the
National Internal Revenue Code of 1997 as amended. This is in order to be
aware of the allowable deductions, such as Optimized Standard Deductions and
Itemized Deductions, and be able to be fair to both the taxpayer and the agency.

 Improve the auditing system in the BIR

In order to have a transparent and productive working environment,
workers should have a strict implementation of the protocols in the agency. An
 example of this would be bribery—workers should refrain from taking part in
these illegal act; instead, they should report this to their superiors instead.

 Propose that rich taxpayers or big companies conform their income or

financial statements to the BIR monthly so as to be informed of the
possible deductions and tax avoidance methods and payment of the tax
due as well at the end of the year.
This is to be able to keep track of the monthly revenues
received by the individual and to pay the tax due during the end of the taxable
year. It is to ensure that the taxpayers comply with the correct payment of tax. In
addition, the auditor will have an estimation of the tax due to guarantee the
payment.

Smuggling as a rampant issue in the Philippines, causing a loss of 2% of GDP per

year in lost tax revenue.

Until today, smuggling is a rampant and serious issue in the Philippines. When
goods are smuggled, these are not taxable or aren’t subject to tax. As a result, there is
a great loss in revenues. There are two kinds of smuggled goods namely; physical and
technical. Physical smuggling is the importation of goods which supposedly should pass
through the Customs for payment of tariff duties. Food, for example, is a common
smuggled good. On the other hand, technical smuggling of goods involves fraud. The
usage of fake names, IDs, and company addresses are applied here.
People tend to smuggle goods because they want to avoid the payment of taxes.
They also do not want their time consumed because bringing products in the country
requires some paper work. It undergoes a long process especially when the goods are
illegal, questionable or raises curiosity (example: lots of gold jewelry, medicines or
money). Therefore, these smugglers would claim it as their “personal baggage” to make
activities easier.
 Many would ask and wonder why smuggling of goods is made possible in the
country today. The answer is simple: the permission of authorities and the corrupt
people of the government. It is the government implementing laws and regulating rules.
Given this, there are five solutions for this rampant issue.

Solutions

 Well-trained officials, authorities and personnel at the Customs.

The Filipinos have embraced other cultures and they get easily swayed by
whatever the foreigners will say. It is the colonial mentality which enables the
Filipinos to just accept and “worship” them. The people working at the Customs
in our country are of course, Filipinos themselves. It is sad how most of them are
unscrupulous, allowing imported goods to enter the company because of bribery.
It is no wonder why there is a loss in the country’s tax revenues – connivance of
the Customs and the smugglers. For example, if a particular good, container or
package is brought in the country, that person in the Customs will get P80,000 to
P200,000 per container.
Therefore, the officials, authorities and personnel at the Customs should
be well-trained. They should not allow bribery or any temptations that will
persuade them to allow smuggled goods. Personal matters should be out of work
or while working at the Customs. These people at the Customs are attracted with
the big offers they get in exchange of allowing the goods. Also, not all smugglers
are foreigners. In fact, the Filipinos themselves commit such acts.
The head of the Customs should make sure that everyone is adhering to
rules properly. They should be strict and serious with this issue negatively
affecting the country. A training program should always be conducted every year
to constantly remind these people at the Customs that smuggling cannot at all be
tolerated.
 Strict regulation at the unguarded coastlines or any entrance around the
archipelago to stop underground shipping of goods.

There are not enough coast guards in the Philippines. It is difficult for the
country to watch over the inflowing activities especially in the areas of Mindanao
and Batanes because of the foreign countries nearby (Malaysia, Taiwan). In
order to have strict regulation at the unguarded coastlines or any entrance
around the archipelago to stop underground shipping of goods, the government
should simply hire more people to watch over. Why not be cunning as the North
Korean guards at the borderline?

