Chato files bill seeking to merge BIR, BOC

MANILA, Philippines - Former Internal Revenue Commissioner Liwayway Vinzons-Chato wants to dissolve the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) and create a single revenue authority to improve the government’s revenue stream.

Chato, now congressional representative of the lone district of Camarines Norte, has filed House Bill 6007 or an Act Creating the Philippine Revenue Authority (PRA).

The creation of a new revenue authority, which integrates the work of the BIR and the BOC, hopes to make tax collection in the country more efficient.

Chato believes that the Department of Finance (DOF) should “lead tax policy development and strengthen its capability for high-level analysis of the tax regime.”

She said a single revenue authority could improve customer service and lower compliance costs.

By having one revenue agency in the country, Chato also believes that tax collection would improve given that it would be more focused and aligned.

“This proposed law would also make the decision making process of the PRA more similar to corporations since it would be the revenue board that would make ultimate decisions including the choice of a commissioner. By having a collegial body, it is envisioned that corruption would be deterred,” Chato said.

She believes that by having a board appoint the commissioner, the appointee would be made accountable.

As such, Chato proposed in her bill the dissolution of the BIR and the transfer of all its functions to a body that will be called PRA to handle revenue policy, maintenance and delivery.

The bill also proposes the integration of revenue generation function of the present BOC with the PRA as well as the renaming of the BOC as the Philippine Border Services Agency to reflect the changes in its functions and powers.

Furthermore, the bill proposes that officers and employees of the new revenue agency to undergo training and be subject to the provisions of the Lateral Attrition Law. The law provides a system of rewards and punishment depending for BIR and BOC employees depending on their performance.

The bill also proposes that collection goals of the PRA would be covered by a contract agreement wherein the PRA’s goals are determined contractually with the Department of Finance which in turn would pay the PRA a service fee as consideration for attaining its goals.

The Finance department, the BIR and the BOC have yet to submit their respective position papers on the proposed bill.

However, officials from the different agencies said the bill poses risks and challenges. Officials prefer exempting the BIR and the BOC from the Salary Standardization Law to be able to attract highly competent people.