16th CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'14 
FEB 27 P 6 :39 
SENATE 
S. BILL NO. 2149 
IUX'EIVElJ In, 
\'{)I 
-IW v 
Introduced by Senator SONNY M. ANGARA 
Explanatory Note 
This bill seeks to amend Section 24 of the National Internal Revenue Code of 
1997, as amended, by adjusting the individual income tax brackets and reducing the rates 
of individual income tax beginning January 1,2015, 
The bill is part of a twin measure to reduce the country's income tax rates for 
individuals and corporations in preparation for the Association of South East Asian 
Nations (ASEAN) Integration, This legislative measure is consistent with the Philippine 
commitment to the 10-member ASEAN Economic Community (AEC) Blueprint, which 
seeks to transform ASEAN into a single market and production base by December 2015. 
The AEC shall be guided by five (5) cote elements, such as free flow of goods, free flow 
of services, free flow of investment, freer flow of capital, and free flow of skilled labor. 
While the ASEAN Blueprint does not mandate member countries to amend their 
income tax schedules, it is highly expected that human capital would flow to where it 
could earn best. Next to Thailand and Vietnam, the Philippines has the highest top rate at 
32-percent. When the AEC Declaration was signed in 2007, some member-states began 
to lower their corporate and individual income tax rates, with further reductions in the 
subsequent years. 
In order for the Philippines to attract human capital and to prevent the migration 
of our own, it is imperative that we reduce the existing income tax rates while 
maintaining the progressivity of our income tax system, as mandated by the 1987 
Philippine Constitution. 
The current individual income tax bracket has been unchanged since 1997 until 
today when the consumer price index (cpr) has almost doubled' already. In order to 
buffer the revenue impact of the individual income bracket adjustments and the reduction 
of individual income tax. rates, this bill spreads the reduction over a period of three (3) 
years. 
In view of the foregoing, immediate approval of this bill is earnestly sought. 
SONNY M. ANGARA 


16'h CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'14 
FEB 27 P 6 :39 
• 
S.BILLNO. 2149 
IUXEIVEO t\y: __ /~ 
SENATE 
Introduced by Senator SONNY M. ANGARA 
AN ACT 
AMENDING SECTION 24 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: 
' 
I 
SECTION 1. Section 24(A)(2) of the National Internal Revenue Code of 1997, as 
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amended, is hereby further amended to read as follows: 
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"Sec, 24, Income Tax Rates, -
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"(A) Rates of Income Tax on Individual Citizen and Individual Resident 
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Alien of the Philippines, -
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(2) Rates of Tax on Taxable Income of Individuals, - The tax shall 
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be computed in accordance with and at the rates established in the 
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following schedule: 
"Taxable Income 
Beginning 
Beginning 
Beginning 
January 1,2015 
January 1,2016 
January 1,2017 
"P20,000 but not over 
15% 
13% 
10% 
P70,000 
"Over P70,000 but not over 
PlO,500 + 20% of P9,100 + 18% of P7,000 + 15% of 
P200,000 
the 
excess 
over the 
excess 
over the 
excess 
over 
P70,000 
P70,000 
P70,000 
"Over P200,000 but not over 
P36,500 + 25% of P32,500 + 23% of P26,500 + 20% of 
P500,OOO 
the 
excess 
over the 
excess 
over the 
excess 
over 
P200,000 
P200,OOO 
P200,000 
"Over P500,000 but not over 
Plll,500 + 30% of PlOl,SOO + 25% of P86,500 + 22% of 
Pl,OOO,OOO 
the 
excess 
over the 
excess 
over the 
excess 
over 
P500,000 
P500,00O 
P500,000 
"Over Pl,OOO,OOO 
P26l,500 + 32%' of P226,500 + 28% of P196,500 + 25% of 
the 
excess 
over the 
excess 
over the 
excess 
over 
Pl,OOO,OOO 
Pl,OOO,OOO 
Pl,OOO,OOO" 
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"[NotoverPI0,000 """,""" " " ,," 5% 
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"Over PIO,OOO but not over"", .. "", P500 + 1 O%ofthe excess 
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P30,OOO 
over PIO,OOO 
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"Over P30,OOO but not over .. ",." "" P2,500 + 15% of the excess 
• 


2 
3 
4 
5 
6 
7 
8 
9 
10 
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1"70,000 
over 1"30,000 
"Over 1"70,000 but not over ............ 1"8,500 + 20% of the excess 
1"140,000 
over 1"70,000 
"Over 1"140,000 but not over ........... 1"22,500 + 25% of the excess 
1"250,000 
over 1"140,000 
"Over 1"250,000 but not over............ 1"50,000 + 30% of the excess 
1"500,000 
over 1"250,000 
"Over 1"500,000 ................... ,. ...... 1"125,000 + 32% of the excess 
over 1"500,000)" 
"xxx 
"xxx. 
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SEC. 2. Implementing Rules and Regulations. - The Secretary of Finance shall 
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promulgate the necessary rules and regulations for the effective implementation of the 
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provisions of this Act. 
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SEC. 3. Repealing Clause. - All laws, orders, issuances, circulars, rules and 
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regulations or parts thereof, which are inconsistent with the provisions of this Act are 
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hereby repealed or modified accordingly. 
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SEC. 4. Separability Clause. - If any provision of this Act is declared 
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unconstitutional or invalid, other parts or provisions hereof not affected thereby shall 
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continue to be in full force and effect. 
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SEC. 5. Effectivity. - This Act shall take effect on January 1,2015 following its 
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publication in at least two (2) newspapers of general circulation. 
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Approved, 
•