GMA wants BIR shielded from political interference

MANILA, Philippines - Former president and now Deputy Speaker Gloria Macapagal-Arroyo has sought an overhaul of the Bureau of Internal Revenue (BIR) to improve tax collection and shield the agency from political interference.

Arroyo said replacing the BIR with the proposed National Revenue Authority (NRA) as contained in her House Bill 695 was “a pressing concern because there is need to dramatically reduce the country’s deficit and cut on public expenditures.”

“There is an urgent need for Congress to create a Revenue Authority to address the growing taxpayer dissatisfaction particularly over frontline services, high level of tax evasion/avoidance, and increasing perception of systematic corruption in the bureau,” the lawmaker said.

She said past efforts to reorganize the BIR were unsuccessful because these were only made through administrative decrees.

At present, Arroyo said the BIR is hampered by at least three fundamental institutional constraints: rigid personnel management system where promotion is based merely on loyalty and seniority rather than exemplary performance; compensation structure that restricts the hiring of first-rate professionals; and strict line-item budgeting that limits the flexibility in the allocation of funds.

With the NRA, Arroyo said tax collection could start on a clean slate since the same would be free from political interference in terms of decisions pertaining to revenue rulings, audit and assessment personnel management and budgeting. 

Under the bill, NRA will be governed by a Revenue Board composed of four representatives from the government and three from the private sector.

The government representatives shall include the heads of the Departments of Finance (as chairperson), Budget and Management, the National Economic and Development Authority and the Securities and Exchange Commission.

Private sector representatives shall be nominated by peak professional organizations and appointed by the President.

She said the private sector representatives must be recognized experts in the fields of economics, accounting, law, business management and other allied professions and would serve for a fixed tenure of office with different periods of expiry to avoid disruption of services, to prevent abandonment of approved plans/programs and to limit reversal of revenue rulings and regulations.

Arroyo said the NRA would be headed by a chief executive officer (CEO) responsible for administrative matters like work program, organizational structure, annual budget, compensation package and appointment of rank and file employees.

The CEO shall be appointed by the Revenue Board for a period of three years with possible reappointment under a performance-based contract.

To fully professionalize the NRA, selection of personnel for the new NRA will be strictly based on merit and fitness.

Arroyo said for those who would be recruited but opt not to join the NRA, an attractive separation/retirement package shall be offered. 

The NRA will receive an annual service fee of not less than one percent but not more than two percent of total collection of the immediate preceding year, net of local government shares.

If it exceeds the annual collection target, the NRA will likewise be entitled to five percent of annual collection in excess of its target. However, no portion of the performance bonus shall accrue to members of the Revenue Board.

“The NRA will establish a performance-based management system which shall govern the selection, hiring, appointment, transfer, promotion or dismissal of all personnel. Such system shall aim to attract and retain professionally competent, well-trained, honest, courteous and efficient personnel and to establish professionalism and excellence at all levels of the (NRA),” Arroyo said.