BIR investigates tax fraud in anomalous flood control projects

Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. has ordered a tax fraud investigation into contractors involved in anomalous flood control projects identified by President Ferdinand R. Marcos Jr.

Lumagui instructed all BIR offices to monitor the president's investigation and conduct parallel audits, emphasizing support for the president’s anti-corruption efforts.

The BIR will deny updated tax clearances to any contractor found underpaying or evading taxes, disqualifying them from future government procurements and suspending final contract settlements.

Revenue Regulation No. 17-2024 mandates that contractors must secure an updated tax clearance before the final settlement of government contracts, certifying no outstanding liabilities.

Contractors involved in 'ghost' flood control projects confirmed by relevant agencies as non-existent will face deficiency tax assessments and disallowance of related cost claims.

The investigation comes after President Marcos ordered a crackdown on corruption in public works, particularly in flood control, identifying 15 contractors that have cornered around P100 billion worth of flood control projects since 2022.