Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No, 129

Introduced by Representative JUAN MIGUEL MACAPAGAL ARROYO

AN ACT
CREATING THE NATIONAL REVENUE AUTHORITY, PROVIDING FUNDS
THEREFOR

EXPLANATORY NOTE

A persistent deficit creates doubt within the financial markets on government's
ability to repay its debt, thus, pushing the cost of borrowing even higher. The
markings of a financial crisis increasingly threaten the entire economy until a
point is reached when business confidence is lost and creditors refuse to lend
any further.

Thus, it is very important to dramatically reduce the National Government's
deficit. One way is to cut on public expenditures. However, this runs counter to
the need for more public investments particularly on health, education and
infrastructure to combat poverty and encourage economic development. To
reduce the deficit without compromising the development spending, government
needs to significantly improve tax collection particularly the Bureau of Internal
Revenue (BIR) which accounts for about 80% of total tax collection

Past efforts to reorganize the BIR have proven to be short-lived because they
were authorized by mere administrative fiat. At present, the BIR is hampered by
at least three fundamental institutional constraints: (a) rigid personnel
management system where promotion is based merely on loyalty and seniority
rather than exemplary performance (e.g. exceeding the revenue target); (b)
compensation structure that restricts the hiring of first-rate professionals; and (c)
strict line-item budgeting that limits the flexibility in the allocation of funds.

There is an urgent for Congress to create a Revenue Authority to address the
growing taxpayer dissatisfaction particularly over front-line services, high level of
tax evasion/avoidance, and increasing perception of systematic corruption in the
Bureau. It is expected that the new authority shall be free from political
interference in terms of decisions pertaining to revenue rulings, audit and
assessment personnel management, and budgeting.

The proposed bill shall have the following salient features:

41. The Authority shall be governed by a Revenue Board composed of four
representatives from the government and three from the private sector.
The government representatives shall include the heads of the
Department of Finance (as Chairperson), the Department of Budget and

1


Management, the National Economic Development Authority and the
Securities and Exchange Commission. Private sector representatives shall
be nominated by peak professional organizations, and appointed by the
President of the Philippines. They must be recognized experts in the fields
of economics, accounting, law, business management and other allied
professions. The members of the Board shall serve for a fixed tenure of
Office with different periods of expiry to avoid disruption of services, to
prevent abandonment of approved pians/programs and to limit reversal of
revenue rulings and regulations.

2. The Revenue Authority shall be headed by a Chief Executive Officer
(CEO) responsible for the preparation of the following: work program,
organizational structure, annual budget, compensation package, and
appointment of rank and file employees, among many others. The CEO
shall be appointed by the Revenue Board for a period of three years with
possible reappointment under a performance-based contract.

3. The Authority shall receive an annual service fee of not less than 1% but
not more than 2% of total collection of the immediate preceding year, net
of local government shares.

4. Selection of personnel for the new Revenue Authority shall be strictly
based on merit and fitness. An attractive separation/retirement package
shall be offered to those who opt to not join the Authority.

In this light, the creation of an independent Revenue Authority should be
pursued.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No,_1201

Introduced by Representative JUAN MIGUEL MACAPAGAL ARROYO

AN ACT
CREATING THE NATIONAL REVENUE AUTHORITY, PROVIDING FUNDS
THEREFOR

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

SECTION 1. Short Title. - This Act shall be known as the "National
Revenue Authority Act."

SECTION 2. Declaration of Policy. — It is the policy of the State to reform
tax administration to meet the resource needs of government, satisfy the
requirements of taxpayers as customers, and help ensure the efficient and
effective collection of taxes by the Government. Towards this end, the State shall
create an internal revenue agency that shall be endowed with fiscal and
administrative powers necessary to discharge its mandate with excellence.

SECTION 3. Creation of the National Revenue Authority; Corporate
Powers. — There is hereby established a public organization to be known as the
National Revenue Authority, hereinafter referred to as the Authority, which shall
be responsible for the implementation of internal revenue laws and shall be
attached to the Department of Finance (DOF). It shall be organized within one
hundred eighty (180) days from the effectivity of this Act. The Authority shall have
the principal place of business in Metro Manila and may establish branches and
offices in such other places as may be deemed necessary for the performance of
its mandate.

