Legal basis, constitutional and statutory authority
- Executive Order No. 175 grounds the President’s authority to reorganize the national government on Section 3, Article XVIII of the Philippine Constitution, including the power to group, consolidate agencies, abolish offices, transfer functions, and create/classify functions, services, and activities.
- Executive Order No. 175 cites the upheld Presidential reorganization power in G.R. No. 112745 involving Presidential Decree Nos. 1416 and 1792 (October 16, 1997).
- Executive Order No. 175 invokes organizational change authorization under Section 78 of the General Provisions of Republic Act No. 8522 (General Appropriations Act, FY 1998).
- Executive Order No. 175 cites the President’s powers under Section 20, Book III of the Revised Administrative Code of 1987.
Policy and declared purpose
- Executive Order No. 175 orders a reorganization to strengthen the Bureau of Internal Revenue (BIR) as an effective and efficient revenue collecting agency.
- Executive Order No. 175 aims to reinforce tax administration and enforcement capabilities, focusing on collection, assessment and enforcement, and regulatory functions relative to excise tax administration.
- Executive Order No. 175 establishes a need for a well-defined institutional structure for dealing with large taxpayers to strengthen control over them.
Organizational structure of BIR
- Section 1 reorganizes the BIR National Office, placing core functions into defined Services and Groups.
- Section 1 places the Regional Offices (ROs) to execute and implement national policies and programs for internal revenue law enforcement and requires RO reporting to the appropriate Deputy Commissioner.
- Section 1 creates Revenue Data Centers (RDCs) with defined responsibilities over distributed information systems and integrity of payment data uploads to the Integrated Tax System (ITS) database.
- Section 1 specifies that service heads are Assistant Commissioners and Group supervision is assigned to Deputy Commissioners, with defined internal divisions.
National Office: Services, groups, and divisions
- Under Section 1(1), the National Office develops and formulates broad national tax administration policies and programs, provides general direction, guidance, and control, and ensures efficient implementation of internal revenue laws and regulations.
- Section 1(1.1) places the following Services directly under the Office of the Commissioner:
- Enforcement Service: headed by an Assistant Commissioner, composed of Tax Fraud Division and Policy Cases Division.
- Policy and Planning Service: headed by an Assistant Commissioner, composed of Planning Division, Management Division, Statistics Division, and Corporate Communications Division.
- Large Taxpayers Service: headed by an Assistant Commissioner, composed of Large Taxpayers Assistance Division, Large Taxpayers Collection and Enforcement Division, Large Taxpayers Assessment Division, Large Taxpayers Programs Division, and Large Taxpayers Document Processing and Quality Assurance Division.
- Under Section 1(1.1.3), a Large Taxpayers Division is likewise established in Regional Offices under the direct supervision of the Large Taxpayers Service for identified large taxpayers.
- Section 1(1.2) establishes the Operations Group (supervised by a Deputy Commissioner) with the following Services and divisions:
- Taxpayer Assistance Service (Assistant Commissioner): Taxpayer Information and Education Division and Taxpayer Service Programs and Monitoring Division.
- Assessment Service (Assistant Commissioner): Assessment Programs Division, Audit Information, Tax Exemption and Incentives Division, and Asset Valuation Division.
- Collection Service (Assistant Commissioner): Collection Programs Division, Withholding Tax Division, Revenue Accounting Division, and Collection Enforcement Division.
- Excise Taxpayers Service (Assistant Commissioner): Excise Taxpayers Assistance Division, Excise Taxpayers Operations Division, Excise Taxpayers Programs Division, and Excise Taxpayers Document Processing and Quality Assurance Division.
- Section 1(1.3) creates the Legal and Inspection Group (supervised by a Deputy Commissioner) with the following Services:
- Legal Service (Assistant Commissioner): Law Division, Appellate Division, Litigation Division, Prosecution Division, and International Tax Affairs Division.
