Arroyo eyes new revenue agency to replace BIR

Former President now Pampanga Rep. Gloria Macapagal Arroyo (Pictured) wants to overhaul the Bureau of Internal Revenue and name it the National Revenue Authority (NAR) in a bid to boost tax collection. (Photo: philippinepresidency/ flickr)

MANILA –Former President now Pampanga Rep. Gloria Macapagal Arroyo wants to overhaul the Bureau of Internal Revenue and name it the National Revenue Authority (NAR) in a bid to boost tax collection.

In her House Bill No. 0695, Arroyo cited the need to create a Revenue Authority so as to 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 front-line services, high level of tax evasion/avoidance, and increasing perception of systematic corruption in the Bureau,” Arroyo said.

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

She also noted that the BIR is hampered by at least three fundamental institutional constraints: (a) rigid personnel management system where promotion is based merely on loyalty and seniority rather than exemplary performance (e.g. exceeding the revenue target); (b) compensation structure that restricts the hiring of first-rate professionals; and (c) strict line-item budgeting that limits the flexibility in the allocation of funds.

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

Under the proposed measure, the 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 Department of Finance (as Chairperson), the Department of Budget and Management, the National Economic Development Authority and the Securities and Exchange Commission.

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

She further stated that the NRA will be headed by a Chief Executive Officer (CEO) responsible for the administrative matters like work program, organizational structure, annual budget, compensation package, and appointment of rank and file employees, among many others.

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

The NRA will receive an annual service fee of not less than 1 percent but not more than 2 percent of total collection of the immediate preceding year, net of local government shares.

If it exceeds the annual collection target, the NRA will be likewise be entitled to 5 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.