SEVENTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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SENAT 
S.B. No.
I s : -3 8
'Senate
cf iljf jk rc rrtir/
'J7 FEB 20 P4 :04
RECEfllO BV:
INTRODUCED BY SENATOR JUAN MIGUEL F. ZU BIR I
AN ACT
AMENDING SECTIONS 84, 86, 88, 89, 90 AND 97 OF TITLE I I I ,  
CHAPTER I, ESTATE TAX OF THE NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED
EXPLANATORY NOTE
The 1987 Constitution provides that the ruie of taxation shall be uniform and 
equitable, and that Congress shall evolve a progressive system of taxation. A 
sound system of taxation must further be based upon the general principles of 
fiscal adequacy, theoretical justice, and administrative feasibility.
As such, this measure seeks to update our law on estate tax to make it fair, 
equitable, and less burdensome. It likewise simplifies the estate tax rates to 
make compliance easier and more convenient, thus encouraging the public to 
pay the proper estate tax promptly and eventually unlock the land market for 
development.
Specifically, this bill fixes the estate tax rate to a uniform final tax of 6% on the 
value of the net estate. Further, this measure adjusts the allowable deductions to 
the current rates of inflation, especially since the last amendment to the estate 
tax law was made in 1997 or almost twenty years ago. As such, although the tax 
rate will be lowered from the current prescribed schedule of five percent (5%) to 
twenty percent (20%), depending on the value of the net estate, the tax base is 
in effect increased, to the benefit of the government.
This also amends the determination of the value of the estate, in that the 
Municipal and City Assessors are required to update their schedule of values of 
real properties closer to the prevailing market prices, within eighteen months 
from the effectivity of this law. This new valuation shall then become the new 
base of tax. Finally, the updated values shall be the basis for the Real Estate 
Property Index, upon which the schedule of values will be adjusted every six 
years.
Taxes are the lifeblood of the government. Thus, Congress has the inherent 
mandate to develop laws that impose fair tax rates upon the people and facilitate 
efficient collection and administration. This is one such measure in pursuit of that 
mandate. In this light, I hope for the earnest passage of this bill.
JUAN MIGUEL F. ZU BIR I


1l3
SEVENTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
Senate Bill No. 1 3 3 8
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o( liir
•17 
FEB 20 
P 4 « 4
R£Ctl\fn)BV:
Introd uced by Senator Juan M iguel F. Zubiri
AN ACT
AMENDING SECTIONS 84, 86, 88, 89, 90 AND 97 OF TITLE I I I ,  CHAPTER I, 
ESTATE TAX OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED
Be it enacted by the Senate and the House o f Representatives o f the Philippine in 
Congress assembled:
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SECTION 1. Section 84 of the National Internai Revenue Code of 1997, as amended is
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hereby amended to read as follows:
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Section 84. Rates of Estate Tax. - There shall be levied, assessed, collected and
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paid upon the transfer of the net estate as determined in accordance with
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Sections 85 and 86 of every decedent, whether resident or nonresident of the
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Philippines, a FINAL tax OF 6 %  based on the value of such net estate [, as
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computed in accordance with the following schedule:
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If the net estate is:
Over
But Not Over
The Tax Shall Be
Plus
Of the Excess Over
P200,000
Exempt
P200,000
500,000
0
5%
P200,000
500,000
2,000,000
P15,000
8%
500,000
2,000,000
5,000,000
135,000
11%
2,000,000
5,000,000
10,000,000
456,000
15%
5,000,000
10,000,000
And Over
1,215,000
20%
10,000,000]
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SEC. 2. Section 86 of the National Internal Revenue Code of 1997, as amended is 
hereby amended to read as follows:
Section 86. For the purpose of the tax imposed in this Chapter, the value of the 
net estate shall be determined:


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(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 
estate -
(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, whichever is lower, but in no 
case to exceed 
FIVE 
HUNDRED 
THOUSAND 
PESOS 
(P 500,000.00) [Two hundred thousand pesos (P200,000)];
(b ) X X x;
(c) x X x;
(d) X X x; and
(e) XXX.
(2) Property Previously Taxed. -  x x x
(3) Transfers for Public Use. -  x x x
(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 
FIVE 
M ILLION 
PESOS 
(P5,000,000.00) [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 M ILLION 
PESOS (P2,000,000.00) [One million pesos (PI, 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 TWO 
M ILLIO N 
PESOS 
(P 2,000,000.00) 
[Five Hundred 
Thousand Pesos (P500, 000)].
(7) XXX.
XXX
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SEC. 3. Section 88 of the National Internal Revenue Code of 1997, as amended is
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hereby amended to read as follows:
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SEC. 88. Determination of the Value of the Estate. -


