Republic of the Philippines
HOUSE OF REPRESENTATIVE:
Quezon City

Seventeenth Congress
First Regular Session

House Bill No. 6089 ae

Introduced by REPRESENTATIVE MARLYN B. ALONTE.

EXPLANATORY NOTE

The role of the Bureau of Internal Revenue (BIR) in advancing President
Rodrigo R. Duterte’s Ten-Point Economic Agenda is crucial. The taxes that the BIR
will fund infrastructure, education, health, rural development and the interna! revenue
allotment of all local government units. The BIR should be fully supportedin taking on
the President's challenge of funding the Administration's programs, especially in light
of the upcoming Comprehensive Tax Reform.

With a total allowed plantilla of 21,491 employees’, the Bureau should ideally,
be providing optimum taxpayer service and unparalleled tax administration
Unfortunately, however, this is not the case since the BIR lacks the needed number
of personnel in administering and enforcement of tax collection. In recent years, the
BIR became a “last option” or pass-through career for professional, technical and
skilled job-seekers due to its low pay, and shallow career growth, among others.
With 27,219,916 registered taxpayers to manage, the BIR only has 9,835 revenuer
manpower or which amounts to a manpower ratio of 2,767 taxpayers to 1 revenuer.
In fact, to those seeking employment, the low salary is not commensurate to the
intimidating volume of taxpayers and the large amount to be assessed and collected
by the Bureau. With other agencies and the public sector providing more in terms of
salary and benefits, the BIR will not be able to attract professionals and technical
Manpower to join its workforce nor will it be able to retain fresh applicants for long.

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.

Thus, the government must address the needs of the Bureau. It should be

highlighted that the government should safeguard the BIR and its employees in its
fulfillment of its vital role in nation building.

4Executive Order No. 366


It is worthy to note that the Bureau of Customs has been allowed to avail of
better compensation and benefits through the enactment Republic Act No. 10863 or
the Customs Modernization and Tariff Act, specifically section 202 thereof, to
conduct a compensation study with the end view of developing and recommending
to the President a competitive compensation and remuneration system to attract and
retain highly qualified personnel. This representation believes that the Bureau of
Internal Revenue deserves the same privilege, if not more, for their efforts and for
the betterment of tax administration.

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 1989", 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.
y

a
MARLYN B. ALONTE


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

6089

House Bill No.

Introduced by REPRESENTATIVE MARLYN B. ALONTE

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 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 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 personne! must be
maintained at a reasonable level in proportion to the national budget; and

(d) A review of goverment 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. 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.

(b) The automatic promotion for Bureau officials and personnel shall be subject to
such rules and regulations to be promulgated by the Department of Finance (DoF)
and Civil Service Commission (CSC), within ninety (90) days from the effectivity of
this Act.

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.
However, such payment schemes shall be subject to such rules and regulations to
be promulgated by the DoF, upon recommendation and approval of the
Commissioner of Internal Revenue (CIR) and with concurrence with the Department
of Budget and Management (DBM) and CSC.

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
iii, 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.
Furthermore, such payment schemes shall be subject to such rules and regulations
to be promulgated by the DoF, upon recommendation and approval of the CIR and
with concurrence with the DBM and CSC.

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. 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, not more than once
every three (3) years, without prejudice to yearly merit reviews or increases based
on performance.

SEC. 7. 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. 8. 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. 9. 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. 10. Repealing Clause. - All laws, decrees, issuances, rules and regulations
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

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