Tax holiday proposal requires ‘careful review’ by DoF, DBM — Palace 

Malacañang on Thursday said it is holding off on taking an official stance on Senator Erwin Tulfo’s proposed one-month income tax holiday, emphasizing that the measure needs to undergo thorough evaluation by key economic agencies.

Speaking at a Palace press briefing, Special Assistant to the President for Investment and Economic Affairs Frederick Go said that both the Department of Finance (DOF) and the Department of Budget and Management (DBM) must be given time to assess the potential fiscal and economic impacts of the proposal.

“Kailangan pag-aralan ito nang mabuti ng Department of Finance at ng DBM. This is quite a big matter, and I think it’s best to give the DOF and the DBM time to carefully study this proposal,” Go said.

When asked whether the tax holiday could help restore public confidence amid growing concerns over government corruption, particularly in light of recent exposés involving flood control and infrastructure projects, Go refrained from linking the two issues directly.

“I’d like to defer this matter to the Department of Finance and DBM because this really has to be studied carefully. I would hesitate to make a response that’s probably not very well thought about,” he stressed.

Tulfo recently filed Senate Bill 1446, also known as the “One-Month Tax Holiday of 2025”, which seeks to provide temporary income tax relief to Filipino workers by exempting compensation income from taxes for one payroll month immediately following the bill’s enactment.

Under the proposal, individual taxpayers earning compensation income would receive a one-month exemption from income tax, while mixed income earners would enjoy the exemption only on the compensation income portion; however, the exemption would not cover mandatory contributions to government institutions such as the Government Service Insurance System, Social Security System, PhilHealth, and the Pag-IBIG Fund, nor would it apply to loan payments or other deductions authorized by the employee.

For mixed-income earners, only the compensation income portion would be exempted from income tax.

Tulfo said the bill aims to provide “immediate financial relief” to Filipino workers facing inflationary pressures and stagnant wage growth.

However, fiscal policymakers have expressed concern over the potential revenue loss from the measure.