FAR FROM THE usual denial, the government’s top tax collector admitted the existence of corruption at the Bureau of Internal Revenue (BIR).
During the Senate blue ribbon committee hearing, BIR Commissioner Charlito Mendoza expressed willingness to cooperate with the “congressional investigation in aid of legislation.”
“We from the BIR appeared before you today, with openness and humility to respond to and to clarify the issues that brought us here… and to listen, learn and work with the Senate to strengthen our tax system,” Menza averred.
Suspended Field Audits
Prior to the senate investigation, Mendoza issued Revenue Memorandum Circular 107-2025 which effectively suspended all field audits and related operations nationwide to address widespread complaints of extortion and abuse involving the issuance of Letters of Authority (LOAs).
According to Mendoza, the suspension of all field audits would give way to policy reviews and implementation of reforms for better taxpayer rights protection.
Aside from the issuance of LOAs, the suspension also covers mission orders, examining books of accounts, and field investigations.
Interestingly, the suspension does not apply for cases nearing prescription, tax evasion, closure of businesses, and specific urgent matters.
No Way To Dump LOA
Former BIR Commissioner Kim Henares, who formed part of the committee hearing’s panel of resource persons, cited the need for BIR to sustain efforts primarily designed to ensure tax compliance.
According to Henares, the mechanism referred to as LOA is necessary to ensure that businesses are paying taxes corresponding to its revenue.
“That Letter of Authority pushes behavior of compliance… so yun po ang hindi pwede mawala. Yung takot, kasi marami po ang hindi nagbabayad ng tamang buwis,” the former BIR chief was quoted as saying during the Senate hearing.
Henares likewise cited a study which she claimed had the country at the losing end because of the absence of “safeguards.” She however did not delve into details.
“Meron pong study na we have not collected more than one trillion pesos from tax evasion.”
Hands On DOF Chief
Likewise present during the senate probe was Finance Secretary Frederick Go, who made a commitment to the August chamber that the Marcos administration would not allow crooks to squander taxes being paid by the Filipino people.
“We welcome this investigation. President Ferdinand Marcos Jr. has made it unequivocally clear — we will not tolerate corruption in the government,” Go told the senators in attendance at the congressional probe into the issuance of LOAs.
According to the Finance Secretary, Mendoza’s order to suspend issuance of LOA and other field activities would enable an increased focus on protecting taxpayer rights and improving internal controls.
The country’s business groups have already signified support to Mendoza’s radical reforms at the government’s revenue bureau.
