Question & AnswerQ&A (DBM DEPARTMENT OF FICE AND DEPARTMENT OF BUDGET AND MANAGEMENT JOINT CIRCULAR NO. 1-95)
The purpose of the Joint Circular is to prescribe the rules and regulations for implementing the BIR Productivity Incentive Fund established under Republic Act No. 7845, which provides incentives to BIR personnel based on increased revenue collections of the Bureau of Internal Revenue.
The Fund is a pool of money created out of the increase in total revenue collections of the BIR during the immediately preceding year over that of the previous year, not exceeding One Hundred Million Pesos annually, used for additional incentive allowances for BIR personnel.
The Fund becomes operative when there is an increase in BIR revenue collections between two consecutive years and the revenue target of the immediately preceding year has been met as certified by the Department of Finance.
Revenue Target refers to the approved amount of targeted revenues for the BIR for a given year as originally used in the budget formulation and excludes estimated yields from new revenue measures not enacted by Congress or approved by the President.
'Increase in total revenue collections' means the actual incremental collections between the immediately preceding year and the year before it, adjusted to exclude tax refunds paid out during those years.
The maximum amount of the BIR Productivity Incentive Fund is capped at One Hundred Million Pesos (P100,000,000) per annum as authorized by Congress.
No, the incentive from the Fund shall be in lieu of any other productivity incentive or similar benefits granted by law or by the President. If such benefits have already been given, they will be deducted from this incentive.
Incentives are granted based on the Performance Evaluation System of the Bureau, approved by the Civil Service Commission, and complying with guidelines issued by the Commissioner of Internal Revenue and approved by the Secretary of Finance.
Any unutilized portion of the Fund lapses at the end of the calendar year and is no longer available for use in succeeding years.
The BIR must prepare an Incentive Plan, submit it to the Office of the President upon recommendation by the Secretary of Finance, supported by certifications of actual collections and revenue targets met. Then, it must request a special budget from the Department of Budget and Management with Presidential approval and submit utilization reports.