Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

Fifteenth Congress
Second Regular Session

1494

COMMITTEE REPORT NO.

IV? Cor out
Submitted by the Committee on Ways and Means on _ | :

RE Hous Bi No,__ 5432

Recommending its approval in substitution of House Bill Nos
3765, 4026 4793 and 5100

Sponsors : Representatves Hermilando |. Mandanas, Deogracias B.
Ramos, Jr.,Martyn Primicias-Agabas, Diosdado Macapagai
Arroyo and Gloria Macapagal-Arroyo

Mr. Speaker,

The Committee on Ways and Means to which were referred House Bill No.
3765, introduced by Representative Ovogracias B. Ramos Jr., entitled

“AN ACT GRANTING TAX DEDUCTIONS TO PARENTS AND
LEGAL GUARDIANS OF CHILDREN WITH SPECIAL NEEDS”

House Bill No, 4026, iiroduced by Representative Marlyn Primicias-Agakas,
entitled

SAN ACT GRANTING ADDITIONAL EXEMPTION FOR
DEPENDENTS WITH DISABILITIES, AMENDING FOR THE

KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF
1997,” AND FOR OTHER PURPOSES”


House Bill No. 4793, introduced by Representative Hermilando | Mandanas,
entitled,

“AN ACT AMENDING SECTION 35(B) OF REPUBLIC ACT
NO. 8424, OTHERWISE KNOWN AS THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED BY
REPUBLIC ACT NO. 9504”

and House Bill No. 5100, introduced by Representatives Diosdado Macapagal
Arroyo and Gloria Macapagal-Arroyo) entitled

“AN ACT GRANTING TAX DEDUCTIONS TO PARENTS AND
LEGAL GUARDIANS OF CHILDREN WITH SPECIAL NEEDS"

have considered the same and recommends that the attached House Bill No

54 $1. entitled:

“AN ACT GRANTING ADDITIONAL EXEMPTION TO AN
INDIVIDUAL TAXPAYER AMENDING FOR THE PURPOSE
SECTION 35(B) OF THE NATIONAL INTERNAL REVENUE
CODE OF 1997, AS AMENDED BY REPUBLIC ACT NO.
9504”

be approved in substitution of House Bill Nos. 3765, 4026, 4793 and 5100
with Representatives Deogracias B. Ramos, Jr., Marlyn Primicias-Agabas
Hermilando |, Mandanas, Diosdado Macapagal Arroyo, Gloria
Macapagal-Arroyo, Giorgidi B. Aggabao, Jesus Crispin Remuila, Andres D
Salvacion, Jr, Fatima Alan Q. Dimaporo, Philip A. Pichay and Jeny P
Trefas as authors thereof

Respectiully submitted,

i“ m
F i.
REP. HERMILANDO i. MANDANAS.
airman

Committee on Ways and Means

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY


whi

9
iv

Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

on 1
House Bill No. 5431
{in substitution of House Bill Nos, 3765, 4026, 4793 and 5100)

introduced by Representatives Deogracias B. Ramos Jr,
Marlyn Primicias- Agabas, Hermilando J, Mandanas, Diosdado
Macapagal Arroyo, Gloria Macapagal Arroyo, Giorgidi B. Aggabao,
Jesus Crispin C. Remulla, Andres D. Salvacion, Jr., Fatima Aliah Q.
Dimaporo, Philip A. Pichay and Jerry P. Treas

AN ACT
GRANTING ADDITIONAL EXEMPTION TO AN INDIVIDUAL
TAXPAYER AMENDING FOR THE PURPOSE SECTION 35(B) OF
THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED BY REPUBLIC ACT NO. 9504

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

SECTION 1. Section 35 (B) of Republic Act No. 8424. otherwise knowa as the Narional
Internal Revenue Code of 1997. as amended be Republic Act No. 9504, is hereby further

amended 10 read as follows:
‘SEC. 35 Allowance of Personal Exeanption tor Individual Taxpayer. -
{A) lh General. ~ For purposes of deternunmy the tax provided in Section 24 (4) of this

Title. there shail be allowed a basi personal exemption AmounLiNg to Filty: thousand
esos (PSO.IKHD for each individual taxpayer



Im the case of married individual w here onl one of the spouses is der ing gross income,
only such spouse shall be allowed the pecsonal exemption

(B) Additional Exempiton for Dependenis. — There shail be allowed an additional
exemption of Twenty -Five Thousand Pesos (223.000) for each dependent WITHOUT
DISABILITY {not exceeding four (4) | AND FIFTY THOUSAND PESOS (P50,000)
FOR EACH DEPENDENT WITH DISABILITY.

The additional exemption for dependents REFERRED MEREIN shall be claimed by
only one of the spouses in the ease oF married indie iduals.

In the exse oF leyaily sepaated spouses. additional evemptions may be claimed only by
the spouse who has custody of the cluld or eh idren| =]

AN INDIVIDUAL TAXPAYER
DISABLED PERSON MAY CL:

OS THE LEGAL GUARDIAN OF A
1 THE ADDITIONAL, EXEMPTION FOR THE

AVAIL OF THE ADDITIONAL EXEMPTION FOR A PARTICULAR TAXABLE
YEAR TO THE EXCLL TON OF THE BIOLOGICAL PARENTS.

