BIR lifts suspension on LOAs
The Bureau of Internal Revenue (BIR) has lifted the suspension on its controversial letters of authority (LOAs) and mission orders (MO) after completing a comprehensive review of its audit procedures and reform measures.
At a press conference on Tuesday, the BIR, together with the Department of Finance (DOF), announced that the issuance, creation, printing and signing of audit authorities and related field operations may now resume under newly issued guidelines and strengthened oversight mechanisms.
The issuance of LOAs and MOs had been suspended in November last year, following mounting complaints of abuse and misuse. In response, the BIR formed a technical working group to review existing procedures and propose reforms.
Data from the BIR showed that the number of issued LOAs has doubled since 2022. As of Nov. 3, 2025, this number has already reached 82,228.
“The BIR’s review is now completed. The BIR conducted a comprehensive review and engaged the private sector,” Finance Secretary Frederick Go said, referring to the “stress test” of the proposed reforms last week.
“It has designed concrete reforms to make audits fairer, more predictable, and more accountable. These changes align with the administration’s big, bold reforms to improve the ease of doing business and strengthen trust in government,” he added.
Under the new rules, the BIR will implement a single-instance audit framework, limiting taxpayers to one LOA per taxable year by consolidating multiple audit authorities.
The agency has also shut down the Value-Added Tax Audit Section and Audit Unit and disbanded various audit task forces. This is intended to establish clearer lines of authority by limiting the issuance of LOAs to regional offices and the Large Taxpayers Service.
Online verifier
To improve transparency, the BIR has launched an online LOA verifier through its REVIE chatbot on the agency’s website.
To “audit the auditors,” the tax agency also rolled out an Audit Auditor Program aimed at strengthening revenue officer accountability. This comes after reports that some officers had been operating a “70/30 scheme,” where 70 percent of assessed amounts were pocketed while only 30 percent were officially recorded.
For the examination of books of accounts, taxpayers are now given the option to choose the manner and venue of inspection, especially if records are voluminous and transporting them would be impractical, burdensome or disruptive.
“These reforms are part of BIR DARES, our five-point reform and legacy agenda,” BIR Commissioner Charlie Mendoza said.
“With audits resuming under these improved rules, we call on taxpayers and the public to actively work with the BIR, reach out for assistance when needed, and uphold compliance so that together, we can ensure fair and professional audits for all. We move forward responsibly and with reforms in place,” he added.
With tax audit operations back in place, LOAs are expected to again contribute to the agency’s revenue collection efforts, especially after the BIR fell short of its 2025 full-year target.
According to Mendoza, collections from LOA-driven audits account for about 2 to 3 percent of the BIR’s total revenue, while the remaining 97 to 98 percent comes from voluntary tax compliance.
For this year, the BIR is targeting a P3.431 trillion tax take. The goal was revised down from the original P3.579 trillion program after the Development Budget Coordination Committee lowered growth targets due to slower-than-expected economic performance last year.
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