Bureau of Internal Revenue Commissioner Charlito Mendoza announced that all letters of authority now require his approval before issuance, as part of reforms to prevent misuse in tax audits. He disclosed this during a Senate blue ribbon committee hearing on December 11, 2025. Previously, these documents were issued at the regional level without escalation to the commissioner.
On December 11, 2025, during a Senate blue ribbon committee hearing, Bureau of Internal Revenue Commissioner Charlito Mendoza announced reforms to the issuance of letters of authority (LOA). These documents typically initiate tax audits, but regional directors previously held absolute authority to issue them without commissioner approval. "Right now po, when it comes to the issuance of letters of authority by the regional directors, meron po silang absolute authority to issue letters of authority. And hindi na po ito umaakyat sa Commissioner for approval or prior clearance," he stated.
In response to reports of LOAs being misused for extortion and soliciting bribes from businessmen and taxpayers, the BIR has suspended field audit operations. Senators JV Ejercito and Erwin Tulfo alleged that BIR personnel retained up to 70% of such collections. To enhance processes, the BIR plans to limit the number of LOAs a taxpayer can receive, supported by an integrated digital system for better checks and balances.
Former BIR Commissioner Kim Henares emphasized that LOAs remain essential for effective tax collection, referencing a study showing P1 trillion in uncollected taxes due to evasion and related issues. During her tenure, her office strictly monitored LOA issuance, with limitations as part of her audit plan. These reforms aim to bolster the BIR's integrity amid corruption allegations.
