04 AUB 2014. |
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Republic of the Philippines \ anh

HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

House Bill No. 4788

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

EXPLANATORY NOTE

The National Internal Revenue Code provides for certain tax
exemptions to income-earning individuals. The wisdom of the grant
of such exemption is to avoid unreasonably burdening a person who
has to provide to a number of household members who are unable to
support themselves just yet either because they are still presumed to
studying and therefore unable to work for self-support, and/or
because the person being sustained by the income earner is
physically or mentally restrained from providing for himself. The
State understands that an income-earner has an obligation first and
foremost to his/her family and the latter supports or assists the
former by imposing lesser taxes accordingly.


However, in light of the K-12 Curriculum recently passed and
implemented in the country, wherein two (2) more year levels were
added to our educational system, a person affected by the said law is
now expected to complete his/her education at twenty-three (23)
years old on average, instead of twenty-one. As such, the income
earners in the family would have to sustain the education of their
children or immediate relatives (i.e. brother/sister) a lit bit longer, or
to be more specific, two years longer than before.

Because of this, it is only proper to amend the section/s of the
National Internal Revenue Code which provide/s for the age
limitation of household members that may qualify as dependents for
purposes of availing tax exemptions, if only to avoid defeating the
purpose and the wisdom of the above-cited specific provision of the
National Internal Revenue Code.

It is only for this reason that this Bill is being sought to be
passed.

emery

ERIC OLIVAREZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS.
First Regular Session

4788

House Bill No.

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

AN ACT INCREASING THE AGE BRACKET OF THE HOUSEHOLD
MEMBERS CONSIDERED AS DEPENDENTS OF A TAXPAYER
FROM 21 TO 23 YEARS OLD, AND FOR THAT PURPOSE,
AMENDING SECTION 29, PARAGRAPH (L), ITEMS (1),(2) and (3)
OF THE NATIONAL INTERNAL REVENUE CODE, IN VIEW OF
THE RECENTLY IMPLEMENTED K-12 CURRICULUM WHICH
ADDED TWO (2) YEARS IN THE PHILIPPINE EDUCATIONAL
SYSTEM.

Section 1. Short Title. This Act shall be known as an “Act
Increasing the Age Bracket of Taxpayers’ Dependents".

Section 2. Section 29, paragraph (K) (2) (a) of the National
Internal Revenue Code is hereby amended to read as follows, to wit:


Section 29, (L) Personal exemptions
allowable to individuals. — (1) Basic personal
exemption. — For the purpose of determining
the tax provided in Section 21 (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 P9,000

For head of a family P12,000
For each married individual P18,000

Provided, That in case one of the spouses
is deriving taxable income, only said spouse
shall be allowed to avail of the aforesaid basic
personal exemption for married individual. (As
amended by R.A. 7497)

For purposes of this paragraph, the term
"Head of Family" means an unmarried or legally
separated man or woman with one or both
parents, or with one or more brothers or sisters,
or with one or more legitimate, 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-three (23)
years of age, unmarried and not gainfully
employed or where such children, brothers or
sisters, regardless of age are incapable of self-
support because of mental or physical defect.


(2) Additional exemption

(A) Taxpayers with dependents. — A
married individual or a head of a family shall be
allowed an additional exemption of five
thousand pesos (P5,000) for each dependent:
Provided, That the total number of dependents
for which additional exemptions may be claimed
shall not exceed four dependents: Provided,
further, That the additional exemption for
dependents shall be claimed by only one of the
spouses in the case of married individuals. (As
amended by R.A. 7497)

In case of legally separated spouses,
additional exemptions may be claimed only by
the spouse who was awarded custody of the
child or children: Provided, That the total
amount of addition exemptions that may be
claimed by both shall not exceed the maximum
additional exemptions herein allowed.

For purposes of this paragraph, a
dependent means a legitimate, recognized
natural or legally adopted child chiefly
dependent upon and living with the taxpayer if
such dependent is not more than twenty-three
(23) years of age, unmarried and not gainfully
employed or if such dependent, regardless of
age, is incapable of self-support because of
mental or physical defect.

(B) Taxpayers with gross compensation
income not exceeding P20,000. — A special
additional exemption of Four thousand pesos
(P4,000) shall be allowed if the gross income of
a single, married or legally separated individual,
or head of family does not exceed the aggregate
amount of P20,000: Provided, That in case
married individual elect to compute their


income tax separately, the spouse claiming the
additional exemption for dependent children
shall be entitled to the special additional
exemption of P4,000.

(3) Change of status. — If the taxpayer
married or should have additional dependents
as defined above during the taxable year, the
taxpayer may claim the corresponding personal
and additional exemptions, as the case may be,
in full for such year.

If the taxpayer should die during the
taxable year, his estate may still claim the
personal and additional exemptions for himself
and his dependents as if he died at the close of
such year,

If the spouse or any of the dependents
should die or if any of such dependents
becomes twenty-three (23) years old during
the taxable year, the taxpayer may still claim
the same exemptions as if they died, or if such
dependents become twenty-three (23) years
old at the closed of such year.

Section 3. Repealing Clause. - All laws, presidential decrees,
letters of instructions, executive orders, rules and regulations insofar
as they are inconsistent with this Act, are hereby repealed or
amended as the case may be.

Section 4. Separability Clause. - In the event that any
provision of this Act or any portion thereof is declared
unconstitutional by a competent court, the other provisions shall not
be affected thereby and shall remain valid and enforceable.


Section 5. Effectivity Clause. — This Act shall take effect after

its complete publication in at least three (3) newspapers of general
circulation.

APPROVED.