WUUSE WF ® ZPRESENTATIVES

RECEIVED
Republic of the Philippines pare. 24 AUG 2016
HOUSE OF REPRESENTATIVE! Tr
Quezon City me x

BY: 4

REPISTR ATION UNIT
BILLS AND iNDEX SERVICE

SEVENTEENTH CONGRESS
First Regular Session

3311

HOUSE BILL NO.

Introduced by REP. JULIETTE T. UY

EXPLANATORY NOTE

This bill envisions to revise the ex
inheritance) tax. ‘The last estate tax amendment was done via Republic Act (RA) 8424 or the
National Internal Revenue Code of 1997.

ting outdated law on the estate (also referred to as

After close to 20 years, the threshold amounts on which the various taxes being levied have not
been adjusted to present-day realities. As inflation rates keep rising and the value of the Peso
decreases, the taxes being paid by citizens have eaten into the income of ordinary Filipinos that
result to a diminishing take home pay

This bill intends to lessen the burden on the surviving spouse and heirs of a decedent in settling
their estate tax liabilities. ‘The value of the estate tax exemption and other allowable deductions
need to be increased so as to give the surviving spouse and heirs of the decedent the opportunity
to enjoy the fruits of labor of their deceased loved ones. This measure hopes to positively
impact on poor and middle-income families who bear the burden of paying such tax. Increasing
the exemptions and deductions for estate tax puxposes would also ensure that the administrative
costs of collecting estate taxes shall become more efficient and more citizens shall attend to this
important duty in processing their inheritance from their loved ones who have passed away.

The threshold amounts in net estate liable to estate taxes as well the allowable deductions for
medical expenses, funeral expenses, standard deduction and the value of family home are
increased by this measure to bring the said rates to the values of the present tim

In view of the foregoing, the immediate passage of this bill is earnestly sought.

Approved,

REP. JUVIETAE T. UY
2nd Disttiery Misamis Oriental


Republic of the Philippines

HOUSE OF REPRESENTATIVES

Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO._

3311

Introduced by REP. JULIETTE T. UY

AN ACT
AMENDING SECTIONS 84, 86, 89 AND 97 OF TITLE III, CHATER I, ESTATE
‘TAX OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

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

SECTION 1.
amended to read as follows:

“Section 84. Rates of Estate Tax, - ‘There shall be levied, a
upon the transfer of the net estate as determined in accordance with
of every decedent, whether resident or nonresident of the Philippines, a ta
s computed in accordance with the following schedule:

value of such net

te,

If the net estate is:

.ction 84 of the National Internal Revenue Code of 1997, as amended, is hereby

.d, collected and paid
ctions 85 and 86

based on the

Over But Not Over | The Tax Shall) Plus | Of The Excess
| Be | Over

P_ 460,000 | Exempt |

P_ 460,000 1,150,000 OE P_460,000
1,150,000 4,600,000 P 23,000 1,150,000
4,600,000 11,500,000 299,000 | 11% 4,600,000 |
11,500,000 23,000,000 1,058,000 | 1 ~__11,500,000
3,000,000 and over 3,000 | 20% 23,000,000,

PROVIDED, THAT EVERY THREE (3) YEARS, AFTER THE EFFECTIVITY OF
THIS ACT, THE BUREAU OF INTERNAL REVENUE SHALL ADJUST THE
AMOUNTS HEREIN STATED TO
CONSUMER PRICE INDEX (CPI) AS PUBLISHED BY THE PHILIPPINE

STATISTICS AUTHORITY (PSA).

ITS PRESENT VALUE USING THE

SECTION 2. Section 86 of the National Internal Revenue Code of 1997, as amended, is

hereby amended to read as follows:


“Section 86. Computation of Net Estate. - For the purpose of the tax imposed in this
Chapter, the value of the net estate shall be determined:

(A) Deductions: Allowed to the Estate of Citizen or a Resident, - In the case of a citizen or
resident of the Philippines, by deducting from the value of the gross

rate -

(1) Expenses, Losses, Indebtedness, and taxes. - Such amounts:

(a) For actual funeral expenses or in an amount equal to five percent (5%) of the gross
estate, whicheve is lower, but in no case to exceed FIVE HUNDRED THOUSAND
PESOS (P300,000) [Two hundred thousand pesos (P200,000)];

() xxx.

(© xxx.

(@) xxx

(©) xxx.

(2) Property Previously Taxed. - xxx.

(3) Transfers for Public U:

XXX.

(4) The Family Home. - An amount equivalent to the current fair market value of the
decedent's family home: Provided, however, That if the said current fair market value
exceeds TWO MILLION PESOS (P2,000,000) [One million pesos (P1,000,000)], the
excess shall be subject to estate tax. As a sine qua non condition for the exemption or
deduction, said family home must have been the decedent's family home as certified by
the barangay captain of the locality.

(5) Standard Deduction. - An amount equivalent to TWO MILLION PESOS
(P2,000,000) [One million pesos (P1,000,000)].

(6 Medical Expenses. - Medical Expenses incurred by the decedent within one (1) year
prior to his death which shall be duly substantiated with receipts: Provided, That in no
case shall the deductible medical expenses exceed ONE MILLION PESOS

(P1,000,000) [Five Hundred ‘Thousand Pesos (P500,000)}

(1) xxx.

SECTION 3. Section 89 of the National Internal Revenue Code of 1997, as amended, is hereby
amended to read as follows:

“Section 89. Notive of Death to be Filed. -In all cases of transfers subject to tax, or where,
though exempt from tax, the gross value of the estate exceeds TWO HUNDRED
‘THOUSAND PESOS (P200,000) [Twenty thousand pesos (P20,000)], the executor,
administrator or any of the legal heirs, as the case may be, within two (2) months after
the decedent's death, or within a like period after qualifying as such executor or



administrator, shall give a written notice thereof to the Commissioner.

SECTION 4. Section 89 of the National Internal Revenue Code of 1997, as amended, is hereby
amended to read as follows:

“Section 97. Payment of

ax: Antecedent to the Transfer of Shares, Bonds or Rights. x:

Ifa bank has knowledge of the death of a person, who maintained a bank deposit
account alone, or jointly with another, it shall not allow any withdrawal from the said
deposit account, unless the Commissioner has certified that the taxes imposed thereon
by this Title have been paid: Provided, however, That the administrator of the estate or
any one (1) of the heirs of the decedent may, upon authorization by the Commissioner,
withdraw an amount not exceeding TWO HUNDRED THOUSAND PESOS
(2200,000) [I'wenty thousand pesos (P20,000)], without the said certification. For this
purpose, all withdrawal slips shall contain a statement to the effect that all of the joint
depositors ate still living at the time of withdrawal by any one of the joint depositors and
such statement shall be under oath by the said depositors.

SECTION 5. Implementing Rules and Regulations. ‘The Bureau of Internal Revenue shall
promulgate the Implementing Rules and Regulations within six (6) months from the effectively
of this Act.

Section 6. Separability Clause. Any part or provision of this Act which shall be held to be
invalid or unconstitutional, other parts or provisions hereof which are not affected thereby shall
continue to be in full force and effect

Section 7. Repealing Clause. All laws, rules, regulations, orders, memoranda or circulars
inconsistent with this Act are hereby repealed or modified accordingly

Section 8. Effectivity Clause. This Act shall take effect fifteen (15) days after publication in
the Official Gazette or in any two (2) national newspapers of general circulation.

Approved,