00:00The letter of authority and or mission order are tax collection measures intended to accurately assess businesses their tax arrears with the Internal Revenue Agency.
00:10Instead, scheming BIR examiners weaponized them as extortion tools to fleece business owners who'd rather settle under the table than have their books audited.
00:19A practice that eventually led to rampant abuse, but which has since been outlawed prior to the current Senate Blue Ribbon Probe on the matter.
00:26As we hear more from our Luisa Erisbe.
00:30The Blue Ribbon Committee has started its hearing on the alleged corruption in the Bureau of Internal Revenue through the use of Letters of Authority or LOA.
00:40Instead of becoming useful for tax collection, it has become a tool for exploitation of businesses by some examiners and revenue district officers.
00:49Small and big businesses, mula po sa maliliit na family convenience store hanggang sa malalaking korporasyon, have raised serious concerns recently.
01:02Kahit po ang mga international companies, hindi na ninyo pinatawad, pinatos na ninyo.
01:10Itong mga kumpanya na ito na nagdadala ng trabaho, teknolohiya at pamumuhonan sa bansa, ay hindi raw nakaligtas sa ganitong uri ng pangaabuso.
01:21LOA serves like a search warrant for businesses with questionable accounting books and unpaid taxes of company or a business.
01:29But according to Senator Tulfo, some officers use this document to ask for settlement payments.
01:35Aside from this, multiple LOAs are issued to certain businesses which doubles tax payments.
01:41This is clearly a form of abuse of the use of LOAs and mission orders.
01:46Former Commissioner Romeo Lumagi Jr. was grilled as the supposed money-making scheme allegedly intensified during his term.
01:53Ang problema yung negosyante, bug-bug po sa kalalagay. Kasi iba-ibang tao.
01:59I-issue ng BAT dito, bukas makalawa next month, issue isang BAT na naman, ibang tao na naman.
02:06Kaya po nito nag-email sa auntie, in a span of six months, we were issued four separate letters of authority with three audits still ongoing.
02:16Without your knowledge, inabuso po nila. Kaya minsan, apat, lima, anin, kayo, instruction nyo, dalawa lang, sige.
02:26Pero when they issue LOAs, iba pa ho yun eh. Yun ang nagiging problema, naabuso po ng panahon nyo.
02:35Wala po kayong safety net to protect the businesses.
02:39Senator J. V. Ejercito also received complaints on the matter. According to him, aside from the multiple LOAs, some examiners even issued this document annually and has a list of businesses to regularly exploit.
02:53Ang problema raw, taong-taong na siyang may LOA dahil pumapayag ni siya sa settlement na lamang. Naging cycle na po tuloy ang extortion.
03:03As of now, the BIR has already suspended the issuances of LOAs. Finance Secretary Frederick Goh said they have set reforms to stop the said scheme.
03:13My first major directive as Secretary of Finance was the temporary suspension of all field audits and related operations effective immediately.
03:24This was formalized under RMC No. 107-2025.
03:29BIR Commissioner Charlie Mendoza and I are fully aligned with the President's goal of cleaning up the system, restoring integrity and public confidence, and implementing reforms.
03:46I would like to reiterate, Your Honors, we will not condone any form of harassment, let alone corruption.
03:52The reshuffling of BIR employees is also recommended by the Blue Ribbon Committee.
03:57Luisa Erispe from the National TV Network for a new and better Philippines.
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