H. No. 34314 / 88 OG No. 28, 4476 (July 13, 1992) ; 3 VLD 252 2d
"(a) Taxable compensation income. - A tax is hereby imposed upon the taxable compensation income as defined in Section 27, other than the incomes subject to tax under paragraphs (b), (c), (d), (e) and (f) of this section, received during each taxable year from all sources determined in accordance with the following schedule:
"Not over P 2,500 | 0% |
"Over P 2,500 but not over P 5,000 | 1% |
"Over P 5,000 but not over P 10,000 | P 25 + 3% of excess over P 5,000 |
"Over P 10,000 but not over P 20,000 | P 175 + 7% of excess over P 10,000 |
"Over P 20,000 but not over P 40,000 | P 875 + 11 % of excess over P 20,000 |
"Over P 40,000 but not over P 60,000 | P 3,075 + 15% of excess over P 40,000 |
"Over P 60,000 but not over P 100,000 | P 6,075 + 19% of excess over P 60,000 |
"Over P 60,000 but not over P 100,000 | P 6,075 + 19% of excess over P 60,000 |
"Over P l00,000 but not over P 250,000 | P 13,675 + 24% of excess over P 100,000 |
"Over P 250,000 but not over P 500,000 | P 49,675 + 29% of excess over P 250,000 |
"Over P 500,000 | P 122,175 + 35% of excess over P 500,000" |
"(f) Simplified Net Income Tax for the Self-employed and for Professionals Engaged in the Practice of Profession. - A tax is hereby imposed upon the taxable net income as determined in Section 27 received during each taxable year from all sources, other than income covered by paragraphs (b), (c), (d) and (e) of this section by every individual whether a citizen of the Philippines or an alien residing in the Philippines who is self-employed or practices his profession therein, determined in accordance with the following schedule:
"Not over P 10,000 | 3% |
"Over P 10,000 but not over P 30,000 | P 300 + 9% of excess over P 10,000 |
"Over P 30,000 but not over P120,000 | P 2,100 + 15% of excess over P 30,000 |
"Over P 120,000 but not over P 350,000 | P 15,600 + 20% of excess over P 120,000 |
"Over P350,000 | P 61,600 + 30% of excess over P350,000" |
"In computing taxable income subject to tax under Sections 21(a); 24(a), (b), and (c); and 25(a)(1), there shall be allowed as deductions the items specified in paragraphs (a) to (i) of this section: Provided however, That, in computing taxable income subject to tax under Section 21(f) in the case of individuals engaged in business or practice of profession, only the following direct costs shall be allowed as deductions:SEC. 6. The Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue, shall promulgate and publish the necessary rules and regulations for the effective implementation of the provisions of this Act."(a) Raw materials, supplies and direct labor;"For individuals whose cost of goods sold and direct costs are difficult to determine, including professionals as herein defined, a maximum of forty percent (40%) of their gross receipts shall be allowed as deductions to answer for business or professional expenses as the case may be."
"(b) Salaries of employees directly engaged in activities in the course of or pursuant to the business or practice of their profession;
"(c) Telecommunications, electricity, fuel, light and water;
"(d) Business rental;
"(e) Depreciation;
"(f) Contributions made to the Government and accredited relief organizations for the rehabilitation of calamity-stricken areas declared by the President; and
"(g) Interest paid or accrued within a taxable year on loans contracted from accredited financial institutions which must be proven to have been incurred in connection with the conduct of a taxpayer's profession, trade or business.
(Sgd.) NEPTALI A. GONZALES | (Sgd.) RAMON V. MITRA |
President of the Senate | Speaker of the House of Representatives |
(Sgd.) ANACLETO D. BADOY, JR. | (Sgd.) CAMILO L. SABIO |
Secretary of the Senate | Secretary General House of Representatives |