 Remove the known entry points of Clark and Subic Bay Freeport Zones for
smuggling goods which get duty-free privileges.
The Freeport zones of Clark and Subic Bay should totally be banished! It
is about time to stop tolerating such operations in the Philippines. It is a wonder
why the government is not taking action to stop this. Simply removing and
stopping the operations at the Clark and Subic Bay Freeport Zones which gets
duty-free privileges should be taken into action now.

 Impose the allowed amount/kilos/quantity of imported goods entering the

Philippines. If goods are not within the allowed range, a specific carrier by
the Philippine government can only bring in these goods.

The Philippine government should only allow a certain amount of imported

goods entering the country. A range and amount of kilos, for example, should be
imposed by the government. Smuggled goods are usually of one kind (jewelry
alone, food alone, money alone etc). This raises suspicion especially in the
airport. This is also the reason why it is best recommended for people to put their
goods in boxes and have them shipped. Since the boxes can contain goods for
smuggling and not for “personal use” or “personal consumption,” the government
 should therefore allow only a specific carrier. This specific carrier will be the only
service recognized by the Philippines in bringing imported goods. In that way,
monitoring of activity is much easier therefore making a reduction in smuggling. It
will also be hard for the smugglers to continue engaging in their illegal ways
because the Philippine Customs will only look for one specific carrier recognized
by them.

 Increase the awareness of farmers, working class and businesses on how

harmful smuggling goods can be and how these negatively affect THEM.

According to President Noynoy, informing the fellow farmers, working

class and businesses in the country will reduce smuggling of goods. This will
increase their awareness on how harmful it can be and how it actually negatively
affects them. Local businesses will suffer because these compete with the
foreign businesses operating in the Philippines. Jollibee, Penshoppe and Mang-
Inasal, for example, are some Filipino stores that can be affected because of
smuggled goods. Imported burgers and clothes can be purchased by the
Filipinos not knowing those are smuggled. The GDP of the country therefore
decreases. It also applies to the farmers and working class because crops from
other countries will attract consumers to purchase these instead. It is believed to
be the better choice and quality. The working class will end up working for
foreigners and not for the growth of the country.
Once the different sectors are informed and become aware, they will make
wise decisions and be careful all the time. It is their livelihood at stake and
patronizing imported goods are no good for them. Little by little, smuggling can
be stopped if everyone will cooperate.

Redundancy of Fiscal Incentives

One of the major problems in government taxing system as we see it is its overly
generous fiscal incentives program for interested investors for the country. Included in
the said fiscal incentives are the income tax holidays, tax and duty exemptions for
capital goods, raw materials, deductions on labor expenses, and others. It is true that
with these incentives, the government has attracted more investors and with every
investment it helps generate employment in the country. But on the other hand, these
benefits or subsidies aren’t really that necessary for some investors because whether or
not the government gives them the incentives the amount of investment that they will be
putting out is the same. Thus, there is redundancy of the fiscal incentives.
According to Reside (2006), close to 90 percent of the fiscal incentives granted
by the Board of Investments is redundant, worth approximately P43.2 billion or almost
1% of GDP in 2004. This estimation has said to might be underestimated mainly
because the basis for this was redundant incentives only with non‐exporting domestic
market‐seeking investments by corporations who are already enjoying high rates of
return (above 15%) even before receiving incentives not including all the investors.
Instead for the governments gaining more revenues that can actually help increase the
government budget in developing the country’s educational, technological, medical and
infrastructures, they are being neglected. Also, some investments are given the same
incentives and they are really earning lots from it even though they aren’t really giving
back big benefits to the government. With that, there is a big loss on the side of the
government. Moreover, these investors aren’t really motivated by incentives motives,
but by another motive which is tax avoidance. Given this issue, here are five possible
solutions that may be applied or used in order to make the situation better.

 Scrap redundant fiscal incentives.

Government shall limit the incentives given to investors. If possible,
incentives shall be equivalent or less than the benefits that the government can
have in return. The government also has to choose corporations that deserve the
incentives. Thus, they can still get revenues from other investors and that
revenues shall be redirected to public investments in poorer regions or
improvement of the country in terms of self development like education, health
and infrastructures.

