The House Committee on Ways and Means approved a bill raising the annual taxable income exemption ceiling to PHP350,000 from PHP250,000, alongside a relief measure exempting microenterprises from the 2-percent Minimum Corporate Income Tax, according to an announcement on Monday in Manila.
House Bills Target Tax Relief for Workers and Small Enterprises
During a committee hearing led by panel chair and Marikina 2nd District Rep. Miro Quimbo, measures 10345 and 10346 received approval subject to style. Speaker Faustino “Bojie” Dy III and Majority Leader Ferdinand Alexander “Sandro” Marcos introduced the measures as part of a broad tax reform package designed to assist individual taxpayers and small businesses.
The proposed income tax measure amends Section 24 of the National Internal Revenue Code by restructuring the graduated income tax rates for individual taxpayers. Under this proposal, individuals earning up to PHP350,000 annually will be exempt from personal income tax, delivering additional take-home pay for low- and middle-income workers.
Balancing Relief and Fiscal Sustainability
Rep. Quimbo stated that the bill forms part of the committee’s broader effort to recalibrate the tax system so it can provide meaningful relief to taxpayers while ensuring the government retains enough resources to fund essential programs and services. According to Quimbo, the committee wants the tax system to keep pace with the realities faced by Filipino families and workers.
“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 in a statement.
MCIT Exemption for Microenterprises
The committee also approved a measure providing relief to micro and small enterprises under the Minimum Corporate Income Tax. Quimbo noted that the panel recognized the disproportionate impact of the tax on businesses still recovering from economic disruptions and operating with limited margins.
“The objective is not simply to reduce taxes. It is to create breathing room for entrepreneurs and businesses so they can spend, invest, hire, and grow,” Quimbo said.
Next Steps for the Omnibus Package
As a subsequent path forward, the panel might merge these tax relief initiatives with matching compensatory revenue measures into one unified omnibus tax reform package. Quimbo emphasized that any reduction in government revenues resulting from the proposed exemptions must be responsibly addressed through measures ensuring fiscal sustainability.
“We are looking at the entire tax system as a whole. 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.