Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. 6120

Introduced by Representative Paolo Everardo S. Javier

EXPLANATORY NOTE

The country’s individual income taxpayers have lamentably suffered inequity on
account of the tax system's inability to keep up with rising inflation rates for quite
some time. From the effectivity of the National Internal Revenue Code (NIRC) of
1997 on January 1, 1998, the individual income tax rates have remained based
on the 1998 Consumer Price Index (CPI) of 67.8%, which is less than half
compared to the current CPI of around 141% (as of August 2015). This means
that a working man’s monthly pay of P10,000 back in 1998 is equivalent to
P20,500, which should just be entirely taxed at the rate of 5% instead of a higher
rate. Otherwise put, the tax on his salary should merely be P1,025.00 and not
P1,550.00, leaving him with an additional monthly take home pay of P525.00 or
P6,300.00 more disposable income on a yearly basis. This amount would
undeniably help in keeping every ordinary Filipino family weather the current
challenges it faces financially.

Considering this unfair situation, it is just timely that individual income taxation be
fixed to make it once more equitable, which was what Congress truly intended
when the NIRC of 1997 was fashioned.

Accordingly, passage of the measure is earnestly sought


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

SIXTEENTH CONGRESS
Third Regular Session

House Bit no. 6120

Introduced by Honorable Representative Paolo Everardo S. Javier

AN ACT
RESTRUCTURING THE INCOME TAX IMPOSED ON INDIVIDUALS,
AMENDING FOR THE PURPOSE SECTION 24 OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED

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

SECTION. 1. Section 24 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:
“SEC. 24. Income Tax Rates. —
(A) xxx
(1) xxx
(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:

I Not over P10,000 5% J

[ Over P10,000 but not over P30,000 P500+10% of the excess
‘over P10,000 ]

[ Over P30,000 but not over P70,000 P2,500+15% of the excess
‘over P30,000 J

[ Over P70,000 but not over P140,000 8,500+20% of the excess

over P70,000 J


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[ Over P140,000 but not over P250,000 _P22,500+25% of the excess

‘over P140,000 }

[ Over 250,000 but not over P500,000 _P50,000+30% of the excess
‘over P250,000 1

[ Over P500,000 P125,000+32% of the excess
‘over P500,000 }

NOT OVER P20,500 5%

‘OVER P20,500 BUT NOT OVER P61,500 1,025+10% OF THE EXCESS
‘OVER P20,500

(OVER P61,500 BUT NOT OVER P143,500 _—P5,125+15% OF THE EXCESS.
‘OVER P61,500

‘OVER P143,500 BUT NOT OVER P287,000 _P17,425+20% OF THE EXCESS
‘OVER P143,500

(OVER P287,000 BUT NOT OVER P512,500 _P46,125+25% OF THE EXCESS
‘OVER P287,000

‘OVER P512,500 BUT NOT OVER P1,025,000 P102,500+30% OF THE EXCESS
‘OVER P512,500

‘OVER P'1,025,000 P256,250+32% OF THE EXCESS

‘OVER 1,028,000

Xxx
0x

PROVIDED, FINALLY, THAT NOT LATER THAN THREE
(3) YEARS AFTER THE EFFECTIVITY OF THIS ACT AND
EVERY THREE (3) YEARS THEREAFTER, EACH NET
TAXABLE INCOME LEVEL AND NOMIAL TAX RATE
HEREIN STATED SHALL BE ADJUSTED TO ITS
PRESENT VALUE USING THE CONSUMER PRICE
INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS
OFFICE (NSO).

(B) xxx

(C) xxx

(D) xx
SEC. 2. Implementing Rules and Regulations. — The Secretary of Finance shall,
upon the recommendation of the Commissioner of Internal Revenue, promulgate

upon the effectivity of this Act the necessary Rules and Regulations for its
effective implementation.

SEC. 3. Separability Clause. — if any provision of this Act is subsequently
declared invalid or unconstitutional, other provisions hereof which are not
affected thereby shall remain in full force and effect.


weIAURENS

SEC. 4. Repealing Clause. - All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamations, rules and regulations or parts
thereof which are contrary to and inconsistent with any provisions of this Act are
hereby repealed, amended or modified accordingly

SEC. 5. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

complete publication either in the Official Gazette, or in at least two (2)
newspapers of general circulation.

Approved,