House, DOF agreed on full implementation of attrition law to support CTRP

Speaker Pantaleon Alvarez bared today that the Department of Finance agreed to his call for the full implementation of the Lateral Attrition Law to ensure better revenue collection in support of the Comprehensive Tax Reform Package (CTRP) now under deliberation in the House of Representatives.

 After a majority caucus Wednesday afternoon, congressional leaders said the CTRP bill is expected to be approved on 2nd reading on Wednesday next week and passed on third and final reading before they adjourn on May 31.

Alvarez said he gave his full support to the passage of the CTRP after the DOF addressed his concerns over the effect of higher taxes on fuel and the problems regarding the revenue collection performance of the Bureau of Internal Revenue and the Bureau of Customs.

“With respect to the collections ng Customs at saka ng BIR, meron na kaming understanding with the Dept. of Finance na we will truly implement yung Attrition Law,” Alvarez said in a press briefing after the caucus.

Under Republic Act 9335, or the lateral attrition law, revenue officials 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.

In September last year, barely a few months after he was installed as Speaker of the House of Representatives, Alvarez had already urged for the full implementation of the lateral attrition law.

Likewise, Alvarez said Congress insisted that once the DOF has established its revenue collection target for the year the department would not be allowed to adjust the same.

“At saka hindi sila pwedeng magbago ng target—once in-establish na yung target collections for the year hindi na pwedeng mag-adjust. So yung in-establish na target for that year yun na yung magiging basis ngayon doon sa pag-apply natin nung Attrition Law,” Alvarez said.

Alvarez also said the current configuration of the CTRP has already addressed his concern over possible adverse effects of higher excise tax on fuels and petroleum products.

“Yung initial concerns ko na-address na naman. Meron nang solutions para ma-address yung problema na yun,” said Alvarez.

Albay Rep. Joey Salceda, senior vice chairman of the Ways and Means Committee,  explained that the increased fuel tax actually targets the rich or top 1 percent of the population whose oil use is equal to the consumption of the lowest 50 percent of our people.

According to Salceda, the increased fuel tax the poorer sector of the population would have to bear will be returned to them through a direct transfer program for the three-year spread of the implementation of the gradual increases of excise tax on petroleum products.

He said such feature “is one of the most progressive items, most egalitarian items, of the tax reform measure.”

Ways and Means Committee chairman Rep. Dakila Cua said they are contemplating on establishing a “social benefits card” for this purpose, which would entitle the holder to certain privileges, depending on his personal circumstances.