SECTION 4. Responsibility and Primary Objective. - The primary
responsibility and objective of the Authority is to raise revenues to finance the
operations of the Government consistent with fiscal policy and revenue collection
targets.

SECTION 5. Powers and Functions. - The Authority shall exercise the
powers and duties heretofore exercised by the Bureau of Internal Revenue Code
of 1997, hereinafter referred to as the Code, and other laws. Such powers and
duties shall comprehend the assessment and collection of all national internal
revenue taxes, fees and charges, and the enforcement of all forfeitures,
penalties, and fines connected therewith, including the execution of judgments in

3


all cases decided in its favor by the Court of Tax Appeals and the ordinary courts.
The Authority shall give effect to and administer the supervisory and police
powers conferred to the Bureau of Internal Revenue by the Code and other laws.

The officials and employees of the Authority shall be hired on a fixed term
performance-based contracts.

In addition, the Authority shall have the following corporate powers: to
adopt, alter and use an official seal which shall be judicially noticed; to enter into
contracts; to lease or own real and personal property; and to sell or otherwise
dispose of the same; incur obligations necessary in the conduct of its operations;
and to perform any and all acts necessary or proper to carry out the purposes of
this Act.

The Authority may acquire and hold such assets and incur such liabilities
in connection with its operations authorized by the provisions of this Act and
other laws, or as are essential to the proper conduct of such operations.

SECTION 6. Capitalization. - The Authority shall have an authorized
capital of Ten Billion Pesos (P10,000,000,000.00) which shall be fully subscribed
by the Republic of the Philippines and shall be paid up by the transfer to the
Authority of assets value in such amount. Initially, the national government shall
transfer to the Authority such assets as may be determined pursuant to Section
19 of this Act.

SECTION 7. Service Fee. — The Authority shall receive an annual service
fee from the Government for services rendered in the discharge of its mandate.
Subject to the recommendation of the Development Budget Coordinating
Committee (DBCC) created under E.0. 232, s. of 1970, as amended, said fee
shall not fall below one percent (1%) nor go beyond two percent (2%) of
revenues collected in the immediately preceding calendar year, net of collections
accruing to Local Government Units, including Internal Revenue Allotment (IRA),
and other agencies; Provided, however; that in the initial year of operation, the
service fee shall be 2% of net revenues collected in the immediately preceding
year. Said amount shall be appropriated in the annual General Appropriations
Act.

The Authority shall likewise be entitled to five percent (5%) of annual
collection in excess of its annual collection target set by the DBCC; Provided,
however, that no portion of the performance bonus shall accrue to members of
the Revenue Board

SECTION 8. Composition of the Revenue Board; Qualification of
Members. — (a) There is hereby created a Revenue Board, hereinafter referred to
as the Board, composed of the Secretary of Finance, as chairperson, and the
following as members: the Director-General of the National Economic
Development Authority, Secretary of the Budget and Management, and the
Chairperson of the Securities and Exchange Commission, all of whom shall
serve ex officio and with no compensation, and three (3) representatives from the
non-government sector to be appointed by the President, who shall serve full-
time for a term of three (3) years, and may be reappointed once: Provided,
however, That reappointment of representatives from the non-government sector
shall follow the nomination process outlined in this Section.

(b) The three members from the non-government sector shall include an
economist, an accountant, and a lawyer. Each shall be selected and appointed
by the President from a pool of candidates to be nominated by peak professional

4


organizations of economists, accountants, and lawyers, respectively, which must
have been in existence for at least ten (10) years. A “peak professional
organization” refers to an organization duly recognized by members as
representative of, and having the largest active membership in their profession
The mechanics of the nomination process shall be provided for in the
Implementing Rules and Regulations of this Act.

(c) Of the initial members appointed from the non-government sector, the
first appointee shall serve for three (3) years, the second for two (2), and the third
for one (1) year.

