Newly appointed Bureau of Internal Revenue (BIR) Commissioner Charlito Mendoza on Thursday promised to tighten controls over the issuance of tax audit orders, aiming to curb corruption and prevent rogue personnel from using letters of authority (LOA) to extort taxpayers.
Speaking before the Senate Blue Ribbon Committee, Mendoza said, “Moving forward, there has to be check and balance in the issuance of letters of authority and mission orders.”
He noted that BIR regional directors currently have “absolute authority to issue letters of authority. And hindi na po ito umaakyat sa commissioner for approval or prior clearance,” a system lawmakers said had enabled corrupt officials to pressure businesses into paying under the table.
LOAs, similar to court-issued search warrants, authorize BIR personnel to examine the financial records of individuals or businesses suspected of tax evasion. Mendoza acknowledged that some revenue officers had abused the system, and said reforms would require district and regional officials to obtain clearance from his office or his deputy before issuing LOAs.
“That is one area that we are looking at. Before the regional directors can issue letters of authority, they would have to clear it first with the deputy commissioner or with the commissioner,” he said, adding, “Kailangan po mag-submit sila ng justification kung bakit mag-i-issue sila ng letter of authority or why this particular taxpayer should be subjected to audit.”
Senate Deputy Majority Leader JV Ejercito previously revealed that some erring BIR officials had pocketed up to 70% of collections from harassed taxpayers, remitting only 30% to the government.
Mendoza, formerly a Department of Finance (DOF) Undersecretary, was designated BIR chief by President Ferdinand “Bongbong” Marcos Jr. on November 12, replacing Romeo Lumagui Jr.