Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17th Congress
First Regular Session

5028

House Bill No.

Sponsored by Deputy Speaker Raneo E. Abu

AN ACT EXEMPTING THE BUREAU OF INTERNAL REVENUE FROM THE
COVERAGE OF REPUBLIC ACT NO. 6758, OTHERWISE KNOWN AS THE
SALARY STANDARDIZATION LAW, AS AMENDED, AND FOR OTHER:
PURPOSES

EXPLANATORY NOTE

Taxation is the power by which the sovereign raises revenue to defray the
necessary expenses of the government from among those, who in some measure, are
privileged to enjoy its benefits and must bear its burden. In this regard, therefore,
tax is the enforced proportional contribution from persons and the properties levied by
the State by virtue of its sovereignty for the support of government and for public
needs.

The Bureau of Intemal Revenue (BIR) is the primordial agency of our
government mandated to assess and collect all national internal revenue taxes, fees
and charges, and the enforcement of all tax laws. The role of the BIR in advancing
President Rodrigo R. Duterte’s Ten-Point Economic Agenda can never be highlighted
enough. The taxes that the BIR collects primarily fund infrastructure, education, health,
rural development and the internal revenue allotment of all local government units.
In light of the upcoming Comprehensive Tax Reform, the BIR should be equipped to
take the President's challenge of funding the Administration's programs.

With a total allowed plantilia of 21,491 employees’, the Bureau should be
providing top-notch taxpayer service and unparalleled tax administration. However,
this is not the case since the BIR lacks needed personnel. In recent years, the BIR
seems to have become merely a “last option” for professional, technical and skilled
job-seekers. With 27,219,916 registered taxpayers to service, the BIR only has 9,835
in its complement which amounts to a ratio of 2,767 taxpayers to 1 revenuer.

' Executive Order No, 366


Considering taxation is a power that is so vital, that on it the very existence of
the State depends, revenuers must be afforded with considerable motivations for them
to be efficient and thereby highly productive in performing their revenue collection
functions. These can be feasibly achieved by granting our revenuers with higher pay
and premium. Presently, the entry-level accountant in the BIR receives P19, 077.00
while an entry-level Accountant 1 in the Securities and Exchange Commission (SEC)
and the Insurance Commission (IC) receives P50, 238.00 and P46, 104.00. Newly-
recruited lawyers in the SEC and IC are paid P53, 754.00 and P66, 524.00,
respectively, while BIR entry-level lawyers are paid P35, 693.00.

Such glaring disparity in compensating our revenuers would help explain why
the BIR is flooded with complaints of BIR personnel who are unprofessional,
incompetent, or worse, corrupt. The current structure for position and compensation
classification only encourages and worsens the current system of incompetence and
corruption. Due to these problems, tax collection suffers and large scale tax evaders
get away.

It is worthy to note that the Bureau of Customs (BOC) has been allowed through
Section 202 of the Republic Act No. 10863 or the Customs Modernization and Tariff
Act to conduct a compensation study with the end view of developing and
recommending to the President a competitive compensation and remuneration system
to attract and retain highly qualified personnel. This representation believes that the
BIR deserves the same privilege, if not more, for their efforts and for the betterment of
tax administration

This bill, therefore, seeks to address this urgent concern through the removal
of the BIR from the coverage of Republic Act No. 6758 otherwise known as the
“Compensation and Position Classification Act of 1989”, or the “Salary Standardization

Law",

With competitive salaries it is expected that corruption of need shall be
eliminated, and that more job-seekers shall see the BIR as a worthy employer and
revenue collection for the betterment of the Philippines a worthy cause to fight for. The
increase in salaries of Bureau officials and employees would also be a symbolic
recognition that Tax Administration is a very technical and specialized field. In the end,
this measure is seen to reinvigorate the primary revenue collection agency of the
government.

In view of the foregoing, the timely passage of this



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17 Congress
First Regular Session

House Bill No. 5028

Sponsored by Deputy Speaker Raneo E. Abu

AN ACT EXEMPTING THE BUREAU OF INTERNAL REVENUE FROM THE
COVERAGE OF REPUBLIC ACT NO. 6758, OTHERWISE KNOWN AS THE
SALARY STANDARDIZATION LAW, AS AMENDED, AND FOR OTHER
PURPOSES,

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Declaration of Policy. ~ It is the policy of the State to reform tax
administration and ensure efficient and effective collection of taxes by employing and
maintaining competent and professional revenue officials and personnel to collect
taxes and enforce internal revenue tax laws. Towards this end, the State shall exempt
the Bureau of Internal Revenue (BIR) and its employees from the coverage of Republic
Act No. 6758, otherwise known as the Salary Standardization Law, as amended

SEC. 2. Exemption from Salary Standardization. — The BIR and its
employees shall be exempt from the coverage of the Salary Standardization Law.

The BIR is hereby authorized to formulate its own Compensation and Position
Classification System based on the following principles:

(a) BIR personnel shall be paid just and equitable wages in accordance with
the principle of equal pay for work of equal value;

(b) Basic compensation for BIR personnel shall generally be comparable with
those in the private sector doing comparable work and must be in accordance with
prevailing laws on minimum wages;

(c) The BIR Compensation and Position Classification System shall be
determined through a comprehensive analysis and audit of actual duties and
responsibilities of the Bureau’s officials and employees;


(c) The total compensation provided for government personnel must be
maintained at a reasonable level in proportion to the national budget; and

(d) A review of government compensation rates, taking into account the
performance of the Bureau, its overall contribution to the national economy, and the
possible erosion in purchasing power due to inflation and other factors, shall be
conducted periodically;

SEC. 3. Incentives to Bureau Officials and Personnel. - The Bureau, subject
to the approval of the President, may provide for other incentives not provided under
existing laws and Civil Service laws.

SEC. 4. Approval of the President. — The BIR Compensation and Position
Classification System implemented pursuant to this Act shall be approved by the
President, and shall be subject to periodic review by the BIR, in consultation with the
Department of Budget and Management (DBM), Department of Finance (DoF) and the
Civil Service Commission (CSC), not more than once every three (3) years, without
prejudice to yearly merit reviews or increases based on performance

SEC. 5. Non-diminution of Salaries. — The BIR Compensation and Position
Classification System to be developed and recommended by the BIR, as approved by
the President, shall apply to all positions, on full or part-time basis, now existing or
hereafter created: Provided, That in no case shall there be any diminution in the
authorized salaries of incumbent employees of the BIR as of December 31, 2016
upon the implementation of the approved BIR Compensation and Position
Classification System

SEC. 6. Appropriation Clause. — The amount necessary to implement this Act
shall be included in the General Appropriations Act of the year following its enactment
into law.

SEC. 7. Separability Clause. - If any of the sections or provisions of this Act is
held invalid, ‘all other provisions not affected thereby shall remain valid.

SEC. 8. Repealing Clause. - All laws, decrees, issuances, rules and
regulations inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

SEC. 9. Effectivity Clause. - This Act shall take effect fifteen (15) days after
its complete publication in at least two (2) newspapers of general circulation.

Approved,