HOUSE 1F REPRESENTATIVES
© RECEIVED

pated 0 JUN 2016

Republic of the Philippines
HOUSE OF REPRESENTATIVES BY:

Quezon City
REGISTRATION UNIT

SEVENTEENTH conGress |_BILLS AND INDEX SERVICE
First Regular Session

HOUSE BILL NO. 466

Introduced by Representative Ranco E. Abu

EXPLANATORY NOTE

This bill is about giving every ordinary Filipino individual taxpayer the equity he
deserves in our country’s tax laws, putting him and the family he supports in a
better position to cope up with life’s daily financial demands.

Since the National Internal Revenue Code (NIRC) of 1997 became effective on
January 1, 1998, the individual income tax rates have unfortunately remained
based on the 1998 Consumer Price Index (CPI) of 67.8%, which has now doubled
to its current rate of about 141% (as of August 2015). Going by these figures, a
regular salaried man’s take-home pay of P10,000 way back in 1998 is now
equivalent to P20,500.00, which rightly should be taxed at the rate range of just
between 11% to 15% and not the higher one of 16% to 20%. In more, practical
terms, the amount of tax on his salary should just be around P500 to P600 instead
of P1,500 to P1,600, increasing his take-home pay. With the constantly rising
prices of basic commodities, this additional ineome will certainly go’a long way in
making ends meet for him and his family.

By doing this much-needed fair tweaking of the individual income tax brackets,
together with the amounts of personal and additional exemption, in accordance
with current CPI and automatically after three (3) years thereafter, this government
can rightfully claim that it has done justice to every ordinary Filipino working
man.

Accordingly passage of the measures is earnestly sought.


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

SEVENTEENTH CONGRESS

First Regular Session

HOUSE BILL No.__ 466

Introduced by Honorable Representative Raneo E. Abu

AN ACT
RESTRUCTURING THE INCOME TAX IMPOSED ON INDIVIDUALS,
AMENDING FOR THE PURPOSE SECTIONS 24 (A) @) AND 35 (B) 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: 7

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:

[ Not over P10,000 3% :
{[ OverP10,000 but not over P30,000 500+10% ofthe excess
over P10,000 |

{Over P30,000 but not over P70,000 100% 15¥% of the excess
P30,000

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


RH SORIDAE BOIS oe AUR

SSSRVLERBE SREY ND Rte ee
CeIAGRESRSSBRRRHN

BBYUBpeaepeenenn
SN2SSe5sGR S55

[ Over P140,000 but not over P250,000 P22,500+25% of the excess
over P140,000 J

[Over P250,000 but not over P500,000 PS0,000+30% of the excess
‘over P250,000 ]

{ Over P500,000 P125,000+32% of the excess
‘over P500,000 J

NOT OVER P20,500 5%

‘OVER P20,500 BUT NOT OVER P61,300 P1,025+10% OF THE EXCESS
‘OVER 20,500

OVER P61,500 BUT NOT OVER P143,500 _S,135+1896 OF THE EXCESS
OVER P6500

OVER P143,500 BUT NOT OVER P287,000 P17 425+20% OF THE EXCESS
OVER P143,500.

‘OVER F287,000 BUT NOT OVER P512,500 46,125+25% OF THE EXCESS
‘OVER P287,000

OVER P512,500 BUT NOT OVER PI,025,000 _P102,500#30% OF THE EXCESS
500,

‘OVER PI,025,000 P256,250+32% OF THE EXCESS *
(OVER P1,025,000 =

XXX,

XXX,
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 NOMINAL 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) xxx”
SEC. 2, Section 35 of the National Intemal Revenue Code of 1997, as amended, is
hereby further amended to read as follows:
“SEC. 35. Allowance of Personal Exemption for Individual Taxpayer. —
(A) xx

B) xx


PROVIDED, FURTHER, THAT NOT LATER THAN THREE @
YEARS AFTER THE EFFECTIVITY OF THIS ACT AND EVERY
THREE (3) YEARS THEREAFTER, THE AMOUNTS OF BASIC

INDEX, AS PUBLISHED BY THE NATIONAL. STATISTICS
OFFICE (NSO),

xxx
(C) xxx

(D) xxx”

SEC. 3. 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. 4. 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,

SEC. 5. 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. 3

SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (1 5) days after its complete

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

Approved,