Ex-BIR Chief not responsible for ‘LOA’ abuse

On Dec 16, 2025

Former BIR Commissioner Romeo 'Jun' Lumagui, at the first Senate hearing on the "weaponization" of BIR 'LOAs,' December 11, 2025. The Senate initially established that he cannot be faulted for the abuses in the serving of LOAs.

THE Senate Blue Ribbon Committee has initially established that former Bureau of Internal Revenue (BIR) commissioner, Romeo ‘Jun’ Lumagui is not among those who should be blamed for the abuses committed by agency personnel in the implementation of ‘LOAs’ (Letter of Authority).

The investigation, which commenced last December 11, was triggered by a privilege speech delivered by Senator Erwin Tulfo, committee vice chair, followed by his filing of Senate Resolution 180 last November 24.\

Tulfo accused the BIR of “weaponizing” the LOAs “for years” now to harass and extort money from business owners.

A similar measure, SR 201, was also filed by Sen. Sherwin Gatchalian last December 10, a day before the inquiry began.

‘Wala kayong pinatawad’

In his opening statement, Tulfo bewailed that no business establishment—from family-owned convenience store to multinational corporations—were exempt from BIR exaction thru the serving of LOAs and ‘MOs’ (mission orders).

“For years, small and big businesses—mula po sa maliliit na family convenience store hanggang sa malalaking korporasyon—have raised serious concerns, recently.

“Walaa kayong pinatawad,” Sen. Erwin Tulfo said as he berates BIR officials during the December 11 Senate hearing on the ‘weaponization’ of LOAs by BIR personnel (photo credit: Senate PRIB).

“Many claim that they were subjected not to fair tax assessment, but to pressure, intimidation, and questionable demands in exchange for the withdrawal or softening of tax investigations.

“Kahit po ang mga international companies, hindi na ninyo pinatawad, pinatos na ninyo, itong mga kompanya na ito na nagdadala ng trabaho, teknolohiya, at pamumuhunan sa bansa, ay hindi raw nakaligtas sa ganitong uri ng pang-aabuso, ayon na rin mismo yan sa iba’t-ibang foreign chambers of commerce dito sa ating bansa at mismo sa kanilang mga ambassador,” Tulfo bewailed.

He also noted that only “2 percent” in additional revenue was generated by the BIR from the thousands of LOAs it issued over the years while “98 percent” came from voluntary payment of business establishments.

“Where did the rest of the collection go from these instruments,” Tulfo asked.

“Eh di sa bulsa ng mga examiner, RDOs (revenue district officers), at Regional Directors.

“Ganito po ang modus, Mr. Chair: 25 percent lang ng koleksyon kasi napupunta sa gobyerno yung may resibo, while the 75 percent goes straight to their pockets,” the solon concluded.

He added the investigation is necessary because of the “systemic abuse” inside the country’s premier tax collection agency.

Ready to help

For their part, Department of Finance (DOF) Secretary Frederick Go and Lumagui expressed their readiness to help the committee get into the bottom of the controversy.

Lumagui was BIR commissioner from November 2022 until he was replaced last November 12 by DOF undersecretary for revenue operations, Atty. Charlito Martin Mendoza. Mendoza also previously served as Customs district collector and is also present during the hearing along with former BIR commissioner Kim Henares who was invited as a resource person.

While he attended the hearing without a prepared opening statement, Lumagui, a seasoned tax lawyer and former head of the BIR’s tax fraud investigation office, acknowledged the seriousness of the problem.

Lumagui said that on his appointment, he crafted “four pillars” of governance to address corruption in the agency and boost tax collection efficiency thru: integrity and professionalism, digitization, quality service and a level playing field where law-abiding taxpayers are assured of fair treatment from the agency.

Lumagui also bared that during his term, over 132 administrative and criminal cases have been filed against erring BIR employees.

He also claimed that his reform initiatives led to higher tax collection and earned recognition from the agency’s institutional partners.

In 2024, the BIR generated ₱2.85 trillion, a 13.29 percent increase from the previous year; from January to September 2025, collections reached ₱2.32 trillion, reflecting a sustained 10.88 percent year-on-year increase.

LOA comparison between BIR and Customs

During the hearing, it was established that unlike at the Bureau of Customs (BOC) where the LOAs and MOs are signed by the customs commissioner thereby making him directly responsible for any abuse, it is not the same with the BIR.

At the BIR, the power to issue a LOA only reached up to the level of the Revenue Regional Director and the local revenue district officer (RDO).

The system is designed to “blindside” the BIR commissioner, rendering him reliant on the report of his subordinates who may not have the agency’s best interests in their minds.

Mendoza, for his part, said he has taken measures to correct the problem and claimed he has ordered a stop to the issuance of LOAs and MOs on his assumption last November 22.

Tulfo, however, disputed this, claiming that at the Makati Revenue District Office, he has received complaints that LOAs continue to be served despite the order of Mendoza.