Manila: The Bureau of Internal Revenue (BIR) has abolished its large taxpayers value-added tax (VAT) audit unit as part of efforts to streamline tax audits under a single-instance audit framework. Revenue Administrative Order (RAO) No. 004-2026 abolishes the Large Taxpayers VAT Audit Unit (LT VAU) under the Large Taxpayers Service and the VAT Audit Section (VATAS) under the Assessment Division of regional offices.
According to Philippines News Agency, the BIR issued the order to transfer the functions of the LT VAU and VATAS to appropriate divisions and offices under the Large Taxpayers Service, revenue regions, and revenue district offices. All affected personnel will be reassigned or transferred to other offices.
"The RAO formalizes the actual abolition of the VAT Audit units since [we're already using the] single-instance audit framework as provided in RMO 1-2026," BIR Commissioner Charlito Mendoza said in a Viber message. Revenue Memorandum Order (RMO) No. 001-2026, issued in January, contains revised policies, controls, and procedural guidelines on audit initiation, conduct, and assessment.
The measure aims to ensure transparency, prevent the misuse or abuse of audit authority, and uphold due process. The RMO was issued following complaints from taxpayers, stakeholders, and internal units regarding irregularities and inconsistencies in the conduct of tax audits.
Under the single-instance audit framework, a taxpayer may be subjected to only one electronic Letter of Authority for a given taxable year. The audit will cover all applicable internal revenue tax types, including VAT.
