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.
In a post in his official Facebook page, BIR Commissioner Romeo Lumagui Jr. said the LOAs were issued Sept. 1 under the bureau’s Run After Tax Evaders (RATE) program, empowering examiners to scrutinize the financial records and tax compliance of the country’s top flood control contractors.
He assured senators that the BIR would give its full cooperation to both President Ferdinand R. Marcos Jr. and the Senate in uncovering irregularities.
The serving of the audit orders came as Lumagui also highlighted the bureau’s issuance of Revenue Regulation (RR) No. 17-2024, which requires contractors to present updated income tax returns and tax clearances before participating in public bidding.
Lumagui said the new rules are meant to guarantee that all those who earn from government projects pay the correct taxes.
RR 17-2024 strengthens Executive Order No. 398, Series of 2005, which mandates that all government contracts include a stipulation promoting full and correct tax payment.
The regulation also provides 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, with full due regard to taxpayer rights guaranteed under the National Internal Revenue Code (NIRC) and related regulations. ||
