Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
irst Regular Session

HOUSE BILL No,_550

Introduced by Congressman JUAN C. PONCE ENRILE, JR.

EXPLANATORY NOTE

‘The exigencies brought about by the continuing economic crisis to the average Filipino
taxpayer these days necessitates the introduction of certain safety nets that would, even in
part, protect them from an unabated deterioration of their purchasing power. It should be
noted that in the months past, the average consumer has been buffeted with a continuing
increase in fuel prices, rising costs of basic consumer items, higher costs of household utilities
and seemingly unrestrained increases in the cost of education.

All these are falling squarely on the shoulders of the fixed-income taxpayers who are not only
the most conscientious in paying their taxes, but likewise the very same taxpayers who are
being earmarked to be burdened by more

U1 is hereby recommended that the House of Representatives, pursuant to its mandate of
protecting the rights and furthering the well-being of the Filipino people, exercise its law-
making powers in the effort to legislate such safety nets. Such an objective is the purpose of
this measure, which proposes to increase the present levels of personal and additional
exemptions for the individual income taxpayer as currently provided for under Republic Act
8424, otherwise known as the Tax Reform Act of 1997.

Given the utmost urgency by which our people are seeking relief from their economic
difficulties, the immediate passage of this bill is earnestly sought

Ju ENRILE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 550

Introduced by Congressman JUAN C. PONCE ENRILE, JR.

INCREASING THE ALLOWABLE PERSONAL AND ADDITIONAL

AN ACT

OF INDIVIDUAL TAXPAYERS, AMENDING FOR THE PURPOSE S. ION 35 (A)
AND (B) OF THE NATIONAL INERNAL 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 35 (A) and (B) of the National Internal Revenue Code of 1997,

as amended, is hereby amended to read as follows

“SEC, 35.

(A)

Allowance of Personal Exemption for Individual Taxpayers. ~

In General ~ For purposes of determining the tax provided in
Section 24 (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
qualified dependents [P20,000.00] P 48,000.00

For head of the family [P25, 000.00]P 54,000.00

For each married individual (P32, 000.00}P 64,000.00


(B)

In the case of married individuals where only one of the spouses is
deriving gross income, only such spouse shall be allowed the personal

exemption.

For purposes of this paragraph, the term “head of the family” means an
unmarried or legally separated man or woman with one or both parents,
or with one or more brothers and 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-one (21) years of age,
unmarried and not gainfully employed or when such children, brothers
or sisters, regardless of age are incapable of self-support because of
mental or physical defect.

Additional Exemption for Dependents. ~ There shall be allowed an
additional exemption of [Eight Thousand Pesos (P8,000.00)] SIXTEEN
THOUSAND PESOS (P 16,000.00) for each dependent not exceeding
four (4),

The additional exemption for dependents shall be claimed by only one

of the spouses in the case of married individuals.

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

exemptions herein allowed.

For purposes of this Subsections, a “dependent” means a legitimate or
legally adopted child chiefly dependent upon and living with the
taxpayer if such dependent is not more that twenty-one (21) years of
age, unmarried and not gainfully employed or if such dependent,
regardless of age, is incapable of self support because of mental
physical defect.”


SECTION

Separability Clause. — \f any provision of this Act is declared invalid or
unconstitutional, other provisions hereof which are not affected thereby shall continue to be in

full force and effect.

SECTION 3. Repealing Clause. — All provisions of law, orders, decrees, executive orders,

including rules and regulations or parts thereof which are contrary to or inconsistent with the

provisions of this Act are hereby repealed or modified accordingly

SECTION 4. Effectivity Clause. — This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or at least two (2) national newspapers of general

circulation,

Approved,