Manila: The House Committee on Ways and Means has given the green light to a bill that raises the annual taxable income exemption ceiling to PHP350,000 from the previous PHP250,000. This bill also introduces a relief measure exempting microenterprises from the 2-percent Minimum Corporate Income Tax (MCIT), which is part of an extensive tax reform package aimed at providing assistance to individual taxpayers and small businesses.
According to Philippines News Agency, the proposed legislation, introduced by Speaker Faustino 'Bojie' Dy III and Majority Leader Ferdinand Alexander 'Sandro' Marcos, includes House Bills Nos. 10345 and 10346. These bills were approved, pending stylistic adjustments, during a committee hearing led by Marikina 2nd District Representative and panel chair Miro Quimbo.
The proposed income tax reform seeks to amend Section 24 of the National Internal Revenue Code by restructuring the graduated income tax rates imposed on individual taxpayers. With this proposal, individuals earning up to PHP350,000 annually would be exempt from personal income tax, thereby offering additional take-home pay for low- and middle-income workers.
Quimbo stated that the bill is part of the Committee's broader effort to recalibrate the tax system, providing meaningful relief to taxpayers while ensuring the government has sufficient resources to fund essential programs and services. He emphasized the importance of aligning the tax system with the realities faced by Filipino families and workers, particularly with incomes not keeping pace with the rising cost of living.
The Committee also approved a measure aimed at providing relief to micro and small enterprises under the MCIT, acknowledging the disproportionate impact of this tax on businesses still recovering from economic disruptions and operating with limited margins. Quimbo explained that the goal is not merely to reduce taxes, but to create breathing room for entrepreneurs and businesses to spend, invest, hire, and grow.
Quimbo also mentioned that the Committee might consolidate the proposed tax relief measures with corresponding compensatory revenue measures into a single comprehensive tax reform package. He highlighted the necessity of responsibly addressing any reduction in government revenues from the proposed tax exemptions through measures ensuring fiscal sustainability.
'We are looking at the entire tax system as a whole. We want to deliver real relief to taxpayers, but we also have a responsibility to make sure that the government can continue to fund public services. That means balancing tax relief with responsible and sustainable revenue measures,' Quimbo said.
