Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House BillNo.__2660

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
GRANTING ADDITIONAL EXEMPTION TO AN _ INDIVIDUAL TAXPAYER,
AMENDING FOR THE PURPOSE SECTION 35(B) OF THE NATIONAL INTERNAL.
REVENUE CODE OF 1997, AS AMENDED BY REPUBLIC ACT NO. 9504

EXPLANATORY NOTE
The proposed measure seeks to ease the financial burden of individual taxpayers

by:

1) Removing the limitation on the number of allowable dependents and including
an additional exemption for those who have dependents with disability;

2) Including legitmated children and parent/s in the definition of dependents;

3) Allowing a legal guardian to a person with mental and physical disability to
claim additional exemption;

4) Allowing an additional exemption of Fifty Thousand Pesos (P50,000.00) for
each dependent child with disability regardless of age; and

5) Allowing an additional exemption of Fifty Thousand Pesos (P50,000.00) for
each dependent parent with disability


It is the hope of the authors that the additional exemptions proposed under the
bill will be a welcome respite for the unheralded working class who provides the much-
needed revenues for the government.

We therefore urge our colleagues to ensure the immediate passage of this bill.

DIOSDADO AGAL ARROYO GLORIA M, ”AGAL ARROYO
Second District, Camarines Sur SeconMBistrict, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

2660

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
GRANTING ADDITIONAL EXEMPTION TO AN INDIVIDUAL TAXPAYER,
AMENDING FOR THE PURPOSE SECTION 35(B) OF THE NATIONAL.
INTERNAL REVENUE CODE OF 1997, AS AMENDED BY REPUBLIC ACT
NO. 9504

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

SECTION 1. Section 35(B) of Republic Act No. 8424, otherwise known as
the National Internal Revenue Code of 1997, as amended by Republic Act No
9504, is hereby further amended to read as follows:

“SEC. 35. Allowance of Personal Exemption for Individual Taxpayer. —

(A) In General. — For purposes of determining the tax provided in Section
24(A) of this Title, there shall be allowed a basic personal exemption
amounting to Fifty Thousand Pesos (P50,000.00) for each individual
taxpayer.

In the case of married individual where only one of the spouses is
deriving gross income only such spouse shall be allowed the personal
exemption

(B) Additional Exemption for Dependents. - There shall be allowed an
individual exemption of Twenty Five Thousand Pesos (P25,000.00) for


each dependent WITHOUT DISABILITY [not exceeding four (4).] AND
FIFTY THOUSAND PESOS (P50,000.00) FOR EACH DEPENDENT
WITH DISABILITY.

The additional exemption for dependents REFERRED HEREIN shall be
claimed by only one of the spouses in case of married individuals.

In the case of legally separated spouses, additional exemptions may be
claimed only by the spouse who has custody of the child or children].

AN INDIVIDUAL TAXPAYER WHO IS THE LEGAL GUARDIAN OF A
DISABLED PERSON MAY CLAIM THE ADDITIONAL EXEMPTION FOR
THE SAID DEPENDENT: PROVIDED, THAT ONLY THE LEGAL
GUARDIAN CAN AVAIL OF THE ADDITIONAL EXEMPTION FOR A
PARTICULAR TAXABLE YEAR TO THE EXCLUSION OF THE
BIOLOGICAL PARENTS.

[Provided, that the total amount of additional exemptions that may be
claimed by both shall not exceed the maximum additional exemptions
herein allowed ]

[For purposes of this Subsection, a “dependent” means a legitimate,
illegitimate, or legally adopted child chiefly dependent upon and living with
the taxpayer if such dependent is not more than twenty-one (21) years of
age, unmarried and not gainfully employed or if such dependent,
fegardless of age, is incapable of self-support because of mental or
physical defect.]

FOR PURPOSES OF THIS SUBSECTION:
(A) THE TERM “DEPENDENT” REFERS TO:

1) A LEGITIMATE, LEGITIMATED, ILLEGITIMATE OR LEGALLY
ADOPTED CHILD CHIEFLY DEPENDENT UPON AND LIVING
WITH THE TAXPAYER IF SUCH DEPENDENT IS NOT MORE
THAN TWENTY-ONE (21) YEARS OF AGE, UNMARRIED AND
NOT GAINFULLY EMPLOYED OR IF SUCH DEPENDENT,
REGARDLESS OF AGE, IS INCAPABLE OF SELF-SUPPORT
BECAUSE OF MENTAL OR PHYSICAL DISABILITY;

2) A PARENT OR BOTH PARENTS, LIVING WITH THE
TAXPAYER, NOT GAINFULLY EMPLOYED AND DEPENDENT
UPON THE LATTER FOR CHIEF SUPPORT, OR WHERE SUCH
PARENTS ARE INCAPABLE OF SELF-SUPPORT BECAUSE OF
MENTAL OR PHYSICAL DISABILITY OR OLD AGE.


(B)THE TERM “DISABLED PERSON” REFERS TO A PERSON
SUFFERING FROM RESTRICTION OR DIFFERENT ABILITIES AS A
RESULT OF MENTAL, PHYSICAL OR SENSORY IMPAIRMENT, TO
PERFORM AN ACTIVITY IN THE MANNER OR WITHIN THE
RANGE CONSIDERED NORMAL FOR A HUMAN BEING.

8XXX”

SECTION 2. Penalty. — Notwithstanding the penalty provided for in
Section 267 of the National Internal Revenue Code of 1997, as amended, any
person who willfully violates the preceding section by declaring fictitious
dependents shall, upon conviction, be liable for the payment of a fine equivalent
to thrice the amount of tax, interest and surcharges due from the taxpayer.

SECTION 3. Implementing Rules and Regulations. — Within thirty (30)
days upon the approval of this Act, the Department of Finance, in coordination
with the Bureau of Internal Revenue and the Department of Social Welfare and
Development, shall issue the necessary implementing rules and regulations for
the effective implementation of this Act

SECTION 4. Separability Clause. — If any provision or part hereof is
subsequently declared invalid or unconstitutional, other provisions hereof which
are not affected hereby shall remain in full force and effect.

SECTION 5. Repealing Clause. — All laws, acts, presidential decrees,
executive orders, issuances, presidential proclamations, rules and regulations or
parts thereof which are contrary to or inconsistent with any provision of this Act
are hereby repealed, amended or modified accordingly.

SECTION 6. Effectivity Clause. - This Act shall take effect fifteen (15)

days after its publication in the Official Gazette, or in at least two (2) newspapers
of general circulation

Approved,