(d) Whenever the chairperson or any of the members serving in ex officio
is unable to attend a meeting of the Board, the representative shall be an
Undersecretary or its equivalent rank; Provided, that the highest ranking ex.
officio member shall preside over the meeting in case the chairperson if absent.

(e) A member from the non-government sector shall be a natural-born
citizen of the Philippines, at least forty (40) years of age, of good moral character,
known for honesty and patriotism, of unquestionable integrity, and a recognized
expert in the field of taxation, fiscal policy, public finance, fiscal administration,
accounting, management, or law: Provided, however, That such members shall
not have been employees of the Bureau of Internal Revenue or the Authority
created under this Act within the last ten (10) years prior to their appointment:
Provided, further, That no person who has been connected as a director, partner,
officer, lawyer, accountant, consultant or in any other capacity with individuals,
general professional partnerships, or professional corporations who prepare and
file tax returns, statements, protests and other papers with, or who appear
before, the Authority shall be appointed within one (1) year from the cessation of
such connection. An appointment to fill the vacancy created by the death,
resignation or removal of a member from the non-government sector shall only
be for the unexpired period of such member's term.

(f) The President of the Philippines shall initially fix the compensation of
the members from the non-government sector based on an objective
classification system, to be specified in the Implementing Rules and Regulations
of this Act, at a sum commensurate to the importance and responsibilities
attached to the position. The Board may increase such compensation: Provided,
however, that the increase shall not affect the compensation of a member during
whose incumbency the increase was approved for the duration of such member's
term.

SECTION 9. Powers of the Revenue Board. — The Revenue Board shall:

(a) Adopt and promulgate policies and rules for the effective
enforcement of the provisions of the Code, this Act, and other revenue laws;

(b) Upon the recommendation of the CEO, approve the annual and
supplemental, budget of receipts and expenditures of the Authority, and
authorize such operating and capital expenditures of the Authority as may be
necessary or proper for the effective management, operation and administration
of the Authority;


(c) Form committees, including an executive committee, that shall
assist the Board in the performance of its functions: Provided, however, that no
person shall be appointed to the executive committee who has been employed
within the past ten (10) years by the Bureau of Internal Revenue or the Authority
created under this Act;

(d) Exercise such powers and perform such other acts as may be
necessary, useful, incidental or auxiliary to carry out the provisions of this Act, or
to perform the purposed and objectives of this Act. All references in the Code
and other revenue laws, and in the rules and regulations issued thereunder, to
the Secretary of Finance shall be deemed to refer to the Revenue Board.

SECTION 10. Conflict of Interest. — In addition to the requirements of
Republic Act No. 6713, otherwise known as the Code of Ethical Standards, any
member of the Board with personal or pecuniary interest in any matter in the
agenda of the Board shall disclose such interest to the Board and shall inhibit
himself during the deliberations when such matter is taken up. The decision
taken on the matter shall be made public and the minutes of the meeting shall
reflect the disclosure made and the inhibition of the member concerned.

SECTION 11. Disqualifications. — In addition to the disqualification
imposed by Republic Act. No. 6713, a member of the Board shall be disqualified
from being connected as director, partner, officer, lawyer, accountant, consultant
or in any other capacity with individuals, general professional partnerships, or
professional corporations who prepare and file tax returns, statements, protests
and other papers with, or who appear before, the Authority, in, which case such
member shall terminate his or her association with such individuals and resign
from, and divest himself or herself of any and all interests in, such general
professional partnerships, or professional corporations. Members of the Board
from the non-government sector shall not hold any other public office or
employment during their tenure, unless such office or employment is with a state
university or college or is concerned with the performance of their duties as
members of the Board.

SECTION 12. Removal of Members from the Non-Government Sector. —
The President may remove any member of the Board from the non-government
sector for any of the following reasons:

(a) The member suffers from physical or mental incapacity that renders
him or her incapable of properly discharging the duties and
responsibilities of membership in the Board and such incapacity has
lasted for more than six (6) months; or

(b) The member has committed acts or operations that are shown prima
facie to be fraudulent or illegal or manifestly opposed to the aims and
interests of the Authority;

(c) The member no longer possesses the qualifications specified in
Section 8 of this Act; or

(d) The member is subsequently disqualified under the provisions of
existing law.


