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Republic of the Philippines RE CEIV nk
HOUSE OF REPRESENTATIVES oare, MAR 16 2017
Quezon City is

Seventeenth Congress
First Regular Session

House Bill No5321

Introduced by REPRESENTATIVE PROSPERO A. PICHAY, JR.

EXPLANATORY NOTE

The role of the Bureau of Internal Revenue (BIR) in advancing
President Rodrigo R. Duterte’s Ten-Point Economic Agenda can never be
highlighted enough. The taxes that the BIR collects primarily funds
infrastructure, education, health, rural development and the internal
revenue allotment of all local government units. In light of the upcoming
Comprehensive Tax Reform, the BIR should be equipped to take the
President’s challenge of funding the Administration’s programs.

With a total allowed plantilla of 21,491 employees’, the Bureau should
be providing top-notch taxpayer service and unparalleled tax administration.
However, this is not the case since the BIR lacks needed personnel. In
recent years, the BIR seems to have become merely a ‘last option” for
professional, technical and skilled job-seekers. With 27,219,916 registered
taxpayers to service, the BIR only has 9,835 in its complement which
amounts to a ratio of 2,767 taxpayers to 1 revenuer.

A number of issues which hound the BIR finds cause in the
uncompetitive salary that revenuers receive. 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. As such,
the BIR has become an employment alternative while job-seekers wait for
better jobs, or worse, a last option altogether. 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.

Aside from this, the low salary of revenue employees is seen as a
major factor in the cultivation of a culture of corruption of need, the
demoralization of current personnel and the deterioration on the
institutional knowledge of personnel. Moreover, 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.

| Bxecutive Order No. 366


Thus, the government must address the needs of the Bureau, lest we
sacrifice needed revenues to fund the programs of the government, It should
be highlighted that the government should safeguard the BIR and its
employees in its fulfillment of its vital role in nation building.

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 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 accountability. Thus, this law shall 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
of long-time Bureau officials and employees, the law shall 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

PR A. PICHAY, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

House Bill No. 5821

Introduced by REPRESENTATIVE PROSPERO A. PICHAY, JR.

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:

SECTION]. 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 personnel must be
maintained at a reasonable level in proportion to the national budget; and

(d) 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. 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:

Substandard performance or under-performance;
Simple Neglect in the performance of Duty; and

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.