BusinessWorld: Attrition law to finally take effect this year

MANILA, Philippines - A law aimed at sacking inefficient tax and customs officials while rewarding those who exceed revenue goals will finally be implemented this year, with the Finance department ordering the two main revenue agencies to submit a list of people to be dismissed for failing to meet targets in 2007. The move came after legal questions on Republic Act 9335, also known as the Attrition Act of 2005, were set aside last week by the Supreme Court, which junked a petition, which claimed the law was unconstitutional. Finance Secretary Margarito B. Teves, who heads the Revenue Performance Evaluation Board (RPEB) created by the Attrition Act, said the personnel lists from Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) should be in by the end of September. "I need this for the Revenue Performance Evaluation Board on or before September 30. The BIR is willing to submit earlier. As soon as we get the final list, taking note of the assumptions versus realities and other considerations, the RPEB will deliberate," Mr. Teves told reporters on Tuesday. BIR Deputy Commissioner Nelson M. Aspe said the tax bureau’s list would be submitted in the first week of September. "We [gave our] word [to] ... during our last command conference. BIR will come up with recommendation on who will be [dismissed] for 2007 in a month or two, [or] first week of September," he said. Customs division chief Edna V. Barrida said the agency would comply. "The lateral attrition committee of the BoC has not yet met finally to come up with the names. We are evaluating each division, sub-boards and units of all districts for their performance. We are still evaluating," she said. Under the Attrition Act, revenue officials and employees who fall short of their collection targets by at least 7.5% can be removed from service. If revenue collections exceed the target by 30% or below, 15% of the excess will accrue to a rewards fund. If the excess is more than 30%, 15% of the first 30% and 20% of the remaining amount will go to the fund. The law is supposed to motivate tax and customs collectors to increase revenues for the government, which is struggling to balance the national budget. The BIR missed its P765.9-billion target by a little more than P54 billion last but will be safe as an agency since it was only 7% behind the goal. Individual collectors, however, will still be subject to dismissal if they fell by at least 7.5% behind their targets. Customs, meanwhile, is in trouble as it fell 7.8% behind the P228.2-billion goal, collecting only P210.5 billion in 2007. In March, the BoC Employees Association (BOCEA) asked the Supreme Court to nullify the Attrition Law, saying 1,200 Customs employees including Commissioner Napoleon L. Morales himself were at the risk of losing their jobs after missing the target by P17.7 billion. The tribunal, however, ruled last Friday that "The law lays down a reasonable yardstick for removal with due consideration of all relevant factors affecting the level of collection." "Public service is its own reward ... A system of incentives for exceeding the set expectations of a public office is not anathema to the concept of public accountability," it said, even as it struck down a joint congressional oversight committee created by the law, which is said was given too much power. The author of the Attrition Act, Quezon Rep. Danilo E. Suarez, said it was "high time" for the law’s implementation after numerous delays. For instance, the law was signed in January 2005 but the implementing rules did not come out until May 2006. "They (the Department of Finance) should implement it. It is easy to identify them (those who are up for attrition) especially those who are perennially short of targets," Mr. Suarez told BusinessWorld. "Most of them were waiting for the Supreme Court resolution ... They thought the Supreme Court would say it is a violation of the security of tenure," he added. — Ruby Anne M. Rubio, BusinessWorld