SECTION 13. Meetings. — The Board shall meet at least twice a month.
The Board may be called to a meeting by the chairperson or by three (3) other
members of the Board. The presence of four (4) members shall constitute a
quorum; Provided, That in all cases the chairperson or the chairperson’s duly
designated alternated shall be among the four (4). All decisions of the Board
shall require the concurrence of at least four (4) members. The Authority shall
maintain and preserve a complete record of the proceedings of the Board,
including the tapes and transcripts of the stenographic notes, either in their
original form, in microfilm, or in any electronic medium.

SECTION 14. The Chief Executive Officer; Qualifications; Appointments;
Term of Office. - The Authority shall be headed by a Chief Executive Officer,
hereinafter referred to as CEO, who shall be a natural-born citizen of the
Philippines, of good moral character, known for honesty and patriotism, of
unquestionable integrity, with at least seven (7) years experience in
management, and a recognized expert in the field of taxation, finance, fiscal
administration, economics, public administration or public finance.

The CEO of the Authority shall be appointed by the Board from a list of at
least three (3) nominees prepared by a selection committee created by the Board
and chaired by a member of the Board, for a term of three (3) years; Provided,
That the incumbent Commissioner of the Bureau of Internal Revenue as of the
date of approval of this Act shall not be qualified to serve as CEP of the Authority
except in a holdover capacity pending the appointment of the CEO.

The CEO shall enter into a performance contract with the Board and
maybe reappointed depending on the CEO’s performance: Provided, however,
that no person may be appointed as CEO for more than three (3) terms. In
addition to other grounds for removal as may be provided for by law, the CEO
may be removed by a majority vote of all the members of the Board prior to the
end of the CEO's 3-year term for failure to meet commitments in the performance
contract, unless such failure is attributable to a cause or causes beyond the
CEO's control.

SECTION 15. Powers and functions of the CEO. — The CEO of the
Authority shall exercise the powers and functions of the Commissioner of the
Internal Revenue under Sections 4,5,6,7,8,15,16,17,19,20 and other provisions
of the National Internal Revenue Code of 1997. In addition, the CEO shall:

(a) Execute, administer and implement the policies and measures
approved by the Board;

(b) Direct and supervise the operations and administration of the Authority;

(c) Represent the Authority in all dealings with offices, agencies and
Instrumentalities of the Government and with all persons and entities,
public or private, domestic or foreign;

(d) Direct and supervise the preparation of the agenda for the meeting of
the Board, and to submit for the consideration of the Board such
policies and measures as he or she believes necessary to carry out the
purposes and objectives of this Act;


(e) Promulgate, with the approval of the Board, all necessary rules and
regulations for the effective enforcement of the provisions of the Code,
this Act and other revenue laws;

(f) Determine the organizational structure, including the geographical
location of the branches and offices, of the Authority; recognize its
personnel; and issue such rules and regulations, as he or she may
deem necessary or convenient for these purposes;

(g) Establish a performance-based management system which shall
govern the selection, hiring, appointment, transfer, promotion or
dismissal of all personnel. Such system shall aim to attract and retain
professionally competent, well-trained, honest, courteous and efficient
personnel and to establish professionalism and excellence at all levels
of the Authority

All positions in the Authority shall be governed by a compensation and
position classification system and qualification standards approved by
the Board based on a comprehensive job analysis and audit of actual
duties and responsibilities. The Board shall have the authority to
establish a compensation plan for the Authority: Provided, however,
That the total personal services budget of the Authority shall not be
more than sixty percent (60%) of its total operating budget.

