Manila: The Bureau of Internal Revenue (BIR) has served Letters of Authority (LOAs) to the country’s top 15 flood control contractors during a Senate Blue Ribbon Committee hearing, formally launching parallel tax investigations into alleged irregularities in critical government projects.
According to Philippines News Agency, BIR Commissioner Romeo Lumagui Jr. announced on his official Facebook page that the LOAs were issued under the bureau’s Run After Tax Evaders (RATE) program. This initiative empowers examiners to scrutinize the financial records and tax compliance of the nation’s leading flood control contractors.
Lumagui assured senators that the BIR would fully cooperate with President Ferdinand R. Marcos Jr. and the Senate in uncovering any irregularities. He emphasized that public taxes should fund legitimate projects, not fictitious ones.
The audit orders were served as Lumagui highlighted the bureau’s issuance of Revenue Regulation (RR) No. 17-2024. This regulation requires contractors to present updated income tax returns and tax clearances before participating in public bidding, ensuring that all earnings from government projects are taxed correctly.
RR 17-2024 reinforces Executive Order No. 398, Series of 2005, which mandates that all government contracts include a stipulation promoting full and correct tax payment. It also states that final payments to contractors may be withheld if they fail to show updated tax clearances, with retention money and unpaid balances subject to levy for tax obligations.
The audit of the 15 contractors will proceed under standard fraud audit procedures, respecting taxpayer rights guaranteed under the National Internal Revenue Code (NIRC) and related regulations.
