[) 5G oF REPRESENTATIVES

| @ECENED |
Republic of the Philippines pare 24 AUG 2016 j
HOUSE OF REPRESENTATIVE:
Quezon City, Metro Manila H
SEVENTEENTH CONGRESS 7 . 1
First Regular co | PEAISTRATION LNT
| a BIL. S SANGER SERN INDEX SERVICE

House Bill NoB2

Introduced by DIWA Party-list Representative Emmeline Y. Aglipay ~ Villar

EXPLANATORY NOTE

While taxes are the lifeblood of the government, it should go without saying that such taxes
should not place an inequitable burden on the citizens of a State -- for a government is given
life precisely in order to serve its citizens. An analysis of tax policies our neighbors in the
Association of Southeast Asian Nations (ASEAN) reveals that the Philippines has one of the
highest average tax rates, together with Vietnam and Thailand. However, Singapore has the
lowest marginal tax rate at both ends of its tax bracket spectrum, at 2% for the lowest
qualifying income earners and 20% for the wealthiest.

In the Philippines, the tax rate established by law ranges from 5% for the lowest income
earners to 32% for the wealthy. Yet the "wealthy" category is overly broad, with those
earning just a little over P500,000.00 paying the same rate of income tax as those earning in
the millions.

‘The Bureau of Intermal Revenue (BIR) data show that the majority or roughly 82% of the
total collection from individual income taxes comes from compensation-income earners. The
bulk of this is automatically deducted from salaried professionals. These individuals compose
much of the middle classes. Lowering income tax rates for middle-class Filipinos can serve
to spur economic growth and job creation, providing greater disposable income that can lead
to more economic security and a better quality of life. Many nations richer than our own,
nations that spend more on social services than ours, manage to tax their citizens less.

This bill -- filed as a counterpart of Senate Bill No. 147 with the support of its author, Senator
Cynthia Villar - seeks to amend Section 24 of the National Internal Revenue Code of 1997,
as amended, by adjusting the individual income tax brackets and reducing the rates of
individual income tax.

While taxes may be as certain as death, they need not be seen with the same degree of
foreboding.

pened Mi Malian
EMMELINE Y. AGLIPAY - VILLAR
Representative, DIWA Party-list

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

SEVENTEENTH CONGRESS
First Regular Session

3259

House Bill No, *

Introduced by DIWA Party

ist Representative Emmeline Y, Aglipay - Villar

AN ACT

ADJUSTING THE INCOME BRACKETS AND RATES OF TAX IMPOSED ON
TAXABLE INCOME OF INDIVIDUALS, AMENDING FOR THIS PURPOSE
SECTION 24 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Republic of the Philippines in Congress
assembled:
SECTION 1. Section 24(A) (2) of the National Intemal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:
“Sec. 24. Income Tax Rates. —
"(A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the
Philippines. —

=XXX-

(2) Rates of Tax on Taxable Income of Individuals, - The tax shall be computed in
accordance with and at the rates established in the following schedule:

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Taxable Income

Beginning
January 1, 2016

Not over P20,000

3%

Over P20,000 but not over P60,000

P1,000 + 10% of the excess over P20,000

Over P60,000 but not over P140,000

P5,000 + 15% of the excess over P60,000

Over P140,000 but not over P280,000

P17,000 + 20% of the excess over P140,000

Over P280,000 but not over PS00,000

P45,000 + 25% of the excess over P280,000

Over P500,000 but not over P1,000,000

P 100,000 + 30% of the excess over P500,000

Over P1,000,000

P250,000 + 32% of excess over P1,000,000

[Not over 10,000,
Over P10,000 but not over P30,000.
Over P30,000 but not over P70,000.
Over P70,000 but not over P140,00

Over P140,000 but not over P250,000..

140,000

Over P250,000 but not over P500,000.

250,000
Over P500,000 .....

=X XX

> XXX

5%

P500+10% of the excess over P10,000
P2,500+15% of the excess over P30,000
P8,500+20% of the excess over P70,000
P22,500+25% of the excess over

P50,000+30% of the excess over

P125,000+32% of the excess over
P500.000}

SEC 2. Implementing Rules and Regulations. - The Secretary of Finance shall
promulgate the necessary rules and regulations for the effective implementation of the

provisions of this Act.

SEC 3. Repealing Clause. - All laws, orders, issuances, circulars, rules and
regulations or parts thereof, which are inconsistent with the provisions of this Act are hereby

repealed or modified accordingly.

SEC 4, Separability Clause. - If any provision of this Act is declared unconstitutional
or invalid, other parts or provisions hereof not affected thereby shall continue to be in full

force and effect.

SEC 5. Effectivity. - This Act shall take effect fifteen (15) days after its publication in

at least two (2) newspapers of general circulation.

Approved,

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