RECEIVED

Republic of the Philippines i
pate: 59 JUN 2018

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session .
ISTRATION UNIT
HOUSE BILL NO. 411 BLS AND INDEX SERVICE

INTRODUCED BY REPRESENTATIVE TOBIAS “TOBY” M. TIANGCO

EXPLANATORY NOTE

One of the principles of a sound tax system is theoretical justice. The
1987 Constitution explicitly provides that “[t]he rule of taxation shall be
uniform and equitable. The Congress shall evolve a progressive system of
taxation.” (Article Vi, Section 28, paragraph 1)

Indeed, while Congress has provided for a progressive and uniform
system of taxation the existing system of taxation is no longer fair and
equitable. It is a fact that Congress determined the tax brackets [now]
provided under Section 24 of the R.A. No. 8424 as early as 1986. It has
remained unchanged to date. On the other hand, the increase in
inflation has gone up as high as 300%.

With the current income tax brackets, the Philippines effectively
imposes the highest personal income tax in the whole ASEAN region.

Accordingly, low-income and middle-income earners, most of whom
are salaried workers, suffer and bear the bulk of the iniquitous tax burden
among individual taxpayers. This tax burden heavily impact on their
purchasing power.

Considering the clamor of the public for the passage of various
income tax reform measures before Congress in order to restore fairness
in the Philippine tax system has become deafening, this bills seeks to (a)
exempt from income tax all those earning PhP 360,000 annually; (b)
give our low-income and middle income earners, an adjusted, re-
structured and revised income tax bracket that will approximate current
consumer prices, which will, to a certain extent, increase their real
purchasing power.

In this context, approval of the attached bill is e

BIAS “TOBY” M. TIANGCO

HOUSE OF REPRESENTATIVES

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

SEVENTEENTH CONGRESS
First Regular Session

411
HOUSE BILL NO.

INTRODUCED BY REPRESENTATIVE TOBIAS “TOBY” M. TIANGCO

AN ACT AMENDING SECTION 24
OF THE NATIONAL INTERNAL REVENUE CODE Of 1997, AS AMENDED,
AND FOR OTHER PURPOSES

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

SECTION. 1. Section 24 (A) (2) of Republic Act No. 8424, otherwise known
as the National Internal Revenue Code of 1997, as amended, is hereby
amended to read as follows:

“SEC. 24. Income Tax Rates ~

“(A) Rates of Income Tax on Individual Citizen and Individual
Resident Alien of the Philippines, ~

“(1) An income tax is hereby imposed:

XXX
“(2) Rates of Tax on Taxable Income of Individuals. - The
tax shall be computed in accordance with and at the rates
established in the following schedule:
Not over P360,000 0%

Over P360,000 but not over P600,000 10%

Over P600,000 but not over P960,000 20%


Over P960,000 but not over P1,440,000 25%

Over P1,440,000 but not over P1,920,000 30%
Over P1,920,000 32%
Seay’

SEC 2. Implementing Rules and Regulations. - The Secretary of
Finance shall promulgate the necessary rules and regulations for the
faithful and effective implementation of the provisions of this Act;
Provided, That, the failure of the Secretary of Finance to promulgate the
said rules and regulations shall not prevent the implementation of this
Act upon its effectivity.

SEC. 3. Repealing Clause. - Any law, order, issuance, rule or
regulation, memorandum circular contrary to or inconsistent with any
provision of this Act are hereby repealed, amended or modified

accordingly.

SEC 4. Effectivity. - This Act shall take effect fifteen (15) days after
its complete publication in at least two (2) newspapers of general
circulation.

Approved.,