Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Eighteenth Congress
Second Regular Session

7196
HOUSE BILL NO.

Introduced by REPRESENTATIVE LEONARDO L. BABASA, JR.

EXPLANATORY NOTE

According to the Department of Labor and Employment more than 111,000
workers employed by at least 2,300 business enterprises have been affected by the
outbreak of the coronavirus disease (COVID-19).!

Those fortunate enough to retain their bread and butter despite the
pandemic are either facing the daily struggles of commuting and transportation to
and from the office, or working at the comforts of their own homes.

While working remotely has been a muscle memory for some sectors of the
industry, those who were forced to shift had to adjust and develop new habits to
sustain productivity in work,

However, it has similarly challenged our work-from-home and
telecommuting workers in the form of increased electricity bills, unstable internet
connectivity, increased stress, disturbed mental health, as many of us adjust to
conform to a new way of life.

This legislative measure seeks to provide these workers with allowable tax
deductions for electricity expenses to cushion the blow on the probable surge in
their bills as they adapt to telecommuting, if their employers do not provide them
with allowance. Likewise, this will also ensure that similar allowances and benefits
given to the employees are exempt from the imposition of tax. Finally, this bill will
also encourage the furnishing by the employers of these needed allowances by
allowing them to deduct fifty percent (50%) of the amounts they furnish to their
employees for income tax purposes.

In view of the foregoing, passage of this bill is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Eighteenth Congress
Second Regular Session

HOUSE BILL No. 7190

Introduced by REPRESENTATIVE LEONARDO L. BABASA, JR.

PROVIDING FOR TAX INCENTIVES FOR INDIVIDUALS ON A WORK-FROM-
HOME OR TELECOMMUTING PROGRAM, FURTHER AMENDING FOR THE
PURPOSE, REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE TAX
REFORM ACT OF 1997, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 34 of Republic Act No. 8424 is hereby amended to read
as follows:

“Sec. 34 Deductions from Gross Income. - Except for taxpayers earning
compensation income arising from personal services rendered under an employer-
employee relationship where no deductions shall be allowed under this Section,
EXCEPT AS OTHERWISE PROVIDED FOR HEREIN IN CASE OF WORK-FROM-
HOME AND TELECOMMUTING EMPLOYEES, in computing taxable income
subject to income tax under Sections 24(A); 25(A); 26(A); 27(A), (B), and (C); and
28(A)(1), there shall be allowed the following deductions from gross income:

(A) Expenses —
(1) Ordinary and Necessary Trade, Business or Professional Expenses-
(a) 200
(b) 200
(0) 2x

XXX XXX XXX XXX


(N) WORK-FROM-HOME OR TELECOMMUTING EMPLOYEES -
NOTWITHSTANDING THE FIRST PARAGRAPH OF THIS SECTION,
INDIVIDUALS EARNING COMPENSATION INCOME SHALL BE ENTITLED TO A
DEDUCTION OF TWENTY-FIVE PESOS (P25.00) FROM THEIR TAXABLE
INCOME FOR EVERY HOUR WORKED UNDER A WORK-FROM-HOME OR
TELECOMMUTING ARRANGEMENT, PROVIDED, THAT, THE EMPLOYEE
SHALL CERTIFY UNDER OATH THE NUMBER OF HOURS SERVED UNDER THE
WORK-FROM-HOME OR TELECOMMUTING PROGRAM FOR THE YEAR, WHICH
SHALL BE FILED AS AN ATTACHMENT TO THE EMPLOYEE’S INCOME TAX

RETURN.

ALLOWANCES OR OTHER BENEFITS GRANTED BY EMPLOYERS TO THEIR
EMPLOYEES TO COVER EXPENSES NECESSARY FOR TELECOMMUTING NOT
EXCEEDING TWO THOUSAND PESOS (P2,000) PER MONTH, SHALL BE
CONSIDERED AS A NON-TAXABLE BENEFIT. AMOUNTS GRANTED IN EXCESS
SHALL BE SUBJECTED TO EXISTING TAX RULES, PROVIDED, THAT,
EMPLOYEES RECEIVING THIS BENEFIT SHALL NO LONGER BE ENTITLED TO
THE HOURLY DEDUCTION FROM INCOME TAX PROVIDED FOR IN THE
PRECEEDING PARAGRAPH. PROVIDED FURTHER THAT EMPLOYERS SHALL
BE ENTITLED TO AN ADDITIONAL FIFTY PERCENT (50%) INCOME TAX

DEDUCTION FOR ALLOWANCES GRANTED WITHIN THE SPECIFIED CEILING.

SECTION 2. Implementing Rules and Regulations. - The Department of
Finance, together with the Bureau of Internal Revenue shall promulgate the rules
and regulations to implement this Act within ninety (90) days from the effectivity of
this Act.

SECTION 3. Separability Clause. - If any of the sections or provisions of

this Act is held invalid, all other provisions not affected thereby shall remain valid.


SECTION 4. Repealing Clause. - All laws, decrees, orders, resolutions,
instructions, rules and regulations, and other issuances or parts thereof which are
inconsistent with the provisions of this Act are hereby repealed, amended, or

modified accordingly.

SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,