Republic of the Philippines
HOUSE OF REPRESENTAT!
Quezon City

Fifteenth (15"*) Congress
‘Second Regular Session

HOUSE BILL NO: 6092

Introduced by Honorable Catalina Cabrera-Bagasina
Association of Laborers and Employees “ALE” Party-list

EXPLANATORY NOTE

This bill seeks to amend the section 32(b)(7)(e) of Republic Act No. 8424
otherwise known as the National Internal Revenue Code of 1997. This amendment will
not only increase the tax exemption for all earners but the additional exemptions for
individuals especially the fringe benefits of the working class.

Lowering the taxes paid by the lower class will greatly improve their economic
standing and will further empower them to completely eradicate, if not alleviate them

from poverty.

In view of the foregoing, the passage of the bill is earnestly sought.

Hon. one elirempamcna


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Fifteenth (15%) Congress
Second Regular Session

HOUSE BILLNO: _ 6092

Introduced by Honorable Catalina Cabrera-Bagasina
Association of Laborers and Employees “ALE” Party-list

AN ACT
AMENDING SECTION 32 (B)(7)(E)OF REPUBLIC ACT NO. 8424, AS
AMENDED, OTHERWISE KNOWN AS THE NATIONAL INTERNAL
REVENUE CODE OF 1997.

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

Section 1. Short Title. - This Act shall be cited as the "Tax Reform Act of 2012".

Section 2. State Policy. - It is hereby declared the policy of the State to promote
sustainable economic growth through the rationalization of the Philippine internal
revenue tax system, including tax administration; to provide, as much as possible, an
equitable relief to a greater number of taxpayers in order to improve levels of disposable
income and increase economic activity; and to create a robust environment for business
to enable firms to compete better in the regional as well as the global market, at the
same time that the State ensures that Government is able to provide for the needs of
those under its jurisdiction and care..

Section 3. Section 32(B)(7)(E) of Republic Act No. 8424, as amended, otherwise
known as the National Internal Revenue Code of 1997, is hereby further amended to
read as follows:

"Section 32(B)(7)(E)

(e) 13th Month Pay and Other Benefits. - Gross

benefits received by officials and employees of public

and private entities: Provided, however, That the total
exclusion under this subparagraph shall not exceed

2|Page


ONE HUNDRED THOUSAND PESOS
(P100,000) which shall cover:

xxx

(iv) Other benefits such as productivity incentives and
Christmas bonus: Provided, further, That the ceiling
of ONE HUNDRED THOUSAND PESOS
(P100,000) may be increased through rules and
regulations issued by the Secretary of Finance, upon
recommendation of the Commissioner, after
considering among others, the effect on the same of
the inflation rate at the end of the taxable year”.

Section 4. Separability Clause.- If any provision of this Act is declared invalid or
unconstitutional, other provisions hereof which are not affected thereby shall continue
to be in full force and effect.

Section 5. Repealing Clause.- Any law, presidential decree or issuance, executive
order, letter of instruction, administrative order, rule or regulation contrary to or
inconsistent with any provision of this Act as hereby amended or modified accordingly.

Section 6. Effectivity Clause.- This Act shall take fifteen (15) days following its
publication in the official Gazette or in at least two (2) newspaper of general circulation.

Approved,

3|Page