THE Philippine Chamber of Commerce and Industry (PCCI) on Sunday expressed support for Finance Secretary Frederick Go’s initiative to help stop the alleged abuse and misuse of Letters of Authority (LOAs) issued by officers at the Bureau of Internal Revenue (BIR).
The tax collection bureau is under the supervision and control of the Finance department.
“The move is a welcome and timely step toward strengthening taxpayer protection, restoring confidence in tax administration and ensuring that enforcement powers are exercised fairly, transparently and within the bounds of the law,” PCCI said in a statement.
Among the measures Go has prepared to tighten the reform plans earlier announced by BIR Commissioner Charlie Mendoza are:
– Reduce the number of departments within the BIR authorized to issue LOAs.
– Limit the issuance of LOAs to once a year, noting that under the current setup, a taxpayer may receive a VAT LOA for the first half of the year and another for the second half.
– Create a centralized digital registry of LOAs, allowing taxpayers to verify online whether the one issued to them is authentic and authorized.
The PCCI noted that business firms had long raised concerns over certain tax audit instruments, such as LOAs and Mission Orders for activities that go beyond limited fact-finding, audits continuing beyond the validity or scope of issued authorities, overlapping or repeated audit notices for the same taxable periods, and the lack of transparency or traceability in the issuance and monitoring of audit authorities.
These practices, when left unchecked, expose taxpayers to undue pressure and weaken confidence in the tax system, PCCI said.
“Tax enforcement must be firm, but it must also be fair. Any misuse of audit and investigation powers erodes trust, creates uncertainty for businesses and discourages voluntary compliance,” incumbent PCCI President Enunina Mangio pointed out.
“Properly issued, time-bound and digitally tracked audits are critical to maintaining a level playing field and preventing abuse,” she added.
The PCCI said these reforms have important implications for investment promotion, since they represent another step in protecting foreign investors from the abusive or arbitrary use of audit authorities. CHYNNA GRACE ONG
“Protecting taxpayers from abuse is not anti-enforcement — it is pro-good governance,” incoming PCCI President Ferdinand Ferrer said.
“We at the Chamber look forward that through the BIR-Private Multisectoral Group (BIR-PMSG), we will strengthen collaboration with our economic managers and the BIR to support reforms that promote transparency, accountability and investor confidence,” he added.
The BIR-PMSG is a coalition of business organizations coordinating with the agency on tax issues and concerns.
