MANILA — Parañaque City 2nd District Representative Brian Yamsuan has urged Congress to fast-track proposed tax relief interventions for workers and micro and small enterprises (MSEs), warning that surging inflation and a weakening peso are heavily burdening Filipino families and businesses.
Yamsuan emphasized that raising the personal income tax exemption ceiling and abolishing the Minimum Corporate Income Tax (MCIT) for MSEs have grown more urgent as inflation hit 7.8% in October, up from 6.2% in August and 7.2% in September.
“With a devalued peso and inflation surging to 7.8 percent in October, Filipinos now find their purchasing power considerably eroded. Ang dating mabibili mo sa halagang ₱100 ay tumaas na sa P107.80 dahil sa inflation,” he said, adding, “We haven’t even factored in yet the effects of the super El Niño on our economy.”
The lawmaker is pushing for House Bill (HB) No. 10577, which proposes raising the annual personal income tax exemption ceiling from ₱250,000 to ₱450,000, and HB No. 10578, which seeks to remove the 2 percent MCIT on micro and small enterprises.
While the House Committee on Ways and Means—chaired by Marikina City 2nd District Representative Miro Quimbo—has already approved the abolition of the 2% MCIT, it approved a lower personal income tax exemption ceiling of ₱350,000 annually.
Measures regarding the tax relief have been filed by lawmakers including Yamsuan, House Speaker Faustino “Bojie” Dy III, and Majority Leader and Ilocos Norte 1st District Representative Sandro Marcos.
Given the accelerating inflation and the impending economic impact of a super El Niño, Yamsuan suggested that economic managers reevaluate whether the ₱350,000 threshold remains sufficient.
“We leave it to our economic managers to determine if the P350,000 threshold for personal income tax exemption is enough or needs to be raised to help low- and middle-income families survive amid the difficult times we are facing and will continue to face next year,” he stated.
Yamsuan noted that while the ₱250,000 exemption ceiling was established under the 2017 Tax Reform for Acceleration and Inclusion (TRAIN) Law, soaring costs mean goods worth ₱1,000 in 2018 now require about ₱1,300, pushing some middle-income families into lower brackets.
“These developments demonstrate that the current tax exemption threshold no longer protects the most vulnerable from income poverty. Kapag hindi itinaas ang income tax exemption level, baka maging ang mga lower middle income families ay mapunta na sa laylayan ng lipunan,” Yamsuan warned.
For MSEs, Yamsuan pointed out that high inflation, a weak peso, and recent minimum wage hikes have severely inflated operating costs. He noted that the MCIT is especially burdensome because it is calculated on gross income without expense deductions, forcing struggling businesses that are barely breaking even to still pay taxes.
Removing the levy, he added, would give small enterprises vital resources to sustain operations and retain workers.