Ejercito flags ‘weaponization’ of BIR tax letters, warns of investor impact
MANILA, Philippines — Senate Deputy Majority Leader JV Ejercito on Monday warned against the alleged “weaponization” of Letters of Authority (LOA) by the Bureau of Internal Revenue (BIR), saying the practice has become a tool for corruption that is discouraging foreign investment and damaging trust in the country’s tax system.
During plenary deliberations on the proposed 2026 national budget, Ejercito cited complaints from foreign chambers and diplomatic partners, including the European Union ambassador and the American and European chambers of commerce.
“Concerns have been raised regarding the excessive issuance of letters of authority or LOAs… the excessive use of LOAs by the BIR has raised serious concerns among domestic and foreign investors,” Ejercito said.
He warned that unchecked issuance of LOAs could create “an atmosphere of uncertainty” for businesses and be seen as a sign of “unpredictability or overreach” in tax administration.
Ejercito said the Philippines’ low ranking in foreign direct investment (FDI) attractiveness is being worsened by such practices, which he described as “deterrents” to stability and fairness in tax enforcement.
He shared reports of irregularities in LOA issuance, including:
- LOAs issued for taxable years already settled;
- LOAs combining multiple taxable years;
- A P100-million tax assessment reduced to P75 million after a “settlement,” with instructions to “fix the receipt.”
“These are just some of the instances wherein there is questionable process,” Ejercito said.
He urged newly appointed BIR Commissioner Charlie Mendoza to act swiftly to address the issue.
“I’m hoping that the agency can guarantee safeguards and internal mechanisms so that any form of corruption—ito pong pag-weaponize sa LOAs—would be prevented in the future,” he said.
Ejercito said while the Senate supports efforts to strengthen tax monitoring and collection, reforms must prioritize fairness, transparency, and predictability to protect investors and maintain public trust.
