Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

SIXTEENTH CONGRESS
First Regular Session

583
HOUSE BILL NO.

Introduced by: HON. JOSE CHRISTOPHER Y. BELMONTE

EXPLANATORY NOTE

The bill entitled, “AN ACT GRANTING ADDITIONAL EXCLUSION TO
THE GROSS TAXABLE INCOME OF EMPLOYEES OF PUBLIC AND PRIVATE
ENTITIES AMENDING FOR THE PURPOSE SUB-PARAGRAPH (e),
PARAGRAPH 7, SUB-SECTION (B), SECTION 32, CHAPTER VII OF THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR
OTHER PURPOSES” aims to benefit a number of our employees from both the
public and private sectors by excluding from the computation of gross taxable
income those benefits received by workers by way of 13% month pay and bonuses
from collective bargaining or negotiation agreements not exceeding PhP50,000.00.

Considering its magnanimous intent, this bill will definitely help a great
number of our employees, who belong to lower-income brackets who suffer much

from the brunt of taxation.

For these reasons, the approval of the proposed bill is sincerely requested.

Jig hal

JOSE CHRISTOPHER Y. BELMONTE


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS

First Regular Session
5ga
58

HOUSE BILL No.

Introduced by Representative JOSE CHRISTOPHER Y. BELMONTE.

AN ACT GRANTING ADDITIONAL EXCLUSION TO THE GROSS TAXABLE
INCOME OF EMPLOYEES OF PUBLIC AND PRIVATE ENTITIES AMENDING
FOR THE PURPOSE SUB-PARAGRAPH (e), PARAGRAPH 7, SUB-SECTION (B),
SECTION 32, CHAPTER VII OF THE NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.

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

SECTION 1. Amendatory Clause. - The National Internal Revenue Code of 1997, as
amended, is hereby further amended, specifically Sub-paragraph (e), Paragraph 7,
Sub-section (B), Section 32, Chapter VII, to read as follows:

() 13% Month Pay and Other Benefits. - Gross benefits received by
officials and employees of public and private entities: Provided, That
the 13 Month Pay, regardless of amount, received by the employee
from his employer shall be excluded in full from the Gross Taxable
Income. Provided, further, That additional bonuses, benefits, and other
emoluments not exceeding Fifty Thousand Pesos (PhP 50,000) received
by the employee from his employer voluntarily or as a result of
collective bargaining agreements or as mandated by existing laws,
decrees, or orders, such as those enumerated hereunder, shall also be
excluded from the Gross Taxable Income.

(i) Benefits received by officials and employees of the
national and local government pursuant to Republic Act
No. 6686;

(i) Benefits received by employees pursuant to Presidential
Decree No. 851, as amended by Memorandum Order No.
28, dated August 13, 1986; and


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(iii) Benefits received by officials and employees not covered
by Presidential decree No. 851, as amended by
Memorandum Order No. 28, dated August 13, 1986

SECTION 2. Coverage. - This Act shall cover all employees earning compensation
income except those with a rank of Assistant Vice-President and up in the private
sector, Assistant Secretaries or their equivalent salary grade and rank and_up in the
public sector, and elective officials of highly urbanized cities from Councilor up to
the Mayor, Members of the House of Representatives, Senators, the Vice-President
and the President . Provided, That the Councilor, as provided herein, shall include
Ex-Officio members who sits in the Sangguiang Bayan pursuant to the Local
Government Code of 1991. Provided, further, That for purposes of this Act,
compensation income shall exclude benefits, privileges, and other emoluments given
by public or private employers either voluntarily or as a result of collective
bargaining agreements or as mandated by existing laws, decrees or orders.

SECTION 3. Amendment of Existing Rules and Regulations. - Within six (6) months
following the effectivity of this Act, the Bureau of Internal Revenue through the
Commissioner or his agents, is hereby mandated to issue the necessary amendment
in the Implementing Rules and Regulations of the National Internal Revenue Code
of 1997, as amended, to effect the provisions of the two (2) preceding sections.

SECTION 4. Repealing Clause. - All Acts, Decrees or Orders inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 5. Effectivity. - This Act shall take effect after fifteen (15) days following its
publication in a newspaper of general circulation in the Philippines.

Approved.