 Raise tariffs, especially for sensitive and strategic products/ industries.

 Tariff policy must be employed as one means by which to promote
domestic agriculture and industrialization. When tariffs increases, importers will
be discourage to get products from foreign countries, but still they will
continuously find a way in order for their businesses to grow thus, they will look
after product that can locally be manufactured or purchased so that they can get
away with the tariffs. With that, the country could have more self made products
which can help support its own economy. Also even though the government is
giving incentives if the tariffs are high, the government will still earn.

 Promote active state

The government must shift from prioritizing debt servicing and competing
for foreign direct investment to active state promotion of the people's well‐being
above all. The government has to build up its country’s own welfare by properly
distributing the budget and choosing the right people who’ll lead and be assigned
to a certain projects. Like building up public transportations, more public school
and teachers in rural areas, supporting local inventions, campaigning for local
products, building and developing all for the benefit of the country. It has to
practice transparency in order to get the citizen’s trust, and with their trust they
may be encouraged to actually participate in developing the country such as
paying the right amount of taxes. Given that, the country may not need to depend
on other countries anymore and if other countries can see that the Philippines
can stand on its own and that its economy is doing well then automatically
investors will invest in the country with or without incentives.

 Strict Implementation of incentives given to the investors who want to

avail.
This process will help the government identify the investors whose worthy
of the incentives and who among them really wants to invest. Along the process,
the government will take reviews and analyze the probable advantages and
disadvantages the country can get. This is so because, the incentives are being
 taken for granted by some corporations so even though the country needs more
investors in the present it still has to take control.
 Totally remove the incentives
Once the government abolish the incentives, the country get to have full
investment from them rather than giving them incentives which the country aren’t
sure of benefiting much. In addition, by the time they invest in the country they
already take the advantage of using the country’s resources like for a gold mining
company it use of the mountains and other stuffs. Hence, it’s the country’s
resources that are being destroyed not theirs. Aside from that, they will also gain
from the business itself. So the government, may not give incentives more
because it actually has given much by the time the investment deal was
approved.

The Possible Alternatives and Consequences of Tax Evasion

When a taxpayer encounters an amount that would not be desirable to be paid,

he would use an escape from taxation for his own convenience. This would result to tax
evasion. This form of escape is the payment of tax with an inappropriate amount or
fraud by the taxpayer. This could not only be done by a certain individual but also an
organization or a corporation. It is an illegal act which is subject to criminal or civil
liabilities. Some examples of evading tax are the fabrications of expenses, having a
third person to evade taxation or deliberately reducing taxable income. While evasion
would be taxation’s illegal means, tax avoidance would be its counterpart because it is
considered the escape of payment in a minimized way or in legal means (Valencia &
Roxas, Income Taxation, 2012).

In the Philippines, tax authorities investigated further on the speculations of the

claims of several firms to have incurred losses or to have reports of 70-90% of most
gross income are deductions. To add up, based on the statements of tax experts, the
acts of tax evasion done by professionals in the country is the overstatement of
expenses, delinquency of tax incentives, unaudited reports of income, denial of income
and non-filing of returns.
 There would be five possible solutions that would surely be beneficial to the
Philippines and its government:

 Tax Amnesty
Due to the escalating tax evasion cases in a few countries like Nigeria, tax
experts proposed to create a solution. This would be called Tax Amnesty. It is an
awarded opportunity that is given to the taxpayers to pay a specific amount in a specific
time or period. This is a substitute for the evaded tax liability as a means of pardon or
forgiveness instead. In addition, it is also an alternative that would lessen agitation of
criminal or civil prosecution for evading taxpayers. Because of this, as stated by
experts, not all taxpayers evade by the use of fraudulent acts. To explain further, the tax
amnesty would benefit both the tax enforcers and the taxpayers by reducing labor and
payment which would be considered a sound economic tax system due to its
administrative feasibility and balance with the taxpayer’s proportionate ability to pay.
(Nwachukwu, 2011)

