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MANILA - The Department of Finance will put up a fiscal unit that will address the inaccuracies in the targets imposed on revenue generating agencies.
Finance Secretary Purisima said the department has asked the United States Agency for International Development to fund the third party that will be tasked to improve the government's revenue target setting.
"This will be crucial in allowing us to use external information to set the right targets, not just for the bureaus as a whole, but for individual units and regions within the bureaus," Purisima said on the sidelines of the 9th Annual Meeting & Conference of Asia Pacific Economic Cooperation Financial Institutions Dealing with SMEs.
Since taking over in 2010, the Aquino administration has yet to enforce the Lateral Attrition Law.
Under Section 6 of the Lateral Attrition Law or Republic Act 9335, the Revenue Performance Evaluation Board composed of the secretaries of the Departments of Finance and of Budget and Management, the director general of the National Economic and Development Authority, and the commissioners and rank-and-file representatives of the Bureaus of Internal Revenue and of Customs shall assess the annual performance of revenue officers.
Those who fall short of their collection targets by at least 7.5 percent without justifiable cause would be dismissed from service while those who go beyond expectations would be given incentives, including monetary reward.
The targets are based on several macro-economic assumptions, such as the country's gross domestic product growth rate, inflation, peso-dollar exchange rate, and external trade.
Purisima earlier said he was not comfortable with the present goal setting since the targets imposed on each bureau and its corresponding units may be inaccurate.
"The worst thing about an improperly implemented incentives system is that you may reward the wrong persons or fire the wrong people. That's what we want to avoid," Purisima said.
He said the goal setting does not take into account what actually happens in Customs’ port districts and the BIR's revenue regions.
"That's why this has to be properly done. A well-designed, well-implemented incentives system will go a long way in building a meritocracy in the BOC and the BIR," Purisima said.
For the year, the BIR and Customs are required to raise P1.066 trillion and P347.07 billion, respectively. For next year, their targets will rise by 16.23 percent to P1.239 trillion for the BIR, and by 14.41 percent to P397 billion for Customs.
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