THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 
~ 
Introduced by Senator JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
In view of the present economic instability that our country is currently 
experiencing, it is indeed significant that we improve the fairness of the personal income 
tax system. 
Granting increased allowable personal and additional exemption to 
taxpayers would be a great help to them, considering the present changing needs and 
problems of the economy. 
It is without doubt that the revenue earnings the government collects from the 
taxpayers are the tools, which enable the government to continue its functions for the 
good of its people and in order to do so, revenue erosion should be avoided as much as 
possible. 
However, in response to the changing needs and uncertainties of the 
economy, increased personal and additional allowable exemption must be enforced to 
correct the inflationary effects on income. 
It should be noted that the government employs the bulk of our taxpayers whose 
salaries barely support their everyday expenses. The same situation applies to those 
employed in the private sector whose minimum wage is much lower, which is 
sometimes below the remuneration stipulated in the Labor Code of the Philippines. 
This bill seeks to correct this oversight by explicitly providing taxpayers an 
increased allowable personal and additional exemption. 
In view of the foregoing, early passage of this bill is earnestly requested. 
A 
Senator 


THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
SENATE 
S.B. No. 
Introduced by Senator JINGGOY EJERCJTO ESTRADA 
AN ACT 
EXEMPTING THE ALLOWABLE PERSONAL EXEMPTIONS OF INDIVIDUAL 
TAXPAYERS, AMENDING FOR THE PURPOSE SECTION 35(A) AND (B) OF 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 I. Section 35 (A) and (B) of the National Internal Revenue Code of 
1997, as amended, is hereby amended to read as follows; 
“SECTION 35. Personal exemption on income tax of individual taxpayers. 
“(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 qualified 
dependents 
[P20,000] 
P48,OOO 
“For head of the family 
[ P25,000] 
P54,OOO 
“For each married individual 
[P32,000] 
P64,OOO 
“In the case of married individuals where only one of the spouses is deriving 
gross income, only such spouse shall be allowed the personal exemption. 
“For purposes of this paragraph, the term ‘head of the family’ means an 
unmarried or legally separated man or woman with one or both parents, or with one or 


more brothers and sisters, or with more legitimate, recognized natural or legally adopted 
children living with and dependent upon him for their chief support where such brothers 
or sisters or children are not more than twenty-one (21) years of age, unmarried and not 
gainfully employed or when such children, brothers or sisters of age are incapable of 
self-support because of mental or physical defect. 
“(B) Addifional Exemption for Dependents. - There shall be allowed an 
additional exemption of [Eight Thousand Pesos (P8,OOO.OO)J SIXTEEN 
THOUSAND PESOS (P16,OOO.OO) for each dependent not exceeding four (4). 
“The additional exemption for dependents shall be claimed by only one of the 
spouses in the case of married individuals. 
“In the case of legally separated spouses, only the spouse who has custody of 
the child or children may claim additional exemptions: Provided, that the total amount of 
additional exemptions that may be claimed by both shall not exceed the maximum 
additional exemptions herein allowed. 
“For purposes of this subsection, a ‘dependent‘ means a legitimate, illegitimate or 
legally adopted child chiefly dependent upon and living with the taxpayer if such 
dependent is not more than twenty-one (21) years of age, unmarried and not gainfully 
employed or if such dependent, regardless of age, is incapable of self support because 
of mental of physical defect. 
SECTION 2. 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 3. 
Repealing Clause. - All provisions of law, orders, decrees, 
including rules and regulations inconsistent herewith are hereby repealed or modified 
acco rdi ng l y . 
SECTION 4. €flecfivify. - This Act shall take effect fifteen (I 
5) days following 
its publication in the Official Gazette or at least two (2) national newspapers of general 
circulation. 
Approved,