FOURTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
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SENATE 
S.No. 
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Introduced by Senator JUAN MIGUEL F. ZUBlRl 
EXPLANATORY NOTE 
The State aspires to balance its revenues and expenditures so that it may deliver 
basic services and provide for further economic, political and social development. It 
relies on various taxes, fees and charges, sales of assets and other resources to 
sustain the country's needs. Therefore, the State naturally is protective of its existing 
revenues such as the income taxes collected from fixed income earners including those 
earning the minimum wage. 
The Department of Labor and Employment estimates that there are 10,954,925 
purely compensation earners. Of these, 3,007,583 are earning wages higher than the 
minimum; 5,192,908 are paid lower than the minimum; and 2,754,434 are receiving the 
minimum wage. 
This sector of society needs relief. For example, the National Wages and 
Productivity Commission reported that minimum wage earners receiving the minimum 
wage of P 362.00 in Metro Manila actually receives a real wage worth only P241.66 
(based on March 2008 Consumer Price Index, year 2000=100). Price hikes of basic 
commodities and services have since eroded their purchasing power. 
Assuming a family of six composed of a married couple with four qualified 
dependent children and supported by one working parent earning the minimum wage, 
this family still have to shell out from P2,OOO to more than P10,OOO as income tax. 
This bill proposes to ease their burden by amending Section 24(A) and Sec. 
51(A) 2(b) of the National Internal Revenue Code of 1997, as amended, thereby, 
exempting individuals with pure compensation income that does not exceed the annual 
statutory minimum compensation from the payment of income tax. 
According to the latest figures of the Department of Finance, the State collects 
P950.72 Million from minimum wage earners. This will not entirely become a loss to 
government. This is just a drop in the bucket or about 0.1 % of BIRs tax collection target 
of P874 B for 2008. By exempting minimum wage earners from the payment of income 
tax, we are handing them cash which would be spent for basic family needs, thereby 
boosting consumption in the local economy creating a multiplier effect, and from which 
government will recapture its share through other forms of taxation. 
In view of the foregoing, immediate enactment of this bill is earnestly requested. 
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JUAN MIGUEL F. ZUBlRl 


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FOURTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES ) 
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First Regular Session 
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SENATE 
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Introduced by Senator JUAN MIGUEL F. ZUBlRl 
AN ACT 
EXEMPTING MINIMUM WAGE EARNERS FROM PAYMENT OF INCOME TAX 
AMENDING FOR THE PURPOSE RELEVANT PROVISIONS OF THE NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 24(A) of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows: 
"SEC. 24. Income Tax Rates. - 
(A) Rates of Income Tax on Individual Citizen and Individual Resident 
Alien of the Philippines. - 
"( 1) An income tax is hereby imposed: 
"(a) x x x. 
"(b) x x x. 
"(c) On the taxable income defined in Section 31 of this Code, other than 
income subject to tax under Subsections (B), (C), and (D) of this Section, 
derived for each taxable year from all sources within the Philippines by an 
individual alien who is a resident of the Philippines. 
"The tax shall be computed in accordance with and at the rates 
established in the following schedule: 
"Not over P10,OOO ............................ 
5% 
"Over P10,OOO but not over P30,OOO 
P500+10% of excess over P10,OOO 
"Over P30,OOO but not over P70,OOO 
P2,500+15% of excess over P30,OOO 
"Over P70,OOO but not over P140,OOO 
P8,500+20% of excess over P70,OOO 
"Over P140,OOO but not over P250,OOO P22,500+25% of excess over P140,OOO 
"Over P250,OOO but not over P500,OOO P50,000+30% of excess over P250,OOO 


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"Over P500,OOO 
P125,000+34% of the excess over 
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P500,OOO in 1998. 
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Provided, That effective January 1, 1999, the top marginal rate 
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shall be thirty-three percent (33%) and effective January 1, 2000, the said 
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rate shall be thirty-two percedt '(32%): PROVIDED, FURTHER, THAT 
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INDIVIDUALS WITH PURE COMPENSATION INCOME THAT DOES 
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NOT EXCEED THE ANNUAL STATUTORY MINIMUM COMPENSATION 
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ARE EXEMPT FROM PAYMENT OF INCOME TAX." 
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respective taxable income. 
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"x x x." 
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"(A) Requirements. - 
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"(a) x x x; 
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"( b) x x x; 
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"(c) x x x ;  and 
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"(d) x x x. 
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"(2) The following individuals shall not be required to file an income tax 
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return: 
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"(a) x x x; 
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"For married individuals, the husband and wife, subject to the 
provision of Section 51 (D) hereof, shall compute separately their individual 
income tax based on their respective total taxable income: Provided, That 
if any income cannot be definitely attributed to or identified as income 
exclusively earned or realized by either of the spouses, the same shall be 
divided equally between the spouses for the purpose of determining their 
SEC. 2. Section 51(A)(2)(b) of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows: 
"SEC. 51. Individual Return. - 
"(1) Except as provided in paragraph (2) of this Subsection, the following 
individuals are required to file an income tax return: 
"(b) An individual with respect to pure compensation income, as defined in 
Section 32(A)(1), derived from sources within the Philippines, the income tax on 
which has been correctly withheld under the provisions of Section 79 of this 
Code: Provided, That an individual deriving compensation concurrently from two 
or more employers at any time during the taxable year shall file an income tax 
return: Provided, further, That an individual whose pure compensation income 
derived from sources within the Philippines DOES NOT exceed[s Sixty thousand 
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pesos (P60,000)] THE STATUTORY MINIMUM COMPENSATION shall NOT 
[also] file an income tax return; 
"(c) x x x; and 
"(d) x x x. 
"(3) x x x. 
I'X x x. 
SEC. 3. lmplementing Rules and Regulations. - The Secretary of Finance shall, 
upon recommendation of the Commissioner of Internal Revenue, promulgate within 
thirty (30) days from the date of approval of this Act, the rules and regulations 
necessary for the implementation of this Act. 
SEC. 4. Separability Clause. - If 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. 
SEC. 5. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to, or 
inconsistent with any provision of this Act is hereby repealed or modified accordingly. 
SEC. 6. Effectivity Clause. -This Act shall take effect upon approval, 
Approved, 
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