Manila: The Department of Finance (DOF) has pledged its full cooperation with the Senate Blue Ribbon Committee's probe into alleged misuse of Letters of Authority (LOAs) and Mission Orders (MOs) by Bureau of Internal Revenue (BIR) personnel. The DOF emphasized the importance of fairness, transparency, and accountability in tax collection. Finance Secretary Frederick Go highlighted that President Ferdinand R. Marcos Jr. has made it clear that corruption will not be tolerated in the government. In response, Go has temporarily suspended all field audits to allow for a comprehensive review of current enforcement practices.
According to Philippines News Agency, the investigation was initiated by the Committee Vice Chair, Senator Erwin Tulfo, who expressed concern over the systemic abuse of LOAs and MOs, which were intended to ensure lawful tax collection. Reports indicate that both small and large businesses have been pressured into questionable settlements to avoid tax investigations. Tulfo noted that even international companies have not been spared, with complaints reaching foreign chambers of commerce and ambassadors. He also pointed out that a mere 2 percent of BIR revenue from the business sector comes from LOA-initiated audits, with the remaining 98 percent collected voluntarily. Allegations suggest that a significant portion of LOA-related payments ends up in the pockets of corrupt examiners and officials.
Senator Joseph Victor Ejercito further detailed patterns of abuse reported by taxpayers and business groups, highlighting multiple LOAs issued to the same taxpayer within short periods and inflated assessments without basis. Ejercito emphasized the need to stop the culture of corruption affecting businesses big and small, where LOAs are used for harassment and coercion.
BIR Commissioner Charlie Mendoza acknowledged the necessity for reforms in both enforcement and oversight to restore fairness and eliminate discretion in the audit system. He proposed integrated digital systems, real-time monitoring, and strict audit protocols to strengthen these reforms. Mendoza affirmed that the BIR had suspended the issuance of LOAs to allow for a full reevaluation of the audit process.
Former BIR Commissioner Romeo Lumagui Jr. also assured the Senate Blue Ribbon Committee of his cooperation. Lumagui testified about implementing key programs during his term to curb corruption by promoting integrity and professionalism among BIR employees. These initiatives included digital transformation through the Online Registration and Update Systems and the BIR web portal, which achieved significant visitor engagement and the agency's first ISO certification. Lumagui highlighted that these reforms contributed to substantial revenue collection figures in 2024 and 2025 before his departure from BIR last month.
