1 MOUSE OF REPRESENTATIVES

. RECEIVED
Republic of the Philippines
House of Representatives pare-0 1 AUG 2016
Quezon City Metro Manila time: _}2340 py
SEVENTEENTH CONGRESS BY:

First Regular Session
REGISTRATION UNIT

Howes 2154 BILLS AND INDEX SERVICE

Introduced by REP. ENRICO A. PINEDA and REP. MICHAEL ODYLON L. ROMERO

EXPLANATORY NOTE

To be productive and to perform at his or her best, an individual must set aside time for
recuperation, relaxation and socialization. An employee who renders work beyond the usual
working hours requires additional physical and mental effort to accomplish his or her tasks.

In doing so, he or she sacrifices rest and recreation in pursuit of the objectives of the
organization or business establishment. As such, it is only apt that the employee receives
compensation for every additional hour of work he or she rendered in full

This bill seeks to achieve such end by amending Section 32 (B) (7) of the National Internal
Revenue Code, incorporating overtime pay among the miscellaneous items that are excluded in the
gross income.

This bill leaves out overtime pay in the computation of an employees’ taxable income,
which in turn reduces the income tax that would be withheld from his or her salary.

a
that the resulting increase in purchasing power of the employees will compensate for such los:
through increased economic activity and demand for goods and services.

le such a measure will cost the government in terms of foregone revenues, it is hoped
s

As it is admitted that government requires taxes to fund its operations, serve the people, and
finance growth, this bill imposes a limit of P60,000 per annum in order to avail of this exemption.

In light of the foregoing, and in cognizance of the almost 40 million members of the labor
force who stand to benefit from reduced tax burden, the prompt approval of this measure is

earnestly sought.

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EI ICO A\PINEDA MICH: ODYLON L. ROMERO
Representative, IPACMAN Partylist /Represéntatve, IPACMAN Partylist


Republic of the Philippines
House of Representatives
Quezon City Metro Manila

SEVENTEENTH CONGRESS
First Regular Session
2104
House Bil &494

Introduced by REP. ENRICO A. PINEDA and REP. MICHAEL ODYLON L. ROMERO

AN ACT
EXCLUDING OVERTIME PAY FROM THE COMPUTATION OF TAXABLE INCOME
AMENDING FOR THE PURPOSE SECTION 32 (8) (7) OF REPUBLIC ACT NUMBER
8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF
1997, AS AMENDED

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

SECTION 1 Section 32 paragraph (B) subparagraph (7) of Republic Act No. 8424, otherwise
known as the "National Internal Revenue Code of 1997," as amended is hereby further amended to
read as follows:

“See.

2.

“(A) General Definition. - x xx

ss Income. -

“(B) Exclusions from Gross Income. - x xx

(1) xxx
(2) xxx
(3) xxx
(4) xxx
(5) xxx
(6) xxx
“(7) Miscellaneous items,

“(a) x xx

“(b) xxx

“() x xx

“(d) xxx

“(e) xxx

“(p) OVERTIME PAY, — COMPENSATION RECEIVED DUE TO
HOURS WORKED IN EXCESS OF THE MAXIMUM NORMAL HOURS OF
WORK. PROVIDED , THAT ANNUAL COMPENSATION RECEIVED FROM
OVERTIME WORK SHALL NOT EXCEED SIXTY THOUSAND PESOS
(P60.000.00)


“G) [I x xx

“C[(g)] x xx

“@IG)] x xx.”
Sec. 2.Jmplementing Rules and Regulations. ~ Within sixty (60) days from the effectivity of

this Act, the Bureau of Internal Revenue (BIR), the Department of Finance (DOF), the Department

of Labor and Employment (DOLE) and the Civil Service Commission (CSC) shall, promulgate the
necessary rules and regulations to effectively implement the provisions of this Act.

Sec. 3.Repealing Clause.~ All laws, executive orders, presidential decrees, issuances, rules
and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

Sec. 4.Effectivity. ~ This Act shall take effect fifteen (15) days following its publication in at
least two (2) newspapers of general circulation or in the Official Gazeute.

Approved,