BIR cuts assessment units, launches LOA verifier

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January 28, 2026 | 12:00am

MANILA, Philippines — The Bureau of Internal Revenue (BIR) is pursuing a series of reforms including dissolving redundant units and mounting a verifier platform to improve the transparency of its tax audits.

BIR Commissioner Charlito Mendoza yesterday announced the resumption of tax audits, ending a two-month suspension on taxpayer examinations, including the issuance of letters of authority (LOA) and mission orders.

This time, the audits are guided by a new framework embodying a number of reforms intended to enhance transparency as proposed by stakeholders from the private sector.

For one, Mendoza said the BIR would be enforcing a single instance audit rule. Under this, the BIR can issue only one LOA to a taxpayer per taxable year, consolidating into a single letter each and every obligation owed by an individual or business.

Likewise, the BIR is shutting down the VAT Audit Section, called VATAS, to simplify regulatory authority. It is also terminating audit task forces to devote the sole power to assess obligations to regional offices and dedicated units, such as the Large Taxpayers Service.

Mendoza said the BIR also launched a LOA verifier through its own website, providing taxpayers with a platform where they can confirm the authenticity of an audit order.

The BIR also revamped its documentation, verification and oversight procedures. This will be paired with an audit-to-auditor program to enhance accountability.

Citing data from the BIR, Mendoza said tax collections from LOAs comprise up to three percent of revenue yearly, with the larger chunk of 97 percent coming from voluntary compliance.

For 2026, the BIR is directed to raise P3.58 trillion, higher by 16 percent from last year. At this level, the lead tax collector has to generate at least P9.8 billion daily, demanding more efficiency in its revenue efforts.

In November 2025, the BIR suspended all field audits and related activities indefinitely. The BIR had to suspend tax audits to develop a new framework in response to taxpayers’ complaints.

Taxpayers, particularly businesses, were demanding the BIR to address inflated assessments and inconsistent practices caused by the indiscriminate issuance of LOAs.

Prior to the lifting of the suspension, the BIR presented the new audit framework to the business community, and the agency received no objection to the reforms integrated in its policy.