The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Order (RMO) 36-2025 to strengthen its audit program and enhance tax compliance. The revised guidelines, which took effect on Aug. 18, 2025, broaden the scope of prescribed cases that must undergo audit through an electronic Letter of Authority (eLA).
The BIR has identified specific categories of taxpayers that will be subject to mandatory audit, including:
a. Taxpayers with value-added tax (VAT) returns reflecting erroneous input VAT carry-over due to overclaiming or misreporting of VAT credits;
b. Taxpayers with Mission Order findings indicating at least a 30 percent understatement of sales;
c. Taxpayers flagged for non-compliance with tax obligations under the Spontaneous Exchange of Information program, based on data shared with other agencies or institutions; and,
d. Policy- or industry-specific cases as directed by the BIR Commissioner, particularly where systemic issues are observed.
In addition, taxpayers undergoing closure or reorganization are required to secure a termination letter prior to the issuance of a Tax Clearance Certificate of Liabilities, ensuring that all tax obligations are settled before the business winds down.
RMO 36-2025 forms part of the BIR’s broader initiative to tighten tax monitoring and ensure that high-risk taxpayers are audited before being granted clearance or allowed to close operations.
Taxpayers are therefore advised to regularly review their tax filings, maintain proper documentation, and prepare for potential audits, especially when planning for closure or reorganization.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants