BIR announces resumption of tax audits

The Bureau of Internal Revenue (BIR) said Tuesday it would resume tax audits under a tighter framework after it had secured broad support from the private sector in order to achieve its proposed reforms. 

In a press release, the BIR said the reforms would govern audits once the suspension of Letters of Authority (LOAs) is lifted in the coming weeks.

It said the center of the proposed reforms is a single-instance audit rule. Under the draft order, a taxpayer will generally face one electronic Letter of Authority (eLA) per taxable year, which covers all internal revenue taxes, subject to limited and clearly defined exceptions. 

Meanwhile, multiple eLAs issued for the same taxpayer and year will be automatically consolidated into a single audit authority, with an option for taxpayers to request non-consolidation within set deadlines.

BIR Commissioner Charlito Martin Mendoza said the audit reforms formed a key pillar of BIR D.A.R.E.S., the agency’s five-point reform agenda. 

“While these reforms cannot be completed overnight, they are already underway,” Mendoza said. “Progress will continue as reforms are implemented, monitored, and refined over time.”

The proposed rules were presented by the Technical Working Group Review Committee on Assessment Integrity and Audit Reform (TWGRC-AIAR), led by Deputy Commissioner Marissa Cabreros. 

The said committee also outlined changes to audit selection, which include shifting non-mandatory audits to a risk-based, system-assisted process using anonymized taxpayer lists to reduce discretion and improve objectivity.

The BIR said these reforms were designed to address long-standing complaints over inflated assessments as well as inconsistent audit practices. 

These reforms also include safeguards such as stronger documentation requirements, standardized audit checklists, stricter supervisory review, and sanctions for erring revenue officers.

For its part, private sector groups welcomed the proposals and raised no objections to lifting the audit suspension. 

“The initial set of reforms is right smack at the heart of taxpayers’ concerns—indiscriminate issuance of LOAs, bloated initial assessments, and inconsistent application of audit rules,” Ruben Pascual, secretary general of the Philippine Chamber of Commerce and Industry (PCCI), said. 

On the other hand, Department of Finance Undersecretary Rolando Ligon Jr. said the reforms supported the administration’s push to boost investor confidence. 

“These audit reforms reflect the big, bold changes our government is pursuing to inspire optimism and encourage investment,” Ligon said.

In November 2025, the BIR ordered the immediate suspension of all field audits and related operations, including the issuance of Letters of Authority (LOA) and Mission Orders (MO) amid complaints by some businessmen and taxpayers.—AOL, GMA Integrated News