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Si:\ 1:M ELM II COiMiRESS Ol THE ) 
REPUBLIC OF THE PIIIEIPPINES 
)
First Regular Session 
)
SENATE
S. No. 1316
*17 FEB-7 Pl:19
/SV
R EC riV ED  IT,'.
Introduced by Senator Ralph G. Recto
AN ACT
EXEMPTING THE BUREAU OF INTERNAL REVENUE FROM THE COVERACiE OF 
REPUBLIC ACT NO. 6758, OTHERWISE KNOWN AS THE COMPENSATION AND 
POSn iON CLASSIFICATION ACT OF 1989, AS AMENDED, AND FOR OTHER 
PURPOSES
Explanatory' Note
Under Section 2, Title I of Republic Act No. 8424 otherwise known as the National 
Internal Revenue Code of 1997, as amended, the Bureau of Internal Revenue (BIR) is mandated, 
among others, to collect all national internal revenue taxes, fees and charges, and to enforce all 
forfeitures, penalties and fines connected therewith. Pursuant to this mandate, and over the 
course of the past decade, the BIR has been collecting close to 80% of the National 
Government’s tax revenues. The BIR, however, has been considered to be suffering from 
underperformance compared to other emerging Asian countries and this can be attributed to the 
fact that the agency is currently understaffed. At present, the BIR has an authorized planiilla ol 
21.491 but only 9,835 positions have been filled.
Although in recent years there has been improvement with respect to tax compliance by 
taxpayers, plugging tax leakages remain to be a constant challenge for government revenue 
of ficers brought about by the complex schemes employed by certain large taxpayers just to avoid 
taxes. Tax administration is a highly technical and specialized Held and for it to be considered 
efficient, effective and at par with the legal and accounting personnel in the private sector, the 
BIR must be equipped with high-caliber professionals and first-rate technical and support staff 
who are regularly trained in the intricacies of taxation. With a competitive salary and incentive 
package, the BIR may be able to employ and retain high-caliber core personnel and counter the 
prospect of organizational “brain drain” to the private sector and even incidents of corruption.
As the very foundation of tax administration, it is quite ironic that little attention is given 
with respect to the welfare of BIR employees. The current compensation schedule of BIR 
employees is considered grossly disproportionate to the importance and risk that their work 
entails. Just to illustrate, a BIR employee occupying the position of Revenue Officer 1 has a 
monthly salary of PhP 19.620.00, a paltry sum compared to an employee holding a similar 
position at the Securities and Exchange Commission (SEC) who receives a monthly salary of at 
least PhP50,238.00. Furthermore, with respect to lawyers, the entry-level salary at the BIR is 
PhP 35.693.00, a meager amount compared to lawyers employed at the SEC and Insurance 
Commission (1C) who receive a monthly .salary of PhP53,754.00 and PhP66,524.00, 
respectively. With such a low salary, several employees and officials at the BIR resign from 
office to join other government agencies and the private sector where they arc expected to 
receive double or even triple the amount of their current compensation package. And a number


of those who remain, however, either perform below their potential or worse, resort to corrupt 
activities.
As a measure of commensurate reward, this bill seeks to exempt the BIR Irom the 
coverage of Republic Act No. 6758, otherwise known as the “Compensation and Position 
Classification Act of 1989” or more popularly known as the Salary Standardization Law. With 
its passage, it is expected that the salaries of BIR employees and ofllcials will be at par with 
industry standards and it is hoped that the BIR will be able to fill the glaring gap in its workforce 
and attract the best and the brightest in the field of taxation. 
More importantly, with a 
competitive compensation package, incidences of corruption at the BIR will be minimized il not 
eradicated and that the public can expect a BIR that can further improve its collection 
performance, and overall, a more efllcient tax administration.
In view of the foregoing, immediate passage of this bill is earnestly sought.


