August 20, 2017 | MANILA, PHILIPPINES

Finance department agrees to BIR, Customs staff incentives

SPEAKER Pantaleon D. Alvarez said the Finance department has to fully implement the lateral attrition law, which features a system of rewards and penalties intended to encourage employees of revenue-collection agencies to exceed their targets.


In a news conference after an all-party caucus on tax reform on Wednesday afternoon, Mr. Alvarez said that the Department of Finance (DoF) agreed to the implementation of Republic Act 9335 to ensure better revenue collection in support of the comprehensive tax reform package.

“With respect to the collections of Customs and the BIR (Bureau of Internal Revenue), we already have an understanding with the Department of Finance that we will truly implement the Attrition Law,” Mr. Alvarez said in a briefing.

Under the law, revenue officials who fall short of their collection targets by at least 7.5% would be dismissed from service while those who exceed expectations could be rewarded with cash, among other incentives.

The Speaker also said that once the revenue target has been established for the year, the department should not be allowed to adjust it.

“Once the target collection has been established for the year, it can’t be adjusted. So the established target for that year will be the basis on the application of the attrition law,” Mr. Alvarez stressed.

Asked about the latest configuration of the tax reform package, Mr. Alvarez said that his initial concerns have been addressed over the possible adverse effects of a higher excise tax on fuel and petroleum products.

“Solutions have been offered to address those problems,” he said.

The original bill drafted by the Finance department in September seeks to impose a one-time P6 excise tax on oil and petroleum products. However, in the DoF-endorsed bill officially filed with the House in January, the P6 will be implemented over three years on a staggered basis, starting from P3 in 2018, P2 in 2019, and P1 in 2020.

Mr. Alvarez said that he is now throwing his “full support” behind the passage of the tax reform package with all his concerns addressed.

The tax package is scheduled to be sponsored on the plenary on Monday by Ways and Means committee chairman Rep. Dakila Carlo E. Cua (Quirino). Second-reading approval is targeted for Wednesday next week. -- Raynan F. Javil