Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. KENNETH T. GATCHALIAN 
EXPLANATORY NOTE 
In 2024, Republic Act No. 12066, otherwise known as the “Corporate Recovery 
and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the 
Economy (CREATE MORE) Act” was enacted which improved corporate tax 
incentives to boost competitiveness and create jobs. While it benefits corporations 
directly, the GINHAWA bill now focuses on helping the real backbone of the 
economy—the working Filipinos.
With rising prices, high inflation, and economic uncertainty, many Filipinos 
struggle to meet their financial needs. This bill aims to provide relief by increasing 
workers’ take-home pay and improving their quality of life. 
Thus key proposals include raising income tax exemption to ₱400,000 annual 
income, increasing tax-free bonuses to ₱150,000, removing taxes on service charges and 
additional compensation (overtime, holiday, night shift, hazard pay) and exempting 
honoraria and allowances of poll workers. Additionally, the following reforms are also 
apparent in the measure: 
1.
Lower fringe benefit tax for managers and supervisors
2.
Exempt employer-paid insurance premiums from tax
3.
Extra labor expense deduction for micro taxpayers
4.
Tax credits for businesses giving discounts to PWDs, seniors, and solo parents
5.
Extended tax filing deadlines during calamities
6.
Exempt micro taxpayers from withholding tax requirements
7.
Increase VAT-exempt threshold from ₱3M to ₱4M
8.
Reduce taxes on life and health insurance premiums
9.
Remove TIN requirement for cooperative members seeking tax exemptions
July 30, 2025
11:32 am
2616


Working Filipinos have long supported the economy and it’s time to ease their 
burden and help them live better. In view of the foregoing, urgent approval of this 
measure is earnestly sought. 
KENNETH T. GATCHALIAN 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. KENNETH T. GATCHALIAN 
AN ACT 
AMENDING SECTIONS 24, 32, 33, 34, 53, 57, 109, 123, AND 236 OF 
REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS 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. Short Title. - This Act shall be known as the “Granting Increase in Take-
Home Pay for All Working Filipinos Act (GINHAWA).” 
Sec. 2. Declaration of Policy. - It is the policy of the State to: 
a.
Enhance the progressivity of the tax system through the
rationalization of the Philippine internal revenue tax system, thereby
promoting sustainable and inclusive economic growth; and
b.
Provide, as much as possible, an equitable relief to a greater
number of taxpayers and their families in order to improve levels of
disposable income and increase economic activity.
Sec. 3. Section 24 of the National Internal Revenue Code of 1997, as amended, 
is hereby further 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.
x x x
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:
[(a) Tax Schedule Effective January 1, 2018 until December 31, 
2022: 
Not over P250,000…………………………………. 0% 
Over P250,000 but not over P400,000………………………..20% 
of the excess over P250,000 
2616


Over 
P400,000 
but 
not 
over 
P800,000………………………..P30,000 + 25% of the excess 
over P400,000  
Over 
P800,000 
but 
not 
over 
P2,000,000……………………..P130,000 
+ 
30% 
of 
the 
excess over P800,000  
Over 
P2,000,000 
but 
not 
over 
P8,000,000…………………...P490,000 
+ 
32% 
of 
the 
excess over P2,000,000  
Over P8,000,000 ………………………….P2,410,000 + 35% of 
the excess over P8,000,000  
(b)Tax Schedule Effective January 1, 2023 and onwards:  
Not over P250,000…………………………………..0%  
Over P250,000 but not over P400,000………………15% of the 
excess over P250,000  
Over 
P400,000 
but 
not 
over 
P800,000………………………..P22,500 
+ 
20% 
of 
the 
excess over P400,000  
Over 
P800,000 
but 
not 
over 
P2,000,000……………………..P102,500 
+ 
25% 
of 
the 
excess over P800,000  
Over P2,000,000 but not over P8,000,000…………………... 
P402,500 + 30% of the excess over P2,000,000  
Over P8,000,000 …………………………………… P2,202,500 + 
35% of the excess over P8,000,000]  
  
