Lawmakers from the Makabayan bloc have introduced House Bill 10161, or the Tax Reform Act for Middle Income Earners (TRAM), which aims to double the current personal income tax exemption threshold from ₱250,000 to ₱500,000 annually—exempting workers earning up to roughly ₱41,667 per month.
Filed by ACT Teachers Representative Antonio Tinio, Gabriela Representative Sarah Jane Elago, and Kabataan Representative Renee Louise Co, the proposed measure seeks to give economic relief to low- and middle-income earners while mandating a triennial adjustment of taxable income brackets anchored on the Consumer Price Index.
“Poverty wages and regressive taxation is a deadly combination. The government has long denied Filipino workers of their constitutional right to a living wage while automatically siding with capitalists to keep wages low. To make matters worse, the Marcos Jr. administration has prioritized legislation that further increased consumer taxes, squeezing ordinary Filipinos dry,” Tinio said.
Tinio noted that seven years following the passage of the TRAIN Law in 2018, individual income taxes grew to represent 37 percent of collections—up from 32 percent—while corporate income tax contributions dropped from 21 percent to 16 percent.
Citing figures from the Congressional Policy and Budget Research Department (CPBRD), he highlighted that corporate tax cuts under the CREATE Law cost the government ₱230.4 billion in lost revenue over three years, compared to ₱213.4 billion from personal tax relief under the TRAIN Law.
“In other words, the government gave more tax relief to domestic and foreign corporations than it did for workers and employees in both public and private sectors. Those who have less in life are favored less by law,” Tinio said.
The lawmaker criticized the current tax system for burdening employees whose earnings still fall short of actual living costs, pointing out that government workers under Salary Grade 11 were once tax-exempt but now pay taxes due to past wage adjustments exceeding the ₱250,000 threshold. Currently, only public workers at Salary Grade 6, Step 8 (₱20,761 monthly) or below remain untaxed.
“The government has no moral authority to impose income taxes on workers who are earning below the living wage. IBON Foundation estimates that a family of five needs ₱1,301 per day to live decently. Yet we are taxing workers whose wages fall far short of this,” Tinio said.
Beyond raising the exemption ceiling, the proposed legislation seeks to reinstate an additional tax exemption of ₱25,000 per dependent for up to five dependents.
It includes specialized coverage for solo parents under the Expanded Solo Parents Welfare Act, children with special needs, senior citizen relatives, and persons with disabilities.
“Instead of squeezing the pockets of the poor and ordinary Filipinos dry, the government should impose higher taxes on the rich, especially billionaires and large corporations, who have the capacity to pay. We need to reverse these regressive taxation policies and provide meaningful relief to the masses and the middle class,” Tinio stressed.