Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2539

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

This bill seeks to grant tax exemption on allowances and benefits
granted to public school teachers. Undoubtedly, there is a great
demand now for public school teachers in the rural areas especially
considering the shortage brought about lately by the exodus of
teachers for overseas employment. However, the difficulties of life in
the rural areas, such as in transportation, lodging or insurgency
problem, to mention only a few, have discouraged teachers to be
employed there.

Thus, it is the sincere belief of the undersigned that with this
privilege of tax exemption on salary, more new teachers will be
encouraged to accept teaching jobs in remote areas, where usually
vacancy of temporary nature exists. This is because public school
teachers in this category either will get an equal take home pay or a
regular public school teacher may even get more than due to the
savings they get from being tax exempt.

This bill will also encourage teachers to opt to stay in the public
school system to enhance the teaching-learning process. It cannot be
ignored that the tax exemption on the income of teachers will result in
extra money for them to spare for their other needs.

In view of the foregoing, approval of this bill is urgently sought.

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2539

Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT
EXEMPTING FROM TAX ALL ALLOWANCES AND BENEFITS
GRANTED TO PUBLIC SCHOOL TEACHERS, INCLUDING THOSE
IN THE STATE COLLEGES AND UNIVERSITIES

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

SECTION 1. Short Title. - This Act shall be referred to as “The
Public School Teachers’ Tax Incentive Act”.

SEC. 2. Statement of Policy. - It is hereby declared the policy
of the State to assign the highest budgetary priority to education and
ensure that teaching will attract and retain its rightful share of the best
available talents through adequate remuneration and other means of
job satisfaction and fulfillment.

It is further declared a policy and commitment of the State. to
promote and improve the economic status of all public school teachers,
including those in State colleges and universities by increasing their
take home pay through exemption from tax all allowances and benefits
granted to them.

SEC. 3. Exclusions from Gross Income. - All allowances and
benefits granted to public school teachers, including those in the State
colleges and universities at all levels, shall not be included in the
computation of gross income and shall be exempt from taxation under
Title III, Chapter VI of Republic Act No. 8424, otherwise known as the
“Tax Reform Act of 1997”.

SEC. 4. Exemption from Attachment, Levy, and Execution.
- All benefits and allowances referred to herein shall likewise not be
subject to attachment, levy, and execution.

SEC. 5. Rules and Regulations. - The Commissioner of the
Bureau of Internal Revenue is hereby authorized to promulgate such
rules and regulations as may be necessary to implement the provisions
of this Act.

SEC. 6. Repealing Clause. - All laws, decrees, executive
orders, letters of instruction, letters of instruction, letters of


implementation, rules and regulations, and other issuances
inconsistent with any provision of this Act are hereby repealed,
modified, superseded or amended accordingly.

SEC. 7. Separability Clause. - If any provision of this Act of
the application of such provision to any person or circumstance is held
invalid for any reason, the remainder of this Act or the application of
such provision to other persons or circumstances shall not be affected
thereby.

SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days

after its complete publication in any two (2) newspapers of general
circulation.

Approved,