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(A) Usufruct. -  X X X.
(B) Properties. - The estate shall be appraised at its fair market value as of the 
time of death. However, the appraised value of real property as of the time of 
death shall be, whichever is higher of -
(1) The fair market value as determined by the Commissioner; or
(2) The fair market value as shown in the schedule of values fixed by the 
Provincial and City Assessors.
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PROVIDED, 
THAT 
ON 
THE 
FIRST 
EIGHTEEN 
(18) 
MONTHS 
OF 
IMPLEMENTATION OF THIS ACT, THE BASE OF TAX SHALL BE THE OLD 
SCHEDULE 
OF 
VALUES 
OF 
REAL 
PROPERTIES 
OF 
CITIES 
AND 
PROVINCES.
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PROVIDED FURTHER, THAT W ITH IN  EIGHTEEN (1 8) MONTHS UPON 
THE EFFECTIVITY OF THIS ACT, PROVINCIAL, MUNICIPAL AND CITY 
ASSESSORS SHALL BE DIRECTED TO UPDATE THEIR SCHEDULE OF 
VALUES OF REAL PROPERTIES CLOSER TO THE PREVAILING MARKET 
PRICES, W HICH HEREINAFTER SHALL BECOME THE NEW BASE OF TAX.
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PROVIDED FINALLY, THAT EVERY SIX (6 ) YEARS THEREAFTER, THE 
SCHEDULE OF VALUES SHALL BE ADJUSTED TO ITS PRESENT VALUE 
USING A REAL ESTATE PROPERTY INDEX, AS PUBLISHED BY THE 
PHILIPPINE STATISTICS AUTHORITY (PSA).
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SEC. 4. Section 89 of the National Internal Revenue Code of 1997, as amended is
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hereby amended to read as follows:
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SEC. 89. Notice o f 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 
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.
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SEC. 5. Section 90 of the National Internal Revenue Code of 1997, as amended is


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hereby amended to read as follows:
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SEC, 90. Estate Tax Returns. -
(A) Requirements. - In all cases of transfers subject to the tax imposed herein, 
or where, though exempt from tax, [the gross value of the estate exceeds Two 
hundred thousand pesos (P200,000), or regardless of the gross value of the 
estate], where the said estate consists of registered or registrable property such 
as real property, motor vehicle, shares of stock or other similar property for 
which a clearance from the Bureau of Internal Revenue is required as a condition 
precedent for the transfer of ownership thereof in the name of the transferee, 
the executor, or the administrator, or any of the legal heirs, as the case may be, 
shall file a return under oath in duplicate, setting forth:
(1) The value of the gross estate of the decedent at the time of his death, 
or in case of a nonresident, not a citizen of the Philippines, of that part of 
his gross estate situated in the Philippines;
(2) The deductions allowed from gross estate in determining the estate as 
defined in Section 86; and
(3) Such part of such information as may at the time be ascertainable and 
such supplemental data as may be necessary to establish the correct 
taxes.
Provided, however. That estate tax returns showing a gross value 
exceeding FIVE M ILLIO N PESOS (P 5,000,0000.00) [Two million 
pesos (P2, 000,0000] shall be supported with a statement duly certified to 
by a Certified Public Accountant containing the following:
(a) Itemized assets of the decedent with their corresponding gross 
value at the time of his death, or in the case of a nonresident, not a 
citizen of the Philippines, of that part of his gross estate situated in 
the Philippines;
(b) Itemized deductions from gross estate allowed in Section 86; 
and
(c) The amount of tax due whether paid or still due and 
outstanding.
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SEC. 6. Section 97 of the National Internal Revenue Code of 1997, as amended is
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hereby amended to read as follows:


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SEC. 97. Payment of Tax Antecedent to the Transfer of Shares, Bonds or 
Rights. - There shall not be transferred to any new owner in the books of any 
corporation, sociedad anonima, partnership, business, or industry organized or 
established in the Philippines any share, obligation, bond or right by way of gift 
inter vivos or mortis causa, legacy or inheritance, unless a certification from the 
Commissioner that the taxes fixed in this Title and due thereon have been paid is 
shown.
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If a 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 
FIVE HUNDRED THOUSAND PESOS (P 500,000.00) [Twenty 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 are 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.
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SEC. 7. Im p le m e n tin g  Rules and Regulations. The Bureau of Internal Reveneu, 
shall within sixty (60) days from the effectivity of this Act, issue the necessary rules and 
regulations for the effective implementation of this Act.
SEC. 8. S eparability Clause. If any provision of this Act is subsequently declared as 
invalid or unconstitutional, other provisions hereof which are not affected thereby, shall 
remain in full force and in effect.
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SEC. 9 Repealing Clause. All laws, decrees, order, rules and regulations, and other 
issuances, or parts thereof, inconsitent with the provisoes of this Act are hereby 
repealed or modified accordingly.
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SEC. 10. E ffectivity Clause. This Act shall take fifteen (15) days after its publication
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in the Official Gazette or in newspaper of general circulation.
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Approved,