Bureau of Internal Revenue (BIR) Commissioner Charlito Martin Mendoza announced Thursday that all letters of authority (LOAs) should now be personally cleared by his office before issuance, describing the move as an immediate step to strengthen oversight and restore public trust in the agency’s audit system.
Speaking before a Senate Blue Ribbon Committee hearing on alleged abuses in the issuance of LOAs, Mendoza said the clearance requirement is part of broader audit reforms, including digitalization, aimed at reducing human intervention and ensuring audits are fair, transparent and predictable.
Mendoza, in response to a question from Senator Paolo Benigno Aquino IV about urgent reform steps, said “all LOAs will be cleared by my office,” to prevent arbitrary, repetitive, or overlapping audit orders.
The BIR has also temporarily suspended the issuance of LOAs while it reviews and modernizes its audit and enforcement processes, according to the Commissioner. Reforms aim to increase voluntary tax compliance through fairness rather than fear of punitive action.
Finance Secretary Frederick Go, who was present at the hearing, expressed full support for the commissioner’s efforts to strengthen accountability and reduce discretionary enforcement.
Committee chair Senator Panfilo Lacson pledged to secure funding for the BIR’s full digital transformation, calling it essential to curb corruption and limit human discretion in audit processes.
Senator Erwin Tulfo, vice chair of the committee, criticized the alleged misuse of LOAs as an extortion tool against businesses, noting that many owners are afraid to report abuses for fear of retaliation.
“Napakaraming negosyante ang gustong magsumbong pero ayaw magpakilala dahil baka ma-blacklist sila,” Tulfo said.
Tulfo and Senator Joseph Victor Ejercito, who requested the investigation, are preparing witnesses and evidence for succeeding committee hearings to ensure a thorough review of alleged LOA abuses.
Mendoza stressed the goal of rebuilding taxpayer trust.
We must eliminate arbitrariness, remove repetitive or overlapping issuances, and establish near-time monitoring of ongoing audits. 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,” he said.
He also directed the technical working group reviewing LOAs and other concerned BIR units to prepare all relevant data, audit histories and investigation reports for succeeding Senate hearings.
 as an immediate measure to curb corruption, increase oversight, and restore public trust in the tax agency’s audit system.){kind=link}