RMO No. 26-2026 — Reclassification of Implementing Offices Digest | Full Text | Annex A | Annex B | Annex C | Annex D

Bringing ln Revenues for Nation-Building REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE National Otfice Building Quezon City v BACO}IG pf ,-,e3g$f& s August 4, 2026 REVENUE MEMORANDUM ORDER NO. 026-2026 TO All lnternal Revenue Officials and Employee Concerned SUBJECT Reclassification of lmplementing Offices I. BACKGROUND: The Bureau of lnternal Revenue (BlR) periodically reviews the classification of Revenue Regions (RRs) and Revenue District Offices (RDOs) to ensure that organizational structures remain responsive to evolving operational demands. For purposes of this review, the Large Taxpayers Service (LTS) shall be treated as a separate Revenue Region, while the Large Taxpayers Divisions (LTDS) in Cebu and Davao, as well as the Audit Offices, shall be treated as Revenue District Offices. Existing classifications may no longer adequately reflect variations in collection performance, taxpayer base, workload, service delivery requirements and splitted Revenue Regions. Accordingly, a data-driven and objective approach is adopted to provide a more equitable basis for staffing, resource allocation, and administrative planning. II. OBJECTIVES: This Order aims to 1 Update the classification of lmplementing Offices using a data-driven and objective methodology; 2. Provide a basis for staffing, position allocation, and related administrative actions, consistent with operational requirements and with the policies and guidelines of the Department of Budget and Management and the Civil Service Commission on organizational efficiency, rationalization, and results-based performance management; and 3. Ensure the effective and efficient enforcement of internal revenue laws and regulations through the alignment of organizational structure and resource distribution with operational demands, thereby promoting equitable workload distribution, accountability, and fiscal prudence _ 000 007 2 4 \:, I UREAU oF fl:-l RECORoS MA '^IolEfl i5r-Jri!- 'Tdrtf'u,VBI#,E BIR National Ofiice Bldg., Senator Miriam Defensor-Santiago Avenue, Dili zon W ebsite: www. b i r. g ov. p h Trunkline: 8981-7000 : 8929-7676 sEP 2 e 2020 ilY: I ADMIN UNIT " 1 It[,1€]

III. DATA USED AND METHODOLOGY 1. Data Used The classification is based on the following data. a Percentage share of average RR/RDO collection relative to total average BIR collection lor CY 2023-2025 (Source: Revenue Accounting Division, reconciled with the Bureau of the Treasury, as of February 24, 2026); b Percentage share of active registered taxpayers per RR/RDO relative to total BIR active registered taxpayers for CY 2025 (Source. lnformation Systems Development and Operations Service (ISDOS), lnformation Systems Group (lSG), extracted as of May 21,2026), c Percentage share of the average number of RR/RDO transactions recorded through the Queueing System relative to total average BIR transactions for CY 2023-2025. (Source: Client Support Service, as of May 26, 2026); d Percentage share of the average number of RR/RDO transactions on the number of Electronic Certificates Authorizing Registration (eCARs) issued generated from transfer of Real and Personal Properties relative to total average BIR transactions lor CY 2023-2025 (Source: APtt/D, Assessment Service, as of July 22,2026); e Percentage share of the number of tax returns filed per RR/RDO relative to total BIR tax returns filed for CY 2025 (Source. ISDOS, lSG, extracted as of June 17,2026), f Percentage share of the average number of RR/RDO Letter of Authority (LOA) relative to total average BIR LOAS for CY 2023-2025 (Source: APMD, Assessment Service, as of July 23,2026), and s Classification of Business Taxpayers under Section 21 of the National lnternal Revenue Code of 1997 (NIRC) as amended (Micro, Small, Medium and Large) per RR/RDO as additional reference for staffing analysis (Source: lnformation Systems Development and Operations Service (ISDOS), lnformation Systems Group (lSG), extracted as of May 21,2026). 2. Methodology The Class lndicator (Cl) of each RR and RDO is computed as the weighted sum of the following components: a. Forty percent (40%) - Percentage share of average RR/RDO collection relative to average total BIR collection; b. Fifteen percent (15%) - Percentage share of RR/RDO active registered taxpayers relative to total BIR active registered taxpayers; c. Ten percent (10o/o) - Percentage share of average RR/RDO transactions recorded through the Queueing System relative to average total BIR transactions, d. Ten percent (100/o) - Percentage share of average RR/RDO transactions on the number of eCARs issued generated from transfer of Real and Personal Properties relative to average total BIR transactions; e. Fifteen percent ('15olo) - Percentage share of RR/RDO tax returns filed relative to total BIR tax returns filed; and f. Ten percent (lOYo) - Percentage share of average RR/RDO number of LOAs relative to average total BIR LOAs t'i".) FHS"Efr"orf^'^|^'.'$)lr'f ,'MFSJ,, ffi sEP 2e 2026 It BY: ADMIN UNIT. 1 0 TIMEr 00000724

