PHL tax system seen benefiting from AI audits, lower CTA fees

By Aubrey Rose A. Inosante, Reporter

THE GOVERNMENT has been urged to harness artificial intelligence (AI) to overhaul the tax audit system and lower Court of Tax Appeals (CTA) filing fees.

Raymond Abrea, chairman and chief executive officer of the Asian Consulting Group, said the Bureau of Internal Revenue’s (BIR) recent audit reset should shift to a technology-driven approach that protects honest taxpayers while deterring corrupt actors.

“This audit reset is a welcome development, but real reform requires an AI-driven, risk-based audit that targets high-risk taxpayers — especially corrupt politicians and government contractors — while protecting compliant taxpayers and restoring trust in the system,” Mr. Abrea said in a statement on Monday.

BIR Commissioner Charlito Martin R. Mendoza recently ordered the suspension of field audits, following complaints from business groups over alleged extortion linked to letters of authority.

At the same time, Finance Secretary Frederick D. Go proposed creating a centralized digital platform to check the authenticity of these documents, alongside restricting the number of BIR offices authorized to issue them, as part of broader efforts to tighten oversight and prevent misuse.

Eleanor L. Roque, tax principal at P&A Grant Thornton, called for the lowering of CTA filing fees, warning that the current system can open the door to corruption.

“If the amount assessed is unreasonably huge, the BIR examiner already has the leverage. They can inform the taxpayers to just pay the BIR personnel instead of paying the CTA filing fees,” she said via Viber. 

Ms. Roque said the filing fees, which are based on the amount assessed by the BIR, pose a “huge roadblock for taxpayers wanting to exercise their rights.”

She also argued against BIR regulations and circulars that create gray areas, which examiners may exploit to justify unreasonable assessments.

“Even if the taxpayers have valid defenses, the only route is through the CTA which is expensive and time-consuming. Hence, instead of protesting the assessment, the taxpayer becomes victim of extortion just to decrease the tax payable,” she said.

Ms. Roque noted that while stories of extortion hounded the agency, only a few BIR personnel have been jailed for such offenses.

“The BIR can look at highlighting what they are doing in punishing the abusive examiners who issue jeopardy assessments. This will send a good signal to the taxpayers that BIR is no longer tolerating this practice,” she said.