Manila: House Committee on Ways and Means chairperson and Marikina City Rep. Miro Quimbo announced that the estimated PHP50-billion revenue loss from President Ferdinand R. Marcos Jr.'s proposed tax relief package could be fully offset by imposing higher taxes on vape products, tobacco, sugar-sweetened beverages, and single-use plastics.
According to Philippines News Agency, during his fifth State of the Nation Address (SONA), President Marcos urged Congress to expand the income tax exemption to cover workers earning up to PHP350,000 annually, reduce income taxes for other workers, exempt small businesses from the minimum corporate income tax, and grant tax amnesty for various unpaid taxes and penalties. Quimbo, in a press briefing at the House of Representatives, highlighted that the Department of Finance estimates that the proposed changes, including increasing the tax-exempt ceiling for 13th-month pay and other bonuses, would result in a PHP50 billion reduction in government revenue.
Quimbo emphasized that the government plans to recover these foregone revenues through taxes that also promote public health and environmental protection. He mentioned that one of the House's priorities is increasing taxes on vape products, which are seen as a growing public health concern, particularly among the youth. Quimbo described vaping as a significant issue affecting the country and stressed the need to address it.
Additionally, Quimbo pointed out that the House is examining adjustments to taxes on heated tobacco products, noting that some devices are currently lightly taxed compared to international standards. Lawmakers are also considering expanding the coverage of taxes on sugar-sweetened beverages to include products linked to the rising incidence of diabetes. Furthermore, Congress is contemplating broader taxes on single-use plastic products, particularly sachets, to help curb plastic pollution and reduce flooding caused by clogged waterways. Quimbo cited Marikina City's experience with drainage blockages during heavy rains as a reason for imposing appropriate taxes on plastics.
Quimbo stated that these proposed revenue measures would enable the government to provide meaningful tax relief to Filipino workers while maintaining fiscal responsibility and pursuing public health and environmental objectives.
The House of Representatives is targeting the approval of President Marcos' proposed tax relief package by August to ensure its implementation on Jan. 1, 2027. Quimbo noted that Speaker Faustino 'Bojie' Dy III and Majority Leader Ferdinand Alexander 'Sandro' Marcos aim for House approval on third reading by August to keep the President's timetable on track. He explained that the proposed increase in the income tax exemption threshold cannot take effect before Jan. 1, 2027, as government revenues and expenditures for 2026 have already been programmed under the existing tax structure.
Quimbo also mentioned that the House is targeting third reading approval of the proposed tax amnesty covering unpaid income tax, estate tax, VAT, and other tax liabilities before its October break, expressing a desire to pass it as soon as possible.
