House panel OKs higher tax exemptions for workers, small businesses

MANILA – The House Committee on Ways and Means on Monday approved a bill raising the annual taxable income exemption ceiling to PHP350,000 from PHP250,000, and a relief measure exempting microenterprises from the 2-percent Minimum Corporate Income Tax (MCIT), as part of a broad tax reform package meant to help individual taxpayers and small businesses.

Introduced by Speaker Faustino “Bojie” Dy III and Majority Leader Ferdinand Alexander “Sandro” Marcos, House Bills Nos. 10345 and 10346 were approved, subject to style, during a committee hearing presided over by Marikina 2nd District Rep. and panel chair Miro Quimbo.

The proposed income tax measure seeks to amend Section 24 of the National Internal Revenue Code by restructuring the graduated income tax rates imposed on individual taxpayers.

Under the proposal, individuals earning up to PHP350,000 annually would be exempt from personal income tax, providing additional take-home pay for low- and middle-income workers.

Quimbo said the bill is part of the Committee’s broader effort to recalibrate the tax system to provide meaningful relief to taxpayers while ensuring that the government has sufficient resources to fund essential programs and services.

“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.

The Committee likewise approved a measure seeking to provide relief to micro and small enterprises under the MCIT, recognizing the disproportionate impact of the tax on businesses that are 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,” he said.

Quimbo said the Committee may consolidate the proposed tax relief measures with corresponding compensatory revenue measures into a single omnibus tax reform package.

He emphasized that any reduction in government revenues from the proposed tax exemptions must be responsibly addressed through measures that will ensure 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. (PNA)

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