The Senate Blue Ribbon Committee on Thursday launched an investigation into reports of extortion and abuse within the Bureau of Internal Revenue (BIR), where officials allegedly issue excessive and irregular Letters of Authority (LOAs) to pressure and harass both local and foreign businesses.
LOAs are official documents used to examine taxpayer records to ensure proper tax compliance.
“For years, small and large businesses, from small family-owned convenience stores to major corporations, have raised serious concerns,” Sen. Erwin Tulfo said.
“Many say they were subjected not to fair tax assessments, but to pressure, intimidation, and questionable demands in exchange for having tax investigations withdrawn or reduced,” he added.
Even international firms, including those bringing investment and jobs to the Philippines, have reportedly been subjected to alleged abuses, according to foreign chambers of commerce.
Only about 2 percent of total tax collections from businesses come from LOAs, while the remaining 98 percent comes from voluntary payments.
Allegations suggest that some collections from LOAs may have been diverted to individual examiners and regional officials, raising concerns of systemic abuse.
“We will hold accountable anyone who has betrayed their sworn duty to serve with integrity. Our goal here is simple: To restore trust, protect our taxpayers, and ensure that public power is never ever again used for private gain,” Tulfo said.
Data provided by BIR officials showed that 62,462 LOAs were issued in 2023, 75,510 in 2024, and 82,145 from January to October 2025.
Revenue regions with the most LOAs include Manila, Caloocan, Quezon City, south National Capital Region (NCR), and Makati, largely reflecting business concentration in Metro Manila.
BIR Commissioner Charlito Martin Mendoza assured stakeholders that future LOAs will require approval from the National Office to limit discretion at the regional level.
Sen. Bam Aquino noted that many businesses, particularly micro and small enterprises, fear harassment and are hesitant to report abuses publicly.
“They feel they have nowhere to turn, and no one to seek help from, and they are the most terrified when someone tries to extort or exploit them,” Aquino said.
Mendoza reported that the bureau has suspended LOA issuance temporarily and formed a technical working group to study audit procedures and recommend reforms.
The committee plans to review past LOAs to identify potential fraud, repeated audits, or excessive assessments.
Editor’s Note: This is an updated article. Originally posted with the headline: “Blue Ribbon probes extortion complaints vs. BIR officials”
