{HOUSE OF REP;
Republic of the Philippines

HOUSE OF REPRESENTATIVES RECEIVED
Quezon City
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SEVENTEENTH CONGRESS ey.
First Regular Session —fo__

PISTRA TION UNIT

BILLS A\D AUX SERVICE

House Bill No. 2347

Introduced by Representative GLORIA MACAPAGAL ARROYO.

AN ACT AMENDING SECTION 24 OF THE NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED, AND FOR OTHER PURPOSES

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, 2017.

Article VI, Section 28 (1) of the 1987 Constitution provides that “the rule of taxation shall
be uniform and equitable” and for Congress to “evolve a progressive system of taxation”
wherein the tax rates imposed must be based on the person's ability to pay. However,
after almost two decades, our individual income tax bracket has remained unchanged
while the consumer price index (CPI) has more than doubled already. Bracket creep
has pushed middle-income eamers to higher tax brackets even without any “real”
increase in their income. Our outdated, unfair and oppressive tax system has burdened
our taxpayers for so long,

This bill aims to lower income tax rates across-the-board, reducing the highest tax rate
from 32 to 25 percent by 2019, and to compress the tax brackets from seven to five.
Given the wage distortion due to the exemption from tax payment of minimum wage
earners, this bill sets the lowest tax bracket at Php70,000 taxable income taking into
consideration prevailing minimum wage

It must be stressed that taxation is not just a way for the government to raise revenue; it
is also a means to build a more humane and just society, and to ensure upward
mobility

In view of the foregoing, the immediate approval of this bill is earnestly sought

oat

GLORIA MACAPAGAL ARROYO
2” District, Pampanga

TATIVES


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2347

Introduced by Representative GLORIA MACAPAGAL ARROYO

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 House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 24(A)(2) of the National Internal Revenue Code of 1997,
as amended, is hereby further amended to read as follows:

“Sec. 24. Income Tax Rates. —

*(A) Rates of Income Tax on Individual Citizen and Individual Resident
Alien of the Philippines —

(2) Rates of Tax on Taxable Income of Individuals. - The tax shall be
computed in accordance with and at the rates established in the following
schedule:

TAXABLE INCOME | BEGINNING GINNING BEGINNING
JANUARY 4, 2017__| JANUARY 1, 2018 __| JANUARY 14, 2019
NOT OVER P70,000 0% 0% 0%

OVE! 15% 13% 10%

NOT OVER P200,000

‘OVER P200,000 BUT | P30,000+20% of the | P26,000+18% of the | P20,000+15% of the
NOT OVER P500,000 | excess over P200,000 | excess over P200,000 | excess over P200,000
|

OVER P500,000 BUT | P90.000+25% of the | P80,000+23% of the | P65,000+25% of the

NOT OVER | excess over P500,000 | excess over P500,000 | excess over P500,000

|P1,000,000_ | —

‘OVER P'1,000,000 P215,000+32% of the | P195,000+28% of the | P165,000+25% of the
excess over | excess ‘over | excess over
1,000,000 _ 1,000,000 1,000,000

PROVIDED, THAT EVERY THREE (3) YEARS AFTER THE
EFFECTIVITY OF THIS ACT, THE PRESIDENT OF THE PHILIPPINES
SHALL ADJUST THE AMOUNTS HEREIN STATED TO ITS PRESENT


VALUE USING THE CONSUMER PRICE INDEX (CPI), AS PUBLISHED
BY THE PHILIPPINE STATISTICS AUTHORITY (PSA).”

“[Not over P10,000

“Over P10,000 but not over P30,000

“Over P30,000 but not over P70,000

“Over P70,000 but not over P140,000

“Over P140,000 but not over P250,000

“Over P250,000, but not over P500,000

“Over P500,000

peed

“XXX,

5%

P500 +10% of the excess
over P10,000

P2,500+15% of the excess
over P30,000

P8,500+20% of the excess
over P70,000

P22,500+25% of the
excess over P140,000

P50,000+30% of the
excess over P250,000

P125,000+32% of the
excess over P500,000]”

SECTION 2. Implementing Rules and Regulations. — The Secretary of
Finance shall promulgate the necessary rules and regulations for the effective

implementation of the provisions of this Act

SECTION 3. Repealing Clause. — All orders, rules, regulations and other
issuances, or parts thereof, which are inconsistent with this Act, are hereby repealed or

modified accordingly.

SECTION 4. Separability Clause.— Any provision of this Act declared
unconstitutional shall not affect the validity of the other provisions thereof.

SECTION 5. Effectivity. - This Act shall take effect on January 1, 2017 following
its publication in at least two (2) newspapers of general circulation

Approved,