AMLC flags tax crimes as money laundering threat

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

June 26, 2026 | 12:00am

MANILA, Philippines — Tax crimes have been flagged as one of the Philippines’ highest money laundering threats, with authorities warning that proceeds from tax evasion may be coursed through banks, shell companies, real estate and other formal channels.

In the full public version of the Third National Anti-Money Laundering and Counter-Terrorism Financing Risk Assessment (NRA), tax crimes were rated as a “high” money laundering threat due to the scale of potential proceeds and the need to protect government revenues from illicit financial flows.

“Tax crimes, particularly tax evasion, are a significant money laundering threat because they generate illicit savings, undermine public revenue and may involve sophisticated concealment methods,” the report said.

The report, prepared by the Anti-Money Laundering Council, cited an estimated annual revenue loss of about P500 billion from tax evasion. The proceeds may come from unpaid taxes, fraudulent deductions, underreported income, non-filing, fake transactions, false invoices, transfer pricing abuse, offshore schemes, value-added tax fraud and concealment of income from digital economy activities.

These proceeds may then be laundered through shell companies, false trade invoicing, misstated records, cash-intensive businesses, nominee accounts, professional facilitators, offshore structures, inter-account transfers and investments in real estate, luxury goods or businesses.

“Tax-crime-related proceeds may move through higher-value formal channels as well as lower-value retail payment channels, depending on the typology,” the report said.

In one publicly shareable typology, the report cited a company that records fictitious expenses using false invoices to reduce taxable income. The funds saved from unpaid taxes are then transferred to related-party accounts and later used to buy real estate and other assets.

“The transactions appear legitimate because they are supported by fabricated business documents,” the report said.

The NRA said tax crimes may also have cross-border dimensions, including transfer pricing abuse, offshore schemes, profit shifting, foreign accounts, false trade invoicing and the use of international corporate structures.

This makes detection more difficult, especially when ownership structures, trade documentation or professional services are used to obscure the true source and movement of funds.

Apart from tax crimes, the NRA identified illegal drug trafficking, fraud and swindling or estafa, cyber-enabled scams and environmental crimes as the other highest money laundering threats in the country.

Drug trafficking remained one of the most significant sources of illicit proceeds. From 2021 to 2024, covered persons filed about 283,000 drug-related suspicious transaction reports with an aggregate value of about P25.09 billion.

For money laundering cases predicated on drug offenses, P2.38 billion was seized or frozen, P1.02 billion was preserved and P88.6 million was forfeited or confiscated during the period.

Law enforcement data also showed swindling and estafa investigations rose to 7,471 in 2024 from 1,927 in 2021, while swindling and estafa-related suspicious transaction reports increased to 713,403 in 2024.

Environmental crimes were likewise assessed as a high money laundering threat. The report cited an estimated P50-billion annual loss from illegal wildlife trade, around P5.4 billion in losses from illegal, unreported and unregulated fishing from 2022 to 2023 and 6,678 suspicious transaction reports related to environmental crime predicates from 2021 to 2024 involving about P46.54 billion.

The report said the country has strengthened its legal framework, institutional coordination, financial intelligence, supervision and enforcement capacity.

However, it also said sustained reforms are needed to ensure that stronger laws and improved supervision translate into the disruption of illicit financial flows.