FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. No. 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
The Constitution states that the rule of taxation shall be uniform and equitable and 
that Congress shall evolve a progressive system of taxation. 
Following this mandate under the Constitution, this bill proposes to adjust the 
present income tax rates and exempt small income earners of not over P60,OOO and 
minimum wage earners from paying income tax. It is further proposed that small income 
and minimum wage earners be relieved from filing individual income tax returns in this bill. 
Any loss in government revenue as a result of these proposed changes is very 
negligible and can be compensated by the new excise tax and expanded value-added tax 
laws, as well as better law enforcement in running after big smugglers and tax evaders. 
The benefits of this bill simply outweigh the costs. These amendments will provide a 
more equitable and progressive system of taxation that will give immediate relief to small 
income and minimum wage earners by increasing their purchasing power. The amount that 
they will save from income tax payment can be used instead for their basic needs like food, 
shelter, education, and health care to mitigate the economic difficulties they face everyday. 
Thus, the immediate passage of this bill is earnestly sought. 


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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
SENATE 
S. No. 166 
Introduced by Senator Richard J. Gordon 
AN ACT AMENDING SECTION 24 (A) AND SEC. 51 (A) OF REPUBLIC ACT NO. 8424, 
OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED 
Be it enacfed by the Senate and the House of Represenfafives of the Philippines in 
Congress assembled: 
SECTION 1. Section 24 (A) of Republic Act No. 8424, otherwise known as the 
National Internal Revenue Code of 1997, as amended, is hereby amended to read as 
follows: 
"Sec. 24. lncome lax Rates. - 
(A) Rates of lncome Tax on Individual Citizen and Individual Resident 
Alien of the Philippines. - 
(1) An income tax is hereby imposed: 
(a). , . 
(b) . . I 
(c) . . . 
The tax shall be computed in accordance with and at the rates 
established in the following schedule: 
[Not over P10,OOO 
5% 
Over P10,OOO but not over P30,OOO 
Over P30,OOO but not over P70,OOO 
Over P70,OOO but not over P140,OOO 
Over P140,OOO but not over P250,OOO 
Over P250,OOO but not over P500,OOO 
Over P500,OOO 
P500 f 15% of the excess over P10,OOO 
P2,500 -t 15% of the excess over P30,OOO 
P8,500 f 20% of the excess over P70,OOO 
P22,500 + 25% of the excess over P140,OOO 
P50,OOO + 30% of the excess over P250,OOO 
P125,OOO f 34% of the excess over P500,OOO 
in 1998. 


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Provided, That effective January 1, 1999, the top marginal rate shall 
be thirty-three percent (33%) and effective January 1, 2000, the said rate 
shall be thirty-two percent (32%).] 
NOT OVER P90,OOO 
0% 
OVER P90,OOO BUT NOT OVER P150,OOO 
10% OF THE EXCESS OVER P90,OOO 
OVER P150,OOO BUT NOT OVER P300,OOO 
P6,OOO t 13% OF THE EXCESS OVER 
P150,OOO 
OVER P300,OOO BUT NOT OVER P600,OOO 
P25,500 t 18% OF THE EXCESS OVER 
P300,OOO 
OVER P600,OOO BUT NOT OVER P1,000,000 P79,500 t 22% OF THE EXCESS OVER 
P600,OOO 
OVER P1,000,000 BUT NOT OVER P2,000,000 P167,500 f 27% OF THE EXCESS 
OVER PI ,000,000 
P437,500 t 34% OF THE EXCESS 
OVER P2,000,000 
OVER P2,000,000 
PROVIDED, THAT THE ABOVE RATES SHALL BE REGULARLY 
AND EQUITABLY ADJUSTED BY THE BUREAU OF INTERNAL REVENUE 
TO EXEMPT STATUTORY MINIMUM WAGE EARNERS FROM INCOME 
TAX. 
. . .  
Sec. 2. Section 51 (A) of Republic Act No. 8424, otherwise known as the National 
Internal Revenue Code of 1997, as amended, is hereby amended to read as follows: 
"Sec. 51. Individual Returns. - 
(A) Requirements. - 
(I). 
. . 
(2). . . 
(b) An individual with respect to pure compensation income, as 
defined in Section 32 (A) (I), 
derived from sources within the Philippines, the 
income tax on which has been correctly withheld under the provisions of 
Section 79 of this Code: Provided, That an individual deriving compensation 
concurrently from two or more employers at any time during the taxable year 
shall file an income tax return: Provided, further, That an individual whose 
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pure compensation income derived from sources within the Philippines 


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exceeds THE STATUTORY MINIMUM WAGE, OR Sixty thousand pesos 
(P60,000), WHICHEVER IS HIGHER, shall also file an income tax return: 
,, 
* . .  
Sec. 3. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
Sec. 4. SeparaMMy Clause. - If any portion or provision of this Act is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall remain 
in force and effect. 
Sec. 5. ,Effectivity. - This Act shall take effect after fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
Approved,