Salaried Filipinos earning P29,000 or less each month would see withholding deductions disappear entirely under a tax package that Malacañang says President Ferdinand Marcos Jr. wants Congress to enact before the year closes.
Palace Press Officer Claire Castro confirmed the president’s timeline during a briefing on Tuesday, August 4, describing the measure as one the Department of Finance is actively refining.
“Kasalukuyan itong binubusisi ng DOF kasi nais po ng pangulo na ito ay maipasa sa pinakamabilis na panahon,” Castro said. “Ang nais po sana ng pangulo ngayong taon.”
The centerpiece of what the DOF has branded the Progress Bill is a jump in the personal income tax exemption ceiling, lifting it to P350,000 annually from the current P250,000. Finance Undersecretary Karlo Fermin Adriano, speaking a day earlier on Monday, August 3, framed the reform as a corrective to what he called “declining purchasing power and creeping taxes” weighing on middle-income earners.
Beyond the exemption ceiling, the bill reworks the brackets sitting just above it. Those earning between P351,000 and P450,000 a year would face a 15 percent rate on the portion exceeding P350,000, while workers in the P451,000-to-P800,000 range would owe a base of P15,000 plus 20 percent of whatever exceeds P450,000. Taxpayers within those tiers could keep as much as P17,500 more each year, according to the department.
That relief carries a fiscal cost the government estimates at P300.33 billion in reduced revenue across 2027 to 2030 — a gap the DOF intends to close by widening the reach of consumption and luxury levies.
Sweetened beverages carry the heaviest share of the offset, projected to raise P296.97 billion over the four-year window, per figures cited by BusinessMirror. Liquor and distilled spirits, with a 6 percent annual indexation kicking in from 2031, would contribute an estimated P31.36 billion, while e-cigarettes, vape products, and novel tobacco items are pegged at P33.06 billion.
The department is also reaching into areas its earlier reform efforts left untouched. A proposed levy of P150 per kilogram on plastic goods, rising 5 percent annually, could yield P52.19 billion. Recalibrating the motor vehicle road user tax to track cumulative inflation — with the proceeds earmarked for road upkeep — is projected to bring in P89.58 billion.
Wealth sits squarely in the DOF’s sights as well. The plan would slap a 75 percent excise rate on automobiles priced above P8 million and reclassify private jets as non-essential goods subject to excise, a pairing the department expects to generate P15.64 billion between 2027 and 2030. Adriano’s team has cast the equity provisions as an answer to what it views as an uneven tax burden across income levels.
