Romualdez : Reward system will boost tax collection

  • Written by Ryan Ponce Pacpaco
  • Published in Top Stories
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PHILIPPINE Constitution Association (Philconsa) President Martin Romualdez yesterday welcomed the positive response of the Department of Finance  to the prodding of Speaker Pantaleon “Bebot” Alvarez to strictly enforce Republic Act (RA) No. 9335 or the Lateral Attrition Law.

Romualdez, a former three-term Leyte congressman, said the full implementation of the Lateral Attrition Law will help ensure that government-collecting agencies would consistently meet their target revenues especially with at least P230 billion in taxes uncollected by the Bureau of Customs (BoC).

He lamented the failure of the previous administration to implement the Lateral Attrition Act which provides for a system of reward and punishment for officials and employees of the BoC and Internal Revenue (BIR) who meet and fail their target revenues, respectively.

“We welcome the initiative of the Speaker to push for the implementation of the law. It’s unfortunate that this good law has not been implemented in the past administration. With this development, I hope the concerned department will enforce this to boost the performance of the Bureaus of Customs and Revenue,” said Romualdez, former head of the House Independent Bloc in the last 16th Congress.

“If they fall short of target revenue, the Attrition Law is there to impose sanctions and also provide incentives to the performers. That would have been a fair and transparent approach to ensure checks and balances,” said Romualdez.
Alvarez bared that the DoF agreed to his call for the full implementation of the Lateral Attrition Law to ensure better revenue collection in support of the Tax Reform for Acceleration and Inclusion (TRAIN), formerly known as the Comprehensive Tax Reform Package  (CTRP), now under deliberation in the House of Representatives.
After a majority caucus Wednesday afternoon, congressional leaders said the TRAIN bill is expected to be approved on second reading on Wednesday next week and passed on third and final reading before they adjourn on May 31.
Alvarez said he gave his full support to the passage of the TRAIN after the DoF addressed his concerns over the effect of higher taxes on fuel and the problems regarding the revenue collection performance of the BIR and and the Bureau of Customs BoC.
“With respect to the collections ng Customs at saka ng BIR, meron na kaming understanding with the Deptment of Finance na we will truly implement ‘yung Attrition Law,” Alvarez said in a press briefing after the caucus.
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.
In September last year, barely a few months after he was installed as Speaker of the House of Representatives, Alvarez had already urged the full implementation of the lateral attrition law.
Likewise, Alvarez 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.
“At saka hindi sila pwedeng magbago ng target—once in-establish na yung target collections for the year hindi na pwedeng mag-adjust. So yung in-establish na target for that year yun na yung magiging basis ngayon doon sa pag-apply natin nung attrition law,” Alvarez said.
Alvarez also said the current configuration of the CTRP has already addressed his concern over possible adverse effects of higher excise tax on fuels and petroleum products.

“Yung initial concerns ko na-address na naman. Meron nang solutions para ma-address yung problema na yun,” said Alvarez.
Albay Rep. Joey Salceda, senior vice chairman of the House committee on ways and means, has explained that the increased fuel tax actually targets the rich or top 1 percent of the population whose oil use is equal to the consumption of the lowest 50 percent of the people.
According to Salceda, the increased fuel tax the poorer sector of the population would have to bear will be returned to them through a direct transfer program for the three-year spread of the implementation of the gradual increases of excise tax on petroleum products.
He said such feature “is one of the most progressive items, most egalitarian items, of the tax reform measure.”
House committee on ways and means chairman Quirino Rep. Dakila Cua said they are contemplating establishing a “social benefits card” for this purpose, which would entitle the holder to certain privileges, depending on his personal circumstances.