Manila: Senator Francis Pangilinan has introduced a legislative proposal aiming to raise the annual personal income tax exemption threshold from PHP250,000 to PHP350,000. This move aligns with President Ferdinand R. Marcos Jr.'s recent call during his fifth State of the Nation Address (SONA) to enhance the tax-exempt income threshold.
According to Philippines News Agency, Senate Bill No. 2344, filed a day following Marcos' penultimate SONA, suggests amendments to Section 24 of the National Internal Revenue Code of 1997. The bill seeks to exempt the initial PHP350,000 of annual taxable income from personal income tax, extending the higher exemption threshold to self-employed individuals and professionals who choose the 8-percent gross receipts tax regime.
Senator Pangilinan emphasized that the proposal aims to update the country's income tax exemption to better align with current economic conditions. The goal is to aid ordinary workers in retaining a larger share of their income for essential household needs such as food, transportation, education, healthcare, and utilities. He highlighted the ongoing issue of inflation eroding the purchasing power of Filipino families, while wage earners face increasing financial pressures despite stagnant incomes.
In a statement released Friday, Pangilinan remarked, "Filipinos have yet to reach their homes and yet their income for the day is already gone because of tax. They say PHP1,000 these days don't last long."
If the bill is enacted, it would also adjust income thresholds for higher tax brackets. The proposed thresholds include PHP500,000 for the 15-percent tax rate, PHP1 million for the 20-percent rate, PHP2.5 million for the 25-percent rate, and PHP8 million for the 30-percent rate.
A similar proposal was previously filed by Senator Bam Aquino last year. Aquino's Senate Bill No. 267, submitted on July 8, 2025, intends to raise the annual income tax exemption threshold from PHP250,000 to PHP480,000 by amending the National Internal Revenue Code. This bill also aims to exempt individuals earning up to PHP480,000 annually from paying income tax, in response to public demands for more affordable living and higher take-home pay.
