Senate OKs bills on tax exemptions, incentives


Sen. Ralph Recto, the chairman of the Senate committee on ways and means who sponsored the measure, said SB 2855 seeks to amend Section 35 of the National Internal Revenue Code of 1997 that limits the number of dependents to only four at P25,000 per dependent. INQUIRER FILE PHOTO

The Senate has approved two revenue measures that will impact on ordinary wage earners’ tax deductions and promote the affordability of hybrid, environment friendly vehicles like the Toyota Prius.

The Senate passed on third and final reading Senate Bill No. 2855, the proposed Family Care Act of 2013, that seeks to lift the limit on the number of qualified dependents that a taxpayer may claim for tax deductions.

It also approved Senate Bill No. 2856, or the Alternative Fuel Vehicles Incentives Act, which grants tax incentives to manufacturers or importers of alternative-fuel vehicles to make such cars more affordable.

Sen. Ralph Recto, the chairman of the Senate committee on ways and means who sponsored the measure, said SB 2855 seeks to amend Section 35 of the National Internal Revenue Code of 1997 that limits the number of dependents to only four at P25,000 per dependent.

Economic reprieve


“The impact of the bill is on the economic reprieve that will be granted to families, alleviating the financial difficulties of taxpayers with more children, and allowing individuals to cope with the cost of caring for parents and legitimate children or children with disabilities,” he said.

According to Recto, the cap on the number of dependents was established in 1973 to promote family planning but has had the effect of discriminating against taxpayers with large families.

The rationale for removing the limitation on the number of qualified dependents is that setting a ceiling on the number of dependents has no bearing on the decision of couples to beget children, he said.

This view is supported by economists, Recto said.

SB 2855 also proposes the expansion of the coverage of qualified dependents to include parents who are dependent on a taxpayer for support and are living with him or her.

Extended exemptions

The bill also proposes to extend coverage to a parent or parents, regardless of income, who are incapable of self-support because of mental or physical disability.

“We also propose to allow a taxpayer who acts as the legal guardian of a person with mental or physical handicap, regardless of age and incapable of self-support, to claim the additional exemption for these dependents,” Recto said.

Besides Recto, the other authors of SB 2855 are Senators Manuel Villar, Lito Lapid and Antonio Trillanes.

Recto, who also authored the proposed Alternative Fuel Vehicles Incentives Act, said the proposed law “will usher [in] an era of cheaper, cleaner cars that will reduce the country’s dependency on the use of fossil fuels.”

Alternative fuel incentives


Under SB 2856, fiscal and nonfiscal incentives will be granted for the importation and manufacture of electric, hybrid and other vehicles using alternative sources of energy such as, but not limited to, solar, wind, hydrogen fuel cell, compressed natural gas or liquefied natural gas, methane and liquefied petroleum gas.

He said the manufacturers or assemblers of completely knocked down units of alternative fuel vehicles, or AFVs, including the conversion of vehicles into electric, hybrid and other AFVs, will be exempted from payment of excise taxes and duties for nine years.

Manufacturers and assemblers of such vehicles will also be exempt from the payment of the value-added tax for the purchase and importation of raw materials, spare parts, components and capital equipment used in the manufacture or assembly of AFVs, also for nine years.

Recto said importers of completely built units of AFV will be exempt from payment of excise taxes and duties for nine years, while owners of AFVs will be exempt from the payment of the motor vehicle user’s charge (MVUC) upon registration of their vehicles.

Nonfiscal incentives granted under the proposed measure include priority in the registration and issuances of plate numbers and priority in franchise applications for public utility vehicles.

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  • danny

    Mas maigi kung aalisin nyo ang VAT !!!

    • sanjuan683

       hehehehe oo nga ano itong si VATBOY dumidiskarte na naman election na kasi kaya nagpapapogi. Utot mo VATBOY. I-repeal mo lang yan VAT tuwa na ako sa iyo.

  • Bansot

    I can’t see how Bill 2856 can have an impact on the living standars of ordinary wage earners, when this group  can hardly  afford to buy an ordinary vehicle , much more  a hybrid car which costs 15% to 20% higher. Government officials in higher position, and rich people are the only direct beneficiaries of this tax tax incentive , since they’re the ones who can afford the hybrid.

    • Karabkatab

      I agree with you on this Bansot.  Maybe the government can build roads or lanes exclusive to bicycles, so that students, workers and ordinary folks can travel at less cost and without having fear of being side swiped by motorized vehicles.  Private sector who owns commercial establishments, places of work and institutions shall likewise be required by the government to provide safe parking areas for bicycles

    • DamayDamayLang

       Kaya dapat, included doon yung bisekleta at padyak! … alternative energy source din yun ah!

