BIR readies sweeping reforms on tax audits

MANILA, Philippines — The Bureau of Internal Revenue (BIR) rolled out a sweeping reform agenda that puts audit reform at the center of its priorities, as the agency prepares to relaunch tax audits under tighter rules, stronger safeguards and greater accountability.

BIR Commissioner Charlito Martin Mendoza said the five-point program, dubbed BIR D.A.R.E.S., is meant to align the bureau’s work with President Marcos’ directive to keep revenue collection focused on nation-building while fixing long-standing weaknesses in tax administration.

“BIR DARES reflects what we are already grappling with on the ground,” Mendoza said. “These are not abstract priorities. These are the real challenges we face, and these are the reforms we are choosing to confront.”

The reform package covers digital and data transformation, audit reform and accountability, revenue
collection and base protection, employee empowerment and welfare promotion as well as service excellence and stakeholder engagement.

The program was formally launched during the BIR Directors’ Conference attended by regional directors from Luzon and officials of the Large Taxpayers Service, marking the first policy cascade for 2026. A second round for Visayas and Mindanao offices is scheduled later this month.

Mendoza said audit reform is the most urgent pillar, noting that public trust in the tax system is shaped largely by how audits are conducted and how assessments are issued.

He recalled that the BIR suspended the issuance of letters of authority (LOAs) in November last year after concerns were raised by the private sector over audit practices. The pause, he said, allowed the agency to review its audit framework and address gaps that could undermine fairness and credibility.

In response, the BIR created a technical working group committee on assessment integrity and audit reform, which is reviewing audit processes, systems and controls. Mendoza said the group is now finalizing policy issuances that would govern the lifting of the suspension and the resumption of audits.

“These reforms are being carefully designed to ensure that when audits resume, they do so under clearer rules, stronger safeguards and better oversight,” he said.

Among the immediate changes taxpayers will see are the rollout of a public LOA verifier through the BIR website chatbot REVIE, the adoption of a single consolidated LOA per taxpayer per year and the abolition of audit units and task forces whose functions previously overlapped. 

The agency will also revive the revalida or “audit the auditors” system to tighten accountability among revenue officers.

Beyond audits, Mendoza said the BIR would push the digitalization of tax services and strengthen risk-based enforcement, particularly for high-risk products such as vape, tobacco and fuel, to support compliance and revenue growth. 

He added that employee welfare and professionalism remain central to delivering service excellence across the agency.

“This is about preparing the organization for what comes next,” Mendoza said. “The work being done now will define how we carry out our mandate moving forward.”