[Provided. that dhe total amount of additional exemptions that May be ciaimed by both
shall not exceed the maximum additional exemptions herein allow ed.{

[For purposes of this Subsection, a “dependent” means 2 legitimate iHegnimate, or legally
adopied child chiefly dependent upon and In ing with the Laxpayer it’ such dependent 13
seek ate than venty-one (21) reas OF aye. unmarried and not gainfully emploved or if
such dependem. regardless of ase. 1s ‘ecapable of sel-suppont because of mental or
phy steal defect.

FOR PURPOSES OF THIS SUBSECTION:
(A). THE TERM “DEPENDENT? REFERS TO:

1) A LEGITIMATE, LEGITIMATED. ILLEGITIMATE OR LEGALLY:
ADOPTED CHILD CHIERLY DEPENDENT UPON AND LIVING
WITH THE TAXPAYER IF SUCH DEPENDENT iS NOT MORE
THAN TWENTY-ONE (21) YEARS OF AGE, UNMARRIED AND
NOT GAINFULLY EMPLOYED OR IF SUCH DEP! NDENT,
REGARDLESS OF AGE, IS INCAPABLE OF SELF SUPPORT
BECAUSE OF MENTat, OR PHYSICAL DISABILITY;

2:

A PARENT OR BOTH PARENTS, LIVING WITH THE TAXPAYER,
NOT GAINFULLY EMPLOYED AND DEPENDENT UPON THE
- LATTER FOR CHIEF SUPPORT, OR WHERE SUCH PARENTS:
ARE INCAPABLE OF SELF-SUPPORT BECAUSE OF MENTAL OR
PHYSICAL DISABILITY OR OLD AGE,

(8). THE TERM “DISABLED PERSON: REFERS TO A PERSON
SUFFERING FROM RESTRICTION OR DIFFERENT ABILITIES AS
A RESULT OF MENTAL, PHYSICAL OR SENSORY IMPAIRMENT,
TO PERFORM AN ACTIV ITY EN THE MANNER OR WITHIN THE
RANGE CONSIDERED NORMAL FOR A HUMAN BEING,


"XXX"

SEC, 2. Penalty.- Notwathstandurns the penalty provided for iu Secuos 267 of the Nauonat
internal Revenue Code uf 1997. as amended. any person who willluik Violates the preceding
section by declaring Victitious dependents shalt. yon eon iction, be lable for the pay ment oF

2 fine equinaleut to thrice the amount of tas. interest and surcharges due from the taxpayer
SEC. 3. tmplementing Rules and Regatations.- Within thirty (30) days upon the <pprovat

of this Act the Department of Finance. in coordmation with the Burcan of Internal Revenue
and the Department of Social Wellare and Development. shat issue the necessary
mplementins, rules and regulations for the eflecisse implementation of this Act

ility Clause. W anv provision or part hereof is subsequently Veclared
imalid Cr wncoustitattonal, other provisions herent which ae hot affected herzos shail
remain in Cull force and effect

SEC. 8. Repeating Clause. — All jaws. acts. Presidential decrees. execuuve orders
BSuances. presidential proctamations, cules and rewulations os parts ihereof which ave
Contrary 10 OF meonsisteal with any provision of this Act are hereby repealed. amended or
moduiied accordingly.

SEC. 6. Effectivity Clause. This Act shall tahe eftect Hifleen (15) days after its pub..cation
euher in the Official Gazelle, of in at beast 10 (2) nen spapers of yeneral circulation

Approved


FACT SHEET

HOUSE BICC NO. 5431
(Substitute to House Bill No. 3765, 4026, 4793 and 5100)

AN ACT GRANTING ADDITIONAL EXEMPTION TO AN
INDIVIDUAL TAXPAYER BY AMENDING SECTION 35(B) OF THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

BY REPUBLIC ACT NO. 9504

introduced by REPS. Deogracias B. Ramos Jr,, Martyn Primicias-
Agabas, Hermilando |, Mandanas, Diosdado Macapagal Arroyo, Gloria Macapagal
Arroyo, Glorgidi B. Aggabao, Jesus Crispin Remutia, Andres 0. Satvacion, Jr.,
Fatima Aliah Q. Dimaporo, Philip A. Pichay and Jerry Trenas
Referred to the Committee on Ways and Means
Committee Chairperson: Hon. HERMILANDO I. MANDANAS

OBJECTIVE:

+ To ease the financial burden of individual taxpayer.

KEY PROVISIONS:

* Seeks to amend Section 36 (B) of the National internal Revenue
Code of 1997, as amended by Republic Act No. 9504;

* Removes the limitation on the number of allowable dependents;
disability

* Includes legitimated children and parents in the definition of
dependents:

+ Allows a legal guardian to a person with mental and physical
disability to claim additional exemption;

+ - Allows an additional exemption of Fifty Thousand Pesos. {P50,000)
for each dependent child with disability regardless of age;

+ Allows an additional exemption of Fifty Thousand Pesos (P50,000)
for each dependent parent with disability.


RELATED LAWS:

* Republic Act No. 8424, otherwise known as the National Internal Revenue
Code of 1997, as amended

+ Republic Act No. 9504 entitled An Act Amending Sections 22, 24, 34, 35, 51
and 79 of Republic Act No. 8424, otherwise known as the National Internal
Revenue Code of 1997, as amended.