Senate President Pro Tempore Vicente “Tito” Sotto III has filed a measure aiming to raise the tax-exempt annual income threshold for Filipino workers to ₱350,000 starting January 1, 2027.
Under Senate Bill No. 2338, also known as the Expanded Income Tax Exemption of 2026, individuals earning an annual income of ₱350,000 or less would no longer be subject to income tax.
The proposed bill follows President Ferdinand Marcos Jr.’s call for additional tax relief for workers during his fifth State of the Nation Address.
“The conflict in the Middle East and the disruption it caused to the world oil supply sent the cost of fuel to high levels,” Sotto said.
“The prices of food, transport, and electricity have followed, and they have risen faster than wages,” he added.
Under the current Tax Reform for Acceleration and Inclusion (TRAIN) Law, taxpayers earning up to ₱250,000 annually are exempt from paying income tax.
Sotto emphasized that this existing limit is no longer practical due to soaring living costs, pointing out that inflation has steadily eroded the purchasing power of workers despite nominal salary increases.
“This measure aims to provide meaningful tax relief and allow Filipino workers to keep more of what they earn,” he added.