THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
'(M DEC -7 P5 3 1 
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BY : - - 
-_I_- -! 
First Regular Session 
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S E N A T E  
S. B. No. 
1.8 ?' 1 
(In substitution of SBN 1236 in consideration of HBN 2996) 
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Prepared by the Committee with Senator Ralph G. Recto as author thereoj 
AN ACT 
TO IMPROVE THE REVENUE COLLECTION PERFORMANCE OF THE 
BUREAU OF INTERNAL REVENUE (BIR) AND THE BUREAU OF CUSTOMS 
(BOC) THROUGH THE CREATION OF A REWARDS AND INCENTIVES 
FUND AND OF A PERFORMANCE EVALUATION BOARD AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SEC. 2. 
Rewards and Incentives Fund. - A Rewards and Incentives Fund, 
SECTION I. Declaration of Policy. - It is the policy of the State to maximize the 
revenue generation capability and collection of the Bureau of Internal Revenue (BIR) and 
the Bureau of Customs (BOC) by providing for a system of rewards and sanctions 
through the creation of a Rewards and Incentives Fund and a Performance Evaluation 
Board in the above agencies, for the purpose of encouraging their officials and employees 
to exceed their revenue goals. 
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hereinafter referred to as the Fund, which shall be equivalent to twenty percent (20%) of 
the collection of the BIR and the BOC in excess of their respective revenue goal of the 
year, as validated by the Development Budget and Coordinating Committee (DBCC), 
shall be automatically appropriated in the next year's General Appropriations Act (GAA). 
Revenue goal shall refer to the original revenue target of the BIR and the BOC for a 
given fiscal year as stated in the Budget of Expenditures and Sources of Financing 
(BESF) submitted by the President to Congress. 
The Fund shall be allocated, distributed and released in accordance with the rules 
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and regulations for that purpose as prescribed by the Performance Evaluation Board in 
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each agency, hereinafter creqted in Section 2 oftbis Act, 


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SEC. 3. Performance Evaluation Board. - There is hereby created a Performance 
Evaluation Board in the BIR and BOC, hereinafter referred to as the Board, each of 
which shall be composed of the Secretary of the Department of Finance @OF) or his 
representative; Secretary of the Department of Budget and Management (DBM) or his 
representative; the Commissioner of Internal Revenue or his representative, in the case of 
the BIR; the Commissioner of Customs or his representative, in the case of the BOC; a 
representative from the rank-and-file employees; and a representative from the officials, 
both of whom shall be duly nominated by their respective recognized organization. 
Sec. 4. Powers and Functions of the Board. - The Board in the agency shall have 
the following powers and functions: 
a,) 
To prescribe the rules and guidelines for the allocation, 
distribution and release of the Fund due to the agency as provided 
for in Section 2 of this Act; 
To set the criteria and procedures for removing from service 
employees and officials for sanctionable acts prescribed pursuant 
to this Act, subject to civil service laws, rules and regulations; and 
To terminate personnel in accordance with the criteria adopted in 
the preceding paragraph, the decision of which shall be 
immediately executov. 
b.) 
c.) 
SEC. 5. Right to Appeal. - An employee or official whose employment is 
terminated by virtue of the decision of the Board may appeal to the Civil Service 
Commission (CSC). 
SEC. 6. Rules and Regulations. - The DOF, DBM, SIR, BOC and CSC, shall 
jointly issue the rules and regulations of this Act within thirty (30) days after its 
effectivity. 
SEC. 7. Separability Clause. - If any provision of this Act is 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. 
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SEC. 8. Repealing CZuuse. - All laws, presidential decrees, executive orders, 
other executive issuances, rules and regulations or parts thereof, including the provisions 
of Section 285 of Republic Act 8424, which are inconsistent with this Act are hereby 
repealed, amended or modified accordingly. 
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SEC. 9. 
ESfectivity. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved, 
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