SENATOR Joseph Victor “JV” Ejercito has warned that abusive tax audit practices at the Bureau of Internal Revenue could drive away both local and foreign investors, as he pushed for clearer and fairer audit procedures during a Senate Blue Ribbon Committee hearing.
Ejercito raised the concern as the committee, chaired by Senate President Pro Tempore Panfilo “Ping” Lacson, continued its inquiry into allegations that some BIR personnel have allegedly misused Letters of Authority and mission orders, turning them into tools of harassment instead of proper tax enforcement.
“We really need the BIR and other revenue generating agencies of government now dahil talagang medyo mabigat yung short, P200 billion right now,” Ejercito said, referring to the budget gap discussed during the hearing.
He said investors look closely at consistency and transparency in tax administration, warning that repeated or overlapping audits—especially against small and medium enterprises—create uncertainty that can push businesses to relocate to neighboring countries.
During the hearing, lawmakers cited figures showing that of 3,520 Letters of Authority issued, only 54 cases reached the final decision on disputed assessment stage.
Total assessments reached about P601 billion, but actual collections amounted to only P7.95 billion, far below the expected standard collection rate.
Ejercito said the low conversion of audits into collections reflects systemic problems that need to be addressed urgently.
“We need much bigger revenues to be collected,” he said, stressing that government finances are already strained by borrowing and revenue shortfalls early in the year.
He welcomed assurances from BIR officials that reforms are being implemented to minimize abuse and improve collections, saying reforms initiated by the current leadership are “expected to minimize abuse this time and increase the much needed revenues.”
However, Ejercito emphasized that reforms must be sustained and closely monitored.
He said both the Senate and the public, including the media, will continue to watch whether promised changes translate into fair treatment of taxpayers and stronger revenue performance.
The Blue Ribbon Committee is expected to continue its investigation, with further hearings aimed at strengthening accountability and restoring confidence in the country’s tax audit system.
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