BIR Chief Orders All LOAs for Review under Audit Reform Push

Bureau of Internal Revenue (BIR) Commissioner Charlito Martin R. Mendoza announced Thursday that all Letters of Authority (LOAs) will now require clearance from his office before issuance, describing the move as an immediate step to strengthen oversight and restore public trust in the agency’s audit system.

Mendoza announced this during a Senate Blue Ribbon Committee hearing on alleged abuses in the issuance of LOAs.

He said that the measure is part of broader reforms, including digitalization, aimed at reducing human intervention and ensuring audits are fair, transparent, and predictable.

Responding to a question from Senator Paolo Benigno “Bam” A. Aquino IV on urgent steps for audit reform, Commissioner Mendoza said, “All LOAs will be cleared by my office,” emphasizing that this safeguard will prevent arbitrary, repetitive, or overlapping audit orders.

In his opening statement, Commissioner Mendoza stressed the broader goal of rebuilding taxpayer trust:

“We must eliminate arbitrariness, remove repetitive or overlapping issuances, and establish near-time monitoring of ongoing audits. These improvements, many of which can be enabled with the help of an integrated digital system, will reinforce the checks and balances between enforcement and oversight. Rebuilding trust requires reform on both fronts: correcting how enforcement is carried out, and ensuring that rules and oversight mechanisms are clear, consistent, and transparent.”

BIR Commissioner Mendoza also directed the Technical Working Group reviewing LOAs and other concerned BIR units to prepare all relevant data, audit histories, and investigation reports in advance of succeeding Senate hearings. He called on taxpayers, businesses, and stakeholders to report irregularities or process improvement suggestions via email at tellthecommissioner@bir.gov.ph.

Department of Finance Secretary Frederick D. Go, who attended the hearing, expressed his full guidance and support for Commissioner Mendoza as he implements reforms to strengthen accountability and reduce discretionary enforcement.

Senate Blue Ribbon Committee chairperson, Senator Panfilo Lacson, pledged to secure funding for BIR digitalization initiatives, saying full digital transformation is essential to curb corruption and limit human discretion in audit processes.

The committee’s Vice Chairperson, Senator Erwin Tulfo, criticized the alleged misuse of LOAs as an extortion tool against businesses, saying many business owners are afraid to report abuses for fear of retaliation.

“Napakaraming negosyante ang gustong magsumbong pero ayaw magpakilala dahil baka ma-blacklist sila,” Senator Tulfo said.

Both Senator Tulfo and Senator Joseph Victor “JV” G. Ejercito, who initially raised the complaints and requested the investigation, are preparing witnesses and evidence to be presented to the committee in succeeding hearings to ensure a thorough review of alleged LOA abuses.

“The BIR has temporarily suspended the issuance of LOAs as part of the review and modernization of its audit and enforcement processes,” Commissioner Mendoza said, emphasizing that reforms aim to increase voluntary compliance through fairness rather than fear of punitive action.