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

SIXTEENTH CONGRESS
Third Regular Session

House BILL No._6279

Introduced by Honorable MARK A. VILLAR

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

EXPLANATORY NOTE

The 1987 Constitution provides that “The rule of taxation shall be uniform and
equitable. The Congress shall evolve a progressive system of taxation”. (Article VI, Section
28 (1)),

‘The 1987 Constitution also states that “No person shall be deprived of life, liberty, or
property without due process of law, nor shall any person be denied the equal protection of
the laws’. (Article Il, Section 1)

Our country suffers from inequalities. One of the said inequalities that continuously
batter our countrymen is our current tax system.

An analysis of tax policies of the Association of Southeast Asian Nations (ASEAN)
members manifests that the Philippines has the second highest average tax rate, following
Vietnam and Thailand. On the other hand, Singapore has the lowest marginal tax rate at
both ends of its tax bracket spectrum, at 20% for the wealthiest and 2% for the lowest
qualifying income earners."

Our neighbors in the ASEAN clearly see that at certain income levels, more

disposable cash or purchasing ,power must be left in the hands of taxpayers to enable
them to have good quality of lives and provide for their families. In our case, taxpayers

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who are not considered high-earning are pushed into high tax brackets, same brackets as
the richest taxpayers.

Inflation makes it hard for Filipinos to meet the demands of daily living. The rise in
commodity prices has clearly weakened the purchasing power of our people's hard-earned
money. Also, the people are left without any purchasing power to contribute to the
economy due to excessive taxation.? Hence, having to contend with the above mentioned
factors, the quality of life of the Filipino people is highly adversely affected.

The concept of equity in taxation requires that the apportionment of the tax burden
be, more of less, just in the light of the taxpayer's ability to shoulder the tax burden and, if
warranted, on the basis of the benefits received from the government. The basis is the
taxpayer's ability to pay.

Bureau of Internal Revenue (BIR) data show that the majority or roughly 82% of the
total collection from individual income taxes comes from compensation-income earners.
The bulk of this is automatically deducted from salaried professionals. These individuals
are the middle class. The middle class is the “goose that lays the golden eggs”, as the said
class is the moderating force in society because their wealth is adequate to keep them
from the extremism of a hungry poor or an indulgent rich.‘ In individual income taxation,
the poor are exempted, while the rich have many government incentives

The Due Process Clause of the Constitution is not only concerned with procedural
due process, but also substantive due process. Substantive due process requires that the
law itself, not merely the procedure by which the law would be enforced, is fair,
reasonable, and just It is apparent that Section 24 of the National Internal Revenue Code
of 1997, as amended is wanting of the characteristics.

To ease the tax burden of our Filipino workers, and for our country to be at par with
regional standards and to make the Philippine workforce more competitive with its
neighbours, this bill seeks to amend Section 24 of the National Internal Revenue Code of
1997, as amended, by adjusting the individual income tax brackets and reducing the rates
of individual income tax

After more than a decade without the much necessary amendment to the Tax Code,
this is the perfect time to pass a law reducing such taxes.

http it 7. ng-working-middle-
y xi blo m/e -rule-of-uniformity-and-equity-in.htm!

4http://opinion in UTT IE ing-working-middle-

5 Corona v. United Harbor Pilots Association of the Philippines. G.R. No. 111953. December 12,
1997,


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

tA eT
MARK A. VILLAR


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

SIXTEENTH CONGRESS.
Second Regular Session

6279

HOUSE BILL NO.

Introduced by Honorable MARK A. VILLAR

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 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. —

(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:

Taxable Income “Beginning
January 1, 2016 |

P25,000 : 5%

(Over P25,000 but not over P70,000 P1,500 + 10% of the excess.
over P25,000



Over P70,000 but not over P160,000
Over P160,000 but not over P320,000
Over P320,000 but not over P570,000
Over P570,000 but not over P1,200,000

Over P1,200,000

INot 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.
Over P140,000 but not over P250,000.
Over P250,000 but not over P500,000.
Over P500,000

XXX
XXX

P5,500 + 15% of the excess
over P70,000

P19,000 + 20% of the excess
over P160,000

P50,000 + 25% of the excess
over P320,000

P115,000 + 30% of the excess _
over P570,000

P1,200,000 + 32% of excess
over P1,200,000 |
5%

P500+10% of the excess over P10,000
P2,500+15% of the excess over P30,000
P8,500+20% of the excess over P70,000
P22,500+25% of the excess over P140,000
P50,000+30% of the excess over P250,000
P125,000+34% of the excess over P500,000 in
1998]

SEC 2. Implementing Rules and Regulations. - The Secretary of Finance shall promulgate
the necessary rules and regulations for the effective implementation of the provisions of this Act.

SEC 3. Repealing Clause. - All laws, orders, issuances, circulars, rules and regulations or
parts thereof, which are inconsistent with the provisions of this Act are hereby repealed or modified

accordingly.

SEC 4, Separability Clause. - If any provision of this Act is declared unconstitutional or
invalid, other parts or provisions hereof not affected thereby shall continue to be in full force and

effect

SEC 5. Effectivity. - This Act shall take effect on January 1, 2016 following its publication in

at least two (2) newspapers of general circulation.

Approved,