Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.4423

Introduced by Representative Harlin Neil J. Abayon III

EXPLANATORY NOTE

This bill seeks to provide a system of tax incentives to corporations, partnerships,
organizations and other juridical entities for their support of the use of environment-friendly

bags.

In view thereof, immediate passage of this bill is earnestly sought

HARLIN J. ABAYON TIT
Representative
AANGAT TAYO Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH CONGRESS
First Regular Session

4423

HOUSE BILL NO.

Introduced by Representative Harlin Neil J. Abayon TIT

AN ACT
GRANTING TAX INCENTIVES TO CORPORATIONS, PARTNERSHIPS,
ORGANIZATIONS, AND OTHER JURIDICAL ENTITIES FOR USING AND
PROMOTING THE USE OF ENVIRONMENT-FRIENDLY BAGS, SUPPORTING
SUCH EFFORTS 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 “Green Tax Incentives Act.”

SECTION 2, Declaration of Policy. ~ It is the policy of the State to protect and advance the right
of the people to a balanced and healthful ecology in accord with the rhythm and harmony of
nature, However, protection of the environment cannot be achieved without the aid of the private
sector. As such, the State recognizes the indispensable role of the private sector and encourages
its full participation and cooperation in achieving its goal of environmental protection and
preservation. Environmental protection and preservation is for the common good and should be
the concern of all. Local efforts of environmental significance may and can be beneficial not
only to our nation, but to the world as a whole as we maintain ecological balance in pursuit of
sustainable development

SECTION 3, Definition of Terms. The following terms when used in this Act shall

a, “Bureau” — the Bureau of Internal Revenue (BIR);

b. “Consumer” — any person who makes a purchase at retail for any purpose other than
resale;

c. “Department” —the Department of Trade and Industry (DTI);

d. “Environment-Friendly Bag” ~ a type of bag that benefits the environment in some
way, including but are not limited to those made from recycled products, repurposed
products, sustainable materials, and organic materials;

e. “Plastic Bag” — any plastic, latex, or polypropylene carry-out bag provided by the
store to a consumer at the point of sale;

f. “Reusable Bag” — a bag with handles that is specifically designed and manufactured
for multiple re-use and meets all the following requirements:

1.) Has a minimum lifetime of 125 uses, which, for purposes of this subsection,
means the capability of carrying a minimum of 22 Ibs. or 15 liters, 125 times
over a distance of at least 175 feet;


2.) Is machine washable;

3.) Does not contain lead, cadmium, or any other heavy metal in toxic amounts;

4.) Is labelled “Reusable” on the front and/or back of the bag in lettering at least
one inch in height,

SECTION 4. Scope. ~ Corporations, partnerships, organizations, and other juridical entities
which support this effort by participation and cooperation shall be given tax incentives.

SECTION 5. Procedure, ~ Such corporations, partnerships, organizations, and other juridical
entities mentioned in preceding section shall collate and file the necessary documentation to.
prove that they have been using, promoting and supporting environment-friendly bags. The same
shall be submitted to the Department of Trade and Industry (DTI) for proper evaluation. Upon
findings by the Department that such corporation, partnership, organization, or juridical entity
has satisfactorily proven that they have been using, promoting and supporting environment-
friendly bags, then a certificate of compliance shall be issued and which will be attached to the
tax return to be submitted to the Bureau in order to avail of the tax incentives,

SECTION 6. Tax Incentives, ~ The following tax incentives shall be enjoyed by corporations,
partnerships, organizations, and other juridical entities which use, promote, and support the use
of environment-friendly bags:

a, In computing the taxable income, the above-mentioned entities may claim as
deduction, expenses in producing, procuring, or purchasing environment-friendly
bags during taxable year, provided, that such production, procurement, or purchase of
said bags is not the primary business of the juridical entity; .

b. Newly created juridical entities may, within three (3) years from incorporation, be
exempt from the Expanded Value Added Tax (EVAT) on the production,
procurement or purchase of environment-friendly bags,

SECTION 7, Exception, ~ This Act shall not be applicable to corporations, partnerships,
organizations and other juridical entities whose primary business is the production, manufacture,
and distribution of environment-friendly bags

SECTION 8. Determination of Rules and Regulations. — Additional rules and regulations which
will further the purpose of (his Act may be determined, formulated, and implemented by the
Department through its Secretary

SECTION 9. Separability Clause. ~ If any provision or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain
valid and subsisting,

SECTION 10. Repealing Clause. ~ Any law, presidential decree or issuance, executive order,
letter of instruction, administrative order, rule of regulation contrary to or is inconsistent with the
provision of this Act is hereby repealed, modified, or amended accordingly

SECTION 1. Effectivity Clause. ~ This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation

Approved,