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Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

1043

HOUSE BILL NO.

Introduced by: HON. KRISTINE SINGSON-MEEHAN

AN ACT
GRANTING INCENTIVES TO QUALIFIED TAXPAYERS BY EXEMPTING THEM
FROM AUDIT AND INVESTIGATION IF THEY PAY AT LEAST TWENTY
PERCENT MORE OF INCOME TAX, VAT, EXCISE AND PERCENTAGE TAXES
PAID DURING THE PREVIOUS TAXABLE YEAR

EXPLANATORY NOTE

‘This measure seeks to exempt qualified taxpayers from audit and investigation of income tax,
VAT, excise and percentage tax returns by paying at least twenty percent (20%) more of the
income, VAT, excise and percentage taxes paid, as the case may be, during the previous
taxable year. This way, the taxpayer has an incentive to voluntarily declare and pay a higher
tax, enhancing incidence/rate of tax payment to the government. The objective is to increase
tax collection with the least administrative cost and reduce fiscal leakages by encouraging
voluntary tax compliance without compromising the revenue collection generated from
auditv/investigation and enforcement.

This would complement the Administration’s Tax Reform for Acceleration and Inclusion
(TRAIN) law, and the tax amnesty under Republic Act 11213, whose primary authors were
then Deputy Speaker Eric Singson and then Minority Leader Danilo Suarez, enacted
February of this year. With all these laws and measures being considered, the funds generated
would sustain and support President Rodrigo R. Duterte’s massive “BUILD BUILD BUILD”
infrastructure program which aims to spur economic growth.

‘Thus, the immediate approval of this bill is earnestly sought.

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Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS,
First Regular Session

HOUSE BILL NO.

1043

Introduced by: HON. KRISTINE SINGSON-MEEHAN

AN ACT
GRANTING INCENTIVES TO QUALIFIED TAXPAYERS BY EXEMPTING THEM
FROM AUDIT AND INVESTIGATION IF THEY PAY AT LEAST TWENTY
PERCENT MORE OF INCOME TAX, VAT, EXCISE AND PERCENTAGE TAXES
PAID DURING THE PREVIOUS TAXABLE YEAR

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

SECTION 1. Coverage. — An individual or corporate taxpayer may avail of the
incentive of exemption from audit and investigation by the Bureau of Internal Revenue (BIR)
for the current taxable year by paying at least twenty percent (20%) more of the income,
VAT, excise and percentage taxes paid, as the case may be, during the previous taxable year:

Provided, That continued availment of this incentive shall be subject to the condition
that said individual or corporate taxpayer shall not fail to pay for a taxable year at least
twenty percent (20%) more of the income, VAT, excise tax and percentage taxes paid, as the
case may be, for the immediately preceding taxable year.

SEC. 2. Exemptions. - The incentives provided in this Act shall not apply to
taxpayers or cases existing as of the effectivity of this Act:

a. Withholding agents with respect to their withholding tax liabilities;

b. Those with pending cases falling under the jurisdiction of the Presidential
Commission on Good Government;

c. Those with pending criminal cases filed in court for tax evasion and other
criminal offenses under Chapter Il of Title X of the National Internal
Revenue Code (NIRC) of 1997, as amended, and the felonies of frauds,
illegal exactions and transactions, and malversation of public funds and
property under Chapters III and IV of Title VII of the Revised Penal Code;

d. Those with pending cases involving unexplained or unlawfully acquired
wealth or under the Anti-Graft and Corrupt Practices Act and Republic No
7078, otherwise known as “An Act Defining and Penalizing the Crime of
Plunder”;

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e. Those with pending cases filed in court involving violation of the Anti-
Money Laundering Act”; and

f Tax cases subject of final and executor judgement by the courts

SEC. 3. Penalty Provision. — Any taxpayer who violates the provisions of this law
shall be subjected to immediate investigation, in addition to the imposition of penalties
pursuant to the NIRC of 1997, as amended, and other applicable laws.

SEC. 4. Implementing Rules and Regulations, — The Bureau shall promulgate and
publish rules and regulations for the proper implementation of this Act within sixty (60) days
from its approval.

SEC. 5. Separability Clause. — If, for any reason, any section or provision of this Act
is declared unconstitutional or invalid, the other sections or provisions which are not affected
shall continue to be in full force and effect.

SEC. 6. Repealing Clause. — All other laws, decrees, executive orders,
proclamations, rules and regulations, or parts thereof, inconsistent with the provisions of this
Act are also hereby amended or repealed accordingly.

SEC. 7. Effectivity— This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in a newspaper of general circulation.

Approved,

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