NOT OVER P400,000..……………………………0%  
OVER 
P400,000 
BUT 
NOT 
OVER 
P650,000……………………….. 15% OF THE EXCESS 
OVER P400,000  
OVER 
P650,000 
BUT 
NOT 
OVER 
P1,300,000……………………….. P37,500 + 20% OF 
THE EXCESS OVER P650,000  
OVER 
P1,300,000 
BUT 
NOT 
OVER 
P3,200,000…………………….. P167,500 + 25% OF THE 
EXCESS OVER P1,300,000  
OVER 
P3,200,000 
BUT 
NOT 
OVER 
P12,800,000…………………... P642,500 + 30% OF THE 
EXCESS OVER P3,200,000  
OVER P12,800,000 ………………P3,522,500 + 35% OF 
THE EXCESS OVER P12,800,000   
x x x  
Provided, That minimum wage earners as defined in Section 22(HH) of this 
Code shall be exempt from the payment of income tax on their taxable income: 


Provided, further, That the holiday pay, overtime pay, night shift differential pay, 
[and] hazard pay, AND SHARE IN THE SERVICE CHARGES received by such 
minimum wage earners shall likewise be exempt from income tax. SERVICE 
CHARGES SHALL REFER TO THE ADDITIONAL PAY DISTRIBUTED 
AMONG EMPLOYEES AS PROVIDED UNDER PRESIDENTIAL DECREE NO. 
442, SERIES OF 1974, AS AMENDED, OTHERWISE KNOWN AS THE 
“LABOR CODE OF THE PHILIPPINES”.   
(b) Rate of Tax on Income of Purely Self-employed Individuals and/or 
Professionals Whose Gross Sales or Gross Receipts and Other Non-
operating Income Does Not Exceed the Value-added Tax (VAT) Threshold 
as Provided in Section 109(BB). – Self-employed individuals and/or 
professionals shall have the option to avail of an eight percent (8%) tax 
on gross sales or gross receipts and other non-operating income in excess 
of [Two] FOUR hundred [fifty] thousand pesos [(P250,000)] 
(P400,000) in lieu of the graduated income tax rates under Subsection 
(A)(2)(a) of this Section and the percentage tax under Section 116 of this 
Code.  
x x x   
Sec. 4. Section 32 of the National Internal Revenue Code of 1997, as amended, 
is hereby further amended to read as follows:  
“Sec. 32.  Gross Income. –  
A. 
General Definition. – xxx  
B. 
Exclusions from Gross Income. – The following items shall not be 
included in gross income and shall be exempt from taxation under this 
Title:  
1. Life Insurance. – x x x  
2. Amount Received by Insured as Return of Premium. - x x x  
3. Gifts, Bequests, and Devises. - x x x  
4. Compensation for Injuries or Sickness. – x x x  
5. Income Exempt under Treaty. - x x x  
6. Retirement Benefits, Pensions, Gratuities, etc. - x x x  
7. Miscellaneous Items. – x x x  
(a) Income Derived by Foreign Government. - x x x  
(b) Income Derived by the Government or its Political Subdivisions. - x x x  
(c) Prizes and Awards. - x x x  
(d) Prizes and Awards in sports Competition. - x x x  
(e) 13th Month Pay and Other Benefits. - Gross benefits received by officials 
and employees of public and private entities: Provided, however, That the 
total exclusion under this subparagraph shall not exceed [Ninety] ONE 
HUNDRED FIFTY thousand pesos [(P90,000)] (P150,000) which shall 
cover:  
(i) xxx xxx  
(ii) xxx xxx  
(iii) xxx xxx  


