BIR probes 200+ contractors over alleged ghost projects, tax fraud

Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. said Thursday that the bureau is conducting a sweeping investigation into more than 200 contractors and companies allegedly linked to ghost projects and fraudulent tax practices.

Lumagui said a specialized unit has been auditing the firms since last year as part of the government’s intensified campaign against large-scale tax evasion.

“Right now, we are investigating over 200 companies, including contractors involved in questionable projects. A full department is focused on these cases,” Lumagui said in an interview.

He explained that the audit process often takes longer when companies refuse to cooperate. “When they don’t participate, it really takes longer because we must resort to substituted services and ensure that all procedures are correct to avoid dismissal on technical grounds,” he said.

Lumagui cited the case of businessman Pacifico "Curlee" Discaya II, whose company Saint Gerard Construction was earlier charged with tax evasion. He said additional complaints are being prepared involving Discaya’s other firms, many of which were formed through joint ventures.

“There will be more to come. Discaya companies are numerous, and we’re still tracing their joint ventures,” he noted.

The BIR is also coordinating with the Department of Public Works and Highways (DPWH) to verify the authenticity of project implementations. Lumagui said some ghost projects were confirmed only after DPWH disclosed that certain projects certified as completed were never actually constructed.

“For us, we rely on documents. If a contractor presents a DPWH certificate of completion, we take it at face value. But now that DPWH itself has said some projects were not completed, our audits will proceed faster,” he said.

Meanwhile, the bureau is moving to collect tax liabilities from individuals and companies even while criminal complaints are being processed.

“The criminal case for tax evasion is separate from the tax liability. We are already collecting what is due. Even if they are acquitted, that does not erase their tax obligations,” Lumagui explained.

He also noted the case of Brice Hernandez, who recently returned luxury vehicles to a company identified as IPI. Lumagui stressed that returning assets does not constitute restitution nor exempt one from tax penalties.

“This is not restitution — it is a tax liability that must be settled,” he said.

Lumagui added that criminal charges will continue even if taxpayers admit wrongdoing or later pay what they owe. “Payment of taxes does not automatically absolve anyone from criminal liability,” he emphasized.

The commissioner said the BIR is strengthening case-building to ensure airtight prosecutions and highlighted the importance of coordination with other agencies.

More details on the investigations and case breakdowns will be uploaded to the BIR’s official website in the coming weeks.