Law Summary
Coverage and Eligibility
- Applies to all officials and employees of BIR and BOC
- Includes regular and contractual personnel
- Requires a minimum of six months of service
Rewards and Incentives Fund
- Fund sourced from collections exceeding revenue targets as set by the Development Budget and Coordinating Committee (DBCC)
- Percent allocation: 15% of excess if 30% or below; 15% of first 30% plus 20% of excess over 30%
- Fund automatically appropriated the year after revenue target exceeded and released within same fiscal year
- Revenue targets based on original estimates in annual Budget of Expenditures and Sources of Financing (BESF)
- Apportionment among units and personnel proportional to contribution to excess collections
- Distribution administered by the Revenue Performance Evaluation Board according to prescribed rules
Incentives to District Collection Offices
- Districts exceeding their allocated target by less than 10% entitled to 10% reward of excess over allocated target
- Penalty for districts deliberately undershooting their target to lower future targets; such districts disqualified from incentives
- Award automatically appropriated and released the year after achievement
- Distribution governed by rules of the Revenue Performance Evaluation Board
Revenue Performance Evaluation Board Composition
- Chaired by Secretary or Undersecretary of Department of Finance
- Members include Department of Budget and Management Secretary or Undersecretary, National Economic and Development Authority Director General or Deputy, BIR and BOC Commissioners (nonvoting)
- Includes two rank-and-file representatives and one official representative nominated by recognized employee organizations
Board Powers and Functions
- Prescribe rules for fund allocation and rewards
- Set criteria and procedures for removal of officials/employees missing targets by 7.5% or more
- Exemptions for newly created districts, recent transferees, and consideration of economic difficulties
- Authority to terminate personnel based on performance evaluations with due process
- Prescribe performance evaluation system
- Issue implementing rules and regulations
- Submit annual report to Congress
Liabilities of BIR and BOC Personnel
- Officials and employees held liable for violations, negligence, malfeasance, misfeasance, or failure of due diligence
- Liability for losses or injury to business establishments or taxpayers caused by such conduct
Appeal Mechanism
- Terminated officials/employees may appeal to Civil Service Commission or Office of the President
- Appeals subject to relevant laws, rules, and regulations
Performance Reporting
- BIR and BOC Commissioners to submit semi-annual reports to Revenue Performance Evaluation Board
- Reports to detail collection status, personnel responsible, reasons for shortfall/surplus, and recommendations
- Annual report to include names recommended for termination or rewards
- Reports forwarded to Congress within two months of period end
- Separate shortfall reports prepared for Office of the President evaluating Commissioner performance
Rulemaking and Oversight
- DOF, DBM, NEDA, BIR, BOC, and CSC to jointly issue implementing rules within 30 days of effectivity
- Creation of a Joint Congressional Oversight Committee with members from Senate and House
- Committee oversees implementation and ceases to exist after approving rules
Legal Provisions
- Separability clause to preserve unaffected provisions if parts are declared invalid
- Repealing clause rescinds inconsistent laws, decrees, orders, issuances, and rules
- Act effective 15 days after publication in two newspapers of general circulation
This summary encapsulates the key provisions, procedural requirements, institutional framework, and accountability mechanisms established to enhance revenue collection efficiency within the BIR and BOC under the Act.