Appoint, fix the remuneration and other emoluments, and remove
personnel of the Authority; Provided, That the Board shall have final
appellate authority in cases involving promotion, transfer, assignment,
or reassignment of personnel of the Authority and these personnel
actions are deemed made in the interest of service and not
disciplinary;

(h) Provide for the continuing education and training of Authority officials
and employees. For this purpose, the Authority may establish a
training Institute or enter into agreements with institutions of higher
learning in the country for the establishment of training programs for its
technical personnel in the field of taxation, tax administration and
related fields. The Authority is likewise authorized to defray the cost of
study, at home or abroad, of qualified employees of the Authority, of
promising university graduates or of any other qualified persons who
shall be determined by proper competitive examinations,

(i) To exercise such other powers and functions as may be vested in the
CEO by the Board.

The CEO shall have the authority to delegate any of the foregoing
powers to such official or officials of the Authority, as her or she may
deem necessary.

All reference in the Code and other revenue laws, and in the rules and
regulations issued thereunder, to the Commissioner of the Internal
Revenue shall be deemed to refer to the CEO.


SECTION 16. Salary of the CEO. - The Board shall fix the salary of the
CEO based on an objective classification system to be specified in the
Implementing Rules and Regulation of this Act at a sum commensurate to the
importance and responsibilities attached to the position.

SECTION 17. Indemnification for Legal Defense Costs and Expenses. —
Section 227 of the National Internal Revenue Code is hereby amended to read
as follows:

“The National Revenue Authority shall indemnify members of the Revenue
Board and other officials of the National Revenue Authority, including personnel
of the units performing assessment, audit and collection functions against all
costs and expenses reasonably incurred by such person in connection with any
civil or criminal action, suit or proceeding to which they may be or made a party
by reason of their performance of their functions or duties, unless they are finally
adjudged in such action or proceeding to be liable for gross negligence or
misconduct.

“In the event of settlement or compromise, indemnification shall be
provided only in connection with such matters covered by the settlement as to
which National Revenue Authority is advised by external counsel that the
persons to be indemnified did not commit any gross negligence or misconduct.”

“The costs and expenses incurred in defending the aforementioned action,
suit or proceeding may be paid by the National Revenue Authority in advance of
the final disposition of such action, suit, or proceeding upon receipt of an
undertaking by or on behalf of the member of the Revenue Board, official or
employee to repay the amount advanced should it ultimately be determined by
the National Revenue Authority that said member of the Revenue Board, official
or employee is not entitled to be indemnified as provided in this Section.”

SECTION 18. Implementing Details. — The Authority shall be made
operational by the performance of the following acts:

(a) The President shall constitute the Revenue Board by appointing the
members thereof within one hundred eight (180) days from the effectivity of this
Act; and (b) The completion of the transfer of such assets and liabilities of the
Authority as provided in the succeeding Section.

SECTION 19. Transfer of Assets. (a) Upon the effectivity of this Act, a
Committee composed of the Chairperson and ex officio members of the Revenue
Board and the Chairpersons of the Committees on Ways and Means of the
Senate and the House of Representatives shall determine the assets of the
Bureau of Internal Revenue which shall be transferred to the Authority. The
Committee shall hire the services of an independent appraiser to determine the
value of the assets to be transferred to the Authority.

(b) The Committee shall complete its work within ninety (90) days from
the constitution of the Board. It shall submit a comprehensive report of its
findings and justifications to Congress and the President within fifteen (15) days
from the completion of its work.

SECTION 20. Mandate to Organize. — (a) The Authority shall be organized
by the Board, by adopting it is so desires, an entirely new organizational structure
or staffing pattern to suit the operations of the Authority under this Act. No
preferential or priority right shall be given to or enjoyed by any personnel for
appointment to any position in the new staffing pattern, nor shall any personnel

9


SECTION 16. Salary of the CEO. — The Board shall fix the salary of the
CEO based on an objective classification system to be specified in the
Implementing Rules and Regulation of this Act at a sum commensurate to the
importance and responsibilities attached to the position.

