Section 4Sec./Art. 4

Section 24 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"Section 24. Income Tax Rates. -

x x x

(B) Rates of Tax on Certain Passive Income. -

(1) Interests, Prizes, and Other Winnings. - A final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest, yield, or any other monetary benefit earned from any currency bank deposit or deposit substitute, trust funds, and other similar arrangements; prizes (except prizes amounting to Ten thousand pesos (P10,000) or less which shall be subject to tax under 'Subsection (A) of Section 24); and other winnings (except winning amounting to Ten thousand pesos (P10,000) or less from Philippine Charity Sweepstakes and Lotto which shall be exempt), derived from sources within the Philippines.

(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 company, or on the share of an individual in the distributable net income after tax of a partnership (except a general professional partnership), of which the individual 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 the individual is a member or co-venturer.

(3) Capital Gains from the Sale, Exchange, or Disposition of Shares of Stock not Traded in a Local or Foreign 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, exchange, or other disposition of shares of stock in a domestic or foreign corporation, except shares sold or disposed through a local or foreign stock exchanges subject to stock transaction tax under Section 127(A) and (B) of this Code.

(4) Capital Gains from Sale of Real Property. -

x x x

(5) Royalties. - A final tax at the rate of twenty percent (20%) is hereby imposed on royalties earned as passive income: Provided, That royalties on books, as well as other literary works and musical compositions, shall be subject to a final tax of ten percent (10%)."