Formula. cl = Xr + Xz + Xs + )Q+ Xs+ Xo e RR/RDO Collection X,={ Average Total BIR Collection ,10+* 4Oo/o RR/RDO Number of Active Registered Taxpayers x2 { Total BIR Number of Active Registered Taxpayers x roolx 15% Average RR/RDO Number of Transactions per Queueinq System X:= Average Total BIR Number of Transactions x roolx 'looa I Average RR/RDO Number of Transactions on eCARs x roolx & I Average Total BIR Number of Transactions 10% &= { RR/RDO Number of Tax Returns Filed Total BIR Number of Tax Returns Filed , roolx 15% Averaqe RR/RDO Number of LOAS lssued x"={ Average Total BIR Number of LOAs lssued x roo| ,, 10% 3. Distribution of Revenue Regions and Revenue District Offices by Class Under the revised classification, all RRs shall be grouped into five (5) classes, designated as Classes A, B, C, D, and E, while all RDOs shall be categorized into eight (8) classes, namely Classes A, B, C, D, E, F, G, and H. The G classification consists of areas generally categorized as remote or geographically isolated municipalities and provinces. The framework likewise covers the nine (9) lsland Districts which mostly fall under Class G based on the required computation criteria. However, taking into account their operational and admtnistrative characteristics, these RDOs were automatically identified as Class H. The only exceptions are RDO No.36 (Palawan) and RDO No. 84 (Bohol), which are placed in higher classes based on the prescribed evaluation criteria. The distribution of RRs and RDOs across classes is determined uslng the Cl, applying a normal distribution approach to ensure a balanced and objective classification. r.'1f BUREAU OF IN TERNAL REVE NUE \1. RECORDS AGEMEN T DIVi srott sEP 2e 2026 ffi ADMIN UNI BY; fi;,l t:l3Po\ 00000724

The corresponding distribution tables are presented below: DISTRIBUTION OF REVENUE REGIONS BY CLASS CLASS CLASS LIMIT NUMBER OF RRs A 8.12 - 10.32 4 q B 5.30 - 8 11 2.37 - 5.29 fi D 1.77 -2.36 4 E 1.43 - 1.76 a TOTAL 22 DISTRIBUTION OF REVENUE DISTRICT OFFICES BY CLASS CLASS CLASS LIMIT NUMBER OF RDOs A 1 86 - 4.62 13 B 1.24 - 1 .85 15 C 0.73 - 1.23 20 D 048-072 24 E 0.32 -O 47 19 F 0.20 - 0 31 15 G 004-019 11 H 7 TOTAL 124 r.\_1) BUREAU OF \:i-l RECORDS MA '^l^l'#$!frEVtS,y..i sEP 2e 2026 ffi ADMIN UNI BY: l,;1, e:tqrr\ 00000724

IV. CLASSIFICATION OF ISLAND REVENUE DISTRICT OFFICES The classification of the lsland Revenue District Offices (RDOs) reflects their relative size, workload, and operational requirements as shown below. IMPLEMENTING OFFICE CLASS 6 CITY OF MANILA AND PALAWAN 36. Palawan D 9A CABAMIRO 35. Romblon H 9B LAQUEMAR 62. Marinduque H 1O BICOL REGION 69. Catanduanes H 70. Masbate H 13 CENTRAL VISAYAS REGION 84. Bohol C 15 ZAMBOANGA PENINSULA AND TAWI-TAWI 94. lsabela City (Non-BARMM)/Basilan H (BARMM) 95. Sulu H 96. Tawi-Tawi (BARMM) H V. CLASSIFICATION BY IMPLEMENTING OFFICE The LTS, and LTAudit Divisions including LTDs Cebu and Davao, shall be classified as Class A. The lists of the lmplementing Offices, together with their corresponding classifications, are attached as Annexes A to C of this Order. The number of taxpayers classified as Micro, Small, Medium, and Large (MSML) under Section 21 of the National lnternal Revenue Code of 1997 (NIRC), as amended, is attached hereto as supplemental data (Annex D) for staffing analysis of the BIR's core functions, namely: Registration, Filing, Payment, Compliance, EnforcemenuAudit, and Support Services. Such analysis shall likewise take into account the number of tax returns filed and taxes paid under each MSML classification to ensure the reasonable allocation of personnel across functions and establishment of section/s deemed necessary for public service. Finally, the Key Performance lndicators (KPls) shall also be adjusted based on the RDO classification and taxpayer classification. /f\ BUREAU OF IN TERNAL REV ENUE \j./ RECORDS MAN AGEMENT DI vtstoN sEP 2e 2026 R ADMIN UNIT - 1 BY: TIMT {rl Pn 00000724

VI. UPDATING OF CLASSIFICATION The classification of lmplementing Offices shall be updated as necessary considering changes in law, rules, regulations, processes and other lustifiable circumstances duly approved by the Commissioner. VII. REPEALING CLAUSE All issuances inconsistent with this Order are hereby repealed, amended, or modified accordingly. vilt. EFFECTIVITY This Order shall take effect immediately upon approval U r CHARLITO MARTIN R. MEND Commissioner of lnternal Revenue B-3/gdff (f) BUREAU OF INTERNAL REVENUE \f. RICOROS MANA6EMENT DIVISION sEP 2e 2020 ft BY: L ADMIN UNI l,;!. L"tbrn 00000724