EIGHTEENTH CONGRESS OF THE 
)
REPUBUC OF THE PHILIPPINES 
)
Second Regular Session 
)
SENATE 
S. N0.17DR
20 JUL 16 P4 :06
RECf.'
Introduced by Senator Francis "Tol" N. Tolentino & Senator Win Gatchatfan
AN ACT
PROVIDING FOR TAX INCENTIVES FOR EMPLOYEES ON A WORK-FROM- 
HOME OR TELECOMMUTING PROGRAM, FURTHER AMENDING FOR THE 
PURPOSE, REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE 
NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997, AND FOR OTHER
PURPOSES
EXPLANATORY NOTE
The COVID-19 pandemic has single-handedly brought down the world's 
economy in a matter of months. In the Philippines, as the number of cases traversed 
the fifty thousandth mark, more and more people are experiencing and suffering 
from its effects, not just on their health and incomes, but on our entire economy.
As to how the pandemic has greatly affected our labor force, during the first 
five weeks of the Luzon-wide Enhanced Community Quarantine alone, over 2 million 
employees were displaced wherein about 70% of were brought about by temporary 
business closures and the other 30% were forced to adopt alternative working 
arrangements such as reduced working days and hours, forced leave, and work- 
from-home or telecommuting programs.
As a consequence of these events, telecommuting has become the new 
normal. Be It because of the continued health and safety risks posed by physically 
reporting to work during this pandemic or because of the realization of the benefits


and advantages of working from home, telecommuting has permeated into society 
and is most likely here to stay.
While telecommuting has provided Filipino employees with much needed 
flexibility and convenience in performing their daily tasks, it has also provided 
challenges like increased electricity bills, unreliable internet connectivity, increased 
stress, disturbed mental health, and more as Filipinos still try to hastily adapt to this 
new normal. In this light, it is but proper to legislate measures that would assist the 
Filipinos transitioning to new modes of work and alleviate their concerns. One of 
these concerns is the sudden surge of electricity expenses at home.
Therefore, this measure seeks to provide telecommuting employees, 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. Should the employers provide allowances, this bill also aims to 
classify those allowances as tax exempt ensuring that employees who receive such 
allowances enjoy the benefit to its full extent. Lastly, this bill encourages employers 
to provide much needed allowances to their employees by allowing them to deduct 
an additional 50% of the amounts they provide for income tax purposes.
In view of the foregoing, the passage of this bill is earnestly
FRA
OL" N. TOLENTINO
CHALIAN


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
SENATE
s. No.i2oe
I 
w
20 JUL 16 P4 :07
(
Introduced by Senator Francis "Tol" N. Tolentino & Senator WinVG^chalian
AN ACT
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 
NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997, AND FOR OTHER
PURPOSES
Be It enacted by the Senate and House of Representatives of the Philippines In 
Congress assembled:
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Section 1. Section 34 of Repubiic Act No. 8414 is hereby amended to read as
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follows:
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"Sec. 34. Deductions from Gross Income. - Except for taxpayers earning
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compensation income arising from personal services rendered under an
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employer-employee relationship where no deductions shall be allowed under
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this Section, EXCEPT AS OTHERWISE PROVIDED FOR HEREIN IN CASE
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OF WORK-FROM-HOME AND TELECOMMUTING EMPLOYEES, 
in
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computing taxable income subject to income tax under Sections 24(A); 25(A);
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26; 27(A), (B), and (C); and 28(A)(1), there shall be allowed the following
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deductions from gross income:
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(A) Expenses -
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(1) Ordinary and Necessary Trade, Business or Professional Expenses-
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(a) XXX
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(b)XXX


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(c) XXX
(D) 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-FICE 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 PRECEDING 
PARAGRAPH. PROVIDED FURTHER, THAT, EMPLOYERS 
SHALL BE ENTITLED TO AN ADDITIONAL FIFTY 
PERCENT (50%) INCOME TAX DEDUCTION FOR 
ALLOWANCES GRANTED WITHIN THE SPECIFIED 
CEILING.
XXX


1 
Sec. 2. Implementing Rules and Regulations. — The Department of Finance,
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together with the Bureau of Internal Revenue shall promulgate the rules and
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regulations to implement this Act within ninety (90) days from the effectivity of this
4 
Act.
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Sec. 3. Separability Clause. —If any provision or part thereof is held invalid or
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unconstitutional, the remainder of the law or the provision not otherwise affected
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shall remain valid and subsisting.
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Sec. 4. Repealing Clause. — Any law, presidential decree or issuance,
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executive order, letter of instruction, administrative order, rule, or regulation
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contrary to or inconsistent with the provisions of this Act is hereby repealed,
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modified, or amended accordingly.
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Sec. 5. Effectivity Clause. — This Act shall take effect fifteen (15) days after
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Its publication in at least two (2) newspapers of general circulation.
Approved