THE ₱350,000 TAX-FREE INCOME PROPOSAL CLEARED A HOUSE COMMITTEE
The House committee on ways and means approved House Bill No. 10345, which would raise the annual taxable-income exemption from ₱250,000 to ₱350,000.
Taxable income is the amount left after mandatory contributions and other deductions allowed under tax rules. It is different from a worker’s total annual salary.
Minimum-wage earners are already exempt from personal income tax. The proposal is primarily aimed at workers whose taxable income currently falls between ₱250,000 and ₱350,000.
Under the current schedule, the first ₱250,000 is tax-free. Income between ₱250,000 and ₱400,000 is taxed at 15 percent of the amount above ₱250,000. A person with exactly ₱350,000 in taxable income would therefore currently owe ₱15,000 a year before any applicable adjustments.
If the bill becomes law in its present form, taxable income of up to ₱350,000 would fall under the zero-percent bracket.
The proposal has only cleared a House committee. A committee report must still be filed. The bill would then proceed to House deliberations and voting, followed by a separate Senate process. Any differences between the two chambers would have to be resolved before the measure could reach the President.
Workers should therefore not expect an immediate change in their payslips.
The House must also explain how much revenue the government would lose. Income-tax collections help finance schools, hospitals, transportation and other public services.
WHAT TO WATCH
The committee report, the complete tax schedule that will apply above ₱350,000, the government’s estimate of lost revenue, and whether the Senate adopts the same threshold.