FOURTEENTH CONGRESS of the 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
Introduced by HON. RAMON BONG REVILLA, JR. 
EXPLANATORYNOTE 
Based on the National Statistics Office, October 2006-2007 Labor Force 
Survey, there are almost 36.7 million employed individuals in the country as of 
2007, compared to the 32.9 million in 2006. Almost 48.9% belongs to the service 
sector, while 15.1% and 36% account for agriculture and industry (mining, 
manufacturing, etc) sectors, respectively. 
Consequently, a big bulk of our workforce are wage and salary workers 
constituting 5 1.1 %. With an increase in fuel prices, rising costs of commodities, 
higher water and electricity bills and unbridled rise in the cost of providing 
education, the so-called backbone of our economy are geatly affected. The 
hardest hit had been the minimum wage-earners and even less affluent sections of 
the middle class, who in recent years have experienced minimal improvements in 
their income. As one said - one's net take home pay can no longer take an 
employee home. 
Hence, this proposed measure seeks to mitigate the economic difficulties 
that they are facing. An increased level of personal exemptions and exempting the 
minimum wage-emers from payment of tax will enable families to spend more on 
food and other basic needs. 
Hence, passage of this bill is earnestly sought. 


FOURTEENTH CONGRESS of the 
) 
REPUBLIC OF ‘I’T-IE PIHIL,IPPINES 
) 
I7irst Regidar. ,Yemion 
1 
SENATE 
S.B. NO. 2217 
Introduced by HON. RAMON BONG REVILLA, JR. 
“AN ACT 
AMENDING SECTIONS 24(A), 35(A) AND (B) AND 51(A)(2)(B) OF REPUBLIC ACT 
NO. 8424 OTHERWISE KNOWN AS THE NATIONAL lNTERNAL REVENUE CODE 
OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.” 
He it enacted by the Senate and H o l m  o j  Representative,r of the Philippines in 
Congress aswiibled: 
SECTION 1. Section 24(A) of the National Internal Revenue Code of 1997, as 
amended, is hereby 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 j An income is hereby imposed: 
(a) On the taxable income defined in Section 31 of this Code, other than 
income subject to tax under Subsections (B), (C) and (D) of this Section, 
derived for each taxable year from all sources within and without the 
Philippines be every individual citizen o f  the Philippines residing therein; 
(b) On the taxable income defined in Section 31 of this Code, other than 
income subject to tax under Subsections (B), (C) and (D) of this Section, 
derived for each taxable year from all sources within the Philippines by an 
individual citizen of the Philippines who is residing outside of the Philippines 
including overseas contract workers referred to in Subsection(Cj of Section 23 
hereof, and 
(c) On the taxable income defined in Section 31 of this Code, other than 
income subject to tax under Subsections (B), (C) and (Dj of this Section, 
derived for each taxable year from all sources within the Philippines by an 
individual alien who is a resident of the Philippines. 
The tax shall be computed in accordance with and at the rates 
established in the following schedule: 
Not over P10,OOO ........................................... 5% 
Over P10,OOO but not over P30,OOO ................. P500+10% of the 
excess over PI 0,000 
i 