- Inspection Service (re-established; Assistant Commissioner): Internal Security Division, Internal Audit Division, and Personnel Inquiry Division.
- Section 1(1.4) establishes the Information Systems Group (supervised by a Deputy Commissioner) to support BIR operations, composed of:
- Information Systems Operations Service (Assistant Commissioner): Systems Operations Division and Systems Support Division.
- Information Planning and Quality Service (Assistant Commissioner): Security Management Division, Quality Assurance Division, and Systems Standards and Technology Management Division.
- Information Systems Development Service (Assistant Commissioner): Systems Development Division and Systems Maintenance and Support Division.
- Section 1(1.5) creates the Resource Management Group (supervised by a Deputy Commissioner) to support BIR operations, composed of:
- Human Resource Development Service (Assistant Commissioner): Personnel Division, Training Management Division, Training Delivery Division, and Medical, Dental and Welfare Division.
- Financial and Administrative Service (Assistant Commissioner): Budget Division, General Services Division, Accounting Division, Procurement Division, Accountable Forms Division, and Records Management Division.
Regional Offices and Revenue District Offices
- Under Section 1(2), ROs execute and implement national policies and programs for enforcement of internal revenue laws and report to the Deputy Commissioner for Operations Group.
- Section 1(2.1) provides that each RO is headed by a Regional Director and supervises Assessment Division, Collection Division, Legal Division, Finance Division, Administrative Division, Special Investigation Division, and Revenue District Offices (RDOs) within the region.
- Section 1(2.2) provides that RDOs supervise and control the sections within the district.
Revenue Data Centers and integrated tax systems
- Under Section 1(3), RDCs manage and maintain the BIR’s distributed information systems, ensure security, and maintain system operations.
- Section 1(3) requires RDCs to ensure the integrity of payment data transaction upload to the Integrated Tax System (ITS) database.
- Section 1(3) directs that RDCs report to the Deputy Commissioner for Information Systems Group and coordinate with Regional Directors and Revenue District Officers of the revenue regions and districts they service.
- Section 1(3) provides that each RDC is headed by a Revenue Data Center Head equivalent to the rank of Director I and includes:
- Facilities Management Division
- Computer Operations, Network and Engineering Division.
Appointments, redeployment, and staffing evaluation
- Under Section 2, all Deputy Commissioners, Assistant Commissioners, Regional Directors, Revenue Data Center Heads, and all other holders of Director I positions are appointed by the President, upon recommendation of the Commissioner, and approval of the Secretary of Finance.
- Under Section 2, all other personnel appointments are made by the Secretary of Finance, based on but not restricted to the Commissioner’s recommendation.
- Under Section 3, redeployment of officials and other personnel due to structural realignment must not result in diminution in rank and compensation of existing personnel.
- Under Section 3, redeployment must take into account pertinent Civil Service laws and rules.
- Under Section 3, the Commissioner, upon approval of the Secretary of Finance, must submit to the Department of Budget and Management (DBM) for evaluation and final approval the resultant staffing pattern of the BIR.
- Under Section 4, with approval of the Secretary of Finance, the Commissioner is authorized to determine the number of Regional Offices, Revenue Data Centers, and Revenue District Offices, consistent with requirements of the Computerized Integrated Tax System (CITS) and the principles of economy, efficiency, and effectiveness.
- Under Section 4, with the same approval, the Commissioner may organize the units under the Services and Offices authorized under Executive Order No. 175, subject to DBM evaluation.
- Under Section 5, the Commissioner, with approval of the Secretary of Finance, may transfer and assign Presidential appointees to positions or assignments of equivalent rank within the BIR when exigencies of service so require.
Implementing authority and separation clause
- Under Section 6, the Commissioner, with approval of the Secretary of Finance, must issue rules and regulations and other issuances necessary for effective implementation of Executive Order No. 175.
- Under Section 7, Executive Order No. 175 takes effect immediately.