The Department of Finance (DOF) has signaled a major reset in how tax audits are conducted, pledging full cooperation in the Senate’s investigation into the issuance of Letters of Authority (LOAs) and Mission Orders (MOs)—a long-standing pain point for businesses concerned about audit abuse, uncertainty, and compliance risk.
Finance Secretary Frederick D. Go told the Senate Blue Ribbon Committee that the review aims to directly address complaints from taxpayers, particularly the business sector, about red tape and the alleged misuse of audit powers.
“The DOF extends its full support and cooperation in addressing the long-standing concerns of our taxpayers regarding red tape, audits and alleged weaponization of letters of authority and mission orders,” Secretary Go said at the Senate hearing on December 11, 2025.
In a move closely watched by companies and tax advisers, Secretary Go ordered the immediate suspension of all Bureau of Internal Revenue (BIR) field audits during his first week in office, allowing regulators to reassess policies that directly affect business operations, cash flow planning, and regulatory exposure.
“We welcome this investigation. President Ferdinand R. Marcos, Jr. has made it unequivocally clear that we will not tolerate corruption in government,” he said.
During the suspension period, no LOAs or MOs may be issued or served, under BIR Revenue Memorandum Circular No. 107-2025. This development temporarily eases audit pressure on firms across sectors.
Looking ahead, the BIR is pushing reforms with clear implications for corporate governance and compliance predictability. These include the rollout of a digital audit selection system that will determine which taxpayers are audited, significantly reducing human discretion. Audits issued outside the system will be declared void, with accountability measures in place for erring officials.
The agency is also developing a centralized portal to track all pending LOAs, while tightening approval rules so that only the BIR Commissioner or Deputy Commissioner can authorize audit orders—steps designed to strengthen internal controls and restore confidence among taxpayers.
“We want our taxpayers to see and feel that we truly reformed the system,” Secretary Go said.
For businesses, the reforms point toward a more rules-based, transparent audit environment—one that could lower compliance uncertainty and improve trust between regulators and the private sector.