Marcos Jr. proposes P350K income tax exemption ceiling for middle class

President Ferdinand "Bongbong" Marcos Jr. has urged Congress to raise the annual income tax exemption ceiling to P350,000, aiming to increase the take-home pay of the Filipino middle class and ease their burden amid rising living costs. This initiative comes as the country grapples with the lingering effects of the Middle East fuel crisis. In his fifth State of the Nation Address (SONA), the President stated, "Let us increase the number of workers who will be freed from taxes on their income. We will include those earning not more than P350,000 annually." He assured that the government would not overlook the hardships faced by Filipino workers, the middle class, and micro and small business owners. "We know that they too are burdened by the effects of the crisis. Therefore, to ensure the continued progress of the middle class amidst the lingering effects of the crisis, we will pursue tax relief measures that promote growth, generate revenue, and advance equity toward socio-economic sustainability," Marcos Jr. declared. He further appealed, "As a special protection for them and to allow them to better benefit from their hard-earned income, I call on Congress to pass a law that will provide some relief for our taxpayers." Currently, under Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, individuals earning P250,000 annually are exempt from income tax. The proposed increase would significantly expand the pool of tax-exempt individuals. Moreover, Marcos Jr. proposed exempting small businesses from paying the minimum corporate income tax (MCIT). The MCIT, currently set at 2% of a corporation's gross income for a 12-month period under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, would no longer be imposed on small enterprises. The President also announced plans to provide amnesty for unpaid taxes, including income tax, estate tax, donor's tax, and value-added tax, along with associated penalties. These proposed tax reforms are seen as an effort to foster sustainable economic growth and enhance the financial well-being of Filipinos. The anticipated boost in the purchasing power of the middle class could stimulate domestic consumption, potentially leading to broader economic benefits. Support for small businesses is also expected to strengthen their role in job creation.