Section 5. Section 24 of The NIRC, As Amended, Is Hereby Further Amended To Read As Follows

Section 5.
Section 24 of the NIRC, 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 -
"(1) An income tax is hereby imposed:
"(a) On the taxable income defined in Section 31 of this Code, other than income
subject to tax under Subsections (B), (C), and (D) of this Section, derived for each
taxable year from all sources within and without the Philippines by every individual
citizen of the Philippines residing therein;
"(b) On the taxable income defined in Section 31 of this Code, other than income
taxable year from all sources within the Philippines by an individual citizen of the
Philippines who is residing outside of the Philippines including overseas contract
workers referred to in Subsection (C) of Section 23 hereof; and
"(c) On the taxable income defined in Section 31 of this Code, other than income
taxable year from all sources within the Philippines by an individual alien who is a
resident 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:
"(a) Tax Schedule Effective January 1, 2018 until December 31, 2022:
"Not over ₱250,000 0%
"Over ₱250,000 but not over ₱400,000 20% of the excess over ₱250,000
"Over ₱400,000 but not over ₱800,000 ₱30,000 + 25% of the excess over ₱400,000
"Over ₱800,000 but not over ₱2,000,000 ₱130,000 + 30% of the excess over ₱800,000
"Over ₱2,000,000 but not over ₱5,000,000 ₱490,000 + 32% of the excess over
₱2,000,000
"Over ₱8,000,000 ₱2,410,000 + 35% of the excess over

₱8,000,000
"Tax Schedule Effective January 1, 2023 and onwards:
"Not over ₱250,000 0%
"Over ₱250,000 but not over ₱400,000 15% of the excess over ₱250,000
"Over ₱400,000 but not over ₱800,000 ₱22,500 + 20% of the excess over ₱400,000
"Over ₱800,000 but not over ₱2,000,000 ₱102,500 + 25% of the excess over ₱800,000
"Over ₱2,000,000 but not over ₱8,000,000 ₱402,500 + 30% of the excess over
₱2,000,000
"Over ₱8,000,000 ₱2,202,500 + 35% of the excess over

₱8,000,000
"For married individuals, the husband and wife, subject to the provision of Section 51(D)
hereof, shall compute separately their individual income tax based on their respective total
taxable income: Provided, That if any income cannot be definitely attributed to or identified
as income exclusively earned or realized by either of the spouses, the same shall be divided
equally between the spouses for the purpose of determining their respective taxable income.
"Provided, That minimum wage earners as defined in Section 22(HH) of this Code shall be
exempt from the payment of income tax on their taxable income: Provided, further, That the
holiday pay, pay received by such minimum wage earners shall likewise be exempt from
income tax.
"(b) Rate of Tax on Income of "Purely Self-employed Individuals and/ or

Professionals Whose Gross Sales or Gross Receipts and Other Non-operating
Income Does Not Exceed the Value-added Tax (VAT) Threshold as Provided in
Section 109(BB).— Self-employed individuals and/or professionals shall have the
option to avail of an eight percent (8%) tax on gross sales or gross receipts and other
non-operating income in excess of Two hundred fifty thousand pesos (₱250,000) in
lieu of the graduated income tax rates under Subsection (A)(2)(a) of this Section and
the percentage tax under Section 116 of this Code.
"(c) Rate of Tax for Mixed Income Earners.— Taxpayers earning both compensation
income and income from business or practice of profession shall be subject to the
following taxes:
"(1) All Income from Compensation – The rates prescribed under Subsection
(A)(2)(a) of this Section.
"(2) All Income from Business or Practice of Profession –
"(a) If Total Gross Sales and/or Gross Receipts and Other Non-
operating Income Do Not Exceed the VAT Threshold as Provided in
Section 109(BB) of this Code.— The rates prescribed under
Subsection (A)(2)(a) of this Section on taxable income, or eight
percent (8%) income tax based on gross sales or gross receipts and
other non-operating income in lieu of the graduated income tax rates
under Subsection (A)(2)(a) of this Section and the percentage tax
under Section 116 of this Code.
"(b) If Total Gross Sales and/or Gross Receipts and Other Non-
operating Income Exceeds the VAT Threshold as Provided in Section
109(BB) of this Code.— The rates prescribed under Subsection (A)
(2)(a) of this Section.
"(B) Rate of Tax on Certain Passive Income.—
"(1) Interests, Royalties, Prizes, and Other Winnings.— A final tax at the rate of twenty
percent (20%) is hereby imposed upon the amount of interest from any currency bank
deposit and yield or any other monetary benefit from deposit substitutes and from trust funds
and. similar arrangements; royalties, except on books, as well as other literary works and
musical compositions, which shall be imposed a final tax of ten percent (10%); prizes (except
prizes amounting to Ten thousand pesos (₱10,000) or less which shall be subject to tax
under Subsection (A) of Section 24; and other winnings (except winnings amounting to Ten
thousand pesos (₱10,000) or less from Philippine Charity Sweepstakes and Lotto which shall
be exempt), derived from sources within the Philippines: Provided, however, That interest
income received by an individual taxpayer (except a nonresident individual) from a
depository bank under the expanded foreign currency deposit system shall be subject to a
final income tax at the rate of fifteen percent (15%) of such interest income: Provided,
further, That interest income from long-term deposit or investment in the form of savings,
common or individual trust funds, deposit substitutes, investment management accounts and
other investments evidenced by certificates in such form prescribed by the Bangko Sentral
ng Pilipinas (BSP) shall be exempt from the tax imposed under this Subsection: Provided,
finally, That should the holder of the certificate pre-terminate the deposit or investment
before the fifth (5th) year, a final tax shall be imposed on the entire income and shall be
deducted and withheld by the depository bank from the proceeds of the long-term deposit or
investment certificate based on the remaining maturity thereof:
"x x x."
"(2) Cash and/or Property Dividends. - A final tax at the rate of ten percent (10%) shall be
imposed upon the cash and/or property dividends actually or constructively received by an
individual from a domestic corporation or from a joint stock company, insurance or mutual
fund companies and regional operating headquarters of multinational companies, or on the
share of an individual in the distributable net income after tax of a partnership (except a
general professional partnership) of which he is a partner, or on the share of an individual in
the net income after tax of an association, a joint account, or a joint venture or consortium
taxable as a corporation of which he is a member or co-venturer.
"(C) Capital Gains from Sale of Shares of Stock not Traded in the Stock Exchange. - The provisions
of Section 39(B) notwithstanding, a final tax at the rate of fifteen percent (15%) is hereby imposed
upon the net capital gains realized during the taxable year from the sale, barter, exchange or other
disposition of shares of stock in a domestic corporation, except shares sold, or disposed of through
the stock exchange.
"x x x."

Section 5. Section 24 of The NIRC, As Amended, Is Hereby Further Amended To Read As Follows

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Section 5. Section 24 of The NIRC, As Amended, Is Hereby Further Amended To Read As Follows

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Section 5.

Section 24 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 24. Income Tax Rates. -

"(1) An income tax is hereby imposed:

"(2) Rates of Tax on Taxable Income of Individuals. - The tax shall be computed in

"Not over ₱250,000 0%

"Over ₱8,000,000 ₱2,410,000 + 35% of the excess over

"Tax Schedule Effective January 1, 2023 and onwards:

"Not over ₱250,000 0%

"Over ₱8,000,000 ₱2,202,500 + 35% of the excess over

"(b) Rate of Tax on Income of "Purely Self-employed Individuals and/ or

"(2) All Income from Business or Practice of Profession –

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