Policies and Guidelines on Streamlining the Bureau of Internal Revenue Under Executive Order No. 430

September 17, 1997 REVENUE MEMORANDUM ORDER NO. 57-97 SUBJECT : Policies and Guidelines on Streamlining the Bureau of Internal Revenue Under Executive Order No. 430 TO : All Internal Revenue Officials and Employees I. OBJECTIVE This Order is issued to prescribe the policies and guidelines in the implementation of Executive Order (E.O.) No. 430 dated July 28, 1997 on Further Streamlining the Bureau of Internal Revenue in line with its Computerized Integrated Tax System. II. POLICIES AND GUIDELINES A. On Organizational Structure 1. The design of the Table of Organization (T.O.) or organizational structure of the Services/Offices prescribed under E.O. 430 shall be determined by the following: 1.1 The structure shall adopt the concept of a taxpayer-focused service organization and shall emphasize enforcement effectiveness to enhance voluntary compliance. 1.2 The National Office, as prescribed in E.O. 430, shall be responsible for the development and formulation of broad national tax administration policies and programs and in providing overall direction, guidance and control of the operations of the internal revenue service while Regional Offices and Revenue Data Centers shall execute the national policies and programs prescribed by the National Office for enforcement of the internal revenue laws. 1.3 Regional Offices shall serve as counterparts of the Operations Group, the Legal and Enforcement Group and the Resource Management Group in the National Office while the Revenue Data Centers shall serve as counterparts of the Information System Group. 2. In the preparation of the Revenue Administrative Order (RAO) defining the organization and functions of all Services/Offices under E.O. 430 and the Divisions thereunder, the following shall be observed: 2.1 All functions under E.O. 430 shall be determined according to the process improvement and computerization activities undertaken by the Bureau. 2.2 All functions of Services/Offices as defined in E.O. 430 shall be properly allocated and accounted for in the Divisions created thereunder. 2.3 Common or routine functions of Services/Offices/Divisions shall also be reflected in their respective functional statements. 2.4 All functions of offices under E.O. 132 shall be inventoried and matched against the functions under E.O. 430 to ensure that a corresponding office or application system shall perform the functions. 3. The number of Regional Offices and District Offices shall be rationalized considering efficiency and effectiveness in the delivery of services to the taxpayers and the greater and wider span of control as a result of computerization. 3.1 The number of Regional Offices and Revenue District Offices (RDOs) shall be determined using the following factors: 3.1.1 Critical values of the Regional Offices and RDOs considering variables such as collections, total number of tax returns filed, potential business and compensation taxpayer base, land area and expenditures computed as follows: a) To compute for the percentages of each variable for each Regional Office/RDO: Percentage Variable X value for the per variable = Regional Office/RDO X (p.v.) Grand Total for Variable X b) To compute for the critical values, assign proportions for each variable. The assignment of proportions are: 50% for collections, 30% for total number of tax returns filed, 20% for potential business taxpayer base, 5% for potential compensation taxpayer base, 5% for land area and 10% for expenditures. That is: Critical value = .50 (collections p.v.) + .30 (total number of tax returns filed p.v.) + .20 (potential business taxpayer base p.v.) + .05 (potential compensation taxpayer base p.v.) + .05 (land area p.v.) 10 (expenditures p.v.) wherein: Collections Internal revenue collections by Revenue District Office (RDO) by Regional Office for CY 1996 based on 1209 Reports consolidated by Revenue Accounting Division. Total Number of Tax Returns Filed Number of tax returns filed in the Philippines by RDO by Regional Office for CY 1996. Source: Statistics Division Potential Business Taxpayer Base Number of establishments based on 1995 data from National Statistics Office. Potential Compensation Taxpayer Base 1996 labor force report of the National Statistics Office. Labor force by revenue district for the RDOs in Metro Manila, Makati and Cebu City is not available. Breakdown for these RDOs was estimated by using the data on individual filers for the particular district as basis for percentage distribution of the total force for the area. Land area Based on 1990 data from the National Statistics Office. Land area estimates for selected RDOs in Metro Manila (Quezon City, Makati, Manila) and Cebu City were based on the boundaries specified in the RAOs and "visually" proportioned as shown on the map for the particular boundaries, Expenditures Based on 1996 total obligations incurred submitted by Regional Offices to Statistics Division (where expenditures for Regional Offices were exclusively for Regional Offices). Regional Offices and RDOs shall be ranked based on critical values. 3.1.2 Geographical location/relative distance or contiguity of the RDOs to one another. 3.1.3 The political subdivision as embodied in the Administrative Code. 3.2 The final number of Regional Offices and RDOs to be retained shall be determined by evaluating the resultant number of Regional Offices and RDOs using further the following criteria: a. Span of Control b. Dislocation of Employees c. Budget d. Interface With Other Agencies e. Internal Recruitment for Revenue Data Centers 3.3 The office location of the Regional Offices and RDOs shall be determined taking into consideration the strategic location of the place and the availability of building and facilities. 