FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
Senate Bill No. 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
In view of the present economic instability that our country is 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 specified 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. 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
7 
JUl -2 1'7 ./ , 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
INCREASING THE ALLOWABLE PERSONAL EXEMPTIONS OF INDIVIDUAL 
TAXPAYERS, AMENDING FOR THE PURPOSE SECTION 35 (A) AND (6) OF 
THE NATIONAL INTERNAL REVENUE CODE OF 1987, AS AMENDED 
Be if 
enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION I. Section 35 (A) and (B) of the National Internal Revenue 
Code of 1987, as amended, is hereby further amended to read as follows: 
"SECTION 35. Personal exemption on income tax of individual taxpayers 
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 
independents 
[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 individual 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 one or 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. 
(A) 


Additional Exemption for Dependents - There shall be 
allowed an additional exemption of [Eight Thousand 
Pesos (P8,OOO.OO)l SIXTEEN THOUSAND PESOS 
(P16,OOO.OO) for each dependent not exceeding four 
The additional exemption for the 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 or physical defect.” 
(B) 
(4). 
SEC 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. 
SEC 3. 
Repealing Clause. - All provisions of law, orders, decrees, 
including rules and regulations inconsistent herewith are hereby repealed or 
modified accordingly. 
SEC 4. Effectivity. - This Act shall take effect fifteen (15) days following 
its publication in the Official Gazette or at least two (2) national newspapers of 
general circulation. 
Amroved,