The University of Asia and the Pacific (UAP), through Center for Research and Communication president Dr. Winston Padojinog, has launched a new study urging the government to “make tax audits digital and transparent” to restore confidence in the seafaring industry.
The study warned that alleged abuses involving the Bureau of Internal Revenue’s Letters of Authority highlight the urgency of reform.
Researchers found that arbitrary tax assessments are threatening foreign investment in a sector generating P1.06 trillion and nearly 400,000 jobs. They said uncertainty is rattling the manning services industry at a time when the Philippines is already losing ground in the global seafaring market.
The study noted that even a small dip in confidence among foreign shipowners could push contracts to other countries, endangering the sector’s estimated four percent contribution to GDP and putting thousands of jobs at risk. A previous UA&P study also emphasized the industry’s stabilizing effect, with every peso remitted by seafarers nearly tripling in domestic economic value.
Padojinog said a fully digital, no-contact audit system—with transparent rules, online tracking of LOAs, clear timelines, and an independent review panel—is essential for predictable taxation. He stressed that such predictability is an economic safeguard crucial to maintaining the country’s position as a leading supplier of global seafarers.
The call for reform follows Senator JV Ejercito’s push to investigate alleged misuse of LOAs after reports of excessive, duplicated, and retroactive tax audits. On November 24, the Department of Finance responded by temporarily suspending all BIR field audits and LOA issuances.