SECTION 17. Indemnification for Legal Defense Costs and Expenses. —
Section 227 of the National Internal Revenue Code is hereby amended to read
as follows:

“The National Revenue Authority shall indemnify members of the Revenue
Board and other officials of the National Revenue Authority, including personnel
of the units performing assessment, audit and collection functions against all
costs and expenses reasonably incurred by such person in connection with any
civil or criminal action, suit or proceeding to which they may be or made a party
by reason of their performance of their functions or duties, unless they are finally
adjudged in such action or proceeding to be liable for gross negligence or
misconduct.

“In the event of settlement or compromise, indemnification shall be
provided only in connection with such matters covered by the settlement as to
which National Revenue Authority is advised by external counsel that the
persons to be indemnified did not commit any gross negligence or misconduct.”

“The costs and expenses incurred in defending the aforementioned action,
suit or proceeding may be paid by the National Revenue Authority in advance of
the final disposition of such action, suit, or proceeding upon receipt of an
undertaking by or on behalf of the member of the Revenue Board, official or
employee to repay the amount advanced should it ultimately be determined by
the National Revenue Authority that said member of the Revenue Board, official
or employee is not entitled to be indemnified as provided in this Section.”

SECTION 18. Implementing Details. - The Authority shall be made
operational by the performance of the following acts:

(a) The President shall constitute the Revenue Board by appointing the
members thereof within one hundred eight (180) days from the effectivity of this
Act; and (b) The completion of the transfer of such assets and liabilities of the
Authority as provided in the succeeding Section.

SECTION 19. Transfer of Assets. — (a) Upon the effectivity of this Act, a
Committee composed of the Chairperson and ex officio members of the Revenue
Board and the Chairpersons of the Committees on Ways and Means of the
Senate and the House of Representatives shall determine the assets of the
Bureau of Internal Revenue which shall be transferred to the Authority. The
Committee shall hire the services of an independent appraiser to determine the
value of the assets to be transferred to the Authority.

(b) The Committee shall complete its work within ninety (90) days from
the constitution of the Board. It shall submit a comprehensive report of its
findings and justifications to Congress and the President within fifteen (15) days
from the completion of its work.

SECTION 20. Mandate to Organize. - (a) The Authority shall be organized
by the Board, by adopting it is so desires, an entirely new organizational structure
or staffing pattem to suit the operations of the Authority under this Act. No
preferential or priority right shall be given to or enjoyed by any personnel for
appointment to any position in the new staffing pattern, nor shall any personnel

9


be considered as having prior or vested rights with respect to retention in the
Authority or in any position which may be created in the new staffing pattern,
even if such personnel should be in the incumbent of a similar position prior to
organization. Selection shall be based strictly on merit and fitness and applicants
may likewise be subject to lifestyle checks to ensure their suitability for
appointment to the new organization. The formulation of the program of
organization shall be completed within six (6) months after the effectivity of this
Act, and shall be fully implemented within a period of six (6) months thereafter,
both of which periods shall be collectively referred to as the transition period.
Personnel who may not be retained are deemed separated from the service.

(c) Subject to the preceding paragraph and to minimize the disruption
of intemal revenue administration during the transition period, all incumbent
personnel in the Bureau of Internal Revenue as of the date of the approval of this
Act shall continue to exercise their duties and functions as personnel of the
Authority. To help ensure that revenue targets are met during the same period,
and in addition to the provisions of Section 285 of the National Internal Revenue
Code, an additional amount equivalent to five percent (5%) of the excess in
collection targets for the said period shall be used to pay separations benefits
authorized under the succeeding Section and shall likewise be treated as
receipts appropriated for this purpose. Towards the same end, the hiring of
auditors, suspension of assessments, institutions of voluntary assessment
programs, and similar measures are hereby authorized during the transition
period to augment revenue collection.

SECTION 21. Separation Benefits. - The officials and employees of the
former Bureau of Internal Revenue who are separated from the service as result
of the organization of the Authority shall be allowed to retire or be separated from
the service under existing laws: Provided, that in no such case shall any
employee displaced or separated from the service as a result of this Act, shall
receive less than One Hundred Thousand Pesos (P100,000.00) as separation
benefit. The methodology that shall govern the implementation of the said
program shall be provided in the IRR.

