Senate Minority Leader Alan Peter Cayetano on Tuesday welcomed the Bureau of Internal Revenue’s new system to curb excessive issuance of Letters of Authority (LOAs), emphasizing that taxpayers should no longer face overlapping audits that create fear and uncertainty in the business community.

This follows reforms discussed during the Senate Blue Ribbon Committee’s probe on February 10, 2026 on the alleged misuse and weaponization of LOAs by BIR personnel.

“Almost all the businessmen I spoke with, small, medium, large, even oligarchs, were drowning in LOAs,” he said in a statement.

“Before, one LOA a year. Now, as soon as one ends, another LOA comes for income tax or VAT. Sometimes, there’s a risk of criminal penalties. It’s double, triple the fear,” he added.

During the Blue Ribbon hearing, BIR Commissioner Charlito Mendoza presented the new system, which directly addresses the issues Cayetano highlighted. 

Taxpayers now receive only one electronic LOA (eLA) per taxable year, covering all tax types. The scope and limits of each LOA are clearly indicated, giving taxpayers the right to refuse requests beyond those limits.

Pending audits for the same taxpayer are consolidated into a single eLA, and all LOAs carry mandatory verification labels.

The reforms also introduce a risk-based, system-assisted selection of taxpayers, reducing unnecessary audits and ensuring that only those flagged by anonymized criteria are reviewed. 

According to Commissioner Mendoza, these measures are designed to protect businesses from arbitrary or overlapping audits while still ensuring compliance.

Cayetano said the new system, following years of complaints, aligns with his long-standing calls for fairness and predictability in tax administration. 

He noted that streamlining LOAs and enforcing clear rules will reduce harassment and restore confidence among taxpayers.

“In every crisis there’s a big opportunity. These reforms end that,” he said. ###