  • Beguine

    Endless laws, especially questionable tax benefits and exemption
    supposed to tackle the gaps between rich and poor are a sheer waste 
    of time and effort.Instead, vigorously investigate, hound down, and seize the illegalloot of politicians and government and army officials, and funnelit all back to the government coffers, and then allocate for betternational treasury wealth distribution, thus directly aimed at creating jobs and employment and thereby helping the poor and jobless and giving the national overall economy the much-needed boost.  

  • Taiko_Kauna

    I suppose the proposed laws can be a good smokescreen to divert the people’s attention from the  senate’s bad image resulting from Enrile’s actions. 

  • Pablo Juan

    Both bills actually makes sense.


    galing ni VATman. ibaba tax ng hybrid car? kung pedicab nga wala akong pambili hybrid car pa.

    VATman kung gusto mo talagang makatulong sa mga mamayan ibaba nyo na lang ang VAT o mas maganda  tuluyan naitong tanggalin.

    Kaya lang wala ng paghahatihatian kayong mga kawatan

  • kismaytami

    Isn’t it more logical to lessen the withholding tax paid by singles? Single persons or those who do not have kids were the ones who does not add more burden to our country. And isn’t it more logical to add more tax for those whose jobs is to manufacture babies? They’re the ones who add more burden to the state.

    As a single person, I find it unfair to pay more taxes than those whose kids need to be sent to public schools or be given free health care or medicine.

    I also find it absurd to extend tax exemptions to those parents who are incapable of supporting their kids because they have many kids. Why make babies in the first place if you cannot afford to support them? Isn’t mr. recto’s bills against RH law or responsible parenthood?

    • common_juan

      So are you saying that the 1987 constitution is unconstitutional? It promotes caring to less fortunate people regardless of their status in life.

      • simplengmamayan

        aw parang ang layo nman nyan brod. What he/she was saying is include also the Single on tax exemption for they too take care of their senior parents or elderly. 

      • Harry

        It is those that worked to have more that is paying for the care and not the Constitution nor the officials.

    • Karabkatab

      Your statements are full of contradictions.  We are talking here of taxpayers.  The sector your mentioned, “baby manufacturers”, are not  tax payers as majority of them (if not all) are below the income threshold, in short no income or they don’t pay income tax.  People who earn a living, usually cannot afford to have many children, contrary to your belief. 

      • kismaytami

        What contradiction are you talking about??? Don’t you know that the conditional cash transfer project of the government is giving away tons of cash to baby manufacturers at the expense of taxpayers?

        Don’t you get it? You should pay more if you load more responsibilities to the state.

      • DamayDamayLang

         Kismataymi, please add that if they (those mass “baby manufacturers”) can not pay the required “higher” tax, the penalty is that, they cannot cast a vote!

      • kismaytami

        How I hope that’s the law here. You don’t pay tax, you don’t have the right to vote. Ano sila (baby manufacturers), sinusuwerte???

    • Lila

       the youth is the future.. if you’re single with no children meaning you’re only living for yourself.. so you must contribute more..

      • JaePablo

        Unfortunately Lila, here in our country, most of us SINGLES helps our family with the expenditures! 

      • kismaytami

        You always look to the future that you forgot today.

  • Harry

    How does the BIR verify the actual number of dependents of a taxpayer? A dishonest taxpayer can cheat the BIR for 21 years.

    No incentives for those buying energy saving cars?

  • rpcapinpin3

    Maganda kung Hybrid same price na non-hybrid vehicle para makahinga ka nang maluwag sa Metro Manila. At itaas ang bracket ng 13th month tax from 30k to 60k. Magiging “HAPPY” ang ordinaryong worker niyan. If these will happen I will vote for Mr. VATman.

  • Komen To

    So how much tax do you charge a lucky Filipino, who sits on the floor all year long, taking the salary from the taxes of poor people, and goes home before the year ends with millions as his Christmas gift? This bill is a stale icing on a rotten cake

    • JaePablo

      I feel for you kabayan, but your comment about getting taxes from the salary of these politicians doesn’t make sense… It will be like politicians will pay for their taxes coming from the taxes of the public. 

  • tower_of_power

    Why not make importation by private individuals of solar panels and related equipment tax free? This will truly help reduce expenditures on power by consumers … this will also help reduce pollution!!!


    • Komen To

      Agree. Smart idea, and I hope the poor can afford the price

    • AsensadongPinoy

      I second this, remove taxes on solar panels and other renewable energy materials. So regular people can afford them without being taxed to death!

  • JaePablo

    I hope that next time they tackle about taxation, there would be no corrupt politicians around… Feeling ko kasi, the more we pay tax, the more they can steal money from us! 

  • Fred

    Sige Ralph, dito ka bumawi sa Family Care Act 2013 dahil ang makikinabang ay mga fixed earners. Pag-isipan mo din kung papaano makapag bayad ng tamang buwis ang mga propesyunal na di nagi-issue ng resibo tulad ng duktor, abugado atbp.

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