BIR to resume issuance of LoAs within Q1

THE BUREAU of Internal Revenue (BIR) may resume the issuance of letters of authority (LoA) within the first quarter, as the agency seeks to boost revenue collection.

Finance Secretary Frederick D. Go said tax audits should be resumed as the BIR seeks to meet its revised P3.431-trillion revenue target this year.

“We need to resume that. We need that for revenue collection,” he told reporters on Wednesday evening.

An informed source said the BIR will likely resume LoA issuance within the first quarter.

The LoA is a document from the BIR that allows an examiner to inspect taxpayer accounts. It is required before any tax audit can proceed.

Last November, the BIR banned all field audits, including the issuance of LoAs, mission orders and examinations, following misuse allegations by business groups and lawmakers.

“I must tell you that the Bureau of Internal Revenue (BIR) cannot also survive with these letters of authority suspended forever,” Mr. Go said during his speech at the Financial Executives Institute of the Philippines event on Jan. 21.

The BIR collected only P3.11 trillion in 2025, missing its full-year target of P3.22 trillion.

Data provided to journalists showed that the BIR has lowered its revenue collection target this year to P3.431 trillion, 4.14% lower than the previous goal of P3.579.9 trillion. However, it is 10.5% higher than the actual collection in 2025.

“When we resume this (LoA) 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,” Mr. Go said.

Mr. Go said the BIR will also digitalize and institutionalize a data-driven audit selection process for LoA.

“By leveraging automated risk-based modeling, we are creating a system that minimizes discretion and strengthens accountability. The keyword here is quality assessments, and we will not allow arbitrary or abusive audits,” he said.

The BIR earlier announced preparations ahead of the suspension’s lifting to address concerns of businesses. Business groups have long complained that inconsistent audit practices create uncertainty and expose firms to potential abuse.

BIR Commissioner Charlito Martin R. Mendoza has said the agency earlier established a Technical Working Group Review Committee on Assessment Integrity and Audit Reform following the suspension of tax audits.

The committee is now in the final stages of completing the policy issuances that will guide audit procedures once the freeze is lifted, he said.

Mr. Mendoza had said that once audits resume, taxpayers will have access to an LoA verifier through the BIR’s Chatbot REVIE, and a new policy will limit audits to one LoA per taxpayer.

He added that the agency will also implement a “revalida,” or audit‑the‑auditors system, to tighten accountability among revenue officers.

These reforms are part of the BIR’s five-point priority reform agenda, called BIR DARES, with audit reforms as its top priority.

DARES stands for Digital and Data Transformation, Audit Reform and Accountability, Revenue Collection and Base Protection, Employee Empowerment and Welfare Promotion, and Service Excellence and Stakeholder Engagement.

Meanwhile, the Bureau of Customs’ (BoC) 2026 collection target has also been lowered to P1.003 trillion, 1.07% below the original goal of P1.0138 trillion but 7.34% higher than the P934.4-billion actual collection last year.

Customs Commissioner Ariel F. Nepomuceno earlier said the agency missed its P958.71-billion target in 2025 due to slower import activity amid the rice import ban and the corruption scandal.

In addition, the government raised its nontax revenue collection target by 40.47% to P349.9 billion from its previous target of P249.1 billion.

For 2026, the collection target for other offices is pegged at P38.7 billion. — ARAI