Lawmakers File Bill to Raise Income Tax Exemption Threshold to P500K

A new bill has been filed in the Philippines seeking to raise the annual income tax exemption threshold to P500,000, significantly exceeding President Ferdinand Marcos Jr.'s proposed P350,000 ceiling. The measure aims to boost the purchasing power of Filipino workers and provide meaningful tax relief to low- and middle-income earners. The bill was filed by Akbayan Party-list Representatives Chel Diokno, Percy Cendaña, and Dadah Kiram Ismula, along with Dinagat Islands Representative Kaka Bag-ao. They argue that adjusting the exemption to better reflect current economic realities will allow households to allocate a greater portion of their income toward essential goods, education, healthcare, housing, savings, and productive investments. "By adjusting the exemption to better reflect current economic realities, the proposed measure aims to preserve the purchasing power of Filipino workers, provide meaningful tax relief to low- and middle-income earners, and allow households to allocate a greater portion of their income toward essential goods, education, healthcare, housing, savings, and productive investments," the bill states. Representative Diokno emphasized that a higher exemption threshold would allow workers to take home more of their earnings to help meet their families' daily needs. Representative Cendaña expressed hope that President Marcos Jr. would certify the proposal as urgent, allowing for its swift approval before Christmas and implementation by the start of next year. "If the measure enjoys broad support, I hope it won't have to wait until next year. If the President can certify the measure urgent, then the House leadership will act on the bill ASAP. If all goes well, the measure could be enacted before Christmas, and by January next year, the higher income tax exemption will already be in effect," Cendaña said. The bill also provides self-employed individuals and professionals with the option to avail of an eight percent (8%) tax on gross sales or gross receipts and other non-operating income in excess of P500,000, in lieu of graduated income tax rates and percentage tax. Information Source: GMA News Philippines