BIR resumes audit operations, LOA issuances

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is resuming its audit operations, which includes the issuance of letters of authority (LOAs) and mission orders (MOs).

In a press conference on Tuesday, January 27, BIR Commissioner Charlito Mendoza said the commission’s technical working group concluded its review of the audit rules and processes.

LOAs authorize BIR revenue officers to look into a taxpayer’s books of accounts and records for a designated period, while MOs authorize revenue officers to conduct surveillance activities on business operations.

The BIR suspended field operations, including the issuance of LOAs and MOs, back in November amid calls to investigate an alleged extortion scheme within the agency.

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Mendoza assured taxpayers that reforms will be implemented in the resumption of LOA issuances.

For instance, Mendoza said that LOA issuances will be limited to one letter per taxpayer per taxable year. The BIR will also shut down the Value Added Tax audit section and VAT audit teams, and the power to authorize audits will now be limited to regional offices and the large taxpayers’ service.

To address the alleged issuance of fake LOAs, taxpayers will also be able to verify any LOAs they receive through the BIR’s Revie chatbot.

“Some taxpayers, some sectors have raised the concern that they are not sure if the LOA that was issued to them was indeed officially issued by the BIR. And so we came up with that system where we can actually verify if the LOA that they received is authentic and was officially issued by the BIR,” Mendoza said.

Finance Secretary Frederick Go said the reforms are aligned with the government’s push to improve the ease of doing business.

“As audits resume, we urge taxpayers and the public to actively participate in implementing these reforms. Your engagement is critical to ensuring these improvements succeed,” he said.

According to Mendoza, around 2% to 3% of the BIR’s total collections came from LOAs. – Rappler.com