(iv) xxx xxx   
(V) ALL COMPENSATION, SUCH AS HONORARIA AND 
ALLOWANCES, SERVICE CREDITS, AND OTHER BENEFITS AS MAY 
BE GRANTED TO PERSONS ENGAGED IN ELECTION-RELATED 
SERVICE BY THE COMMISSION ON ELECTIONS, PURSUANT TO 
SECTION 4 OF REPUBLIC ACT NO. 10756, OTHERWISE KNOWN AS 
THE “ELECTION SERVICE REFORM ACT”.  
(f) GSIS, SSS, Medicare and Other Contributions. - x x x   
(g) Gains from the Sale of Bonds, Debentures or other Certificate of 
Indebtedness. - x x x  
(h) Gains from Redemption of Shares in Mutual Fund. - x x x  
(i) Income Derived from the Sale of Gold Pursuant to Republic Act No. 7076. 
- x x x  
(J) ADDITIONAL COMPENSATION REQUIRED UNDER THE LABOR 
CODE. – THE AMOUNT REQUIRED BY LAW TO BE GIVEN TO 
EMPLOYEES AS HOLIDAY PAY, OVERTIME PAY, NIGHT SHIFT 
DIFFERENTIAL PAY, HAZARD PAY, AND SERVICE CHARGES: 
PROVIDED, THAT OVERTIME PAY EXCEEDING ONE HUNDRED 
THOUSAND PESOS (P100,000) SHALL BE INCLUDED IN THE 
GROSS INCOME UNDER SECTION 32 (A) OF THIS CODE.   
Sec. 5. Section 33 of the National Internal Revenue Code of 1997, as amended, 
is amended to read as follows:  
SEC. 33. Special Treatment of Fringe Benefit. -  
A. Imposition of Tax. – Effective January 1, [2018] 2026 and onwards, 
[a final tax of thirty-five percent (35%) is hereby imposed on the 
grossed-up monetary]  THE value of fringe benefit furnished or granted 
to the employee [(except rank and file employees defined herein)] by 
the employer, whether an individual or a corporation (unless the fringe 
benefit is required by the nature of, or necessary to the trade, business 
or profession of the employer, or when the fringe benefit is for the 
convenience or advantage of the employer) SHALL BE INCLUDED IN 
THE COMPUTATION OF THE GROSS INCOME OF THE EMPLOYEE 
SUBJECT TO THE TAX UNDER SUBSECTION (A) OF SECTION 24. 
The tax herein imposed is payable by the employer which tax shall be 
paid in the same manner as provided for under Section [57] 79 (A) of 
this Code[. The grossed-up monetary value of the fringe benefit shall 
be determined by dividing the actual monetary value of the fringe 
benefit by sixty-five percent (65%) effective January 1, 2018 and 
onwards]: Provided, however, That fringe benefit furnished to 
employees and taxable under Subsections (B), (C), (D) and (E) of 
Section 25 shall be taxed at the applicable rates imposed thereat: 
Provided, further, That the grossed -up monetary value of the fringe 
benefit shall be determined by dividing the actual monetary value of the 
fringe benefit by the difference between one hundred percent (100%) 


and the applicable rates of income tax under Subsections (B), (C), (D), 
and (E) of Section 25.  
B. Fringe Benefit Defined. - For purposes of this Section, the term 
'fringe benefit' means any good, service or other benefit furnished or 
granted in cash or in kind by an employer to an individual employee 
(except rank and file employees as defined herein) such as, but not 
limited to, the following:  
(1) Housing;  
(2) Expense account;  
(3) Vehicle of any kind;  
(4) Household personnel, such as maid, driver and others;  
(5) Interest on loan at less than market rate to the extent of the 
difference between the market rate and actual rate granted;  
(6) Membership fees, dues and other expenses borne by the employer 
for the employee in social and athletic clubs or other similar 
organizations;  
(7) Expenses for foreign travel;  
(8) Holiday and vacation expenses; AND  
(9) Educational assistance to the employee or his dependents[;].   
[(10) Life or health insurance and other non-life insurance premiums or 
similar amounts in excess of what the law allows.]  
C. Fringe Benefits Not Taxable. – The following fringe benefits are not 
taxable under this Section:  
(1) Fringe benefits which are authorized and exempted from tax under 
special laws;  
(2) Contributions of the employer for the benefit of the employee to 
retirement, insurance and hospitalization benefit plans;  
(3) Benefits given to the rank and file employees, whether granted 
under a collective bargaining agreement or not; [and]  
(4) De minimis benefits as defined in the rules and regulations to be 
promulgated by the Secretary of Finance, upon recommendation of the 
Commissioner[.]; AND  
(5) LIFE OR HEALTH INSURANCE AND OTHER NON-LIFE 
INSURANCE PREMIUMS OR SIMILAR AMOUNTS IN EXCESS OF 
WHAT THE LAW ALLOWS.  
x x x   
Sec. 6. Section 34 of the National Internal Revenue Code of 1997, as amended, is 
amended to read as follows:  
SEC. 34. Deductions from Gross Income. – x x x   
A. Expenses. – xxx  
1.  Ordinary and Necessary Trade, Business or Professional 
Expenses.- xxx  
2. Expenses Allowable to Private Educational Institutions. – xxx  


