BIR suspends LOA issuance amid extortion complaints

The Bureau of Internal Revenue (BIR) has suspended the issuance of Letters of Authority (LOA) and pending field audits to address extortion and abuse complaints.

BIR Commissioner Charlito Martin Mendoza announced that all LOAs will now require his clearance before issuance, a change from the previous system where regional directors had absolute authority.

A technical working group is reviewing and improving field audit processes to create a more streamlined, predictable, and transparent system.

The BIR is also compiling an inventory of all pending LOAs to track their status and location.

Reforms under consideration include establishing checks and balances for LOA issuance and limiting the number of LOAs taxpayers receive.

The agency plans to integrate audits within regular BIR units to prevent misuse.

The suspension followed reports that LOAs were used to extort bribes, with senators claiming BIR personnel kept up to 70% of these collections.