IN support of the tax-reform package dubbed as Tax Reform for Acceleration and Inclusion (Train), Speaker Pantaleon D. Alvarez said the lower chamber and the Department of Finance (DOF) will strictly and fully implement the lateral attrition law.
Alvarez said the full implementation of the lateral attrition law will ensure better collection of government revenue-generating agencies, namely the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).
“With respect to the collections of [Bureau of] Customs and the BIR, we have understanding with the Department of Finance that we will truly implement the attrition law,” Alvarez said in a recent news conference.
Alvarez also said Congress insisted that once the DOF has established its revenue-collection target for the year, the department would not be allowed to adjust the same.
Several lawmakers are calling for the full implementation of the lateral attrition law before the passage of the DOF-backed tax-reform bill. The tax-reform package seeks to lower personal income-tax rates, expand the value-added tax (VAT) base, adjust excise taxes on petroleum and automobiles, and ease the rates of estate and donor’s taxes.
They said the goals of the tax package would be vulnerable if the attrition law remains inactive.
Under Republic Act 9335, or the lateral attrition law, revenue officials who fall short of their collection targets by at least 7.5 percent would be dismissed from service, while those who go beyond expectations would be given incentives, which may include cash.
The attrition law, which was enacted during the term of then- President Gloria Macapagal-Arroyo, seeks to improve the revenue-collection performance of the BIR and BOC through the creation of a rewards and incentives fund and of a revenue performance evaluation board.
“To set the criteria and procedures for removing from service officials and employees whose revenue collection falls short of the target by at least 7.5 percent, with due consideration of all relevant factors affecting the level of collection as provided in the rules and regulations promulgated under this Act, subject to civil service laws, rules and regulations and compliances with substantive and procedural due process,” the law said.
It said if revenue collections exceed the target by 30 percent or below, the law guarantees that 15 percent of the excess will form part of a rewards fund.