Blue Ribbon lauds BIR reforms in LOA racket

MANILA, Philippines — The Senate Blue Ribbon committee has welcomed the reforms made by the Bureau of Internal Revenue to end the alleged extortion scheme by BIR personnel using letters of authority (LOA).

Senate President Pro Tempore Panfilo Lacson resumed the hearing yesterday on complaints from small business owners, foreign investors and even ambassadors, that erring BIR audit teams found tax deficiencies against them, but bloated due to commissions.

Lacson lauded the reforms presented to the Blue Ribbon by BIR Commissioner Charlito Mendoza. These include single-instance audit framework that limits one electronic LOA per taxpayer for a given year, consolidation of pending LOAs, anonymous assignment of cases, and a system-assisted selection of taxpayers subject to audit to prevent targeting taxpayers.

Mendoza also touted the BIR’s “Revalida” or “audit-the-auditor” system, which checks the quality, timeliness and propriety of audit work and holds examiners accountable for lapses.

Despite these reforms, Lacson noted the poor efficiency in tax collection from electronic LOAs issued by the BIR’s Run After Fake Transactions task force.

Citing data, Lacson said 3,520 LOAs were issued by the task force from 2023 to 2025, with only 54 cases ending in a Final Decision on Disputed Assessment.

While the assessed payables from the BIR’s notice of discrepancy amounted to P601.01 billion, only P7.95 billion or a minuscule 1.32 percent had been paid, he said.

Lacson warned erring BIR personnel that corruption can be a non-bailable offense that may “put them in detention wearing a yellow shirt.”