Senate Office of the Secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) First Regular Session ) MAR -4 P4:53 SENATE 1932 RECEIVED BY: S. No. Introduced by Senator Manuel "Lito" M. Lapid AN ACT STRENGTHENING THE MECHANISM FOR FREE LEGAL ASSISTANCE, AMENDING FOR THE PURPOSE SECTIONS 4 AND 5 OF REPUBLIC ACT NO. 9999, OTHERWISE KNOWN AS THE "FREE LEGAL ASSISTANCE ACT OF 2010" EXPLANATORY NOTE The Constitution guarantees that "free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty." In 2010, Republic Act No. 9999 was enacted to encourage lawyers to provide pro bono services by offering tax incentives. However, the law has been ineffective due to restrictive provisions and the lack of a streamlined verification system. Furthermore, on August 20, 2024, the Supreme Court En Banc approved A.M. No. 22-11-01-SC, or the "Rules on Unified Legal Aid Service" (ULAS). This new rule mandates all covered lawyers to render at least sixty (60) hours of pro bono legal aid service every three (3) years. To harmonize the law with these new judicial developments, this bill seeks to: • Integrate the tax incentives with the Supreme Court's ULAS framework;
• Allow the mandatory legal aid hours rendered under ULAS to be tax- deductible, thereby converting a regulatory burden into a tangible financial relief; and • Designate the newly created ULAS Board as the primary verification authority, eliminating bureaucratic red tape. In view of the foregoing, the immediate passage of this bill is earnestly sought.
Senate Office of the setietary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) First Regular Session 26 MAR -4 P4:53 SENATE 1932 RECEIVED BY: S. No. _ Introduced by Senator Manuel "Lito" M. Lapid AN ACT STRENGTHENING THE MECHANISM FOR FREE LEGAL ASSISTANCE, AMENDING FOR THE PURPOSE SECTIONS 4 AND 5 OF REPUBLIC ACT NO. 9999, OTHERWISE KNOWN AS THE "FREE LEGAL ASSISTANCE ACT OF 2010" Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
SECTION 1. Section 4 of Republic Act No. 9999 is hereby amended to read as
follows: "SEC. 4. [Requirements for Availment] VERIFICATION OF SERVICES. - For purposes of CLAIMING THE DEDUCTIONS PROVIDED UNDER [availing of the benefits and services as envisioned in] this Act, THE UNIFIED LEGAL AID SERVICE (ULAS) BOARD, CREATED UNDER A.M. NO. 22-11-01-SC, SHALL SHARE ITS COMPLIANCE RECORDS WITH THE BUREAU OF INTERNAL REVENUE (BIR). THE CERTIFICATE OF COMPLIANCE OR EQUIVALENT RECORD ISSUED BY THE ULAS BOARD TO A COVERED LAWYER OR REGISTERED ORGANIZATION SHALL BE SUFFICIENT PROOF FOR THE AVAILMENT OF TAX DEDUCTIONS. PENDING THE FULL INTEROPERABILITY OF DATA BETWEEN THE ULAS BOARD AND THE BIR, a lawyer or professional partnership shall secure a certification from the [Public Attorney's
Office (PAO), the Department of Justice (DO])] ULAS BOARD or AN accredited association of the Supreme Court indicating that the [said] legal services PROVIDED are within the services defined by the Supreme Court UNDER THE ULAS RULES."
SECTION 2. Section 5 of Republic Act No. 9999 is hereby amended to read as follows:
"SEC. 5. Incentives to Lawyers. - For purposes of this Act, a lawyer or professional PARTNERSHIP [partnerships]rendering actual free legal services, as defined by the Supreme Court, shall be entitled to an allowable deduction from the gross income, EQUIVALENT TO the amount that could have been collected for the actual free legal services rendered or up to THIRTY PERCENT (30%) [ten percent (10%)] of the gross income derived from the actual performance of the legal profession, whichever is lower: Provided, That the actual free legal services herein contemplated shall be INCLUSIVE [exclusive] of the MANDATORY PRO BONO LEGAL AID SERVICES RENDERED UNDER THE RULES ON UNIFIED LEGAL AID SERVICE (ULAS) PURSUANT TO A.M. NO. 22-11-01-SC, OR ANY SUBSEQUENT ISSUANCE BY THE SUPREME COURT. PROVIDED, FURTHER, THAT FOR PROFESSIONAL PARTNERSHIPS OR LAW FIRMS ELECTING TO AGGREGATE THEIR COMPLIANCE HOURS AS ALLOWED UNDER THE ULAS RULES, THE TAX DEDUCTION MAY BE CLAIMED BY THE PARTNERSHIP CORRESPONDING TO THE TOTAL VALUE OF SERVICES RENDERED BY ITS PARTNERS AND ASSOCIATES. PROVIDED, FINALLY, THAT ACTUAL OUT-OF-POCKET EXPENSES INCURRED BY THE LAWYER OR PARTNERSHIP IN THE PROVISION OF FREE LEGAL SERVICES SHALL BE FULLY DEDUCTIBLE FROM GROSS INCOME AND SHALL NOT BE
SUBJECT TO THE THIRTY PERCENT (30%) CAP PRESCRIBED IN THIS SECTION."
SECTION 3. Implementing Rules and Regulations. — Within ninety (90) days
4 from the effectivity of this Act, the Secretary of Finance, upon the recommendation of 5 the Commissioner of Internal Revenue, and in consultation with the ULAS BOARD and 6 the Supreme Court, shall promulgate the necessary rules and regulations for the 7 effective implementation of this Act.
SECTION 4. Separability Clause. — If any provision of this Act is declared
9 unconstitutional or invalid, the other provisions not affected by such declaration shall remain in full force and effect.
SECTION 5. Repealing Clause. - All laws, decrees, ordinances, or administrative
circulars not consistent with any provision of this Act are hereby amended, repealed or modified accordingly.
SECTION 6. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its complete publication in the Official Gazette or in two (2) newspapers of general circulation. Approved,