BIR Ruling [DA-209-99]

April 5, 1999 BIR RULING [DA-209-99] Putli Suharni C. Samanodi Technical Staff In-Charge Committee on Trade and Commerce Philippine Senate M a n i l a S i r : This refers to the latest revision of the proposed bill entitled "An Act Providing for Electronic Commerce Law and for other Purposes." We were previously concerned that the pertinent provisions of the Tax Code and Revenue Regulations requiring the filing, processing and acceptance of certain documents might be adversely affected if the recognition of electronic documents is mandatorily imposed. However, that has been addressed by Section 25 of the proposed bill, as revised, which provides that government offices are authorized to promulgate appropriate rules and regulations to specify the procedures and safeguards to govern transactions involving electronic documents. Likewise, a clause his been inserted in the bill which states that until the promulgation of such regulations, government offices cannot be compelled to accept or issue documents in electronic format. We therefore offer no adverse comments on the proposed bill, as revised. However, may we offer the suggestion that under the provision of penalties found on Sec. 34, the following clause or clause to this effect be inserted as an additional item: "SEC. 34. Penalties . The following acts shall be penalized by fine and/or imprisonment: xxx xxx xxx "Willful and illegal modification, alteration or manipulation in any other manner, of electronic documents for the purpose of evading or defeating the payment of any tax imposed under the National Internal Revenue Code of 1997 shall, in addition to other penalties provided by law, upon conviction thereof, be meted with a fine of not less than One hundred thousand pesos to a maximum fine commensurate with the tax sought to be evaded, and suffer imprisonment of not less than six (6) months but not more than three (3) years". While on the topic of penalties, the bill might as well define computer fraud and impose specific and hefty penalties for its commission. The possibility of resorting to so-called "high-tec crimes" through the use of computers by criminal elements is not farfetched. And because of its potential to create serious damage to the financial and economic system, computer fraud should perhaps be treated as a form of estafa penalized under the Revised Penal Code. But not being expert on this matter, we offer this merely as a constructive comment on the subject for the further consideration of the Committee. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue