Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

5400

House Bill No.

Introduced by REPRESENTATIVE MA. VICTORIA R. SY-ALVARADO and
REPRESENTATIVE JULIETA R. CORTUNA

Explanatory Note

The power of taxation is sometimes called also the power to destroy. Therefore it
should be exercised with caution to minimize injury to the proprietary rights of a taxpayer. It
‘must be exercised fairly, equally and uniformly, lest the tax collector kill the “hen that lays the
golden egg”. And, in order to maintain the general public's trust and confidence in the
Government this be used justly and not treacherously. It does not conform with
Cur sense of justice in the instant case for the Government to persuade the taxpayer to lend it
a helping hand and tater on to penalize him for duly answering the urgent call. (Antonio
Roxas, et al. v. Court of Tax Appeals and Commissioner of Internal Revenue, GR. No. L-
25043, April 26, 1968)

In cases of extreme and severe suffering of the people, there is a need to balance the
government’s primordial need for funds (i.e. tax money) and the people’s right to life, liberty,
and property. The Philippines has suffered a lot from natural calamities - - those we
encountered in recent memory grew ever stronger and more destructive due to climate change
and extreme weather patterns. Unavoidable and inevitable due to the location of the country,
it still pains our people with the brunt of destruction and widespread loss of life and
possession,

‘Thus, it is imperative that the government lends a helping hand, especially those who
are most vulnerable to these disasters. Under this Act, individual citizens of the Philippines
who are earning purely from compensation income are entitled to an Income Tax Relief for
the year they lose their homes and property due to the destructive forces of nature. Earning
purely compensation income, this class of individuals are currently not spared from the
burden of their loss as they cannot claim any deduction or any reliefwhatsoever despite the
occurrence of such total loss of their belongings.

On the part of the State, there should be recognition of their plight and need. We must
be ready to uplift them in the speediest manner. The benefits of granting these people tax
relief is most apparent - - these are productive citizens who pays religiously their income
taxes, and the sooner we can put their lives in order again, the sooner it is that the State can
expect them to partake in the paying forward the help they receive in the form of their return
to productivity in work and their civic duty of paying taxes.

\


It is a common Filipino virtue that we do not fight someone who is already down. In
truth, our Bayanihanspirit compels us to help these people get right back up. In the same
vein, the government must be compelled to do its part to help people get back right to their
feet. A one-year income tax relief to those who lose all of their belongings is sought by this
Act to be the right stimulus by putting money in their pockets enabling them to recover the
fastest way they may see fit.

In recognition that taxes are the lifeblood of the government, however, this Act
mandates that the foregoing income tax relief can only be claimed by an individual or his
household once every twenty years.

‘The Bureau of Internal Revenue (BIR) is mandated under this Act as the lead agency
to implement the same. This comes with a directive that the objective of the Act is to put
money of the people’s pocket in order for them to use it towards their recovery, thus, it has
only thirty (30) days to act on individual claims. Likewise, the BIR must ensure that no
instances of fraud may creep into the proposed system, as such, only the primary residence as
recorded in the BIR for three (3) next preceding years are allowed to covered by this Act.

Through this measure, those who have lost everything may find hope again, especially
in knowing that their government will never abandon them. They will maintain the dignity of
their lives since the relief is not a dole out and the money they get to keep is the product of
their hard work and perseverance. Yet, at the same time, they are able to recover faster despite
the total loss of their property.

With the foregoing justification and explanation, the passage and adoption of this Act
is most earnestly sought.

wn yon R. SY-ALVARADO
1" District, Province of Bulacan



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

5400

House Bill No._

Introduced by REPRESENTATIVE MA. VICTORIA R. SY-ALVARADO and
REPRESENTATIVE JULIETA R. CORTUNA

AN ACT GRANTING INCOME TAX RELIEF < >
TO INDIVDUAL TAXPAYERS EARNING PURELY COMPENSATION INCOME

WHO LOST THEIR HOMES DUE TO NATURAL CALAMITIES

Section 1.Short Title. This Act shall be known as the Calamity Income Tax Relief Act
of 2015.

Section 2.Coverage. This Act shall entitle all individual citizens of the Philippines
residing a certain area declared to be in a State of Calamity earning purely compensation
income, and who are subject to individual income tax as defined under Section 24 of the
National Internal Revenue Code, Provided that, as a result of aforesaid calamity, the house,
apartment, dwelling, or any other structure serving as the primary residence of the aforesaid
taxpayer has been totally lost or destroyed, Provided further that, the aforesaid primary
residence is not under any insurance coverage or other means that allows the aforesaid f
taxpayer recovery or compensation from his or her loss.

Section 3.Limitations. locality shall be considered under a State of Calamity when it ~—
is declare to be under such state by the proper authorities. To be entitled with the tax relief,
the primary residence of the taxpayer concerned must be within the locality declared to be
under a State of Calamity and is the same primary residence as declared by the concerned
taxpayer to the Bureau of Internal Revenue (BIR) in his income tax return, or as shown in his
or her records with the BIR for three (3) years next preceding the date of total loss or
destruction of the aforesaid residence.

Section 5.Implementing Agency. The BIR shall be the lead implementing agency of
this Act. In compliance with this Act and with the Implementing Rules and Regulation
below.it shall issue and promulgate an appropriate system and the necessary forms and
supporting documents needed for filing a claim for income tax relief under this Act, Provided
that, the Revenue District Office having jurisdiction over the locality declared to be under a


State of Calamity shall likewise have jurisdiction over the claim/s for income tax relief under
this Act from aforesaid locality.

Section 4.Income Tax Relief. All individual income taxpayers earning purely
compensation income covered under this Act shall be granted an Income Tax Relief for the
taxable year of the total loss or destruction of his or her primary residence, Provided that, in
no case shall the aforesaid taxpayer may claim the aforesaid income tax relief oftener than
‘once every twenty(20) years, Provided further that, in case the primary residence concerned
also serves as a family home or is aprimary residence to multiple individual income taxpayers
earning purely compensation income, only one (1) of the aforesaid taxpayers shall be entitled
to claim the aforesaid income tax relief to the exclusion of his or her co-residents and after
they have executed a release, quit-claim, or any analogous document unequivocally assigning
and authorizing the claimant-taxpayer to file the income tax relief for their residence and that
they likewise cannot claim the aforesaid income tax relief oftener than once every twenty
(20) years.

In case there aretaxes from the concemed taxpayer withheld by his or her employer
and already remitted to the BIR, the amount withheld and remitted shall be returned either as
a tax refund by the BIR within thirty (30) days upon approval of his or her claim, without
need from the concerned taxpayer to file a claim for refund. Otherwise, in case the tax from
the concerned taxpayer is not yet withheld or is withheld by his or her employer but is not yet
remitted to the BIR, the tax shall continue to be withheld by the employer and shall only be
released upon approval by the BIR of the claimant-taxpayer’s claim for income tax relief,
Provided that, the BIR shall decide on the aforesaid claim within thirty (30) days from the
date of filing, Provided further, that in case of disallowance of the aforesaid claim, the taxes
withheld shall be remitted to the BIR in accordance with the provisions of the National
Internal Revenue Code.

Section S.Jmplementing Rules and Regulations.The Department of Finance (DOF),
Bureau of Internal Revenue (BIR), Department of National Defense (DND), and Department
of Interior and Local Government (DILG) shall issue and promulgate the Implementing Rules
and Regulations (IRR) to discharge the provisions of this Act. The IRR shall tax effect upon
its publication in two (2) newspapers of general circulation.

Section 6.Repealing Clause.All laws, presidential decrees, letters of instructions,
executive orders, rules and regulations, and specific provisions of the foregoing, insofar as
they are inconsistent with this Act, are hereby repealed or amended as the case may be.

Section 7.Separability Clause. In the event that any provision of this Act or any
portion hereof is declared unconstitutional by a competent court, the other provisions shall
not be affected and shall remain valid and enforceable.

Section 8.Effectivity Clause. This Act shall take effect after its complete publication
in the Official Gazette or in at least two (2) newspapers of general circulation.

APPROVED-