SECTION 22. Transfer of Powers. — All powers, duties and functions
bested by law in the Bureau of Internal Revenue shall be deemed transferred to
the Authority. The powers, duties and functions vested by the National Internal
Revenue Code of 1997 and other revenue laws in the Deputy Commissioners,
Service Chiefs, Assistant Service Chiefs, Revenue Regional Directors, Assistant
Revenue Regional Directors, Chiefs and Assistant Chiefs of Divisions, Revenue
District Officers, special deputies of the Commissioner, internal revenue officers
and other employees of the Authority who are appointed to exercise the same
powers, duties and functions as the abovementioned Bureau of Internal Revenue
officers and employees: Provided, however, That pursuant to the power of the
CEO to determine the organizational structure of the Authority and to reorganize
its personnel under Section 11 of this Act, the positions and bodies embodied in
Sections 7, 9, 10, 11, 13, 14, 15, 51(B), 58(A), 77(A), 81, 90(D), 95, 103(B),
114(B), 128(B), 130 (A)(3), 130 (A)(4)(b), 163, 164, 171, 172, 196, 200(C), 202,
204, 206, 207(A), 207(B), 209, 213, 214, 215, 227, 236(A), 236(B), 236(E),
236(F), 236 (G), 241, 242, 245(a), 245(e), 235(g), 248, and 271 of the National
Internal Revenue Code of 1997 may be changed, abolished, combined with
another position or body , or substituted with another and the powers and
functions granted by these provisions to said positions and bodies may be
performed by such officials or employees deemed appropriated by the CEO:
Provided, further, That for purposed of applications for abatement, cancellation,
and compromise under Section 204 of the Code, the Revenue Board shall be

10


authorized to fix the terms and conditions, including the levels of approving
authority and the creation of committees to process said applications

All references to the Bureau of Internal Revenue in the National Internal
Revenue Code of 1997 and other revenue laws, and in the rules and regulations
issued thereunder shall be deemed to refer to the National Revenue Authority.

SECTION 23. Applicability of Prohibitions and Sanctions, Administrative
Complaints. - The penalties imposed on officials, agents or employees of the
Bureau of Internal Revenue who are guilty of the offenses enumerated in the
National Internal Revenue Code of 1997 and other criminal statutes shall be
applied to members of the Revenue Board and officials, agents and employees
of the Authority who are found guilty of such offenses.

For purposes of administrative complaints against officer and employees
of the Authority, an internal audit to be created by and reporting directly to the
Board shall conduct the investigations on such complaints. For this purpose,
such internal audit unit shall be deemed deputized by the Office of the
Ombudsman under Republic Act No. 6770.

SECTION 24. Repealing Clause. — The provisions of Sections 18, 19, 20,
21, and 22 of Chapter 4 Title 11, Book IV of Executive Order No. 292, otherwise
known as the Administrative Code of 1987, are hereby repealed. The provisions
of Title | of the National Internal Revenue Code of 1997 insofar as they are
consistent with the provisions of this act, are hereby repealed or amended
accordingly. The other provisions of this Act, are hereby repealed or amended
accordingly. The other provisions of the Code, including Sections 51(B), 58(A),
77(A), 81, 90(D), 103(B), 114(B), 128(B), 130(A)(3), 130(A)(4)(b), 163, 164, 166,
171, 171, 172, 196, 200(C), 202, 204, 206, 207(A), 207(B), 209, 213, 214, 215,
227, 236(A), 236(B), 236(E), 236(F), 236(G), 236(0), 241, 242, 245, 245(e),
245(0), 248, 271, and 285 are hereby amended, and those other laws, rules and
regulations in consistent with this Act are hereby repealed or modified
accordingly.

SECTION 25. Separability Clause. — If any provisions, or part hereof, is
held invalid or unconstitutional, the remainder of the law of the provision not
otherwise affected shall remain valid and subsisting,

SECTION 26. Effectivity Clause. — This Act shall take effect fifteen (15)

days following its complete publication in the Official Gazette or in two (2)
newspapers of general circulation

Approved,