The Bureau of Internal Revenue (BIR) on Thursday said it is implementing reforms to address complaints of extortion and abuse in the issuance of letters of authority (LOA).
BIR Commissioner Charlito Martin Mendoza detailed the measures during a Senate blue ribbon committee hearing.
Mendoza said the BIR earlier suspended the issuance of LOAs and mission orders, as well as all pending field audits.
He said a technical working group has been formed to review existing audit protocols and craft a more transparent and predictable system for conducting field audits.
The commissioner also ordered all BIR units to submit an inventory of pending LOAs to determine their whereabouts and current status.
Mendoza said the agency is looking to impose checks and balances on LOA issuance, noting that regional directors currently hold “absolute discretion” to issue them.
Moving forward, he said LOA recommendations from regional directors must first be cleared by the Office of the Commissioner or a deputy commissioner.
He said directors will be required to justify each proposed audit and provide its legal and factual basis.
Mendoza added that the BIR aims to limit the number of LOAs issued to taxpayers by integrating them with the agency’s regular audit units.
He said an online portal is also being developed to allow monitoring of ongoing LOAs.
The reforms were announced amid allegations raised by Senators Erwin Tulfo and JV Ejercito that some BIR officials were involved in money-making schemes through LOAs.
Ejercito earlier claimed that 70 percent of the supposed collections were pocketed by certain officials, with only 30 percent remitted to the government.