A party-list lawmaker is pushing to nearly double the annual income tax exemption ceiling for Filipino workers, arguing that the current threshold has long failed to keep pace with the financial realities many households face.
Mamamayang Liberal Rep. Leila de Lima filed House Bill 9172, which seeks to raise the income tax exemption limit from P250,000 to P480,000 in annual income. The bill was filed on May 11 and was fully adopted in the House.
De Lima pointed to the daily financial strain on ordinary wage earners as the driving force behind the proposal.
“The pay received by many of our countrymen is very insufficient, and often nothing is left of it just several days after payday,” she said in Filipino.
“What more when [a] crisis comes, or someone in the family gets sick? One way to lessen the economic challenges confronting many of our countrymen is to implement reforms in income tax exemption that will increase their take-home pay or disposable income,” she added.
While acknowledging that tax revenue funds essential public services — including education, healthcare, and public safety — de Lima argued that workers are already stretched beyond their means and that the government has an obligation to reduce the load they carry.
In the bill’s explanatory note, she traced the problem to the existing framework introduced under the Tax Reform for Acceleration and Inclusion law, which set the current P250,000 exemption threshold.
“This reform was designed to ease the tax burden on low- and lower-middle-income earners, allowing them to retain a larger portion of their income. However, once annual earnings exceed this threshold, a progressive tax structure applies, with rates starting at 15 percent and rising to 35 percent for top earners. As a result, even modest increases in income can lead to disproportionately higher tax liabilities,” she said.
A companion measure has since been filed in the upper chamber, with Sen. Bam Aquino introducing the proposal as Senate Bill 267.
