Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

Fifteenth Congress
Second Regular Session

HOUSE BILL NO.

Introduced by Representatives Eleandro Jesus F. Madrona and Hermilando |. Mandanas

AN ACT PROVIDING A TAX INCENTIVE FOR MEDICAL AND HOSPITAL CHARITABLE
SERVICES AND FOR OTHER PURPOSES

The Constitution provides in Article XIII Section 11 that the State shall adopt an
integrated and comprehensive approach to health development, which shall endeavor to make
essential goods, health and other social services available to all the people at an affordable
cost. The State shall endeavor to provide free medical care to paupers.

Pursuant to the Constitution, it is precisely the objective of this bill, to provide free
medical and hospital services to the underprivileged members of society, who could not avail of
much needed medical treatment, because of the prohibitive cost of healthcare these days.

While Government strives to make medical and hospital services available to the poor
through Government hospitals, medical, puericulture, day-care and maternal lying-in centers
and through the Philhealth system, still, the assistance is limited and is not sufficient to cover
the ever increasing population of indigents in the Philippines.

The assitance from the medical private sector in rendering free, such medical and
hospital services, is a much needed and timely intervention to beef up, if not sustain
Government's efforts to cater to the health needs of its impoverished citizenry.

In recognition of this laudable act of generosity, it is but incumbent on the part of
Government to grant an incentive to the medical private sector, by allowing them to deduct from
the gross income, the amount of the medical or hospital service rendered for charitable
purposes by the doctor or the hospital or the equivalent of ten percent (10%) of the total gross
income from medical or hospital services rendered, whichever is lower.

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

eee

Representative Eleandro Jesus F. Madrona Repyésentative Hermilando I. Mandanas
Lone District of Romblon ‘Second District of Batangas



Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

Fifteenth Congress
Second Regular Session

3
HOUSE BILL NO. 5688

Introduced by Representatives Eleandro Jesus F. Madrona and Hermilando |. Mandanas

AN ACT PROVIDING A TAX INCENTIVE FOR MEDICAL AND HOSPITAL,
CHARITABLE SERVICES AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Medical and Hospital
Charitable Services Act of 2011".

Sec. 2. Declaration of Policy. - It is the declared policy of the State to recognize
and promote the state of well being of every human person and to guarantee
every citizen’s right to health care, particularly those who cannot afford the.
services of private health service providers.

In addition, the State shall guarantee accessibility of health care by the
poor and ensure that every person who cannot afford the services of a private
health care provider is assisted by a competent private health care provider
preferably of his/her own choice, if upon determination, it appears that the poor
cannot afford the services of the private health care provider, and that the

1


services of a private health care provider are necessary to ensure the health of
the poor.

Sec. 3. Definition of Terms. - As provided for in this Act, the term medical and
hospital services to be rendered by doctors and hospitals refers to any activity or
activities which are defined under the Medical Act or 1959 and R.A. 4226 which
shall include, among others, diagnosis, treatment, confinement and similar
medical and hospital services. The word charitable shall mean medical or
hospital service free of charge including the dispensing of medicines or hospital
supplies, which shall redound to the benefit of the person in need of such
medical or hospital services.

Sec. 4. Requirements for Availment. - For purposes of availing of the benefits
and privileges as stated in this Act, the doctor and the hospital who have
rendered charitable medical and hospital services, shall secure a certification
from the Department of Health (DOH) and the Philippine Medical Association
(PMA) in case of doctors and the Philippine Hospital Association (PHA) or
Private Hospitals Association of the Philippines (PHAP) in case of hospitals
indicating that indeed charitable medical and hospital services have been
rendered for the poor. fe

For purpose of determining the number of hours actually provided by the
doctor or the hospital in rendering charitable services, the DoH and the PMA in
case of doctors and the PHA or PHAP in case of hospitals, shall issue the
necessary certification that indeed charitable services were actually undertaken.
The certification issued by these institutions shall be submitted to the Bureau of
Internal Revenue (BIR) for purposes of availing the tax deductions as provided
for in this Act.

At the beginning of the fiscal year, doctors or hospitals that shall engage
in charitable medical and hospital services, shall be required to register with the
BIR, and thereafter, annually renew such registration, if they intend to
continuously provide such charitable medical or hospital services.

Sec. 5. Incentives to doctors or hospitals. - For purposes of this Act, a doctor or a
hospital rendering actual charitable medical and hospital services shall be
entitled to deduct from the gross income, the amount of the medical service
rendered by the doctor or the amount of the hospital service rendered, for
charitable purposes, or the equivalent of ten percent (10%) of the total gross
income from medical or hospital services rendered by the doctor or the hospital,
respectively, whichever is lower.

Sec. 6. Information, Education and Communication (IEC) Campaign. - The DOH,
PHA and PHAP, in cooperation with the Philippine Information Agency (PIA), is
hereby mandated to conduct an annual |EC campaign in order to inform the

2


doctors and hospitais of the procedures and guidelines in availing tax deductions
and inform the general public that a charitable medical or hospital service to
those who cannot afford private health care service is being provided by the
State.

Sec. 7. Reportorial Requirement. - For purposes of determining the effectiveness
and social impact of the provisions of this Act, the DOH shall submit an annual
report to both Houses of Congress indicating therein the number of recipients
who have benefited from this Act. The report shall state in detail, among others,
the geographic location, demographic characteristics and socioeconomic profile
of the beneficiaries of this Act.

Sec. 8. /mplementing Rules and Regulations (IRR). - Within ninety (90) days
from the date of effectivity of this Act, the Commissioner of Internal Revenue, in
consultation with the DoH, PMA, the PHA and the PHAP, shall recommend to the
Secretary of Finance, the necessary revenue regulations/ implementing rules and
regulations, for the proper implementaticn of the tax component as provided in
this Act.

Sec. 9. Separability Clause. - If any provision of this Act is declared
unconstitutional or invalid, the other provisions not affected by such declaration
shall remain in full force and effect.

Sec. 10. Repealing Clause. - Any law, decree, ordinance or administrative
circular not consistent with any provision of this Act is hereby amended, repealed
or modified accordingly.

Sec. 11. Effectivity Clause. - This Act sha!i take effect fifteen (15) days following its
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved,