FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 163 
INTRODUCED BY SEN. JINGGOYEJERCITO ESTRADA 
EXPLANATORY NOTE 
This bill seeks to grant tax exemption on allowances and benefits granted 
to public school teachers. Undoubtedly, there is a great demand now for public 
school teachers in the rural areas especially considering the shortage brought 
about lately by the exodus of teachers for overseas employment. However, the 
difficulties of life in the rural areas, such as in transportation, lodging or 
insurgency problem, to mention only a few, have discouraged teachers to be 
employed there. 
Thus, it is the sincere belief of the undersigned that with this privilege of 
tax exemption on salary, more new teachers will be encouraged to accept 
teaching jobs in remote areas, where usually vacancy of temporary nature exists. 
This is because public school teachers in this category either will get an equal 
take home payor a regular public school teacher may even get more than due to 
the savings they get from being tax exempt. 
This bill will also encourage teachers to opt to stay in the public school 
system to enhance the teaching-learning process. It cannot be ignored that the 
tax exemption on the income of teachers will result in extra money for them to 
spare for their other needs. 
In view of the foregoing, approval of this bill is urgently sought. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
. 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 7 G 3 
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I· 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
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EXEMPTING FROM TAX ALL ALLOWANCES AND BENEFITS GRANTED TO 
PUBLIC SCHOOL TEACHERS, 
INCLUDING THOSE 
IN 
THE 
STATE 
COLLEGES AND UNIVERSITIES 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Short Title. - This Act shall be referred to as "The Public 
School Teachers' Tax Incentive Act". 
SEC. 2. Statement of Policy. - /t is hereby dec/a red the po/icy of the 
State to assign the highest budgetary priority to education and ensure that 
teaching will attract and retain, its rightful share of the best available talents 
through adequate remuneration and other means of job satisfaction and 
fulfillment. 
It is further declared a policY and commitment of the State to promote and 
improve the economic status of all public school teachers, including those in 
State colleges and universities by increasing their take home pay through 
exemption from tax all allowances and benefits granted to them. 
SEC. 3. Exclusions from Gross Income. - All allowances and benefits 
granted to public school teachers, including those in the State colleges and 
universities at all levels, shall not be included in the computation of gross income 
and shall be exempt from taxation under Title III, Chapter VI of Republic Act No. 
8424, otherwise known as the "Tax Reform Act of 1997". 
SEC. 4. Exemption from Attachment, Levy, and Execution. - All 
benefits and allowances referred to herein shall likewise not be subject to 
attachment, levy, and execution. 
SEC. 5. Rules and Regulations. - The Commissioner of the Bureau of 
Internal Revenue is hereby authorized to promUlgate such rules and regulations 
as may be necessary to implement the provisions of this Act. 
SEC. 6. Repealing Clau'~e. - All laws, decrees, executive orders, letters 
of instruction, letters of instruction, letters of implementation, rules and 
regulations, and other issuances inconsistent with any provision of this Act are 
hereby repealed, modified, superseded or amended accordingly. 


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SEC. 7. Separability Clause. - If any provIsion of this Act of the 
application of such provision to any person or circumstance is held invalid for any 
reason, the remainder of this Act or the application of such provision to other 
persons or circumstances shall not be affected thereby. 
SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days after its 
complete publication in any two (2) newspapers of general circulation. 
Approved,