FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.No. 1615 
~ 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
Considering inflation and the present value of the peso, the allowance of personal 
exemption for the individual taxpayer of P20,OOO for single, P25,OOO for head of the family, 
and P32,OOO for each married individual, as well as P8,OOO for each dependent not 
exceeding four, in our income tax system under Republic Act No. 8424, otherwise known as 
the National Internal Revenue Code of 1997, as amended, is so meager that it does not 
anymore provide a sufficient allowance for the individual taxpayer in view of the rising cost 
of living. 
Set in 1997 or ten years ago, there is thus an urgent need to increase the allowance 
of personal exemption for the individual taxpayer to adjust to inflation and reflect the present 
cost of living. In addition, this bill proposes to regularly adjust these amounts to inflation 
every five (5) years to reflect the current value of the peso. These changes will give 
immediate relief to our individual income taxpayers and make a big difference in their lives. 
Thus, the immediate passage of this bill is earnestly sought. 
Senator 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
SENATE 
SNo. 1615 
Introduced by Senator Richard J. Gordon 
AN ACT AMENDING SECTION 35 OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN 
AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 35 of Republic Act No. 8424, otherwise known as the National 
Internal Revenue Code of 1997, as amended, is hereby amended to read as follows: 
"Sec. 35. Allowance of Personal 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 
as follows: 
For single individual or married individual judicially decreed as legally 
separated with no qualified dependents .............. 
For head of family ................................ 
For each married individual .................... 
PROVIDED, THAT THE ABOVE AMOUNTS SHALL BE REGULARLY 
ADJUSTED TO INFLATION EVERY FIVE (5) YEARS BASED ON THE DATA 
PROVIDED BY THE NATIONAL STATISTICS OFFICE TO THE BUREAU OF 
INTERNAL REVENUE. 
[P20,000] P35,OOO 
[P25,000] P45,OOO 
[P32,000] P60,OOO 
(6) Additional Exemption for Dependents. - There shall be allowed an 
additional exemption of [Eight thousand pesos (P8,000)] FIFTEEN 
THOUSAND PESOS (P15,OOO) for each dependent not exceeding four (4). 
THIS AMOUNT SHALL BE REGULARLY ADJUSTED TO INFLATION 
EVERY FIVE (5) YEARS BASED ON THE DATA PROVIDED BY THE 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
NATIONAL STATISTICS OFFICE TO THE BUREAU OF INTERNAL 
REVENUE. 
$3 
. . .  
Sec. 2. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
Sec. 3. Effectivity. - This Act shall take effect after fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
Approved,