MANILA, Philippines — Government is losing up to P40 billion annually from various tax evasion schemes in the so-called “underground economy,” the Bureau of Internal Revenue (BIR) said Monday.

BIR Commissioner Kim S. Jacinto-Henares stopped short of giving a rough estimate of the amount of the tax leakage since her agency has no statistical study on the matter yet but cited a report by the National Economic Development Authority (NEDA) suggesting the huge amount in revenue losses.

However, Henares admitted that the losses “could be very big” if the statistics of the NEDA is used as a reference to determining revenue losses.

A NEDA report revealed that 43 percent of the country’s gross domestic product (GDP) belonged in the “underground economy” – roughly P3.4 trillion of the estimated P8 trillion GDP for the year.

Businesses in the underground economy – barber shops, sari-sari stores, retail outlets, “ukay-ukay” (used clothes trading), rice retailers, to name a few – are not registered with the BIR and, therefore, do not pay any tax, the NEDA report said.

Some of them are involved in the importation and distribution of smuggled goods which, according to the same study, causes the government to lose up to P127 billion annually in Customs duties and taxes.

Henares assured that the BIR is doing everything it can to run after tax cheats and plug the loopholes in the law that enable these erring income-earners to evade payment of taxes.

She said she has been filing tax evasion charges before the Department of Justice (DoJ) every other week to send a warning to tax cheats and enhance voluntary tax compliance.

Since assuming the top BIR post last year, Henares has already filed 68 tax evasion complaints, many of which involved amounts ranging from millions to billions of pesos.