Strict implementation of Lateral Attrition Law urged

MANILA, Philippines - The principal author of Republic Act 9335 or the Lateral Attrition Law has pressed the Department of Finance (DOF) to strictly implement the law but Finance Secretary Cesar Purisima said the government wants to iron out first the thorny details regarding how targets are set.

 “We are working with the Bureau of Internal Revenue and the Bureau of Customs to make sure the target-setting (process) is right,” Purisima said during a recent hearing at the House of Representatives on proposed P2.006-trillion budget for next year.

Purisima was responding to a question raised by Minority Leader Danilo Suarez as to why the law is not being implemented.

 “We are concerned that implementing this (now) will not be (serve) the right purpose. The targets of the departments I believe are properly set but it is the distribution among the different units among those bureaus that we are fine-tuning,” Purisima said.

Nonetheless, the Finance chief stressed that he is not against the implementation of the law.

 “We would just like to fine-tune the process but I agree that the Lateral Attrition Law will help us achieve our goals,” Purisima said.

The Lateral Attrition Act provides for a system of reward and punishment for Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) 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.

President Arroyo signed the law in 2005 with the aim of boosting the performance of the BIR and the BOC.

Under the law, if revenue collections exceed the target by 30 percent or below, 15 percent of the excess will form part of a rewards fund.

Furthermore, the law also requires the commissioners of the BIR and BOC to submit a regular report on the performance of the two agencies to a nine-member Revenue Performance Evaluation Board, which is chaired by the Secretary of Finance.

Both revenue agencies are against the law but in August 2008, the Supreme Court (SC) ruled as constitutional the rewards and sanctions prescribed under the measure.

The BIR is tasked to collect P1.06 trillion this year while the BOC has an assigned goal of P347 billion to P357 billion.