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

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

The Bureau of Inside 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 important for sustaining proactive tax threat administration.

What’s the major 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 inner evaluation of its tax audit insurance policies and procedures, strengthen inner safeguards, and make sure that the issuance of Letters of Authority (LOAs) and Mission Orders (MOs) follows the rule of regulation, advancing the safety of taxpayer rights.

Not like the annual “Cease Audit,” which was a hard and fast, short-term pause principally affecting routine audits, the present suspension was carried out earlier, consists of stronger inner 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 crucial 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 speedy audit stress, the expectation is that the following audit system can be extra stringent and standardized. Subsequently, companies ought to use this era for crucial inner preparation.

1. Conduct a Tax Publicity Evaluation: Companies ought to proactively use this time to conduct an inner evaluation of their tax information for latest years. The main focus must be on figuring out and correcting potential tax deficiencies associated to frequent 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 crucial part of audit readiness is doc retrieval effectivity. Taxpayers ought to make sure that all monetary information, 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. Keep 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., earnings, VAT, withholding, and many others.) precisely and on time. Sustaining constant, correct compliance is non-negotiable and the very best mitigation technique towards future assessments.

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