3. EXPENSES ALLOWABLE TO MICRO TAXPAYERS -  A 
MICRO TAXPAYER, AS DEFINED UNDER SECTION 21 (B) 
OF THIS CODE, SHALL BE ALLOWED A FIFTY PERCENT 
(50%) ADDITIONAL DEDUCTION ON THE SALARIES, 
WAGES, AND OTHER FORMS OF COMPENSATION PAID TO 
THE EMPLOYEES OF THE MICRO TAXPAYER.   
x x x   
B. 
Interest. –  x x x  
C. 
Taxes. –   
1. In General. – x x x  
2. Limitations on Deductions. – x x x  
3. Credit Against Tax for Taxes of Foreign Countries. – x x x  
4. Limitations on Credit. – x x x  
5. Adjustments on Payment of Incurred Taxes. - x x x  
6. Year in Which Credit Taken. - x x x  
7. Proof of Credits. - x x x  
8. Input Tax Attributable to VAT-Exempt Sales. - x x x  
(9) TAX CREDITS ON SPECIAL DISCOUNTS GRANTED TO 
PERSONS WITH DISABILITY, SENIOR CITIZENS, AND SOLO 
PARENTS. – THE COST OF DISCOUNTS GRANTED TO PERSONS 
WITH DISABILITY AS PROVIDED UNDER REPUBLIC ACT NO. 
7277, AS AMENDED, OTHERWISE KNOWN AS “MAGNA CARTA 
FOR PERSONS WITH DISABILITY”, SENIOR CITIZENS UNDER 
REPUBLIC ACT NO. 9994, OTHERWISE KNOWN AS THE 
“EXPANDED SENIOR CITIZENS ACT OF 2010”, AND SOLO 
PARENTS UNDER REPUBLIC ACT NO. 8972, AS AMENDED, 
OTHERWISE KNOWN AS THE “SOLO PARENTS’ WELFARE ACT 
OF 2000”, MAY BE CLAIMED AS CREDITS AGAINST THE 
NORMAL INCOME TAX DUE DURING THE SAME TAXABLE YEAR 
THE DISCOUNT IS GRANTED.   
Sec. 7. Section 53 of the National Internal Revenue Code of 1997, as amended, is 
amended to read as follows:  
“SEC. 53. Extension of Time to File Returns. - The Commissioner may, in 
meritorious cases, SUCH AS STATE OF CALAMITY OR NATIONAL 
EMERGENCY, grant a reasonable extension of time for filing returns of income 
(or final and adjustment returns in case of corporations), subject to the provisions 
of Section 56 of this Code.”  
Sec. 8. Section 57 of the National Internal Revenue Code of 1997, as amended, 
is amended to read as follows:  
“SEC. 57. Withholding of Tax at Source. –  
A. 
Withholding of Final Tax on Certain Incomes. – x x x  
B. 
Withholding of Creditable Tax at Source. – x x x  
C. 
Tax-free Covenant Bonds. – x x x  


