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Republic of the Philippines
HOUSE OF REPRESENTATIVES -,
Quezon City S,

€ ow
SIXTEENTH CONGRESS INDE
‘Third Regular Session

HOUSE BILL NO. 6258

Introduced by Representative Raneo E. Abu

EXPLANATORY NOTE

This bill is about giving every ordinary Filipino individual taxpayer the equity he
deserves in our country’s tax laws, putting him and the family he supports in a better
position to cope up with life’s daily financial demands.

Since the National Internal Revenue Code (NIRC) of 1997 became effective on January
1, 1998, the individual income tax rates have unfortunately remained based on the 1998
Consumer Price Index (CP!) of 67.8%, which has now doubled to its current rate of about
141% (as of August 2015). Going by these figures, a regular salaried man’s monthly take-
home pay of P10,000.00 way back in 1998 is now equivalent to P20,500.00, which
rightly should be taxed at the rate of just 5% and not a higher one. In more practical
terms, the amount of tax on his monthly salary of P20,500 should just be P1,025.00 and
not P1,550.00, giving him an added monthly take-home pay of P525.00 or P6,300.00
yearly. With the constantly rising prices of basic commodities, this additional income will
certainly go a long way in making ends meet for him and his family.

By doing this much-needed fair tweaking of the individual income tax brackets, together
with the amounts of personal and additional exemption, in accordance with current CPI
and automatically after every three (3) years thereafter, this government can rightfully
claim that it has done justice to every ordinary Filipino working man.

Accordi age of the measure is earnestly sought.



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

SIXTEENTH CONGRESS
Third Regular Session

6253

HOUSE BILL NO.

Introduced by Honorable Representative Raneo E. Abu

AN ACT

RESTRUCTURING THE INCOME TAX IMPOSED ON INDIVIDUALS,
AMENDING FOR THE PURPOSE SECTIONS 24, AND 35 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. 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) xxx

(1) 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 P10,000
{Over P10,000 but not over P30,000

[ Over P30,000 but not over P70,000

{[ Over P70,000 but not over P140,000

3% |

P500+10% of the excess
‘over P10,000 J
P2,500+15% of the excess
‘over P30,000
P8,500+20% of the excess
‘over P70,000 J



BEBSRIATEDSIS ce sQUALN=

eyes seees

23

[ Over P140,000 but not over P250,000 P22,500+25% of the excess
over P140,000 }
[Over P250,000 but not over P500,000 P50,000+30% of the excess
‘over P250,000 }
[ Over 500,000 P125,000+32% of the excess.
over P500,000 ]
NOT OVER P20,500
(OVER 20,500 BUT NOT OVER P61,500 pLgnsti0% oF THE EXCESS
OVER P20,
OVER 61500 BUTNOTOVERI43500 _PSJ254153OF THE EXCESS
OVER P61,500
‘OVER P143,500 BUT NOT OVER P287,000 P17,425+20% OF THE EXCESS
OVER P143,500
‘OVER P287,000 BUT NOT OVER PS12,500 246125254 OF THE EXCESS
‘OVER P287,000
‘OVER P512,500 BUT NOT OVER P1,025,000 _P102,500+30% OF THE EXCESS
‘OVER P512,500
‘OVER PI,025,000 256,250432% OF THE EXCESS
‘OVER PI,025,000
20x
xx

PROVIDED, FINALLY, THAT NOT LATER THAN THREE (3)
YEARS AFTER THE EFFECTIVITY OF THIS ACT AND
EVERY THREE (3) YEARS THEREAFTER, EACH NET
TAXABLE INCOME LEVEL AND NOMINAL TAX RATE
HEREIN STATED SHALL BE ADJUSTED TO ITS PRESENT
VALUE USING THE CONSUMER PRICE INDEX, AS
PUBLISHED BY THE NATIONAL STATISTICS OFFICE
(NSO).

(B) xx
(© xx
(D) xxx”
SEC. 2. Section 35 of the National Internal Revenue Code of 1997, as amended, is
hereby further amended to read as follows:
“SEC. 35. Allowance of Personal Exemption for Individual Taxpayer. ~
(A) xx

(B) xxx


PROVIDED, FURTHER, THAT NOT LATER THAN THREE (3)
YEARS AFTER THE EFFECTIVITY OF THIS ACT AND EVERY
THREE (3) YEARS THEREAFTER, THE AMOUNTS OF BASIC
PERSONAL EXEMPTION AND ADDITIONAL EXEMPTION
FOR DEPENDENTS HEREIN STATED SHALL BE ADJUSTED
TO PRESENT VALUES USING THE CONSUMER PRICE
INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS
OFFICE (NSO).

Bog
(C) xxx

(D) xxx”

SEC. 3. Implementing Rules and Regulations. — The Secretary of Finance shall, upon
the recommendation of the Commissioner of Internal Revenue, promulgate upon the
effectivity of this Act the necessary Rules and Regulations for its effective
implementation.

SEC. 4, Separability Clause. - If any provision of this Act is subsequently declared
invalid or unconstitutional, other provisions hereof which are not affected thereby shall
remain in full force and effect.

SEC. 5. Repealing Clause. - All laws, acts, presidential decrees, executive orders,
issuances, presidential proclamations, rules and regulations or parts thereof which are
contrary to and inconsistent with any provisions of this Act are hereby repealed, amended
or modified accordingly.

SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after its complete

publication either in the Official Gazette, or in at least two (2) newspapers of general
circulation.

Approved,