MONITORING AND EVALUATION MEASURES

a. Benchmarking Method of BIR

To further intensify its fight against tax cheats in the country, BIR has instituted the use of “benchmarking method” to define the standards in measuring the taxpayers’ compliance per industry group. Benchmarking is actually the process of determining and comparing the performance level of taxpayers in a given line of industry as far as Net VAT Due and Income Tax are concerned, in relation to gross sales/receipts vis-à-vis profit margin rate for the purpose of setting an industry standard of taxpayers’ performance /compliance.

Through benchmarking, Revenue District Officers would be able to easily indentify taxpayers who are declaring Income Tax and net VAT dues lower than the minimum amount set per industry group. To implement the benchmarking method, BIR issued Memorandum Order no. 4-2006. The benchmarking activities covered the top 200 taxpayers per industry per district office based on gross sales, as reflected in the tax returns, or the actual gross sales/receipts as determined from sources within and outside the BIR. The coverage will increase until all taxpayers of all industry groups have been fully covered, which is targeted to happen on or before the end of fiscal year 2008.

b. DoF and DBM working on revenue monitoring mechanism

Department of Finance and Department of Budget and Management (DBM) have worked on reporting mechanisms to address the public’s concern on the utilization of the Expanded Value Added Tax (EVAT) revenues. In a report to President Gloria Macapagal-Arroyo, ScretaryTeves said the Department of Finance (DoF) have been keen on the implementation of the two percent EVAT increase (from 10 to 12 %) starting February 1 of 2006, once appropriate official data are available. DoF, hand-in-hand with DBM, started to develop reporting mechanisms on the utilization of EVAT proceeds to engender strong public support by institutionalizing transparency and accountability.

They also have been working out a comprehensive action plan to further enhance the revenue collection efficiency of the Bureau of Internal Revenue and the Bureau of Customs by improving both customer service and enforcement. Furthermore, to address concerns over bleeding and perennially losing government-owned and controlled corporations (GOCCs), DoF has also started developing performance contracts for selected GOCCs that contain mutually agreed upon performance criteria and "deliverables" they are expected to achieve.