[Ask the Tax Whiz] Non permanent suspension of BIR audit: Are you influenced?

The Philippines’ tax whiz discusses the current order of recent BIR Commissioner Charlito Mendoza to quickly droop all area audits and associated operations nationwide

The Bureau of Inner Income (BIR) has ordered a short lived suspension of its area audit operations nationwide, a directive formalized underneath Income Memorandum Round (RMC) No. 107-2025, issued on November 24, 2025. This transfer, initiated underneath the management of the brand new BIR Commissioner, Charlito Martin R. Mendoza, is an institutional response to issues relating to the integrity and equity of the tax audit course of. Understanding this suspension and its implications is significant for sustaining proactive tax threat administration.

What’s the main goal of the audit suspension?

The first goal of the audit suspension underneath RMC 107‑2025 is to allow the BIR to implement a extra complete inside evaluate of its tax audit insurance policies and procedures, strengthen inside safeguards, and be certain that the issuance of Letters of Authority (LOAs) and Mission Orders (MOs) follows the rule of regulation, advancing the safety of taxpayer rights.

In contrast to the annual “Cease Audit,” which was a set, short-term pause largely affecting routine audits, the present suspension was applied earlier, consists of stronger inside controls, covers each new and ongoing audits, and can stay in impact till lifted by the Commissioner.

Which tax audits and operations are explicitly excluded from the suspension?

It’s essential to notice that RMC No. 107-2025 doesn’t represent a complete freeze on all BIR examinations. The next vital and time-sensitive operations are explicitly excluded and can proceed:

What actionable steps ought to taxpayers take throughout this era?

Whereas the short-term suspension alleviates instant audit stress, the expectation is that the following audit system will probably be extra stringent and standardized. Due to this fact, companies ought to use this era for vital inside preparation.

1. Conduct a Tax Publicity Overview: Companies ought to proactively use this time to conduct an inside evaluate of their tax data for current years. The main target ought to be on figuring out and correcting potential tax deficiencies associated to widespread audit findings, notably in areas reminiscent of substantiation of claimed bills, withholding tax compliance, and correct documentation for enter Worth-Added Tax (VAT) claims.

2. Optimize Doc Administration: A vital part of audit readiness is doc retrieval effectivity. Taxpayers ought to be certain that all monetary data, official receipts, invoices, and different supporting paperwork are systematically organized and accessible. Streamlining this course of now will result in a quicker and fewer disruptive expertise when audits resume.

3. Preserve Common Compliance: The short-term suspension pertains strictly to area audit operations and doesn’t have an effect on the duty to file and pay all taxes (i.e., revenue, VAT, withholding, and many others.) precisely and on time. Sustaining constant, correct compliance is non-negotiable and the most effective mitigation technique towards future assessments.

The BIR’s directive presents a chance for the Bureau to implement procedural reforms and for taxpayers to strengthen their inside controls and compliance posture. – Rappler.com