SOUTHBOUND commuters crowd the Main Avenue station of the EDSA Bus Carousel on the morning of 17 June 2025, navigating long lines and a cramped staircase—the only access point to both lanes of the carousel.
Photo courtesy of Toto Lozano for DAILY TRIBUNE
The House Committee on Ways and Means on Monday, 10 August, approved a measure seeking to raise the annual income tax exemption threshold from P250,000 to P350,000.
The bill was among the measures President Ferdinand Marcos Jr. identified as a priority during his State of the Nation Address on 27 July.
If enacted, the measure would amend the National Internal Revenue Code of 1997, which currently sets the tax-exempt income threshold at P250,000.
Marikina Rep. Miro Quimbo, chair of the Ways and Means Committee, said the measure forms part of a broader effort to provide tax relief while ensuring the government retains sufficient revenues to finance public services and programs.
“We want our tax system to keep pace with the realities faced by Filipino families and workers. If incomes have not kept up with the rising cost of living, then we have to make sure that taxation does not further erode their purchasing power,” Quimbo said.
Other proposals sought to increase the threshold to P400,000 or P500,000, with some lawmakers arguing that a higher exemption would provide greater relief to middle-income households.
The committee, however, settled on P350,000 after considering the potential impact of a higher threshold on government revenues.
“After considering all the comments, sponsorship speeches of our dear colleagues, and then of course the position of the different agencies we therefore come to conclusion that we cannot go higher than P350,000 because it was shown that it will greatly affect our revenues if we will put it at P400,000 or P500,000,” Cagayan de Oro Rep. Rufus Rodriguez said in moving for the measure’s approval.
Under the current tax brackets, individuals earning more than P250,000 but not over P400,000 annually are taxed 15 percent on income exceeding P250,000, while higher rates apply to succeeding income brackets.
The panel also approved a measure seeking to exempt microenterprises from the 2 percent Minimum Corporate Income Tax (MCIT).
Quimbo said the proposal is intended to give small businesses more room to recover from economic disruptions, reinvest in their operations and preserve jobs.
“The objective is not simply to reduce taxes. It is to create a breathing room for entrepreneurs and businesses so they can spend, invest, hire, and grow,” he said.
Quimbo said the committee is considering consolidating the measures into a broader tax reform package.
He stressed that any reduction in government revenue must be balanced against the need to maintain fiscal sustainability.
“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.
