Are BIR Informer's Rewards Taxable? NIRC Section 282 Explained

A person who reports tax fraud to the BIR can be rewarded 10% of the tax, surcharge, fee, fine, or penalty the government actually recovers as a result — capped at ₱1,000,000 per case — under NIRC Section 282’s informer’s reward program. The reward itself isn’t tax-free: Revenue Regulations No. 16-2010 subjects it to a 10% final withholding tax, so an informer’s actual take-home amount is smaller than the headline percentage suggests.

What does NIRC Section 282 actually provide? #

Section 282 rewards a qualifying informer 10% of the revenues, surcharges, or fees recovered and/or the fine or penalty imposed and collected as a result of the tip, or ₱1,000,000 per case — whichever figure is lower — and it excludes BIR and other government personnel, and their close relatives, from eligibility. The statutory text reads:

“Any person, except an internal revenue official or employee, or other public official or employee, or his relative within the sixth degree of consanguinity, who voluntarily gives definite and sworn information, not yet in the possession of the Bureau of Internal Revenue, leading to the discovery of frauds upon the internal revenue laws or violations of any of the provisions thereof, thereby resulting in the recovery of revenues, surcharges and fees and/or the conviction of the guilty party and/or the imposition of any of the fine or penalty, shall be rewarded in a sum equivalent to ten percent (10%) of the revenues, surcharges or fees recovered and/or fine or penalty imposed and collected or One million pesos (P1,000,000) per case, whichever is lower.”

Two conditions matter for whether a tip actually qualifies: the information must be voluntarily given, sworn to, and not already in the BIR’s possession, and it must actually lead to a recovery, conviction, or imposed penalty — a report that duplicates what the BIR is already investigating, or one that never results in any actual recovery, generally doesn’t generate a reward. Revenue Regulations No. 16-2010 sets out the procedural guidelines for filing this kind of confidential information and for how the BIR investigates cases that arise from it.

Why is the reward itself subject to withholding tax? #

RR No. 16-2010 subjects the informer’s reward to a final withholding tax of 10% — meaning the BIR withholds tax from the reward payment itself before releasing it to the informer, the same way many other one-time payments carry final withholding rather than being reported as ordinary income to be taxed later. This matters for anyone estimating what a successful tip is actually worth: the 10%-of-recovery (or ₱1,000,000 cap) figure from Section 282 is the gross reward, and the informer nets that amount less the additional 10% final tax withheld on the reward itself. A reward capped at the statutory ₱1,000,000 maximum, for example, nets ₱900,000 after the final withholding tax is applied.

Worked example #

A BIR informer submits sworn, previously-unknown information leading to an assessment against a business, and the BIR ultimately collects ₱6,000,000 in deficiency taxes, surcharge, and interest directly attributable to that tip.

• 10% of the amount recovered: ₱600,000
• Statutory cap: ₱1,000,000
• Reward payable: ₱600,000 (the lower of the two figures)
• Final withholding tax on the reward (10% of ₱600,000): ₱60,000
• Net amount released to the informer: ₱540,000

If the same case had instead resulted in ₱15,000,000 recovered, 10% would compute to ₱1,500,000 — but the statutory cap limits the reward to ₱1,000,000, which would then net ₱900,000 after the 10% final withholding tax.

Frequently asked questions #

How much can a BIR informer be rewarded? #

Under NIRC Section 282, a qualified informer is rewarded 10% of the revenue, surcharges, or fees recovered, and/or the fine or penalty imposed and collected as a result of the information, or One Million Pesos (₱1,000,000) per case, whichever amount is lower.

Is the BIR informer’s reward itself taxed? #

Yes. Revenue Regulations No. 16-2010 subjects the informer’s reward to a final withholding tax of 10%, so the informer receives the net amount after that tax is withheld, not the full computed reward.

Who can qualify for an informer’s reward? #

Any person who voluntarily gives definite and sworn information not already in the BIR’s possession, leading to the discovery of tax fraud or a violation of internal revenue laws that results in recovered revenue or a conviction, can qualify — except a current or former BIR official or employee, another government official or employee, or a relative of either within the sixth degree of consanguinity.

What does the informer actually have to submit to the BIR? #

Revenue Regulations No. 16-2010 sets out the guidelines, rules, and procedures for filing confidential information and for the BIR’s investigation of cases arising from it — the information must be sworn to and must not already be known to the Bureau, since Section 282 requires the tip to actually lead to the discovery of the fraud or violation.

Does the informer get paid even if the BIR only collects part of what it originally assessed? #

The reward is computed as a percentage of what is actually recovered and collected, not what was originally assessed — Section 282 ties the reward to revenues, surcharges, fees, fines, or penalties that are actually recovered and collected, or to an actual conviction, so a case that settles for less than the initial assessment yields a smaller reward base.

Summary #

NIRC Section 282’s informer’s reward program pays a qualifying tipster 10% of what the BIR actually recovers as a result of their sworn, previously-unknown information, capped at ₱1,000,000 per case — and that reward is itself cut by a further 10% final withholding tax under RR No. 16-2010 before it reaches the informer. The program is one piece of the BIR’s broader enforcement toolkit alongside its own audit and investigation programs — see What Is the BIR’s RATE Program? How Run After Tax Evaders Cases Are Built and Filed and Civil vs Criminal BIR Tax Liability for how a reported case can escalate once the BIR acts on the information.