DOF holds implementation of Lateral Attrition Act

MANILA, Philippines – The Department of Finance (DOF) wants to put on hold the implementation of the Lateral Attrition Act as it wans to iron out first thorny details related to revenue targets.

Finance Secretary Cesar Purisima said the department wants to look into the way collection goals are set.

“It is important that the target setting is done properly. That for me is the key to the proper implementation of the Lateral Attrition Law,” Purisima said.

He said that at this stage, he feels there are still ways to improve the goal setting process.

“I think for us to properly implement it and to be fair to all concerned, goal-setting should be done in an inclusive manner where you involve all those that would be affected, and two, the goals should be based on more hard facts. Right now they’re really based on macro-factors that’s hard to break down by region, by district,” Purisima said.

The Lateral Attrition Act provides for a system of reward and punishment for Bureau of Customs and Bureau of Internal Revenue officials and employees depending on their performance.

Those 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.

Last year, The STAR reported that Customs collectors are appealing to the Department of Finance (DOF) to do away with the revenue target

system in gauging the performance of the respective ports.

The 100-strong Customs Collectors Association of the Philippines (CCAP) said the more practical and realistic way to gauge the performance of the collectors is vis-à-vis their collections the previous year.

CCAP president Ronnie Silvestre had said that with so many free trade agreements entered into by the Philippines – which mandate lower tariffs and zero duties on various commodities entering the country – assigning revenue targets on Customs collectors is no longer attuned with reality.

The ability to meet their respective Customs targets is partly the basis for the evaluation of their performance under the Lateral Attrition Act.