Republic of the Philippines
House of Representatives
Quezon City

FLFTEENTH CONGRESS

First Regular Session

House Bill No.__ 4793

Introduced by Representative Hermilando L Mandanas

EXPLANATORY NOTE

Given the current high cost of living, Filipino families grapple with
the basic concem of meeting their needs on a day-to-day basis. Citing the
2009 Family Income and Expenditure Survey (FIBS), Filipino families, on
the average, annually earned and spent Php206,000 and Php176,000,
respectively. Inversely, this means a measly annual family savings of
Php30,000 for the said year. Such is the predicament that present day
Filipino families face, and, as their size increases, so are their woes.

Based on studies and statistics in the past ten years, poverty
incidence, poverty gap, severity of poverty, mean vulnerability and
vulnerability incidence are directly proportional with family size. As such,
large families tend to become the most vulnerable group having the
smallest per capita expenditures and per capita savings. Hence, the bigger
the family size, the higher the cost of living.


Tt is on account of alleviating the plight of Filipino families,
especially large ones, that this measure amending Section 35(B) of
Republic Act (RA) No. 8424, otherwise known as the National internal
Revenue Code of 1997 is being proposed. With the proferred legislation’s
features of removing the limit (at present, four) as to the number of
dependents that may be declared for purposes of claiming additional
exemption, classifying as dependents, subject to qualifications/conditions,
parents and legitimated children, and allowing, in certain situations, legal
guardians to persons with mental or physical defect to claim the additional
exemption for said dependents, poverty incidence among Filipino familics
shall be reduced as there will be more savings that can be devoted to more
basic pressing, matters such as food, shelter, education and the like. And
this will, in turn, ultimately redound to the benefit of the Filipino family
and the country.

Accordingly, passage of the bill is earnestly sought.

|. HERMILANDO I. MANDANAS
Second District, Batangas


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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BiLi No,_4793

Introduced by the Honorable Hermilando |. Mandanas

AN ACT
AMENDING SECTION 35{B) OF REPUBLIC ACT NO. 8424, OTHERWISE
KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED BY REPUBLIC ACT NO. 9504

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

SECTION 1. Section 35(B) of Republic Act No. 8424, otherwise known as the
National Intemal Revenue Code of 1997, as amended by Republic Act No. 9504,
is hereby further amended to read as follows:

“SEC. 35. Altowance of Personai Exemption for Individual Taxpayer. —

“(A) in General. — For purposes of determining the tax provided in Section
24(A) of this title, there shall be allowed a basic personal exemption
amounting to Fifty Thousand pesos (P50,000) for each individual
taxpayer.

“In the case of mariied individual where only one of the spouses is
deriving gross income, only such spouse shall be allowed the personal
exemption.

“(B) Additional Exemption for Dependents. — There shall be allowed an
additional exemption of Twenty-five thousand pesos (P25,000) for each
dependent {not exceeding four (4)}.

“The additional exemption for dependents REFERRED HEREIN shall be
claimed by only one of the spouses in the case of married individuals.


“In the case of legally separated spouses, additionat exemptions may be
claimed only by the spouse who has custody of the child or childrenf:]

“[Provided, that the total amount of additional exemptions that may be
claimed by both shali not exceed the maximum additional exemptions
herein allowed.)

“For purposes of this Subsection, THE TERM [a] “dependent/S” SHALL
mean|s] [a:

“1) ONE OR MORE UNMARRIED fegitimate, LEGITIMATED, illegitimate
or legally adopted child NOT MORE THAN TWENTY-ONE (21) YEARS
OF AGE, {chiefly dependent upon and] living with the taxpayer, [if such
dependent is not more than twenty-one (21) years of age, unmarried and]
not gainfully employed, [or if such dependent] AND DEPENDENT UPON
THE LATTER FOR CHIEF SUPPORT, OR WHERE SUCH CHILD,
regardless of age, is incapable of selfsupport because of mental of
physical defect,

“2) A PARENT OR BOTH PARENTS, LIVING WITH THE TAXPAYER,
NOT GAINFULLY EMPLOYED AND DEPENDENT UPON THE LATTER
FOR CHIEF SUPPORT, OR WHERE SUCH PARENTS ARE INCAPABLE
OF SELF-SUPPORT BECAUSE OF MENTAL OR PHYSICAL DEFECT
OR OLD AGE.

“AN INDIVIDUAL TAXPAYER WHO IS THE LEGAL GUARDIAN TO A
PERSON WITH MENTAL OR PHYSICAL DEFECT, REGARDLESS OF
AGE AND INCAPABLE OF SELF-SUPPORT, MAY CLAIM THE
ADDITIONAL EXEMPTION FOR THE SAID DEPENDENT: PROVIDED,
THAT ONLY THE LEGAL GUARDIAN CAN AVAIL OF THE ADDITIONAL
EXEMPTION FOR A PARTICULAR TAXABLE YEAR TO THE
EXCLUSION OF THE BIOLOGICAL PARENTS.”

Soo”

SEC. 2. Penalty. - Notwithstanding the penalty provided for in Section 267 of the
National Intemal Revenue Code of 1997, as amended, any person who willfully
violates the preceding section by declaring fictitious dependents shall, upon
conviction, be liable for the payment of a fine equivalent to thrice the amount of
tax, interest and surcharges due from the taxpayer.

SEC. 3. Implementing Rules and Regulations. - The Department of Finance, in
coordination with the Bureau of Intemat Revenue and the Department of Social
Welfare and Development, shall issue the necessary implementing rules and
regulations within thirty (30) days upon the approvai of this Act.


SEC. 4. Separability Clause. - if any provision of this Act is subsequently
declared invalid or unconstitutional, other provisions hereof which are not
affected thereby shail remain in full force and effect.

SEC. 5. Repeating Clause. - All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamations, rules and regulations or parts
thereof which are contrary to and inconsistent with any provision of this Act are
hereby repealed, amended or modified accordingly.

SEC. 6. Effectivity Clause. - This Act shail take effect fiiteen (15) days after its

Publication either in the Official Gazette, or in at least two (2) newspapers of
general circulation, whichever comes earlier.

Approved,