Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS:

First Regular Session

HOUSE BILL NO. 3154

Introduced by Honorable EDUARDO R.

EXPLANATORY NOTE

‘This bills seeks to strengthen the organizational capability of the Bureau of Customs (BOC) and
the Bureau of Internal Revenue (BIR), the two primary revenue-generating agencies of the
Philippine government.

It is the policy of the State to reform revenue administration and ensure efficient and effective
collection of taxes and duties to meet the financial requirements of the government.

This bill also provides for the creation of the National Revenue Academy (NRA) by the
Department of Finance which shall handle all the trainings, continuing education programs and
other courses for all the officials and personnel of BIR and BOC.

‘This Act shall be implemented in conjunction with Republic Act No. 9335, otherwise known as
the Attrition Law, which provides for a system of reward and sanctions in both agencies, the BIR
and BOC, for the purpose of encouraging their officials and employees to exceed their revenue
targets.

For these foregoing reasons, approval of this bill is eamestly sought.

CaN

EDUARDO R. GULLAS


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
‘rst Regular Session

3154

HOUSE BILL NO.

Introduced by Honorable EDUARDO R. GULLAS

AN ACT STRENGTHENING THE BUREAU OF INTERNAL REVENUE (BIR) AND
THE BUREAU OF CUSTOMS (BOC), APPROPRIATING FUNDS THEREOF AND FOR
OTHER PURPOSES

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

SECTION 1. Declaration of Policy — It is the policy of the state to reform revenue
administration and ensure efficient and effective collection of taxes and duties to meet the fiscal
requirements of the government, strengthen the organizational capability of the primary revenue
generating agencies of the government, the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC), by allocating a certain percentage of the actual hard collection of each agency
per year for their annual budget, exempting the personnel and officials of the BIR and BOC from
the Salary Standardization Law, and instituting a program to professionalize and continuously
enhance their skills.

SEC. 2. Definition of Terms ~ For purpose of this Act, the terms:

(a) “ Actual Collection “ refers to all taxes and duties collected by the BIR and BOC
respectively, Including cash as well as non-cash collections receivables and other
incomes.

(b) “ Hard Collection ” refers to taxes and duties collected by the BIR and BOC,
respectively. net of collections from Tax Expenditure Fund (TEF), Tax Credit Certificates
(TCC) Tax Revenue Advice (TRA) and tax subsidies.

SEC. 3. Basis of Annual Appropriation and Compensation — The annual appropriation for the
BIR and BOC shall be 2% of the actual hard collection of the taxes and duties of the previous
year which shall fund the agencies' personal services, maintenance and other operating expenses
(MODE), capital outlay and the setting up of the operations of the National Revenue Academy
(NRA).


‘The determination of the compensation package for the two agencies shall be performance-based
including the successful completion and passing of the trainings and other courses required by
the National Revenue Academy, and the use of a comprehensive job analysis and evaluation of
the actual duties and responsibilities of the officials and personnel of each agency, vis-a-vis the
tax and duties collection of the BIR and BOC in the preceding year. The compensation package
shall be approved by the Department of Finance (DOF), subject to periodic review by the BIR
and BOC in consultation with the department of Budget and Management (DBM) and the Civil
Service Commission (CSC), Provided, that the annual collection performance shall be used to
determine the adjustment in compensation for the two agencies.

The adjustment in the personal services and salaries thereto shall depend on the amount of the
hard collection of the previous year: Provided, that the incremental increase in the previous
year's actual collection shall not be less than 15% from the year immediately preceding it:
Provided, further, that the percentage increase in basic pay shall not be more than 30% from the
previous year's rate.

SEC. 4. Creation of the National Revenue Academy ~ The Department of Finance shall create
a National Revenue Academy (NRA) which shall handle all the trainings, continuing education
programs and other courses for all the officials and personnel of the BIR and BOC. The budget
for the NRA shall be taken from its share of the 2% annual hard collection of taxes and duties by
the BIR and BOC respectively.

All existing officials and personnel of the BIR and BOC shall be requires to undergo re-tooling
and enhancement seminars and training programs to be conducted by the NRA. All applicants to
the bureaus shall also be required to pass the basic courses before they can be hired whether on
contractual or permanent status.

SEC. 5. Application Evaluation Board ~ There is hereby created an Appropriation Evaluation
Board in the BIR and the BOC, hereinafter referred to as the Board each of which shall be shall
be composed of the Secretary of the Department of Finance (DOF) or his/her Undersecretary as
the Chairman of the Department of Budget and Management (DBM) and his/her Undersecretary
and the Chairman of the Civil Service Commission (CSC) or his/her Commissioner and as non
voting members, the Commissioners of the BIR and BOC, or their Deputy Commissioners; two
representatives from the rank-and-file employees and a representative from the officials, both of
whom shall be duly nominated by their respective from the officials, both of whom shall be duly
nominated their respective recognized organization.

SEC. 6. Power and Functions of the Board ~ The Board in the agencies shall have the
following powers and functions.

(a) To prescribe the rules and guidelines for the annual budget and review of subsequent
adjustments, if any, of the basic salaries of the officials and personnel of BIR and BOC as
provided for in Section 3 of this Act;

(b) To approve the proposed budget prepared by each agency, based on the criteria rules
and guidelines it had earlier set.



SEC. 7. Application of the Attrition Law ~ This Act shall be implemented in conjunction with
Republic Act 9335, otherwise known as the Attrition Law, which provides for a system of reward
and sanctions in the above agencies for the purpose of encouraging their officials and employees
to exceed their revenue targets. Under this Act, BIR and BOC officials and employees may still
qualify for salary adjustment event if they do not meet their annual target, for as long as the year-
on-year increase in actual collection of taxes and customs duties is not less than 15%.

SEC. 8. Rules and Regulations — The DOF, DBM, CSC, BIR and BOC shall jointly issue the
implementing rules and regulations (IRR) of this Act within (30) days after its effectivity.

SEC. 9. Separability Clause ~ I f any provision of this Act declared invalid by a competent
court, the remainder of this Act or any provision not affected by such declaration of invalidity
shall remain in force and effect.

SEC. 10. Repealing Clause — All laws, decrees, issuances, rules and regulations inconsistent
with the provisions of this Act are hereby repealed.

SEC. 11. Effectivity — This Act shall take effect fifteen (15) days after its publication in at least
two (2) newspapers of general circulation.