Prescribes the Agency Level Key Performance Indicators (KPIs)

July 19, 2011 REVENUE MEMORANDUM ORDER NO. 031-11 SUBJECT : Prescribes the Agency Level Key Performance Indicators (KPIs) TO : All Internal Revenue Officials and Employees I. Background To measure the level of performance of the Bureau's operational units in the implementation of the 2011-2016 strategies and programs, Key Performance Indicators (KPIs) are formulated and defined to have standard criteria in monitoring and evaluation process. II. Objective This Order is issued to provide high-level (Agency Level) indicators for CY 2011-2016, that shall measure the performance of the Bureau using a broad set of KPIs under a balanced framework of perspectives. III. Policies and Guidelines The following policies shall be observed: 1. The performance measures for all functional areas are set through the Key Performance Indicators (KPIs). These KPIs, which are broad and comprehensive set of measures on an Agency level, are defined in Annex A . Since the KPIs support a long-term Strategic Plan, some of these KPIs may not be presently measurable, hence, baseline data will have to be established in the initial year (CY 2011) and performance measurements to start in the succeeding years. Likewise, a set of operational level KPIs consistent with the Agency Level KPIs shall subsequently be formulated and cascaded to all implementing offices (at the National, Regional and District offices.) 2. The set of KPIs shall be revisited annually and updated, if needed. IV. Repealing Clause All revenue issuances or portions thereof inconsistent herewith are hereby repealed or amended accordingly. HTCESI V. Effectivity This Order takes effect immediately and hereby directs all Revenue Officials and Employees to refer to this Revenue Issuance as guide in their performance evaluation. (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX A BIR Key Performance Indicators (Agency Level) Strategic Key Performance Formula Definition/Details of Objectives Indicators (KPIs) Formula Attained 1 Collection performance (Total Actual Collection - Goal Percentage of attainment of collection target collection of all x 100 assigned goal - actual and sustained implementing offices) Goal collection vs. collection goal collection growth set by DBCC 2 Collection growth (Total collection of all Collection this year - Current year collection vs. implementing offices) Collection last year previous year collection x 100 Collection last year 3 Tax Compliance Gap for: Potential - Actual May be expressed as difference i. Value Added Tax (VAT) or between actual & potential or ii. Corporate Income Tax (CIT) (1-Actual/Potential) x 100 as a percentage iii. Personal Income Tax (PIT) (Note: no baseline data yet) Improved 4 Taxpayer's Satisfaction Index Overall Satisfaction Rating Expressed in terms of "Net taxpayer Rating Satisfaction Rating," as satisfaction and defined in BIR Performance compliance Survey 5 Filing Filing compliance percentage for: Actual number of filers Expected number of filers per i. Value Added Tax (VAT) x 100 period, by tax type, can be ii. Corporate Income Tax (CIT) Expected number of filers derived from the BIR iii. Personal Income Tax (PIT) Registration Data Base for business taxpayers 6 Registration % Increase in number of Registered business Numerator = No. of registered registered business taxpayers this year - business taxpayers in current taxpayers (TPs) Registered business year (or period) i. Total taxpayers last year Denominator = No. of registered ii. Corporate x100 business taxpayers for same iii. Non-corporate Registered business period in previous year taxpayers last year 7 Reduction in processing time Processing time of applications of applications for: Processing time this year - for primary and secondary i. Primary Registration Processing time last year registration ii. Secondary Registration Changes for primary registration and for secondary registration are measured separately 8 Audit of refund claims within BIR: Reduction in amount of time required to Number of refunds processed complete audit of refund within 120 days claims within the BIR x 100 (Note: no baseline data yet) Total number of refunds processed Improve 9 Audit Efficiency: assistance, Reported cases as % of compliance and audit cases handled Cases reported Cases Reported - as enforcement x 100 submitted by Revenue District process Cases handled Offices to Assessment Division Cases handled by Revenue District Offices - beginning inventory plus assigned 10 Audit Effort: Amount collected from audit % collected from involuntary of TPs compared effort to their voluntary payments x 100 Total collection 11 Arrears Collection: Arrears collected as % of Amount of arrears collected "Potentially recoverable arrears" potentially recoverable arrears x100 shall be determined based on Potentially recoverable guidelines to be prescribed in a arrears Revenue Regulations (RR) 12 Criminal Investigation/Tax Fraud: Frequency of filing of cases No. of cases filed per month Bi-monthly average for one (1) with Department of (2 cases per month) year Justice (DoJ) Cases filed in court as % of Cases filed in court cases filed with DoJ x 100 Cases filed with DoJ Improve integrity 13 Returns Encoding: and accuracy of % of tax returns captured into Returns encoded Also an indicator of the taxpayer system x 100 elimination of the backlog in database Total stock returns encoding Improve integrity, 14 Agency Integrity Rating/Index: professionalism, Integrity perception rating Change in Net Satisfaction competency, and Rating satisfaction of human resources Agency Integrity Index As a score An Agency Integrity Index will be developed based on a rating system under a previous Integrity Development Action Plan (IDAP) Optimize 15 Budget utilization rate Total obligations management of x 100 Total obligations - total amount resources Total budget certified available and committed to be paid Total budget - total available allotment 16 Expedite processing and payment of Disbursement DVs processed and paid DVs with complete and correct Vouchers (DVs) within 24 working days supporting documents and not x100 subject to COA pre-audit DVs processed