Blue Ribbon to look into BIR’s resumption of LOA issuance

By Wilnard Bacelonia, Philippine News Agency

HEARING. The Senate Blue Ribbon Committee, chaired by Senator Panfilo Lacson on Dec. 11, 2025, launches its probe into reports of extortion, abuse, and other alleged money-making schemes within the Bureau of Internal Revenue. The committee will hold a hearing this week to examine the Bureau of Internal Revenue’s resumption of the issuance of letters of authority and mission orders, Senate President Pro Tempore Panfilo Lacson said Monday. (Senate of the Philippines/facebook)

MANILA – The Senate Blue Ribbon Committee will hold a hearing this week to examine the Bureau of Internal Revenue’s (BIR) resumption of the issuance of letters of authority (LOAs) and mission orders (MOs), Senate President Pro Tempore Panfilo Lacson said Monday.

Lacson, panel chair, said the committee has to be formally briefed on the reforms and safeguards the BIR instituted to prevent abuse of LOAs against taxpayers.

“The Senate Blue Ribbon Committee needs to be formally informed of the new reforms instituted by the BIR in relation to the issuance of LOAs and if safeguards are already in place to prevent or at least minimize abuse committed against our taxpayers, then we may have to conclude the committee hearings on the matter,” Lacson said.

“We will schedule a hearing this week in this regard to hear what the BIR has to say.”

The BIR earlier announced the resumption of audit operations, including the issuance of LOAs and MOs, which had been suspended in November amid allegations of extortion involving their use.

BIR Commissioner Charlito Mendoza has said reforms would be implemented, including limiting LOA issuances to one per taxpayer per taxable year and allowing taxpayers to verify LOAs through the agency’s chatbot.

During its previous hearing last Dec. 11, 2025, Committee Vice Chairperson Erwin Tulfo said LOAs and MOs —intended to ensure lawful tax collection— have been misused for harassment and extortion, affecting both local and international companies.

“Kahit po ang mga international companies… ay hindi nakaligtas sa ganitong uri ng pang-aabuso (Even international companies have not been spared from this kind of abuse),” he said, citing complaints raised with foreign business groups and diplomats.

Tulfo also pointed to data showing that only about 2 percent of BIR revenue from the business sector comes from LOA-initiated audits, while the bulk is paid voluntarily, raising concerns that some LOA-related collections are being diverted.

Senator Joseph Victor Ejercito also echoed the concerns, citing reports of multiple LOAs issued to the same taxpayers within short periods and allegedly inflated assessments used to pressure businesses into settlements.

“Malaki o maliit ang iyong negosyo, target ka ng BIR… Nagagamit ang LOA sa harassment, coercion, at pilit na negotiation (Whether your business is big or small, you can be targeted by the BIR… The LOA is being used for harassment, coercion, and forced negotiation),” Ejercito said, adding that the practice has fueled a culture of corruption that must be stopped.