Benjamin Franklin once said, "In this world nothing can be said to be certain, except death and taxes." This adage holds true in the Philippines, where taxes are the lifeblood of the government. With 5.6 million individual taxpayers, the Bureau of Internal Revenue collected P764.6 billion in individual income tax in 2024. Projections for 2025 and 2026 are P849.5 billion and P922.4 billion, respectively.
Proposed Tax Relief Measures
Amid the ongoing economic crisis, lawmakers have proposed increasing the tax exemption threshold from P250,000 to P400,000. This means individuals earning up to P400,000 annually would no longer pay income tax. Senator Sherwin Gatchalian filed the Ginhawa Act (Granting Increase in Take-Home Pay for All Working Filipinos Act) to implement this change. A similar bill is expected in the House of Representatives from 4Ps party list Representative Jonathan Abalos.
Additional Tax-Free Benefits
The proposal also seeks to raise the tax exemption for 13th-month pay and other benefits from P90,000 to P150,000. Service charges from restaurants and service workers, overtime pay, night shift differentials, holiday pay, and hazard pay would also become tax-free.
Support and Concerns
Economic Planning Secretary Arsenio Balisacan supports these measures but questions where the government will find replacement revenue. If the 2026 projection holds, individual income tax would account for 13.6% of the P6.793 trillion national budget. Balisacan warned that funding for infrastructure projects, health, and social services could be strained.
In light of these challenges, one might ask whether those involved in the P1 trillion flood control scandal paid their taxes.
