Senator Francis Pangilinan has filed a bill seeking to increase the annual personal income tax exemption threshold from P250,000 to P350,000, following President Ferdinand Marcos Jr.’s call to raise the tax-exempt income ceiling during his fifth State of the Nation Address (SONA).
Pangilinan filed Senate Bill No. 2344 on Tuesday, a day after the President delivered his penultimate SONA.
The measure seeks to amend Section 24 of the National Internal Revenue Code of 1997 by exempting the first P350,000 of annual taxable income from personal income tax.
The proposed legislation also extends the higher exemption threshold to self-employed individuals and professionals who choose the 8-percent gross receipts tax regime.
Pangilinan said the bill aims to update the country’s income tax system to better reflect current economic conditions and allow Filipino workers to keep more of their earnings for basic household expenses.
He said inflation has steadily reduced the purchasing power of Filipino families while many wage earners continue to face rising living costs despite stagnant incomes.
“Hindi pa nakakauwi ang mga Pilipino sa mga bahay nila, ubos na ang kinita nila sa araw na yun dahil sa tax. Ang P1,000, sabi nga nila, kapag nabaryahan, aba parang hinipan lang ng hangin. Wala na agad (Filipinos have yet to reach their homes and yet their income for the day is already gone because of tax. They say P1,000 these days don’t last long),” Pangilinan said in a statement released Friday.
Aside from increasing the tax-free income threshold, the bill also proposes new income brackets for higher tax rates.
Under the measure, taxable annual income of up to P500,000 would be subject to a 15-percent tax, while those earning up to P1 million would be taxed at 20 percent.
Income of up to P2.5 million would be subject to a 25-percent tax, while those earning up to P8 million would fall under the proposed 30-percent tax bracket.
President Marcos, in his SONA on Monday, urged Congress to pass legislation increasing the income tax exemption threshold to provide relief to Filipino workers.
A similar proposal is also pending in the Senate.
Senator Bam Aquino filed Senate Bill No. 267 on July 8, 2025, seeking to increase the annual income tax exemption threshold from P250,000 to P480,000.
Aquino’s bill also proposes exempting individuals earning up to P480,000 annually from paying income tax as part of his push for more affordable living and higher take-home pay for Filipino workers.
Photo courtesy of Kiko Pangilinan/Website
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