Attrition Act of 2005

Case Overview and Summary

Title: Attrition Act of 2005 (Republic Act No. 9335)

Declaration of Policy (Section 2):
- Optimize revenue generation and collection of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) through a system of rewards and sanctions.

Coverage (Section 3):
- Covers all BIR and BOC officials and employees with at least 6 months of service, regardless of employment status.

Rewards and Incentives Fund (Section 4):
- Created from excess collections over revenue targets set by the Development Budget and Coordinating Committee (DBCC).
- Percentage of excess collection accruing to the Fund:
  - 30% or below excess: 15% of excess
  - More than 30% excess: 15% of first 30% plus 20% of remaining excess
- Automatically appropriated and released the following fiscal year.
- Allocated proportionally based on contribution to excess collection.

Incentives to District Collection Offices (Section 5):
- If BIR/BOC misses target by less than 10%, districts exceeding allocated targets get 10% of excess as incentive.
- Excludes districts that deliberately forego collection to avoid higher targets.

Revenue Performance Evaluation Board (Section 6):
- Created in BIR and BOC, chaired by DOF Secretary/Undersecretary.
- Composed of DBM, NEDA, BIR/BOC representatives, and employee representatives.

Powers and Functions of the Board (Section 7):
- Prescribe rules for allocation, distribution, and release of the Fund.
- Set criteria and procedures for removing underperforming officials/employees (below 7.5% of target).
- Terminate personnel based on criteria, subject to due process.
- Prescribe performance evaluation system.
- Submit annual report to Congress.

Liability (Section 8):
- BIR/BOC officials, examiners, and employees liable for losses due to violations, negligence, or failure to exercise diligence.

Right to Appeal (Section 9):
- Terminated officials/employees may appeal to Civil Service Commission or Office of the President.

Performance Report (Section 10):
- BIR/BOC Commissioners to file regular reports on collection status, shortfalls/surpluses, and recommendations.
- Year-end report to include names for termination or reward.
- Reports submitted to Board, Congress, and President.

Rules and Regulations (Section 11):
- To be jointly issued by DOF, DBM, NEDA, BIR, BOC, and CSC within 30 days of effectivity.

Joint Congressional Oversight Committee (Section 12):
- Composed of 7 Senators and 7 Representatives, including minority members.
- To approve implementing rules and regulations.

Separability Clause (Section 13)
Repealing Clause (Section 14)
Effectivity (Section 15): 15 days after publication in at least 2 newspapers of general circulation.