00:00After a two-month pause, tax audit services are back but under stricter terms or rules.
00:06Reforms put in place to include audit letters limited to one each taxpayer
00:10and the dissolution of the VAT tax unit and the WOT tax section have been welcomed by taxpayers
00:15who seek consistent data-driven applications to end abuse and corruption in tax computation and payments.
00:22Our Denise Osorio has more.
00:24The Bureau of Internal Revenue and the Department of Finance has resumed tax audit operations,
00:32placing them under stricter and more transparent rules after a two-month suspension imposed in November 2025.
00:39The tax authority said the pause was used to review audit procedures, identify weaknesses in the system,
00:45and respond to complaints from businesses about overlapping audits and alleged harassment.
00:50We suspended the audits. We wanted to review the protocols, we wanted to review the processes
00:57and see where the vulnerabilities are.
01:01And we are now done with the review.
01:04The technical working group has come up with the recommendations, and so we are now ready to issue audits.
01:10Under the revised framework, only one letter of authority may be issued to a taxpayer in a given taxable year,
01:16except in specified cases.
01:18The BIR has also dissolved the VAT Audit Unit and the Value-Added Tax Audit Section, or VATO and VATAS,
01:26limiting audit authority to regional offices and large taxpayer services.
01:31To improve transparency, taxpayers can now verify audit orders online via the BIR's website using the REVI chatbot.
01:39An audit, the auditor program, has also been introduced to strengthen oversight of tax examiners.
01:45The agency said the reforms are intended for audits to be conducted in a more controlled and transparent manner.
01:51With all the new reforms that will be in place with the lifting of the audits spectrum,
01:58we are confident that the conduct of audits will now be more transparent and controlled and with clearer oversight.
02:12This is something that we study very carefully and with these reforms we are confident that the audits are moving forward.
02:22Hindi na po dapat nilang katakutan.
02:24Hindi na po nilang dapat nilang.
02:25Business groups have broadly welcomed the changes, while stressing the importance of consistent implementation.
02:31The Federation of Philippine Industries said audits are a necessary tool,
02:36but warned the excessive discretion in enforcement has historically led to abuse.
02:41In a statement, FBI Chairperson Elizabeth Lee said audits should be selected on the basis of data rather than individual discretion,
02:49arguing that this makes compliance more predictable and reduces opportunities for corruption,
02:55particularly for micro, small and medium enterprises or MSMEs.
02:59The Philippine Chamber of Commerce and Industry expressed similar views.
03:03Its Vice President for Trade and Industry, Brian Ang, said the business sector had held extensive discussions with the tax authority
03:10and that safeguards are in place to prevent audit orders from being used as a form of harassment.
03:17The business sector has had several conversations with the BIR on this issue,
03:22and they have had many safeguards in place to make sure that this LOA will no longer be weaponized
03:28and used as harassment by examiners, especially towards our small and medium enterprises.
03:34The PCCI added the credibility of the reforms would ultimately depend on execution,
03:40particularly at the regional and local levels.
03:43If we are asked to pay for the right taxes and we are given the receipt for the entire tax payment,
03:48all businessmen, small, micro, medium, will be willing to pay the right taxes.
03:52It's only when there is some under-the-table payment, that's the only time that we are hesitant to pay it,
03:59and that's the only time we feel the harassment.
04:01Proper computation, proper assessment, payment, na nakarecebo lahat, we will accept that.
04:06Business groups note that MSMEs account for almost all businesses in the Philippines,
04:12generating millions of jobs, and are central to the domestic economy,
04:17making a predictable and non-discretionary audit system critical.
04:20The BAR said the changes form part of its DARES reform agenda,
04:26with some measures already in effect and others,
04:29particularly those related to digital monitoring, to be introduced gradually.
04:33The agency said it would continue to engage with taxpayers and business groups
04:37to ensure audits are conducted fairly and professionally.
04:42Denise Osorio from the National Television Network for a New and Better Philippines.
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