Lawmaker Eyes P500,000 Income Tax Exemption Ceiling

Lawmakers in the Philippines are actively debating an increase in the personal income tax (PIT) exemption ceiling, a move championed by President Ferdinand "Bongbong" Marcos Jr. While the President has proposed raising the threshold from the current P250,000 to P350,000 annually, some legislators are pushing for an even higher ceiling. Bicol Saro Party-list Representative Terry Ridon voiced his support for a more substantial increase, suggesting a ceiling of P500,000. Ridon argued that a P350,000 ceiling would only benefit a limited number of individuals, particularly those earning around P30,000 monthly. He emphasized that as the Philippines progresses towards an upper-middle-income economy, tax benefits should be extended to a broader segment of the population. "If we can, we want to raise the ceiling for income tax payment exceptions to at the very least P500,000," Ridon stated during a press conference. He added that the proposed P350,000 might not capture a significant portion of Filipinos who could benefit from such an exemption. Marikina Representative Miro Quimbo, who chairs the House Ways and Means Committee, indicated that P350,000 is the guiding figure for their deliberations. He clarified that this amount refers to income after deductions for social security contributions (SSS, GSIS, PhilHealth, Pag-IBIG). "Meaning, the amount of salary you receive less the deductions that you pay. And if P350,000 remains, then you are tax-exempt," Quimbo explained. He estimated that raising the exemption to P350,000 could benefit approximately one million workers who would no longer have to pay income taxes. Quimbo also expressed optimism about the feasibility of the proposed increase, citing positive revenue collection reports from the Bureau of Customs. He suggested that the revenue forgone from the tax exemption could be recouped through increased economic activity and potentially other tax measures. "This is doable, doable because the President saw that on its own, there will be tax activities generated," he said. However, he stressed that any measures to recover lost revenue should not involve increasing indirect taxes, such as VAT, which disproportionately affect lower-income individuals. The proposed tax relief comes amidst efforts to boost domestic consumption and support the economic recovery of the Philippines. By increasing the disposable income of taxpayers, the government aims to stimulate spending, which can, in turn, drive economic growth. The Philippine economy has shown resilience, partly due to strong remittances from Overseas Filipino Workers (OFWs) and the robust Business Process Outsourcing (BPO) sector. This tax adjustment is seen as a measure to further support the middle class and encourage broader participation in the economy. Information Source: GMA Money Philippines