Over P30,OOO but not over P70,OOO ... .._ ._. _.. ... ... P2,500+15% of the 
excess over P30,OOO 
Over P70,OOO but not over P140,OOO ... _.. ..... ... ... P8,500+20% of the 
excess over P70,OOO 
Over P140,OOO but not over P250,OOO ... ... .,. _._ 
... P22,500+25% of the 
excess over 
P140,OOO 
Over P250,OOO but not over P500,OOO ... .. . .__ 
.._ ... P50,000+30% of the 
excess over 
P250.000 
Over P500,OOO 
P125,000+34% of the 
excess over P500,OOO in 
1998. 
Provided, That effective January 1, 1999, the top marginal rate shall be 
thirty-three percent (33%) and effective January 1, 2000, the said rate shall be 
thirty-two percent (32%): PROVIDED, FURTHER, THAT TNDIVIDUALS 
WITH PURE COMPENSATION INCOME THAT DOES NOT 
EXCEED THE ANNUAL STATUTORY MINIMUM COMPENSATION 
ARE EXEMPT FROM PAYMENT OF INCOME TAX. 
For married individuals, the husband and wife, subject to the provision 
of Section 51 @) hereof, shall compute separately their individual income tax 
based on their respective total taxable income: Provided, That if any income 
cannot be definitely attributed to or identified as income exclusively earned or 
realized by either of the spouses, the same shall be divided equally between 
the spouses for the purpose of determining their respective taxable income. 
SECTION 2. Section 35 (A) and (B) of the National Internal Revenue Code of 1997, 
as amended, is hereby amended to read as follows: 
“SEC. 35. Allowance of Personal Exemption for Individual Taxpayers- 
(A) In General. - For purposes of determining the tax provided in Section 24 
(A) of this Title, there shall be allowed a basic personal 
exemption as follows: 
For single individual or married individual 
judicially decreed as legally separated with 
no qualified dependents 
[P20,000.00] P40,OOO.OO 
For head of the family 
[P25,000.00] P54,OOO.OO 
For each married individual 
[P32,000.00] P64,OOO.OO 
In the case of married individuals where only one of the spouses is deriving 
gross income, only such spouse shall be allowed the personal exemption. 
For purposes Of this paragraph, the term “head of the family” means an 
unmarried or legally separated man or woman with one or both parents, or 
with one or more 
brothers and sisters, or with one or more legitimate, 
2 


recognized natural or legally adopted children living with and dependent upon 
him for their chief support, where such brothers or sisters or children are not 
more than twenty-one (21) years of age, unmarried and not gainfully employed 
or when such children, brothers or sisters, regardless of age are incapable of 
self-support because of mental or physical defect. 
(B) Additional Exemption for Dependents. - There shall be allowed an 
additional 
exemption of 
[Eight 
Thousand 
Pesos 
(P8,000.00)] 
SIXTEEN 
THOUSAND 
PESOS 
(P16,OOO.OO) for each dependent not exceeding four (4). 
The additional exemption for dependents shall be claimed by only one of the 
spouses in the case of married individuals. 
In the case of legally separated spouses, additional exemptions may be 
claimed only by the spouse who has custody of the child or children: 
Provided, That the total amount of additional exemptions that may be claimed 
by both SPOUSES shall not exceed the maximum additional exemptions 
herein allowed. 
For purposes of this Subsections, a “dependent” means a legitimate, 
illegitimate or legally adopted child chiefly dependent upon and living with 
the taxpayer if such dependent is not more than twenty one (21) years of age, 
unmarried and not gainfully employed or if such dependent, regardless of age, 
is incapable of self support because of mental physical defect.” 
SECTION 3. Section 51 (A)(2)(b) of the National Internal Revenue Code of 1997, as 
amended, is hereby amended to read as follows: 
SEC. 5 1. Individual Returns.- 
(A) Requirements.- 
(2) The following individuals shall not be required to file an income tax return: 
(a) An individual whose gross income does not exceed his total personal and 
additional exemptions for dependents under Section 35: Provided, That a citizen of 
the Philippines and any alien individual engaged in business or practice of profession 
within the Philippine shall file an income tax return, regardless of the amount of gross 
income ; 
(b) An individual with respect to pure compensation income, as defined in Section 32 
(A)(l), derived from sources within the Philippines, the income tax on which has 
been correctly withheld under the provisions of Section 79 of this Code: Provided, 
That an individual deriving compensation concurrently from two or more employers 
at any time during the taxable year shall file an income tax return: Provided, .further, 
That an individual whose compensation income derived from sources within the 
Philippines exceeds THE STATUTORY MINIMUM WAGE, OR Sixty 
Thousand pesos (P60,000), WHICHEVER IS HIGHER, shall also file an 
income tax return; 
(c) xxx 
(d) xxx 


SECTION 4. Separability Clause - If for any reason any section or provision of 
this Act is declared unconstitutional, other provisions hereof which are not effected 
thereby shall continue to be in full force and effect. 
SECTION 5. Repealing Clause. - Any laws, decrees, or rules and regulations 
which are inconsistent with or contraiy to the provisions of this Act are hereby amended 
or repealed. 
SECTION 6. Effectivity Clause. - This Act shall take effect upon its publication 
in at least two (2) national newspapers of general circulation. 
Approved,