Manila: The Senate Blue Ribbon Committee will hold a hearing this week to examine the Bureau of Internal Revenue's (BIR) resumption of the issuance of letters of authority (LOAs) and mission orders (MOs), Senate President Pro Tempore Panfilo Lacson said Monday.
According to Philippines News Agency, Lacson, who is the panel chair, stated that the committee needs to be formally briefed on the reforms and safeguards the BIR has put in place to prevent the misuse of LOAs against taxpayers. Lacson emphasized the importance of understanding the new measures and ensuring that safeguards are established to minimize abuse.
The BIR recently announced that it would resume audit operations, including the issuance of LOAs and MOs, after suspending them in November due to allegations of extortion related to their use. BIR Commissioner Charlito Mendoza mentioned that reforms would include limiting LOA issuances to one per taxpayer per taxable year and allowing taxpayers to verify LOAs through the agency's chatbot.
During a previous hearing on December 11, 2025, Committee Vice Chairperson Erwin Tulfo highlighted that LOAs and MOs, intended to ensure lawful tax collection, have been misused for harassment and extortion, impacting both local and international companies. Tulfo cited complaints from foreign business groups and diplomats, noting that even international companies have been subjected to such abuses.
Tulfo also referenced data indicating that only about 2 percent of BIR revenue from the business sector is derived from LOA-initiated audits, with the majority being paid voluntarily. This raises concerns that some LOA-related collections are being diverted.
Senator Joseph Victor Ejercito echoed these concerns, pointing to reports of multiple LOAs being issued to the same taxpayers within short timeframes and allegedly inflated assessments used to pressure businesses into settlements. Ejercito stressed that businesses, regardless of size, are being targeted by the BIR, leading to harassment, coercion, and forced negotiations, which contribute to a culture of corruption that needs to be addressed.
