THE Bureau of Internal Revenue (BIR) has abolished its dedicated value-added tax (VAT) audit units as part of an organizational restructuring aimed at integrating the function into existing offices.
Revenue Administrative Order (RAO) 4-2026 removed the Large Taxpayers VAT Audit Unit (LT VAU) under the Large Taxpayers Service (LTS) and the VAT Audit Section under the assessment divisions of the BIR’s regional offices.
It took effect on June 1.
“The RAO formalizes the actual abolition of the VAT Audit units since single-instance audit framework na tayo as provided in RMO 1-2026,” BIR chief Charlito Martin Mendoza told reporters.
The restructuring transfers the functions, records, personnel and other resources of the affected units to designated offices within the bureau.
Prior to the reorganization, the LT VAU was tasked with conducting VAT-related audits and examinations involving taxpayers under the jurisdiction of the LTS.
Meanwhile, VAT audit sections in regional offices handled audit functions for taxpayers under their respective jurisdictions.
The move followed the lifting of a suspension of field audits and related operations following complaints that the system was being abused to harass taxpayers.
One reform implemented is the adoption of a single-instance audit framework. Under this, a taxpayer will generally be issued only one letter of authority (LOA) per taxable year, with multiple audit authorities consolidated into a single document, subject to clearly defined exceptions.
The reform is intended to prevent repeated and overlapping audits that have long been a source of complaints.
The BIR has also introduced a verification system to protect taxpayers from fake or unauthorized LOAs.
