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Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

THIRTEENTH CONGRESS
41 Regular Session

‘House Bill No, 260

introduced by RODRIGUEZ D. DADIVAS.

Explanatory Note

Fixed income earners or pure compensation income earners who have been issued
cettificates of withholding tax by their employers shouldn't have to file their income
tax retums, The mere issuance of certificate of withholding tax by their employers
already serves as a proof of both income and tax payment, hence, the filing of
income tax retums is indeed an added burden not only for these people but also for
the government.

The cost of ITR form is estimated to be around P6.50 per set while the number of
registered compensation earners for CY 2001 is close to 3.6 million per the BIR data.
Corollary, the goverment will generate a saving of more than P23milion per year on
ITR forms alone. Furthermore, the govemment would also save time, effort, and
money for the safekeeping of said documents and the manpower to undertake the
record management. The need for the compensation eamers to line up for the long
queue just to file their income tax returns would be over.

Hence, | file this bill to propose the simplification of the system of tax collection and
administration particularly for fied income eamers, thereby easing the BIR of
unnecessary records or of little use. Subsequently, the BIR people would be having
more time to enhance s efficiency in tax collection, tax monitoring and tax audit,
especially of large taxpayers.

This bill was also filed in both houses of Congress during the last 12" Congress but
the deas#tr6f time averted the approval of this bill

Hencd, the immediate approval of this bill is eamestly requested.

ROGET CADE
1* District, Capiz

Fn.baltascofomamendmart



Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

THIRTEENTH CONGRESS
1* Regular Session

House BillNo___ 260 _

Introduced by RODRIGUEZ D. DADIVAS

AN ACT
PROVIDING FOR THE EXEMPTION OF FIXED INCOME EARNERS FROM THE
FILING OF INCOME TAX RETURNS, AMENDING FOR THE PURPOSE SECTION
51 (A) (2) (b) OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE “TAX
REFORM ACT OF 1997”

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

SECTION 1. Section 51 (A) (2) (b) of Republic Act No. 8424, otherwise known
as the “Tax Reform Act of 1997" is hereby amended to read as follows.

"SEC. 51. Individual Return. —

(A) Requirements. —

(1) except as provided in paragraph (2) of this Subsection, the following
individuals ate required to file an income tax retum:

(a) Every Filipino citizen residing in the Philippines;

(©) Every Filipino citizen residing outside the Philippines, on his income from
sources within the Philippines;

{c) Every alien residing in the Philippines, on income derived from sources
within the Philigpines; and

(d) Every nonresident alien engaged in trade or business or in the exercise of
profession in the Philippines.

(2) The following individuals shall not be required to file an income tax retum

{a) An individual whose gross income does not exceed his total personal and
additional exemptions for dependents under Section 35: Provided, That a citizen of
the Philippines and any alien individual engaged in business or practice of profession
within the Philippines shall file an income tax retum, regardiess of the amount of
gross income;

(b) An individual {with respect to} RECEIVING pure compensation income, as
defined in Section 32(A)(1), derived from sources within the Philippines, the income
tax on which has been correctly withheld BY HIS EMPLOYER AS EVIDENCED BY
THE EMPLOYER'S CERTIFICATE OF COMPENSATION PAYMENT TAX
WITHHELD under the provisions of Section 79 of this Code: Provided, That an
individual deriving compensation concurrently from two or more employers at any
time during the taxable year shall file an income tax retumt: Provided, further, That
an individual whose pure compensation income derived from sources within the
Philippines exceeds Sixty Thousand Pesos (P60,000.00) shall also file an income
tax retum};


SEC. 2. Repealing Clause. — All laws, decrees, executive orders, issuances,
tules and regulations inconsistent with this Act are hereby repealed or modified
accordingly.

SEC. 3. Effectivity. - This Act shalll take effect upon approval.
Approved,