The Department of Finance shall review, at least once every three 
(3) years, regulations and processes for the withholding of creditable 
tax under this Code, and direct the Bureau of Internal Revenue to 
amend rules and regulations for the same, should it be found during the 
review that the existing rules, regulations, and processes for the 
withholding of creditable tax under this Code adversely and materially 
impact the taxpayer[.]: PROVIDED, THAT MICRO TAXPAYERS 
SHALL NOT BE REQUIRED TO WITHHOLD TAXES UNDER 
SUBSECTION (B) OF THIS SECTION.  
Sec. 9. Section 109 of the National Internal Revenue Code of 1997, as amended, 
is amended to read as follows:  
SEC. 109. Exempt Transactions. –   
1. 
 x x x  
(CC) Sale or lease of goods or properties or the performance of services 
other than the transactions mentioned in the preceding paragraphs, the 
gross annual sales do not exceed the amount of [Three] FOUR million 
pesos (P[3]4,000,000.00): Provided, That the amount herein stated 
shall be adjusted to its present values using the consumer price index, 
as published by the Philippine Statistics Authority (PSA) every three (3) 
years BEGINNING JANUARY 1, 2029.  
Sec. 10. Section 123 of the National Internal Revenue Code of 1997, as amended, 
is amended to read as follows:  
SEC. 123. Tax on Life Insurance Premiums.  – There shall be collected from 
every person, company or corporation (except purely cooperative companies or 
associations) doing life insurance business of any sort in the Philippines a tax of 
two percent (2%) of the total premium collected, whether such premiums are paid 
in money, notes, credits or any substitute for money; but premiums refunded 
within six (6) months after payment on account of rejection of risk or returned for 
other reason to a person insured shall not be included in the taxable receipts; nor 
shall any tax be paid upon reinsurance by a company that has already paid the 
tax; nor upon doing business outside the Philippines on account of any life 
insurance of the insured who is a nonresident, if any tax on such premium is 
imposed by the foreign country where the branch is established nor upon 
premiums collected or received on account of any reinsurance, if the insured, in 
case of personal insurance, resides outside the Philippines, if any tax on such 
premiums is imposed by the foreign country where the original insurance has been 
issued or perfected; nor upon that portion of the premiums collected or received 
by the insurance companies on variable contracts (as defined in Section 232(2) of 
Presidential Decree No. 612), in excess of the amounts necessary to insure the 
lives of the variable contract workers[.]: PROVIDED, THAT PERSONS DOING 
BUSINESS SIMILAR OR AKIN TO LIFE AND HEALTH INSURANCE SUCH 
AS PRE-NEED COMPANIES, PENSION FUND COMPANIES, HEALTH 
MAINTENANCE ORGANIZATIONS AND OTHER COMPANIES SIMILAR TO 
LIFE INSURANCE SHALL BE SUBJECT TO TAX UNDER THIS SUBSECTION 


AT THE RATE OF TWO PERCENT (2%) OF THE GROSS PREMIUM, PLAN 
PAYMENT, OR INSTALLMENT PAYMENTS COLLECTED WITHOUT ANY 
DEDUCTION FOR THE AMOUNTS REQUIRED BY THE APPROPRIATE 
GOVERNMENT REGULATORY AGENCIES TO BE EARMARKED FOR THE 
BENEFIT OF THE INSURED, OR PLANHOLDER.  
‘Cooperative companies or associations’ are such as are conducted by the 
members thereof with the money collected from among themselves and solely for 
their own protection and not for profit.  
Sec. 11. Section 236 of the National Internal Revenue Code of 1997, as amended, 
is amended to read as follows:  
SEC. 236. Registration Requirements. -  
(A) Requirements. - Every person subject to any internal revenue tax shall 
register once, either electronically or manually, with the appropriate Revenue 
District Office:  
(1) Within ten (10) days from date of employment, or  
(2) On or before the commencement of business, or  
(3) Before payment of any tax due, or  
(4) Upon filing of a return, statement or declaration as required in 
this Code.  
The registration shall contain the taxpayer's name, place of 
residence, business and such other information as may be required by the 
Commissioner in the form prescribed therefor. Provided, That the 
Commissioner shall ensure the availability of registration facilities to all 
taxpayers including those who are not residing in the country: Provided, 
Further, That the Commissioner shall simplify the business registration and 
tax compliance requirements of self-employed individuals and/or 
professionals.  
THE BIR SHALL NOT REQUIRE PERSONS WHO ARE NOT 
SUBJECT TO ANY INTERNAL REVENUE TAX TO SECURE TAXPAYER 
IDENTIFICATION NUMBER (TIN).  
IN THE CASE OF COOPERATIVES REGISTERED WITH THE 
COOPERATIVE DEVELOPMENT AUTHORITY, THE INDIVIDUAL TIN 
OF MEMBERS OF THE COOPERATIVE SHOULD NOT BE A PRE-
REQUISITE FOR THE AVAILMENT OF THE TAX EXEMPTION 
PROVIDED FOR BY LAW.  
x x x  
Sec. 12. Repealing Clause. — All laws, decrees, executive orders, rules and 
regulations, issuances or parts thereof inconsistent with this Act are hereby repealed or 
amended accordingly.  
Sec. 13. Separability Clause. – If any section or provision of this Act shall be declared 
invalid or unconstitutional, the remaining sections or provisions of this Act shall not be 
affected by such declaration and shall remain in force and effect.  
Sec. 14. Effectivity. — This Act shall take effect fifteen (15) days after its publication 
in the Official Gazette or in at least one (1) newspaper of general circulation: Provided, 


That the online posting in the website of Official Gazette shall be considered as sufficient 
publication under this section.