Department of Finance Secretary Frederick Go said Wednesday the government is overhauling the Bureau of Internal Revenue’s audit system to improve accountability before resuming the issuance of tax investigation notices.
Speaking at the 2026 Financial Executives Institute of the Philippines inaugural meeting, Go said the tax agency could not function indefinitely without letters of authority, which are the official documents required to authorize audits and collect unpaid revenues.
“The Bureau of Internal Revenue cannot also survive if these letters of authority are suspended forever. But before we restart it, what I’d like to assure you is that we’re working on several things,” said Go.
The bureau suspended the issuance of these letters in November 2025 following complaints from the private sector regarding audit practices and the conduct of tax examiners.
The proposed reforms focus on the digitization and institutionalization of a data-driven selection process for audits. Go said the new system is designed to minimize human discretion and strengthen oversight within the agency.
“Most importantly, when we resume this activity, we will reduce the number of departments within the BIR authorized to issue letters of authority, and reduce the number of letters of authority a taxpayer can receive in any given year,” said Go.
Go said the bureau would also limit the number of letters of authority a single taxpayer could receive within a calendar year to prevent harassment and redundant investigations.
Bureau of Internal Revenue Commissioner Charlito Mendoza confirmed that a technical working group is in the final stages of refining these policies. The agency has launched a five-point reform agenda known as BIR DARES to modernize its operations.
Mendoza said the reforms are being designed to ensure that once audits resume, they will be conducted under clearer rules and stronger safeguards.
“These reforms are being carefully designed to ensure that when audits resume, they do so under clearer rules, stronger safeguards, and better oversight,” said Mendoza.
He said the bureau is focused on balancing its revenue targets, which often reach billions of pesos, with the need for a more transparent relationship with taxpayers.
The suspension remains in place while the department finalizes the transition to the digital selection system, which officials hope will increase the efficiency of tax collection by 10 percent or more in the coming fiscal years.
