,~) \~ \1 ,I ( 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
i@ih;" nf H]l.~ :~4.fn "!!lr~ 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
NOV 21 
P 1 :31\ 
SENATE 
S.B. No. 1912 
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
EXPLANATORY NOTE 
As the Philippines pushes for inclusive growth, it is imperative that Government create 
the necessary mechanisms to enable the vast majority of Filipinos to feel the fruits of this 
growth. At present, efforts are underway to promote ease of business; generate jobs; support 
the growth of micro, small, and medium enterprises (MSMEs); and address rising 
unemployment and underemployment. 
In spite of all these, however, ordinary Filipinos are still feeling the pinch of high taxes 
and rising prices. The Consumer Price Index shows that a basket of goods worth Php100 in 1998 
is already worth Php196 in 2013, almost doubling in a space of 15 years. While the private 
sector has a role in responding to the needs of its employees, many enterprises also struggle 
with ensuring fair and equal pay for their,workers while keeping their own businesses afloat. 
Thus, the government has to play the delicate balancing act between the growing 
demands of its labor force and the limitations of the private sector. One solution is to review 
and reform the current tax system in a way that reflects current prices, and enables a more 
equitable distribution of wealth for its citizens. 
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The Tax Reform Act, therefore, seeks to amend Section 24 of the National Internal 
Revenue Code of 1997, as amended, by adjusting the levels of net taxable income and 
simplifying the nominal tax rates for the purposes of .computing the individual income tax, 
based on current 2013 prices. The Tax Reform'Ad effectively lowers the taxes on the Filipino 
working class-which comprises around 22 million of the Philippine population-allowing them 
to enjoy a higher net income and increasing their purchasing power, without necessarily 
imposing a burden on the micro, small, and medium enterprises (MSMEs) that comprise a 
majority of employers in the Philippines. The collections from The Tax Reform Act also adjusts 
the tax level of the upper one percent. (1%) of taxpayers, making sure thilt the government is 
able to collect a larger share of income from those who can afford to pay more. A more just tax 
system will also serve to encourage citizens to declare their true i~come and pay their taxes. 
In effect, the Tax Reform Act serves as one of the important reforms to create a more 
equitable, just, and effective tax regime for Filipino taxpayers. It supports the government's 
push for inclusive growth while ensuring that government is still able to raise funds for social 
programs that directly benefit the poor. It is a systemic, win-win solution that offers the 
greatest benefit to the greatest number of Filipinos. 
In view of the foregoing, the approval of thi~ bill is earnestly sought. 


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SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 1942 
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
AN ACT 
'13 
NOV 21 
P1:3tl 
ADJUSTING THE lEVEL OF NET TAXABLE INCOME AND NOMINAL TAX RATES FOR PURPOSES 
OF PROMOTING THE INDIVIDUAL INCOME TAXAMENDING SECTION 24(A) (2) OF THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Section 24(A)(2) of the National Internal Revenue Code of 1997, asamended, 
is hereby further amended to reflect the following rates of tax on taxable income for individual 
wage and salary earners only: 
"Sec. 24. I ncome Tax Rates. -
"(A) xxx 
"(2) Rates of Tax on Taxable Income of Indivi<!uals. - The tax shall be computed in 
accordance with and at the rates established in the following schedule: 
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[Not over PIO,OOO) 
[5%) 
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[Over PIO,OOO but not over P30,000) 
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[Over P30,000 but not over P70,000) 
II 
NOT OVER P60,000 
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Over [P70,000) P60,000 but not over 
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P140,000 
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Over P140,000 but not over [P250,000) 
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P280,000 
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Over [P250,000) P280,000 but not over 
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P500,000 
[P500 + 10% of the exc"ss over PIO,OOO) 
[P2,500 + 15% of the excess over P30,000) 
EXEMPT 
[P8,sOO) P 5,000 + [20%)15% of the excess 
over [P70,000) P60,000 
[P22,500) P17,OOO + [25%)20% of the 
excess over P140,000 
[P50,000) P45,000 + [30%) 25% of the 
excess over [P250,000) P280,000 


laver PSOO,OOO BUT NOT OVER 
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Pl,OOO,OOO 
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OVER Pl,OOO,OOO BUT NOT OVER 
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P12,OOO,OOO 
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OVER P12,000,000 
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"xxx 
[PI2S,000] P100,000 + [32%] 30% of the 
excess over PSOO,OOO 
P250,OOO + 32% OF TH E EXCESS OVER 
Pl,OOO,OOO 
'P4,000,000 + 35% OF THE EXCESS OVER 
P12,000,000 
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"PROVIDED, FINALLY, THAT. NOT LATER THAN SIX (6) YEARS AFTER THE EFFECTIVITY OF 
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THIS ACT AND EVERY SIX (6) YEARS THEREAFTER, THE NET TAXABLE INCOME LEVELS AND 
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NOMINAL TAX RATES HEREIN STATED SHALL BE ADJUSTED TO ITS PRESENT VALUE USING THE 
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CONSUMER PRICE INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS OFFICE (NSO)." 
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SECTION 2.1mplementing Rules and Regulations. -
The Department of Budget and 
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Management (DBM) and the Bureau of Internal Revenue (BIR) shall promulgate not later than 
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thirty (30) days upon the effectivity of this Act, the necessary rules and regulations for its 
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effective implementation. 
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SECTION 3.5eparability Clause. -
If any provision of this Act is subsequently declared 
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invalid or unconstitutional, other provisions hereof which are not affected thereby shall remain 
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in full force and effect. 
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SECTION 4.Repealing Clause. -All laws, acts, presidential decrees, executive orders, 
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issuances, presidential proclamations, rules and regulations or parts thereof which are contrary 
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to and inconsistent with any provision of this Act are hereby repealed, amended or modified 
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accordingly. 
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SECTION S.Effectivity. -This Act shall take effect fifteen (15) days after its complete 
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publication either in the Official Gazette or in at least two (2) newspapers of general circulation. 
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Approved,