Section 9Sec./Art. 9

Section 34 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"SEC. 34. Deductions from Gross Income. - Except for taxpayers earning compensation income arising from personal services rendered under an employer-employee relationship where no deductions shall be allowed under this Section, in computing taxable income subject to income tax under Sections 24(A); 25(A); 26; 27(A), (B), and (C); and 28(A)(I), there shall be allowed the following deductions from gross income:

"(A) Expenses. -

"(1) Ordinary and Necessary trade, Business or Professional Expenses. -

"(a) x x x

"(i) x x x

"x x x

"(v) An additional deduction from taxable income of one-half (1/2) of the value of labor training expenses incurred for skills development of enterprise-based trainees enrolled in public senior high schools, public higher education institutions, or public technical and vocational institutions and duly covered by an apprenticeship agreement under Presidential Decree No. 442, series of 1974, or the 'Labor Code of the Philippines', as amended, shall be granted to enterprises: Provided, further, That for the additional deduction foe enterprise-based training of students from public educational institutions, the enterprise shall secure proper certification from the DepEd, TESDA, or CHED: Provided, finally, That such deduction shall not exceed ten percent (10%) of direct labor wage.

"(B) Interest. -

"(1) In General. - The amount of interest paid or incurred within a taxable year on indebtedness in connection with the taxpayer's profession, trade or business shall be allowed as deduction from gross income: Provided, however, That the taxpayer's otherwise allowable deduction for interest expense shall be reduced by twenty percent (20%) of the interest income subjected to final tax: Provided, finally, That if the interest income tax is adjusted in the future, the interest expense reduction rate shall be adjusted accordingly based on the prescribed standard formula as defined in the rules and regulations to be promulgated by the Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue.

"(2) x x x

"(C) Taxes. - x x x

"(D) Losses. - x x x

"(E) Bad debts. - x x x

"(F) Depreciation. - x x x

"(G) Depletion of Oil and Gas Wells and Mines. - x x x

"(H) Charitable and Other Contributions. - x x x

"(I) Research and Development. - x x x

"(J) Pension Trusts. - x x x

"(K) Additional Requirements for Deductibility of Certain Payments. - x x x

"(L) Optional Standard Deduction (OSD). - x x x.