LOAs now need clearance from BIR chief’s office

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

December 13, 2025 | 12:00am

MANILA, Philippines — The Bureau of Internal Revenue has tightened its audit protocols by requiring all Letters of Authority (LOAs) to secure clearance from BIR Commissioner Charlito Martin Mendoza before issuance.

The move comes as the Senate investigates alleged abuses involving LOAs and Mission Orders (MOs). The Department of Finance (DOF) has pledged full cooperation in the probe, saying reforms are essential to protect taxpayer rights.

Mendoza announced the new directive during a Senate Blue Ribbon committee hearing on complaints of arbitrary and repetitive LOAs on Thursday.

He said the measure is part of a broader push to strengthen oversight, reduce human discretion and restore confidence in the BIR’s audit system.

Responding to a question from Sen. Bam Aquino on immediate reforms, Mendoza said, “All LOAs will be cleared by my office,” underscoring that the safeguard aims to prevent overlapping or questionable audit issuances.

In his opening statement, Mendoza stressed the broader mission of rebuilding trust through consistent and transparent enforcement.

“We must eliminate arbitrariness, remove repetitive or overlapping issuances and establish near-time monitoring of ongoing audits,” he said. “These improvements, many of which can be enabled with the help of an integrated digital system, will reinforce the checks and balances between enforcement and oversight.”

To support the investigation, Mendoza ordered the technical working group reviewing LOAs and other concerned units to prepare audit histories, data and investigation reports ahead of upcoming hearings.

Finance Secretary Frederick Go affirmed the DOF’s full cooperation with the Senate inquiry, saying the government is committed to addressing long-standing concerns about red tape, audit misuse and alleged extortion involving LOAs and MOs.

Go said he moved swiftly upon assuming office, ordering the immediate suspension of all field audits and related BIR operations to allow for a policy review.

Under Revenue Memorandum Circular 107-2025, the BIR is prohibited from creating, printing, signing or serving any LOA or MO while the suspension remains in effect.

Go detailed the reforms being developed by the BIR, including a digital system that will automatically identify taxpayers for audit, minimizing discretion in the selection process.

Audits issued outside the system will be considered void and those responsible will be held liable.

He added that the BIR is creating a portal to track pending LOAs and refining policies so that only the commissioner or deputy commissioner can approve LOAs and MOs prior to issuance.

Mendoza confirmed that the BIR has temporarily suspended the issuance of LOAs as part of the agency’s review and modernization efforts, emphasizing that the ultimate goal is to promote voluntary compliance through fairness rather than fear.

Body cams for BIR

Following his exposé on the alleged abuse of LOAs, Senate Deputy Majority Leader JV Ejercito yesterday expressed support for sweeping reforms to curb corruption.

In an interview with “Storycon” on One News, Ejercito underscored the importance of using new technology as part of anti-corruption reforms.

“If you digitize, that’s really one way to curb corruption,” he said.

“Examiners can be required to wear body-worn cameras… there are things that can be introduced so that we can prevent further weaponization of LOAs,” he added.

The senator agreed that the new setup may result in backlog, but expressed confidence in Mendoza. — Marc Jayson Cayabyab, Janvic Mateo