The Bureau of Internal Revenue (BIR) said it will soon resume tax audits under a new reform framework to eliminate redundant investigations and curb inflated assessments, following consultations with the private sector.
BIR Commissioner Charlito Martin Mendoza, in a meeting on Jan. 21, presented the proposed guidelines to the Multi-Sectoral Group, a body comprising major business associations. The reforms are part of a broader five-point agenda known as BIR DARES, which focuses on digital transformation, audit accountability and service excellence.
Under the new single-instance audit framework, taxpayers will generally be subject to only one electronic letter of authority (LOA) per taxable year for all internal revenue taxes. The bureau plans to consolidate multiple existing authorities for the same taxpayer into a single audit stream, though taxpayers may request non-consolidation under specific deadlines.
The BIR suspended the issuance of LOA in November 2025 to review its processes. To ensure objectivity, the agency said future non-mandatory audits would be risk-based and system-assisted, using anonymized lists to minimize the discretion of individual revenue officers.
The reform package also includes standardized documentation checklists, stricter supervisory oversight and sanctions for personnel who violate the new protocols.
Mendoza said that while some digitalization and data integration efforts would require long-term development, several procedural reforms would be implemented immediately upon the lifting of the suspension.
Philippine Chamber of Commerce and Industry secretary-general Ruben Pascual expressed support for the measures, saying they address long-standing grievances regarding the indiscriminate issuance of audit notices and inconsistent interpretation of tax rules.
He said the private sector is convinced that the Department of Finance and the BIR are listening to business concerns.
Department of Finance Undersecretary Rolando Ligon Jr. said the changes align with the government’s goal to encourage investor confidence.
He said that the feedback from the 20 private sector organizations in attendance, including the Makati Business Club and the Tax Management Association of the Philippines, was overwhelmingly positive.
The Technical Working Group Review Committee on Assessment Integrity and Audit Reform, led by BIR deputy commissioner Marissa Cabreros, is refining the draft order based on the latest feedback. The suspension of audits will be officially lifted once the final order is signed, the BIR said.
