BIR’s Letter of Authority Effect to Taxpayers under RDO 38 North Quezon City: Basis Towards Tax Compliance Framework


  • Mary Grace P. Alonzo, CPA Philippine Christian University


taxation, tax compliance, taxpayers’ level of awareness, Letter of Authority, guidelines and procedures in handling LAs, the effect of failure, attitude toward tax compliance


This study aimed to investigate the effect of taxpayers’ awareness of Letter of Authority (LA) issuances on their attitude toward tax compliance.

It indicated the profile of the subject companies in terms of a form of business; average annual revenue; length of business operation; and status as LA recipient or not.

It also focused on the level of awareness of the respondent taxpayers about the Letter   Authority issuances in terms of the basis of LA issuances; guidelines and procedures in handling LAs; and the effect of failure to settle LA.

The study involved 150 registered business taxpayers of BIR RR No. 38 – North Quezon City, as respondents of the study.

The following statistical tools and techniques were used for the interpretation and analysis of the findings of the study: frequency and percentage, weighted mean, t-test for independent samples, ANOVA by factors, and regression equation analysis.

It was revealed that the level of awareness of LAs is to a high extent and significant.  The moderating variables that affect significantly LAs and compliance are the form of business, number of years in operation, and as the recipient of an LA.

The critical areas needing immediate interventions are  Level of Awareness about Letter Authority Issuance - Basis of Letter, Authority Issuances [All taxpayers are possible candidates for audit of the bureau.], Level of Awareness about Letter Authority Issuance – Effect of Failure to Settle LA [Issuance of eLA under certain situations and/or Preliminary Assessment Notice (PAN)/Final Assessment Notice (FAN).], and Level of Awareness about Letter Authority Issuance - Guidelines and Procedures in Handling Letter Authorities.

It can be concluded that the average annual revenue is not a significant moderating factor in LA. Moreover, a form of business, number of years in service, and recipient of LA are significant moderating factors.


It is recommended that a revisit and review of existing LAs to determine how these can be strengthened to have more “teeth” in their implementations.

The study was conducted from May to June 2022 in Navotas City. Seven (7) stakeholders who are Navotas City Disaster Risk Reduction and Management Council members were interviewed, and 30 implementers were surveyed.

The data were gathered through a questionnaire for the implementers and an interview guide for the stakeholders. The data were interpreted using the measure of central tendency (weighted mean, frequency, and average) to describe the profile of implementers and their knowledge, attitudes, and practices on the program, as well as the management, workforce, and methods perceived by the stakeholders.

All respondents are at least High School graduates with no formal education; the majority are High School Graduates and College level. Most respondents have three to five years of experience and have at least 24 hours of training in Disaster Management. Most of the implementers are generally married males in middle adulthood.

The respondents can be described as knowledgeable about the NCDRRMP and have positive outlooks toward disaster management, but there is a manifestation that there is still room for improvement. Although most implementers/respondents apply NCRRMP's lessons in practice, reporting irregularities to the grievance committee tends to be low, as reflected in their perception.

The strategies and interventions used in the NCDRRMP are responsive as these are reflected in the respondents' knowledge, attitude, and practice with the NCDRRP. In terms of support to the program implementers, the management is responsive. Although the management provides the needs of the implementers in NCDRRMP implementation, some implementers have insufficient competence in Disaster Management due to a lack of capacity building. The workforce is found to be prepared but still needs improvement in NCDRRMP implementation and continuous capability-building activities.

Although there were issues raised in NCDRRMP, its components are extensive or fully implemented. The mechanisms of monitoring and employing strategies that would prevent the occurrence of irregularities from the NCDRRMP need to be intensified. To change shift from implementing the NCDRRMP to the disaster resilient Navotas City to determine the extent of services for the poor citizens, i.e., health, socio-economic, environment, and housing.

Despite the well-stated policy as stipulated in the program's operation manual, there are still loopholes in the monitoring of cash grant release, compliance verification, and grievance redress system that need to be addressed for better program implementation. Intensifying the mechanisms and safeguards on compliance verification, updates and grievance systems, and cash grant releases to avoid discrepancies in program implementation is highly recommended to attain its long-term goal – the human capital investment and enable the indigent households to break the inter-generational cycle of poverty.