Customs, BIR revamp looms

PHILIPPINE NEWS SERVICE — President Gloria Macapagal Arroyo has overturned a plan of the Bureau of Internal Revenue and the Bureau of Customs to defer the implementation of the lateral attrition law, which prescribes a system of rewards and penalties for tax officials and personnel to boost revenue collection.

This means the revamp of the two revenue-earning bureaus will forge ahead soon.

Customs collectors and tax examiners have appealed to Malacañang and finance authorities to suspend the enforcement of the novel scheme until next year to enable them to prepare for it.

Cabinet Secretary Ricardo Saludo said the President has taken a firm position that there should be no delay in implementing the lateral attrition law.

“The Department of Finance, the Bureau of Internal Revenue and the Bureau of Customs shall implement the rewards and sanctions under the attrition law and based on performance targets for the 2006 fiscal year,” Saludo said.

“Hitting our revenue targets is crucial to maintaining fiscal discipline, boosting investor confidence and funding needed public investments and services.”

The full implementation of the lateral attrition law was one of the series of directives issued by the President to speed up action on priority projects and concerns.

Saludo said the President has told her Cabinet members that there should be no lull or delay in the government’s action on urgent matters while the nation’s attention is glued on the results of the mid-term elections.

“As the nation awaits the results of the elections, the government is accelerating development services and major undertakings for economic expansion, job creation, price stability and peace and order,” the Palace official said.

Under the lateral attrition law, internal revenue and customs officials can be rewarded with cash incentives and promotion to higher posts if they exceed or meet collection targets.

On the other hand, those whose revenue collection fell short of targets will be sanctioned with demotion or even removal from office.

The go-signal for the imposition of sanctions on faltering revenue and customs officials was tantamount to a marching order for a major shakeup of the BIR and BoC officialdom, observers say.

It was issued by the President following a report of Finance Secretary Margarito Teves that the national government incurred a P55-billion budget deficit in the first quarter of 2007 due to failure of the BIR and BoC to meet their collection targets.

An administration source disclosed that Teves frowns on the proposal of BIR and BoC officials to defer the implementation of the lateral attrition law.

Meanwhile, the President has instructed the Cabinet to review the Investment Priorities Plan.

Saludo said the IPP, once approved, shall help bring in more foreign capital and investments into the country as investors become more and more bullish, specially with the “largely peaceful and smooth conduct of the elections.’’

The President directed the Department of Energy and the Power Sector Assets and Liabilities Management Corp. to ensure the successful sale of the National Transmission Corp. and the Masinloc power plant in Zambales.

Saludo said these “closely-watched” privatization of state assets shall boost business confidence and generate needed investments for future electricity needs of the country.