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EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
S.B. NO.
SENATE
220
DATE:
BILLS &  INDEX
Introduced by SENATOR IMEE R. MARCOS
AN ACT
RATIONALIZING THE EARMARKING OF VALUE-ADDED TAXATION 
TO ADDRESS INTER-GENERATIONAL POVERTY, AMENDING FOR 
THE PURPOSE SECTION 288 OF THE NATIONAL INTERNAL 
REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Philippines Value Added Tax (VAT) is a broad, far-reaching, 
revenue measure that has been refined, over time, through legislation, to meet the 
needs of Filipinos and national development. In this regard, this measure is another 
step forward in rationalizing the VAT and providing for vital and immediate social 
welfare goals.
This measure earmarks VAT proceeds for food vouchers, and welfare related 
programs and projects needed to address inter-generational poverty. This bill will 
ensure that the poorest of the poor are uplifted through health care, educational 
opportunities, agricultural modernization, disaster risk reduction, and environmental 
care, the next step forward in eradicating poverty, and assuring resiliency of our 
poorest communities.
Further, this bill arrests the possible reduction of the share of local government 
units from VAT proceeds. Under Section 288 of Republic Act No. 8424 or the


National Internal Revenue Code, Fifty Percent (50%) of inaemental VAT proceeds 
goes to LGUs for specifically provided purposes. This would be a lot less than the 
VAT proceeds from the 
'just share' of local government units under Section 6, 
Article X of the 1987 Constitution, which the Supreme Court Ruling clarified to be 
based on all national taxes and not only on national internal revenue taxes, as 
provided in Section 284 of the Local Government Code.
In line with this, this measure requires that Sixty Percent (60%) of all revenue 
proceeds from VAT, equivalent to the share of the national government, be 
reallocated to activities that will arrest intergenerational poverty nationwide.
In view of the foregoing, the immediate passage of this measure is earnestly
sought.
IMEE R. MARCOS


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHIUPPINES 
First Regular Session
SENATE
S. B. NO.
220
DATE
J ■ l^
INDEX
Introduced by SENATOR IMEE R. MARCOS
AN ACT
RATIONALIZING THE EARMARKING OF VALUE-ADDED TAXATION TO 
ADDRESS INTER-GENERATIONAL POVERTY, AMENDING FOR THE 
PURPOSE SECTION 288 OF THE NATIONAL INTERNAL REVENUE 
CODE, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
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Section. 1. Declaration of Policy. It is hereby declared the policy of the State:
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a) To ensure a progressive tax system geared towards uplifting the poor 
through sustainable development programs;
b) To guarantee Local Government Units are provided with a just share 
based on all national taxation that funds local economic development 
and poverty alleviation; and
c) To promote sustainable intergenerational poverty alleviation and pro­
poor productivity enhancing programs.


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Sec. 2. Sec. 288 of the NIRC, as amended, is hereby further amended to read 
as follows:
"Sec. 288. Disposition of Incremental Revenues. -
(A) X X X
(B) x X X
(C) X X X
(D) [ Incremental] TOTAL Revenues from the Value-Added Tax. [Fifty 
percent (50%) of the Local Government unit's shore from- the] THE 
TOTAL revenue from the Value-Added Tax shall be allocated and used 
exclusively for the following purposes:
(1) [Fifteen 
percent (15%)] 
TEN 
PERCENT (1 0 % ) 
for 
public 
elementary and secondary education to finance the ACQUISITION 
AND 
IMPROVEMENT OF SITES, construction 
of buildings, 
purchases of school furniture and in-service teacher trainings;
(2) Ten percent (10%) for health insurance premiums of enrolled 
indigents as a counterpart contribution [ of the local government] to 
sustain the universal coverage of the National Health Insurance 
Program;
(3) [Fifteen percent (15%)] TEN PERCENT (1 0 % ) for environmental 
conservation 
to 
fully 
implement 
a 
comprehensive 
national 
reforestation program; [and]
(4) 
Ten percent (10%) for agricultural modernization to finance the 
construction 
of farm-to-market 
roads 
and 
irrigation 
facilities,
COMMUNAL 
IRRIGATION 
SYSTEMS; 
POST-HARVEST 
FACILITIES; SEED AND ORGANIC FERTILIZER SUBSIDIES; 
LIVESTOCK DISPERSAL PROGRAM; AND ESTABLISHMENT OF 
MARICULTURE AND AQUACULTURE PARKS [ t] ;


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(5 ) 
TEN PERCENT (1 0 % ) FOR FOOD VOUCHERS FOR THE 
FIRST TO SEVENTH INCOME DECILES OF THE NATIONAL 
HOUSEHOLD 
TARGETING 
SYSTEM 
FOR 
POVERTY 
REDUCTION (NHTS-PR); AND
(6 ) 
TEN 
PERCENT 
(1 0 % ) 
FOR 
SOCIAL 
MITIGATING 
MEASURES AND INVESTMENTS IN  SOCIAL PROTECTION, 
EMPLOYMENT, AND HOUSING THAT PRIORITIZE THE POOR 
AND NEAR-POOR HOUSEHOLDS, AS IDENTIFIED UNDER THE 
NHTS-PR.
Sec. 3. Separability Clause. -  If any part or provision of this Act is held 
unconstitutional or invalid, the remaining parts or provisions not affected shall 
remain in full force and effect.
Sec. 4. Repealing Clause. -  Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to 
or inconsistent with the provisions of this Act is hereby repealed, modified, or 
amended accordingly.
Sec. 5. Effectivity Clause. -  This Act shall take effect on January 1, 2020 
following its complete publication in the Official Gazette or in at least one (1) 
newspaper of general circulation.
Approved,