Erwin Tulfo flags alleged BIR money-making scheme via LOAs

MANILA, Philippines — Sen. Erwin Tulfo flagged on Monday an alleged money-making scheme perpetrated by officials of the Bureau of Internal Revenue (BIR) using so-called letters of authority (LOA), calling the bureau the second-most corrupt government agency next to the Department of Public Works and Highways (DPWH).

During the Senate’s marathon plenary debates on the proposed 2026 BIR budget, Tulfo said he was made aware that some BIR officials are “making money” from LOAs, particularly urging BIR Commissioner Charlito Martin Mendoza to address the matter.

READ: Recto sees BIR ‘in good hands’ under Mendoza

“You really need to do something about this — about your own subordinates. They are using that letter of authority to make money. If the DPWH has flood control projects, the BIR has what they call the LOA,” Tulfo said in Filipino.

The senator said he has many businessman friends who complained to him about the scheme.

“They’re even going after the small ones. Even those that aren’t corporations — single-proprietorship businesses — they target them and issue a LOA,” Tulfo added.

“Of course, they don’t want the hassle, so they’d rather just settle. Because even if they’ve paid everything completely and have receipts for all of it, some BIR inspectors — the examiners — will keep looking for faults. “You’re missing this, you’re missing that. Where’s this, where’s that? Let me see this.” Sometimes they even backtrack 5–6 years. Where are they supposed to find those documents?” he added, speaking in Filipino.

Tulfo urged Mendoza to review the BIR’s processes, particularly those involving LOAs, emphasizing that action must be taken to address the issue.

He also noted the need to “reshuffle” regional directors because some are non-performing.

I do believe it’s high time. If you’re going to take action there, you need to reform that agency. Because right now, it seems like it’s the second most corrupt agency after the Department of Public Works and Highways — that’s the BIR. So I believe the President probably put you there because he trusts you, and we also believe that you can do something about it,” Tulfo said. /jpv