BIR officials extort firms using audit letters, says Tulfo
MANILA, Philippines — Sen. Erwin Tulfo alleged that a money-making scheme exists within the Bureau of Internal Revenue (BIR), claiming some officials weaponize the agency’s letter of authority (LOA) to extort businesses.
An LOA authorizes the BIR to conduct a tax audit. Tulfo said he has received complaints from both small and large business owners who were subjected to audits despite complying with all tax requirements.
“This is too much! Even though the business owners are paying their taxes, they will still be given an LOA, like a search warrant into their business records,” Tulfo said on Monday, November 24.
Tulfo described a supposed scheme in which the assessed tax would be set at P25 million. On paper, the taxpayer would pay P15 million after a “discount,” but the business would allegedly be forced to give P20 million in total — with P5 million going to the involved BIR official.
Without specifying names, Tulfo said at least five individuals have sought his help about the alleged practice. He added that even small businesses, such as family-owned groceries, have fallen victim to the schemes.
Senate probe set
As vice chair of the Senate Blue Ribbon Committee, Tulfo said the panel will investigate the alleged scheme through Senate Resolution 180.
Among those who will be invited are former BIR Commissioner Romeo Lumagui, BIR examiners and regional directors.
Tulfo said that while attention is currently focused on alleged corruption involving the Department of Public Works and Highways, the BIR remains one of the most corrupted government agencies.
Call for reshuffle under new BIR chief
The senator advised newly installed BIR Commissioner Charlito Martin Mendoza to reorganize the agency.
“I urge the new commissioner to do a reshuffle because from the complaints we received, the regional directors may have a hand in this,” Tulfo said.
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