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FOURTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
S. No. 
103 
INTRODUCED BY THE HONORABLE MAR ROXAS 
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EXPLANATORY NOTE 
This bill seeks to exempt minimum wage earners in the private sector and 
government workers in Salary Grades 1 to 3, amending certain provisions of Republic Act 
8424, otherwise known as the National Internal Revenue Code of 1997, as amended. 
As per estimates by the National Wages and Productivity Board, there are 7 million 
workers earning the minimum wage and even below. While these workers are in the verge 
of poverty, it is unfair and unjust that the Government, under the law, is taking away a 
portion of their already subsistence-level income. 
Despite this narrow margin from poverty, the Government would still be mandated 
to take a slice away from that family's meager resources. Even if the Government has 
recently exempted minimum wage earners from withholding taxes, they are still liable to pay 
income taxes at the end of the year. The law must be amended to correct this injustice. 
With the poor, every little bit counts, and by lifting their burden of paying income 
tax, we give them opportunities to put their money to daily essentials as well as savings. 
Minimum wage earners can no longer afford to be taxed and to be placed in the cumbersome 
income tax process in the same manner as higher-earning employees. It is our obligation to 
ease their burden in any way we can. 
In view of the foregoing, the immediate enactment of this measure is earnestly 
sought. 
Senttor 


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FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
S. No. 
103 
INTRODUCED BY THE HONORABLE MAR R O U S  
AN ACT 
EXEMPTING FROM INDIVIDUAL TAX 
WORKERS IN THE PRIVATE SECTOR RECEIVING MINIMUM WAGE, 
AS WELL AS GOVERNMENT WORKERS IN SALARY GRADES 1 TO 3, 
AMENDING FOR THIS PURPOSE REPUBLIC ACT 8424, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House OfRepresentatives in Congress assembled: 
SECTION 1. Section 24 of the same decree is hereby further amended to read as follows: 
“SECTION. 24. Income Tax Rates. - 
“(A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the 
Philippines. 
”(I) An income tax is hereby imposed: 
“(a) On the taxable income defined in Section 31 of this Code, other 
than income subject to tax under Subsections (B), (C) and (D) of this 
Section, derived for each taxable year from all sources within and 
without the Philippines be every individual citizen of the Philippines 
residing therein: 
“(b) On the taxable income defined in Section 31 of this Code, other 
than income subject to tax under Subsections (B), (C) and (D) of this 
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Section, derived for each taxable year from all sources within the 


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Philippines by an individual citizen of the Philippines who is residing 
outside of the Philippines including overseas contract workers referred 
to in Subsection(C) of Section 23 hereof; and 
“(c) On the taxable income defined in Section 31 of this Code, other 
than income subject to tax under Subsections (b), (C) and (D) of this 
Section, derived for each taxable year from all sources within the 
Philippines by an individual alien who is a resident of the Philippines. 
“The tax shall be computed in accordance with and at the rates established in 
the following schedule: 
“Not over P10,OOO .................................... 
5% 
“Over P10,OOO but not over P30,OOO ........... P500+10% of the excess 
“Over P30,OOO but not over P70,OOO ............ P2,500+15% of the 
“Over P70,OOO but not over P140,OOO.. ........ .P8,500+20% of the e 
“Over P140,OOO but not over P250,OOO ........ .P22,500+25% of the 
“Over P250,OOO but not over P500,OOO.. ...... .P50,000+30% of the 
Over P500,OOO ...................................... 
P125,000+34% of the 
over’P10,OOO 
excess over P30,OOO 
excess over P70,OOO 
excess over P140,OOO 
excess over P250,OOO 
excess over P500,OOO 
in 1998. 
Provided, That effective January 1, 1999, the top marginal rate shall be thirty- 
three percent (33%) and effective January 1, 2000, the said rate shall be thirty- 
two percent (32%): 
WORKERS IN THE PRIVATE SECTOR WHO ARE CERTIFIED TO BE 
RECEIVING THE MINIMUM WAGE, AS WELL AS EMPLOYEES IN 
GOVERNMENT AND ITS SUBDIVISIONS WHO ARE CLASSIFIED IN 


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SALARY GRADES ONE TO THREE, IN ACCORDANCE WITH REPUBLIC 
ACT NO. 6758, SHALL NOT BE REQUIRED TO PAY INCOME TAX. 
For married individuals, the husband and wife, subject to the provision of 
Section 51 (D) hereof, shall compute separately their individual income tax 
based on their respective total taxable income: Provided, That if any income 
cannot be definitely attributed to or identified as income exclusively earned or 
realized by either of the spouses, the same shall be divided equally between 
the spouses for the purpose of determining their respective taxable income. 
SEC. 4. Separability Clause - If any provision or part hereof, is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected -shall 
remain valid and subsisting. 
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SEC. 5. Repearing Clause. - All laws, decrees, orders, rules and regulations or parts 
therefore, inconsistent with this Act are hereby amended or modified accordingly. 
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SEC. 6. Effectivity Clause - This act shall take effect fifteen (15) days following its 
publication in a newspaper of general circulation. 
Approved,