Taxpayers may soon start receiving letters of authority (LOAs) again from the Bureau of Internal Revenue (BIR), as the suspension on tax audits is expected to be lifted in the first quarter of 2026, allowing the agency to resume audit operations and maximize revenue collection.

Speaking to the private sector on Wednesday night, Jan. 21, Finance Secretary Frederick D. Go said the BIR, the country’s main tax-collection agency, needs to resume issuing LOAs to meet its revenue collection target of ₱3.58 trillion this year. A LOA allows revenue officers to examine a taxpayer’s book and records.

Despite suspending LOA issuance last year amid allegations of red tape, systemic abuse, and so-called “mission orders,” Go stressed that the BIR “cannot survive if these LOAs are suspended forever.”

He said the suspension had already hurt tax revenue collection, as reflected in the BIR’s full-year collections of ₱3.11 trillion last year, or 3.4 percent short of the government’s ₱3.22-trillion target. Go also told reporters that resuming LOA issuance is crucial to improving revenue collection.

While noting that the agency cannot function indefinitely without LOAs, Go said restoring these tax audit documents must follow the full digitization of the BIR’s audit selection process, using risk-based modeling to reduce discretion and improve accountability.

“Using automated risk-based modeling, we are building a system that reduces discretion and strengthens accountability. We will not permit arbitrary or abusive audits,” Go told members of the Financial Executives Institute of the Philippines (FINEX).

The centralized digital ledger will allow businesses to verify the authenticity of an LOA in real time, ensuring tax agents act under official orders rather than conducting unauthorized “show” audits.

Go also reiterated plans to limit the number of BIR departments authorized to issue LOAs and to cap the number each taxpayer can receive annually.

Under the proposed framework, the Department of Finance (DOF) aims to streamline audits by consolidating investigations. Rather than subjecting a single firm to multiple, disjointed inquiries from different tax divisions, the government intends to merge assessments.

In addition, the DOF said it has streamlined tax clearance requirements for socialized and economic housing projects to reduce paperwork.

The BIR’s tax-collection targets are set higher at ₱3.98 trillion in 2027 and ₱4.42 trillion in 2028. Achieving these figures will require the Bureau to maintain the momentum seen in late 2025 while successfully integrating its new digital and structural reforms.