4. The T.O. and the RAO for the Consolidation of Regional Offices and RDOs together with the creation of Revenue Data Centers and RDO Extension Offices shall be signed by the Commissioner for approval by the Secretary of Finance. B. On Deployment of Personnel 1. The implementation of the BIR T.O. under E.O. 430 shall not result to involuntary separation or diminution in rank and compensation of personnel. 2. Staffing under the modified structure shall come from existing personnel. External hiring shall only be considered for highly technical position where the expertise required is not internally available and the need is immediate (i.e. cannot wait for retooling/retraining interventions). 3. Staffing under the modified T.O. shall be done in two stages, i.e., interim assignment and final placement. 3.1. Interim assignments shall be made pending the finalization and approval of a Revised Staffing Pattern pursuant to E.O. 430 in order to avoid disruption in normal operations, mobilize newly-created units and effect a smooth transition to the modified structure. 3.1.1. Interim assignments shall be effected through the issuance of Revenue Travel Assignment Orders (RTAOs) for positions specified in E.O. 430 and Revenue Special Orders (RSOs) for all others. 3.1.2. Interim assignments shall consider the Qualification Standards (QS) and the special requirements (man specifications) of the positions. Thus, only employees who meet the QS of the positions shall be designated thereto. 3.1.3. Interim assignments shall be approved by the Commissioner upon recommendation of the following: 3.1.3.1. MANCOM for managerial positions (down to Division Chief level) 3.1.3.2. Assistant Commissioners/ Regional Directors concerned for non-managerial positions 3.2. Final placement actions shall take place upon approval of the Revised Staffing Pattern of the Bureau by the Department of Finance (DOF) and the Department of Budget and Management (DBM). 3.2.1. An RTAO shall be issued to confirm/finalize an employee's continued discharge of the functions which constituted his interim assignment. 3.2.2. A Screening and Selection Committee shall be constituted each for managerial and non-managerial levels to administer and implement the policies and criteria for selection and final placement of personnel as follows: Chairman - Commissioner of Internal Revenue Member - Deputy Commissioner for Resource Management Group Deputy Commissioner for Operations Group Deputy Commissioner for Information Systems Group Deputy Commissioner for Legal and Enforcement Group For Non-Managerial Positions: Chairman - Assistant Commissioner, Human Resource Development Service Members - Assistant Commissioner, Information Planning and Quality Service Asst. Commissioner, Taxpayer Assistance Service Asst. Commissioner, Enforcement Service Concerned Assistant Commissioner of Other Services/Regional Office/Revenue Data Center Rank-and-File Representative from each respective Service/Regional Office/Revenue Data Center selected/elected by the personnel in their respective offices/units. 4. All personnel shall be evaluated on the basis of performance and integrity. 5. Placement of personnel shall be in accordance with the Civil Service rules and regulations. 6. Assignment/redeployment of personnel shall be dictated by the needs of the organization, however, it shall be effected with care and concern with the welfare of employees in mind. 7. An Employees Grievance Committee composed of the following shall be organized to handle attendant issues/concerns or grievances/complaints related to deployment: Chairman - Assistant Commissioner, Legal Service Members - Assistant Commissioner, Internal Affairs Service Assistant Commissioner, Assessment Service Assistant Commissioner, Information Systems Operations Service Assistant Commissioner, Financial Service C. On Staffing Pattern 1. The Bureau shall undertake a Staffing Rationalization Exercise (SRE) to determine the staffing level and position mix to support the modified structure in line with the organizational streamlining objectives. 2. The SRE shall involve the following processes: 2.1 Defining the staffing benchmarks/staffing guidelines This shall involve the establishment of model organizational units whose manpower complement shall be used as reference figure in defining the optimum staffing configuration (number and mix) of comparable units. The management shall identify a system of classifying organizational units (e.g. Regional Offices/RDOs) and a set of criteria and weights to be used in evaluating the relative performance efficiency of organizational units. 2.2 Defining supplemental staffing guidelines In addition to the reference staffing level defined in 2.1 above, the Deputy Commissioners and Assistant Commissioners shall review their staffing levels vis-a-vis their functions/programs and come-up with staffing proposals which shall consider the following supplemental guidelines: 2.2.1 Staffing modules for executive/management officers. 2.2.2 Flattening the organization, i.e., reduction in layers as practicable. 2.2.3 Staffing adjustments in recognition of the: 2.2.3.1 growth in taxpayer base/volume of transaction 2.2.3.2 peculiarity of the office/operations due to area coverage, topography, geographical location, accessibility, etc. 2.2.3.3 new functions/thrusts to be performed. 2.3 Preparation of staffing proposals by respective Offices/Services consistent with the supplemental staffing guidelines provided in 2.2 above for submission to MANCOM through their respective Deputy Commissioners and Assistant Commissioners. 2.4 Review and approval by MANCOM of the staffing pattern for submission to DOF and DBM. III. REPEALING CLAUSE All revenue issuances or portions thereof inconsistent with the provisions of this Order are hereby repealed or amended accordingly. IV. EFFECTIVITY This Order takes effect immediately. LIWAYWAY-VINZONS-CHATO Commissioner of Internal Revenue