sicvK.M i:i:m  II coin(;ki:ss of h ie  )
KEPUBLIC OF THE IMIIUIMMNES 
)
First Rcrtiiliir Session 
)
SENATE
S. No. 1316
ci tiir iTTflni'p
'17 FEB-7
FECLIVI.U ill'.,
1 :19
Introduced by Senator Ralph G. Recto
AN AC 1
EXEMPTING THE lUIREAlJ OF INTERNAL REVENUE FROM THE COVERAGE OF 
REPUBLIC ACT NO. 675S, OTHERWISE KNOWN AS THE COMPENSATION AND 
POSmON CLASSIFICATION AC I OF 1989, AS AMENDED, AND FOR OTHER 
PURPOSES 
f
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1 
Section I. 
Declaration of Policy. -  It is the policy of the State to reform tax
2 
administration and ensure efficient and effective collection of taxes by employing and
3 
maintaining competent and professional revenue officials and personnel to collect taxes and
4 
enforce internal revenue tax laws. Towards this end, the State shall exempt the Bureau ot
5 
Internal Revenue (BIR) and its employees from the coverage of Republic Act No. 6758,
6 
otherwise known as the Compensation and Position Classification Act ot 1989, as amended.
7 
Section 2. Exemption from the Compensation and Position Classification Act of 1989 or
8 
Salary Standardization. The BIR and its employees shall be exempt from the coverage of the
9 
Compensation and Position Classification Act of 1989, as amended, or Salary Standardization
10 
Law.
11 
The BIR is hereby authorized to formulate its own Compensation and Position
12 
Classification System based on the following principles:
13 
(a) 
BIR personnel shall be paid just and equitable wages in accordance wth the
14 
principle of equal pay for work of equal value;


1 
(b) 
Basic compensation for BIR personnel shall generally be comparable with those
2 
in the private sector doing comparable work and must be in accordance with
3 
prevailing laws on minimum wage;
4 
(c) 
The BIR Compensation and Position Classification System shall be determined
5 
through a comprehensive analysis and audit of actual duties and responsibilities of
6 
the Bureau’s officials and employees;
7 
(d) 
The total compensation provided for government personnel must be maintained at
8 
a reasonable level in proportion to the national budget; and
9 
(e) 
A review of government compensation rates, taking into account the performance
10 
of the BIR, its overall contribution to the national economy, and the possible
11 
erosion in purchasing power due to infiation and other factors, shall be conducted
12 
periodically;
13 
Section 3. Incentives to BIR Officials and Personnel. -  The BIR, subject to tlie approval
14 
of the President, may provide for other incentives not provided under existing laws and Civil
15 
Service laws.
16 
Section 4. Approval of the President. -  The BIR Compensation and Position
17 
Classification System implemented pursuant to this Act shall be approved by the President, and
18 
shall be subject to periodic review by the BIR, in consultation with the Department of Budget
19 
and Management (DBM), Department of Finance (DOF) and the Civil Service Commission
20 
(CSC), not more than once every three (3) years, without prejudice to yearly merit reviews or
21 
increases based on performance.
22 
Section 5. 
Non-diminution of Salaries. — The BIR Compensation and Position
23 
Classification System to be developed and recommended by the BIR, as approved by the
24 
President, shall apply to all positions, on full or part-time basis, now existing or herealter
25 
created: Provided, That, upon the implementation of the approved BIR Compensation and
26 
Position Classification System there shall be no diminution in the authorized salaiies ol
27 
incumbent employees of the BIR as of December 31, 2016.
28 
Section 6. Appropriation Clause. — The amount necessary to implement this Act shall be
29 
included in the General Appropriations Act of the year following its effectivity.


1 
Section 7. Separability Clause. -  If any of the sections or provisions of this Act is held
2 
invalid or unconstitutional, all other provisions not affected thereby shall remain valid and
3 
effective.
4 
Section 8. Repealing Clause. -  All laws, decrees, issuances, rules and regulations
5 
inconsistent with the provisions of this Act are hereby repealed or modified accordingly.
6 
Section 9. Effeclivily Clause. -  This Act shall take effect fifteen (15) days after its
7 
complete publication either in the Official Gazette, or in at least two (2) newspapers of general
8 
circulation.
Approved,