Lawmaker pushes higher income tax exemption ceiling beyond P350,000

As President Ferdinand Marcos Jr. urges Congress to raise the personal income tax exemption ceiling from P250,000 to P350,000, Bicol Saro Party-list Representative Terry Ridon is pushing for a higher threshold. Ridon hopes the ceiling can be raised to at least P500,000, arguing that more Filipinos should benefit from tax relief.

What is the current proposal for income tax exemption?

During a press conference on Thursday, Ridon said there are already House bills pegging the ceiling at P480,000, while he wants it increased to P500,000. He emphasized that the current proposal only covers those earning around P30,000 monthly, leaving many others out. 'If we can, we want to raise the ceiling for income tax payment exceptions to at the very least P500,000,' Ridon said in Filipino. 'We will see which income bracket would be most fitting during the debate in the House Ways and Means committee.'

How would the P350,000 ceiling work?

Marikina Representative Miro Quimbo, chair of the House Ways and Means committee, clarified that the P350,000 figure is not based on gross salary. He explained that deductions for SSS, GSIS, PhilHealth, and Pag-Ibig are subtracted first. If P350,000 remains after deductions, a worker is tax-exempt. 'Even at P350,000, that means one million workers who would no longer have to pay taxes,' Quimbo said. He noted that the figure is indicative and not final.

Is raising the tax exemption ceiling doable?

Quimbo confirmed that raising the ceiling is feasible. The Bureau of Customs reported that it is on track to meet its collection targets for 2026, despite an economic slowdown due to the oil crisis. 'Doable, doable because the president saw that on its own, it will generate tax activities,' Quimbo said. He added that money returned to taxpayers through lower taxes will be spent in the market, creating new taxable economic activity.

What about higher earners?

Quimbo assured that the tax system will remain progressive. 'The richer you are, the higher your tax burden,' he said. The highest tax rate will not change, ensuring that wealthier individuals continue to shoulder a larger share.

How will lost revenues be recovered?

One potential source of added revenues is excise and value added taxes on vape products. Quimbo highlighted the health risks of vaping, especially among the youth, and said that taxing these products appropriately could help offset the revenue loss from the tax exemption. 'We need to impose a more fitting tax compared to the damage it brings to our youth's health,' he said.

When will deliberations start?

Deliberations on the issue are scheduled to begin on Tuesday, August 4. The House Ways and Means committee will examine the numbers to determine the optimal income bracket for the tax exemption.

We want to get the numbers on how many individuals will benefit if we raise the ceiling to P500,000 or P450,000. If the number is big, that would be even better, said Representative Terry Ridon.

This move aligns with the Philippines' status as an upper-middle income economy, where more Filipinos deserve actual benefits from tax reforms. As the debate unfolds, the focus remains on balancing fiscal responsibility with relief for hardworking families.