Republic of the Philippines E
HOUSE OF REPRESENTATIVES >
Sixteenth Congress
Second Regular Session

13 AUG 2014

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House BILL No. 4880

Introduced by Representative ROMAN T. ROMULO

Explanatory Note

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 beginning January |, 2016,

‘The legislative measure is in line with the commitment of the country to the
10- member ASEAN Economic Community (AEC) Blueprint that seeks to transform
ASEAN into a single market and production base by December 2015,

While the ASEAN Blueprint does not mandate member countries to amend
their income tax schedules, it is highly expected that human capital would flow to
where it could carn best. Next to Thailand and Vietnam, the Philippines has the
highest tax rate at 32-percent, When the AEC Declaration was signed in 2007, some
member-states began to lower their corporate and individual income tax rates, with
further reductions in the subsequent years.

In order for the Philippines to attract human capital and to. prevent the
migration of our own, it is imperative that we reduce the existing income tax rates
while maintaining the progressive system of income taxation, as mandated by the
1987 Philippine Constitution,

The current individual income tax bracket has been unchanged since 1997
until today when the consumer price index (CPI) has almost doubled already. In order
to buffer the revenue impact of the individual income bracket adjustments and the
reduction of individual income tax rates, this bill spreads the reduction over a period
of two (2) years.

In view of the foregoing, immediate approval of this bill is earnestly sought.

RR

REP. ROMAN T. ROMULO.


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Sixteenth Congress
Second Regular Session

HOUSE BILL NO, 4880

Introduced by Representative ROMAN T. ROMULO

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 Beginning
January 1, 2016 January 1, 2017
“P20,000 but not over 13% | 10%
P70,000
“Over P70,000 but not over | P9,100 + 18% of the excess | P7,000 + 15% of the excess over
200,000 over P70,000 70,000

“Over P200,000 but not over | P32,500 + 23% of the | P26,500 + 20% of the excess |
500,000 excess over P200,000 over P200,000

“Over P500,000 but not over | P101,500 + 25% of the | P86,500 + 22% of the excess
800,000 excess over P500,000 over P500,000

“Over 800,000 but not over | P176,500 + 28% of the | P152,500 + 25% of the excess
P1,200,000 excess over P800,000 over P800,000

“Over P1,200,000 P288,500 + 30% of the | P252,500 + 28% of the excess
excess over P1,200,000 over P1,200,000"



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“[Not over P10,000 ........0. . 5%

“Over 10,000 but not over . P500 + 10% of the excess

30,000 over P10,000

“Over P30,000 but not over .... P2,500 + 15% of the excess

70,000 over P30,000

“Over 70,000 but not over . P8,500 + 20% of the excess

140,000 over P70,000
“Over 140,000 but not over ... ....+.22,500 + 25% of the excess
250,000 over P140,000

“Over P250,000 but not over .. +» P50,000 + 30% of the excess
500,000 over P250,000

“Over 500,000, P 125,000 + 32% of the excess

over 500,000)”
oo
“XXX,
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.

Src. 5. Effectivity. - This Act shall take effect on January 1, 2016 following its
publication in at least two (2) newspapers of general circulation.

Approved,