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Republic of the Philippines &
[> pare: MAR 14 2012

HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

House Bill No. 9257

Introduced by REPRESENTATIVE MANUEL T. SAGARBARRIA

EXPLANATORY NOTE

The Bureau of Internal Revenue has been consistently marred by allegations
of corruption and incompetency. Prior to the assuming his position as the President of
the Republic, President Rodrigo R. Duterte pointed out BIR as one of the most corrupt
agencies in the government. Itis the role of the Philippine Congress to address the
issues hounding the BIR. Noting the role of the BIR in funding the government, it is
high time that we resuscitate this agenoy and turn it into a premiere tax authority in the
likes of those of Singapore, Japan, and Australia. This calls for hiring the best of the
best among professionals. The Bureau needs top-notch lawyers, accountants,
information technology personnel and professional human resource people to improve
over-all tax administration.

Being covered by the Salary Standardization Law will not cut it. In fact, giving
salaries the same as other agencies, disincentivize work in the Bureau. Aside from
this, the low salary of revenue employees is seen as a major factor in the cultivation
of a culture of corruption, especially corruption of need, the demoralization of current
personnel and a brain drain on the institution itself. Again, there is very limited career
growth in the Bureau considering that there are few available positions or options for
promoting performing revenue officials and personnel.

It is thus proposed that the BIR be removed from the coverage of Republic Act
No. 6758 otherwise known as the “Compensation and Position Classification Act of
4989", or the “Salary Standardization Law’. However, with higher pay comes higher
responsibilities. Thus, this law will also provide for automatic separation from service
of non-performing or underperforming officials or personnel. Moreover, in order to
attract young and capable recruits while at the same time acknowledging the
contribution and respecting the rights of long-time Bureau officials and employees, the
law will also provide for the compulsory retirement of Bureau officials and employees
at the age of sixty (60) years while providing for a proper retirement package in
recognition of their years of service in the Bureau.

In view of the foregoing, the timely passage of this bill is earnestly prayed for.

T. SAGARBARRIA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

5257

House Bill No.

Introduced by REPRESENTATIVE MANUEL T. SAGARBARRIA

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:

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

SECTION1, Declaration of Policy. - It is the policy of the State to improve, optimize,
and professionalize tax administration by employing and maintaining competent and
professional revenue officials and personnel to collect taxes and enforce internal
Fevenue 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 and provide for the
automatic promotion and compulsory retirement among bureau officials and
personnel.

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.

The BIR Compensation and Position Classification System implemented
pursuant to this Act shall be approved by the President, and shalll be subject to periodic
review by the BIR, not more than once every three (3) years, without prejudice to yearly
merit reviews or increases based on performance.

SEC. 2. Automatic Promotion for Bureau Officials and Personnel. — (a) a Bureau
official or personnel shall be automatically entitled to a promotion to a higher salary
step grade and higher rank; Provided That, the automatic promotion to a higher salary
grade shall be given to the concerned Bureau official or personnel only once every two
(2) years from the time of employment or last promotion, as the case may be. The
concerned Bureau official or personnel shall also be automatically promoted to a
higher rank provided that the automatic promotion shall be implemented only once
every three (3) years from the time of employment or last promotion to a higher rank,
as the case may be.

SEC. 3. Compulsory Retirement and Corresponding Benefits. - (a) Upon attaining
sixty (60) years of age or upon accumulation of thirty (30) years of satisfactory service,
whichever is earlier, a Bureau official and personnel shall be compulsory retired;
Provided, That such Bureau employee or official shall be allowed to complete thirty
(30) years of service but not beyond his sixtieth (60) birthday; Provided, however,
that such Bureau official or personnel compulsory retiring by age shall have rendered
at least twenty (20) years of satisfactory service; Provided, finally, that the employment
of the concerned Bureau official or personnel may be extended by the President at a
period not exceeding five (5) years, at the sole discretion of the President.

(b) When such Bureau official or personnel has been compulsory retired from the
Bureau under the provisions of this Act, he or she shall receive a separation gratuity
equivalent to one (1) month of base pay of the salary grade to which he or she holds
at the time of the compulsory retirement for every year of service; Provided that, the
Bureau may provide for a one-time lump sum payment or other payment scheme.

SEC. 4. Merit and Fitness. — If the concerned Bureau official or personnel has been
automatically promoted, he or she shall be subject to merit and fitness retention
requirements to be promulgated by the DoF, in concurrence with the CSC. In any case,
the rules or regulations to be issued shall take into account the following:

i. Substandard performance or under-performance;

ii. Simple Neglect in the performance of Duty; and

ili, Other analogous acts not involving serious infractions or violations of
law.


Failure to comply with the merit and fitness retention requirements shall be grounds
for separation from service. However, he or she shall receive a separation gratuity
equivalent to one (1) month of base pay of the salary grade to which he or she holds
at the time of the compulsory retirement for every year of service; Provided that, the
Bureau may provide for a one-time lump sum payment or other payment scheme.

SEC. 5. 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. 6. 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. 7. 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. 8. 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. 9. Repealing Clause. - All laws, decrees, issuances, rules and regulations
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

SEC. 10. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
complete publication in at least two (2) newspapers of general circulation