 Energy Consumption Tax

As in the case of Italy, another alternative that would be beneficial is the creation
of an energy tax. In the Philippines, like the rest of the world, people use electricity, heat
gas and light as a form of consumption of energy. When people live in bigger homes,
they use energy more. For the energy tax, it would be “attached” to how much energy
each household will consume. The higher the consumption, the higher the tax and this
would be paid on a specified period (Roe, 2011). If people do not pay, or in other words,
evade, the energy to brighten up the property would be long gone. This solution would
be a much convenience to taxpayers around the nation and it would lessen the number
of tax evasion cases. In addition, this would also encourage taxpayers to conserve
energy in homes to lessen the payment of energy bills.

 Government’s Fiscal Adequacy

If the government wants the taxpayers to pay the right amount and the specified
time, then they should show what they would really show to the public. As the
government, they should let its community see the improvements of economy like better
infrastructures from buildings to roads, and any other economic value that would benefit
both the government and the public. When there is fiscal adequacy, the revenue of the
administration should be sufficient for the demands of the public which then would
hopefully lead to a fair payment and trust for the authorities (Valencia & Roxas, 2012). If
the trust keeps up, the effect would have a surplus in the budget of the government and
would create more hopeful improvements to enhance the economy to new heights. In
short, trust for both the government and the public would lessen the tax evasion in the
nation.

 Tight Tax Enforcement

When there are high cases of tax evasion, another recommendable solution
would be proper tax enforcement. The enforcers should give more notices and other
strict implementations to further go to taxpayers with heavy liabilities. When more
taxpayers pay due to the strict compliances, the revenue of the government will
increase. This will further implement more beneficial public investments and services for
the nation. The counterpart of tax enforcement is the tax resistance, and under tax
resistance is tax protest. The resistance is the gray area between tax evasion and
avoidance. This gray area which is seen by the public is the unjust and unfair system of
the government. Stronger enforcers would be helpful in acquiring payments and
liabilities to be paid as long as it is equitable and efficient or even sound and ethical. If
the tax enforcers follow a sound system, there should hopefully acquire the trust of the
public.

 Imprisonment
Another alternate solution would be something that would probably induce
fear among the community of tax evaders. If there would be serious and prolonged
cases of tax evasion, imprisonment should be recommendable. The government should
make a sound system that would make the process from enforcement to imprisonment
be adequate for the taxpayer. This means that several notices should be given then if
the prescribed period was not met for the payment, then tax enforcement should be the
step. Finally, if the taxpayer still do not want to pay, and further evades the tax,
imprisonment should be the final step to compensate for the prolonged and serious
liability. The authorities should give a certain amount of days in prison that would be
adequate for the taxpayer as sound as possible.

References:

http://www.businessdayonline.com/NG/index.php/banking-a-finance/28024-tax-
amnesty-as-legal-solution-to-evasion-
http://www.thedailybell.com/853/Tax-Evasion.html
http://italychronicles.com/a-solution-to-tax-evasion-in-italy-the-energy-use-tax/
Income Taxation by Edwin Valencia and Gregorio Roxas
http://www.dti.gov.ph/uploads/DownloadableForms/Incentives.pdf
http://www.tripleiconsulting.com/main/philippines-tax-incentive-programs/philippines-
economic-zone-authorty-peza/peza-qualified-full-incentives/
http://www.oecd.org/dev/developmentpartnershipsnetworks/43801273.pdf
http://philtaxation.blogspot.com
http://www.bir.gov.ph/legalmatters/8757.htm
http://www.mb.com.ph/node/286577/anti#.UMFeFeRQCSo
http://business.inquirer.net/63257/problems-in-customs-weaken-drive-vs-smuggling
http://www.oecd.org/dev/developmentpartnershipsnetworks/43801273.pdf

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