Business groups back suspension of tax field audits

MANILA, Philippines — Business groups are in favor of the suspension of all field audits of the Bureau of the Internal Revenue (BIR), amid concerns over audit procedures.

In a statement, the Philippine Chamber of Commerce and Industry (PCCI) said it welcomes Finance Secretary Frederick Go and BIR Commissioner Charlito Martin Mendoza’s move to suspend all field audits and related operations of the agency, including the issuance of letters of authority (LOA).

“This intervention provides crucial and immediate relief to businesses, especially micro, small and medium enterprises, by granting them much-needed operational breathing room to better focus on year-end priorities,” the PCCI said.

It added the development allows businesses to focus on strategic planning, inventory management and holiday season sales without the added pressure of a BIR audit.

Semiconductor and Electronics Industries in the Philippines Foundation Inc. president Dan Lachica also welcomed the development.

“I’m glad the new BIR commissioner suspended all audits, the LOAs, because this is again another avenue for corrupt officials,” Lachica said at the BusinessWorld Forecast 2026 Forum yesterday.

The PCCI said it also sees the BIR’s establishment of a Technical Working Group (TWG) to review and update the BIR’s existing policy frameworks on the issuance and implementation of LOAs and related audit procedures as a welcome development.

For the group, the creation of the TWG signals a concrete and meaningful step toward addressing long-standing concerns about clarity, consistency and proper oversight in audit processes.

“PCCI sees this as an important opportunity to improve guidelines, strengthen internal controls and ensure that the audit system fully aligns with established rules and the principles of due process,” the PCCI said.

As lead convenor of the Partnership with Multi-Sectoral Group created under a memorandum of agreement with the BIR, the PCCI is willing to provide technical input and practical insights to the TWG’s review.

The group has expressed willingness to work with the Department of Finance and the BIR in refining the LOA framework and related audit protocols.

“Our shared goal is to cultivate a tax system that protects compliant taxpayers, supports efficient and fair revenue collection and upholds the standards of accountability, integrity and transparency,” the PCCI said.

Not yet off the hook

Meanwhile, former BIR commissioner Romeo Lumagui Jr. could be held accountable if he is proven to be involved in a scheme of using LOAs to extort from businesses, specifically by delivering only 30 percent of collections to the government while the bulk of 70 percent goes to corrupt revenue officials.

Senate Deputy Majority Leader JV Ejercito bared this yesterday as he flagged billions in supposedly lost government revenue due to the alleged corruption racket among BIR officials.

Both Ejercito and Sen. Erwin Tulfo said the alleged scheme among BIR examiners had been going on for years, even before 2022.

Asked whether Lumagui could be held accountable as the alleged scheme was also prevalent  under his watch, Ejercito said “even if he had resigned or been replaced I think they still have to be answerable for their actions or inaction.”

Ejercito said Lumagui could also possibly be summoned to the Blue Ribbon committee hearing on the scheme.

“Probably to clear his side or to air his side, it will be wise for him to go (to the hearing), whether he took action or not,” the senator said.

“I think it should come from him whether he took action or not upon hearing all of these issues or complaints about the LOAs from different businessmen,” Ejercito said at a press conference.

The senator said Lumagui had already been replaced before he could directly ask him about the matter. “I haven’t spoken to him about this issue unfortunately,” Ejercito said.

Tulfo has filed a resolution urging the Blue Ribbon committee to investigate the matter while Ejercito said he would file a similar resolution.

Ejercito noted that early reports suggest the anomaly may have reached senior regional levels.

Tulfo earlier said while the racket has been going on “for quite some time,” the alleged abuses intensified in 2024, which he suspects as a scheme to rack up numbers to reach annual targets for collections.

Ejercito said only P2 billion to P3 billion revenue had been generated, which was way below the P6-billion to P8-billion target.