Business groups back reforms to end tax audit abuse
Published Dec 30, 2025 01:05 pm
High-rise buildings in the Ortigas Business Center are seen on Wednesday, Nov. 5. In a report by Bloomberg, the Philippine Stock Exchange Index has dropped 20 percent over the past decade, ranking as the worst performer among major global benchmarks. In contrast, Asia-Pacific stocks climbed 72 percent, while Indonesia’s Jakarta Composite Index soared 82 percent. Photo by Santi San Juan | MB
Prominent business groups expressed support for ongoing government efforts to restore investor confidence by addressing the alleged abuse and misuse of letters of authority (LOAs) and related audit instruments within the Bureau of Internal Revenue (BIR).
In separate statements, the Federation of Filipino Chinese Chambers of Commerce and Industry Inc. (FFCCCII) and the Philippine Chamber of Commerce and Industry (PCCI) said the reforms initiated by the government align with the business sector’s call for transparency and good governance.
“By instituting greater transparency and accountability in tax audit processes, we protect the integrity of our institutions and fuel the confidence that leads to job creation, innovation, and shared national progress,” said FFCCCII president Victor Lim.
“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,” PCCI president Enunina Mangio said.
Finance Secretary Frederick D. Go earlier said he plans to reduce the number of agencies authorized to issue LOAs, alongside limiting their issuance per year.
This comes after he issued a directive to suspend field audits and related operations of the BIR to protect taxpayers from abuse.
Businesses have long flagged overreaching enforcement when it comes to tax audit instruments such as LOAs and mission orders (MOs).
An LOA allows revenue officers to examine a taxpayer’s books and records, while an MO authorizes surveillance, verification, site inspections, and other limited fact-finding activities.
Concerns have been raised over these documents, particularly their potential to go beyond limited fact-finding, the validity or scope of issued authorities, and the lack of transparency or traceability in the issuance and monitoring of audit powers.
Lim, who leads the most influential Filipino-Chinese business group in the country, said these practices create an environment of uncertainty that discourages both compliance and investment.
He emphasized that reforms are critical to foster “a genuine ease of doing business to encourage the investments necessary for sustainable and inclusive Philippine economic growth.”
“When investor morale is bolstered by fair play and clear rules, businesses are empowered to expand. This expansion, in turn, creates more jobs, lifts communities, and generates a net increase in tax revenues for the government—initiating a virtuous cycle of prosperity that benefits all Filipinos,” Lim added.
The FFCCCII president said that taking steps to prevent abuse would also ensure that both foreign and domestic investors maintain long-term confidence in investing in the country.
Meanwhile, PCCI noted that while strong enforcement is essential to revenue generation, it must be balanced with clear safeguards to protect due process and ensure accountability between the government and businesses.
To further affirm investor confidence, the country’s largest business group urged the government to implement properly issued, time-bound, and digitally tracked audit authorities to stop audit abuse altogether.
“Clear rules, consistent enforcement, and strong safeguards against misuse of LOAs and MOs are essential to strengthening investor confidence and reinforcing the Philippines’ reputation as a fair, transparent, and predictable place to do business,” said Mangio.