HUUSE OF REPRESE!
RE

Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No._ 2402

Introduced by REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

Natural calamities such as earthquakes, typhoons, volcanic eruptions
and massive floods often cause massive and widespread economic losses to
their victims. This is as a result of destruction of, or damage to their
properties. To alleviate the sufferings of the victims of calamities, there is a
need to grant them a reasonable relief from their tax liabilities on their real
properties affected by the calamity within a specified period of time to
accelerate their pace of economic recovery.

Under our current tax laws, relief for losses as a result of calamities is
granted only to individuals or corporations engaged in trade or business or
practice of profession. Losses of property used in trade or business,
resulting from fires, storms or other casualties, that are actually sustained
during the taxable year and not compensated for by insurance or other forms
of indemnity can be claimed as deductions for income tax purposes. The
amount of the deductible casualty loss is limited to the difference between
the value of the property immediately preceding the casualty and its value
thereafter

This bill seeks to grant additional tax relief to victims of calamities in
the form of real property tax moratorium in the affected areas for two (2)
fiscal years from the date of declaration of a state of calamity by the proper
local sanggunian. Real properties covered by the moratorium are residential
lands and buildings, commercial and industrial buildings, agricultural lands
together with the plants and growing fruit trees thereon, and permanently
installed machineries intended by the owners of the buildings or structures
for an industry or business which may be carried on therein.

In the case of donations, foreign assistance pouring in for victims of
calamities are exempt from taxes and import duties if channeled through
certain government agencies and state-accredited groups under Section 18 of
Republic Act No. 10121 or the Philippine Disaster Risk Reduction and

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Management Act of 2010, in conjunction with Section 105 of the Tariff and
Customs Code of the Philippines as amended. The Value-Added Tax (VAT)
on the foreign aid would instead be shouldered by the Philippine government
through budget reports and the tax expenditure fund from the General
Appropriations Act. Meanwhile, local donations are also exempt from
donor tax and deductible as an expense if properly accredited by the
DSWD.

This bill seeks to liberalize the requirements for the grant of
donations, whether foreign or local, by simply requiring the declaration of a
state of calamity by the proper sanggunian of the areas affected by
calamities for the donations to be exempt from all types of taxes. To ensure
proper monitoring by the government, it will only be required that said
donations be properly certified by the DSWD. Tax exemptions on donations
and assistance given to victims of calamities will further encourage donors
and ensure a steady flow of donations to the victims.

While the government depends upon taxation to serve the people for
whose benefit taxes are collected, the government must also be sensitive to
the needs of victims of natural calamities and assist in the alleviation of their
serious economic dislocations.

In view of the foregoing, the immediate consideration and passage of
this bill, filed by the undersigned as House Bill No. 5827 in the Sixteenth
Congress, is earnestly requested.

ARTHUR C. YAP
Representative


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 24.52

Introduced by REPRESENTATIVE ARTHUR C. YAP

AN ACT
PROVIDING FOR TAX RELIEF DURING TIMES OF
CALAMITY AND FOR OTHER PURPOSES

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

SECTION 1. Title. - This Act shall also be known as the
‘Calamity Tax Relief Act of 2016’.

SECTION 2. Declaration of Policy. - It shall be the policy of the
State to assist taxpayers in areas affected by natural calamities, through tax
relief, to reasonably recover from the financial burden caused upon them by
such natural disasters. In such cases of severe suffering of the people, there
is a need to balance the government’s primordial need for funds and the
people’s right to life, liberty, and property. Likewise, it shall also be the
policy of the State to provide tax exemption to donations and assistance
given to victims of calamities in order to encourage donors and for the
maximum utilization of the donations extended.

SECTION 3. Calamity Defined. - For purposes of this Act,

‘calamity’ shall mean a state of extreme distress or misfortune, produced by


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some adverse circumstance or event caused by natural forces such as, but

not limited to, typhoons, earthquakes, volcanic eruptions or similar natural

disasters.

SECTION 4. Effects of Declaration of Calamity - A declaration

of a state of calamity by the proper local sanggunian shall make effective the

following tax reliefs:

a)

b)

The real property tax in the affected areas shall not be assessed and
collected for two (2) fiscal years, starting from the date of declaration of
a state of calamity: Provided, That real property shall refer only to
residential lands and buildings, commercial and industrial buildings,
agricultural lands together with the plants and growing fruit trees
thereon, and permanently installed machineries intended by the owners
of the buildings or structures for an industry or business which may
be carried on therein.

Any donation in the name of any organization that declares that the
funds donated shall be in favor of the victims of the calamity shall be
exempt from donor’s tax: Provided, That the donation is certified by the
Department of Social Welfare and Development (DSWD): Provided,
further, That no more than ten percent (10%) of the said donation shall
be used by the donee organization for administration purposes.

SECTION 5. Implementing Rules and Regulations. - The

Commissioner of the Bureau of Internal Revenue (BIR) shall, within thirty

(30) days from the effectivity of this Act, promulgate the rules and

regulations necessary for the effective implementation of

this Act.


SECTION 6. Separability Clause. - If, for any reason, any
provision of this Act is declared unconstitutional or invalid, the other
sections or provisions hereof which are not affected thereby shall continue
to be in full force and effect.

SECTION 7. Repealing Clause - All laws, decrees, orders, rules
and regulations, or parts thereof, inconsistent with the provisions of
this Act are hereby repealed, amended or modified accordingly.

SECTION 8. Effectivity Clause - This Act shall take effect after
fifteen (15) days following its complete publication in the Official
Gazette or in at least two (2) newspapers of general circulation.

Approved.