The Bureau of Internal Revenue (BIR) on Monday 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 FB Page, BIR Commissioner Romeo Lumagui Jr. said the LOAs were issued 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.
“Ang mga Flood Control Contractors ay nakatanggap ng Letter of Authority galing sa BIR ngayong Senate Blue Ribbon hearing. Ang mga LOA na ito ay inisyu gamit ang Run After Tax Evaders program ng BIR upang magbigay linaw sa anomalya sa mga ghost flood control projects,” said the lawyer.
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.
He assured senators that the BIR would give its full cooperation to both President Ferdinand Marcos Jr. and the Senate in uncovering irregularities, stressing that “ang buwis ng taumbayan ay para sa totoong proyekto, hindi sa ghost projects.”
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.
In a video posted on his official Facebook page, Lumagui explained that “lahat ng contractor na nagnanais lumahok sa mga proyekto ng pamahalaan ay kinakailangang mag-submit ng kanilang pinakahuling income tax returns na maayos na naisumite at na-validate ng BIR.”
“Kasama na ang tax clearance bilang bahagi ng mga dokumentong kinakailangan para makasali sa bidding ng isang proyekto ng gobyerno.”
Lumagui stressed that the new rules are meant to guarantee that “lahat ng kumikita sa mga proyekto ng pamahalaan ay nagbabayad ng tamang buwis.”
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.
Committee Chair Sen. Rodante Marcoleta welcomed the BIR’s move, noting that the bureau’s cooperation would be key in addressing corruption in infrastructure programs.
