PCCI exec: BIR corruption stays; examiner kickbacks bigger than taxes

MANILA, Philippines — A businesswoman who is also an official of the Philippine Chamber of Commerce and Industry (PCCI) has accused Bureau of Internal Revenue (BIR) examiners of extorting several entrepreneurs, saying that the kickbacks they get are bigger than the taxes paid to the government.

During Friday’s hearing of the Senate committee on trade, commerce, and entrepreneurship, PCCI vice president for the National Capital Region Yolanda dela Cruz that after she opened Nisco Philippines, a food processing machinery company, BIR sent her a letter of authority (LOA) demanding a payment of P6 million.

An LOA is a legal document that comes after an auditing of a taxpayer’s financial records.  Dela Cruz said she was able to talk to the first BIR examiner that she encountered that she will be paying 10 percent as long as it goes to the government.

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This BIR examiner sent her a receipt as proof that the payment was recorded for the government, but dela Cruz said the next examiners were transacting “under the table.”

“(Fortunately) ‘yong BIR examiner na napunta sa amin is napakiusapan ko: I am willing to pay but only 10 percent as a help to the government, but I emphasized that all the P600,000 that I will be paying should be with receipts.  And pumayag naman siya.  But after that, naging suki na kami ng BIR, but the succeeding examiners, hindi na pumapayag nang wala silang kita,” dela Cruz said.

((Fortunately) I was able to plead with the BIR examiner assigned to us: I am willing to pay but only 10 percent as a help to the government, but I emphasized that all the P600,000 that I will be paying should be with receipts.  And he agreed.  But after that, we were frequented by the BIR, but the succeeding examiners, they insisted on having their share.)

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“And ang ginagawa ng BIR, which is I think everybody is experiencing, is mas malaki ang naibibigay natin na under (the) table from the one that we are paying BIR,” she added.

(And what the BIR does, which I think everybody is experiencing, is they get more from under (the) table schemes than the one that we are paying BIR.)

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According to dela Cruz, her 2022 LOA remains unsettled because BIR wants her to pay P3 million, but only P500,000 of that will have a receipt.

“So my point is, if the government will remove all these scrupulous and corrupt BIR examiners, kikita ang ating gobyerno.  And until now the LOA, we have the LOA ng 2022 na still pending and pabalik-balik na lang ‘yong documents na sina-submit namin sa BIR, for five times, hanggang sa nakarating sa legal, magbabayad kami ng P50,000, ibabalik sa regions, and then another next few months, babalik na naman sa legal, another P50,000,” she said.

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(So my point is, if the government will remove all these scrupulous and corrupt BIR examiners, the government will earn more. And until now the LOA, we have the LOA ng 2022 na still pending and the documents we have submitted to the BIR have come around, for five times, from the legal office, we paid P50,000, then to the regions, and then another next few months, back to the legal, another P50,000.)

“So five times nangyari sa amin ‘yon, until now, our 2022 LOA is unsettled because they want us to pay P3 million.  And out of the P3 million, P500,000 ‘yong may resibo lang,” she added

(So this has happened five times already, until now, our 2022 LOA is unsettled because they want us to pay P3 million.  And out of the P3 million, only P500,000 has a receipt.)

Senator Bam Aquino, chairperson of the panel, thanked dela Cruz for speaking out, saying that the committee will act on the matter.

Aquino also said that they were under the impression that things in the BIR were okay, as the Senate blue ribbon committee has probed the matter in 2025.

“I remember we had a blue ribbon hearing on this last year, ‘di ba?  And alam ko rin after that blue ribbon hearing, parang gumanda naman po ‘yong sitwasyon.  But I take it na balik na naman ‘yong mga practices gaya nang dati na pinapahirapan po ‘yong ating mga negosyante, tama po ba?” he said.

(I remember we had a blue ribbon hearing on this last year, right?  And I know that after that blue ribbon hearing, the situation improved.  But I take it that we are back to the old practices like before, where businesspeople are harassed, right?)

“Yes sir tama po ‘yan, hindi lang po sa akin, marami din po kaming mga members ng PCCI not only in my locality, not only in NCR pero talking with our co-area vice presidents, in regions, gano’n din po ‘yong nae-experience nila.  And being tasked by our PCCI national council, ito po ‘yong assignment ko, about BIR,” dela Cruz replied.

(Yes sir that’s correct, not only in my case, but other members of PCCI not only in my locality, not only in NCR but talking with our co-area vice presidents, in regions, they experienced the same thing.  And being tasked by our PCCI national council, this is my assignment, about BIR.)

“Isipin niyo po, officer na po kayo ng PCCI, ilang taon na ho kayong nand’yan at pati pa rin po kayo ginaganyan, can you imagine ‘yong mga bago at mga mas maliliit pa siguro,” he added.

(Imagine, you are an officer of the PCCI, it’s been years since you started in the industry and even you are subjected to these schemes, can you imagine how new and smaller players fare.)

This is not the first time that BIR examiners have been accused of using LOAs to extort money.  In December 2025, Senator JV Ejercito detailed a modus operandi on how erring BIR personnel allegedly scammed taxpayers.

One of the schemes, Ejercito said, is the issuance of multiple LOAs within a taxable year or succeeding taxable years, citing the case of a taxpayer in Quezon City who was issued four LOAs within a span of six months. 

Ejercito said another taxpayer was also issued four LOAs by the BIR Laoag office — two each for their mini-grocery and eatery. 

“He is just an ordinary business owner working hard for his family and their three children. They even had to use a bank loan to pay the BIR,” the senator said of the second case.

Then there are “bloated” tax assessments that had no basis, another modus in the agency based on the reports to Ejercito’s office. /mr

Another scheme, Ejercito said, is done when examiners extort companies, as based on the experience of a corporation in Bulacan, the BIR officer allegedly offered a lower settlement amount for a P30-million deficiency.

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“They allegedly offered only P1.2 million — P800,000 ‘for the boys’ and P400,000 was reflected on the receipt. The kickback was even larger than the amount on the receipt!” Ejercito said. /mr