Republic of the Philippines é
HOUSE OF REPRESENTATIVES [2 Ri CEIVED @
© ANE: FEB 14.2M7

Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5022

House Bill Nos

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

A vital aspect of taxation is its administration among the taxpayers in the country, It
should thus be of paramount importance to ensure that the Bureau of Internal
Revenue (BIR) is staffed by competent, proactive, and professional officials and
employees, with integrity and an unbridled sense of nationalism,

At present, the BIR only has a total of 9,292 personnel running the agency's
operations nationwide. This is less than 50% of their total allowed plantilla allocation
of 21,634 employees.’ For 2015, with more than 27.2 million registered taxpayers,
the ratio between taxpayers and BIR personnel assigned to collect and assess are at
1:10,425 and 1:12,602, respectively. Simply put, the BIR severely lacks the needed
personnel to provide top-notch taxpayer service and unparalleled tax administration.

Recruitment efforts have proven ineffective in attracting and retaining top talent in
accounting, law, and public administration. In recent years, the BIR seems to have
become merely a “last option” for professional, technical and skilled job-seekers. The
primary reason being the BIR’s compensation package cannot compete with those of
other agencies and the private sector

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

With the end goal of improving tax administration, legislation is required to exempt
the Bureau from the coverage of Republic Act No. 6758 otherwise known as the
"Compensation and Position Classification Act of 1989", or the “Salary
Standardization Law’

It is worthy to note that the Bureau of Customs has been allowed through Section
202 of the Republic Act No, 10863 or the Customs Modernization and Tariff Act to

Executive Order No. 366 (BIR Rationalization Plan)

2



Conduct a compensation siuicy with the end view of developing and recommending
to the President a compe’ live compensation and remuneration system to attract and
retain highly qualified sonnel. This representation believes that the Bureau of
Internal Revenue deseis the same privilege, if not more, for their efforts and for
the betterment of tax

With competitive salar »xpected that corruption of need shall be eliminated,
and that more job-sce\) shall see the BIR as a worthy employer and revenue
collection for the bet i of the Philippines a worthy cause to fight for. The
increase in salaries of | | officials and employees would also be a symbolic
recognition that Tax Aci nistvation is a very technical and specialized field. In the
end, this measure is. s: reinvigorate the primary revenue collection agency of

the government

In view of the foregoiry ely passage of this bill is earnestly sought



Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, 9022

Introduced by Representative Sharon S. Garin

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 en
in Congress

ted by the Senate and House of Representatives of the Philippines
bled:

SECTION1. 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

(4) 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,