The House Committee on Ways and Means has approved a measure that raises the annual tax exemption ceiling from ₱250,000 to ₱350,000.

The legislative measure aims to set the income tax exemption to ₱350,000, allowing Filipino workers to take the higher amount from their salaries.

“Napprove na po natin yung pagtaas ng exemption sa income tax ng ating mga compensation earners,” House Committee Ways and Means Chairperson Rep. Miro Quimbo confirmed

[“The higher exemption on income tax for compensation earners has been approved.”]

“Dati po, ₱250,000 na taxable income ang exempted lang. Ngayon ay ginagawa na po nating ₱350,000,” he added

[“Previously, the ₱250,000 taxable income is the exemption. Now, we make it ₱350,000.”]

According to the Department of Finance (DOF), there would be an estimated ₱70 billion revenue loss once the proposed income tax relief is effective.

To offset the loss, the House committee eyes raising taxes on tobacco and vape.

“Yung isa sa mga potential compensatory taxes ay yung tax sa sigarilyo at tsaka sa vape dahil ito yung isa sa mga pinakanakakapinsala talaga,” Rep. Quimbo said

[“One of the potential compensatory taxes is the tax on cigarettes and vapes because these are among the most harmful.”]

The panel also approved the exemption of micro and small enterprises from the minimum corporate income tax.

The Congress plans to consolidate the bill for the second reading before the congressional break in October, so that it can be fully enacted into law by January 2027.

With reports from Rosalie Coz