More than three million Filipino workers could receive additional tax relief under a bill filed in the House of Representatives that seeks to raise the annual tax-exempt income threshold from ₱250,000 to ₱350,000, allowing qualified employees to keep a larger share of their earnings amid rising living costs.

Nueva Vizcaya Rep. Timothy Joseph E. Cayton filed House Bill No. 10517, which proposes a higher personal income tax exemption in support of President Ferdinand “Bongbong” Marcos Jr.’s call during his recent State of the Nation Address to ease the tax burden on Filipino workers.

The measure would exempt individuals earning up to ₱350,000 annually from paying personal income tax, replacing the current ₱250,000 threshold. It also seeks to increase the tax-exempt ceiling for 13th-month pay and other employee benefits from ₱90,000 to ₱120,000.

To ensure that tax relief keeps pace with inflation, the bill proposes the automatic adjustment of income tax brackets every three years starting in 2030. It also provides for lower tax rates and other relief measures for qualified taxpayers.

“This measure seeks to provide big relief to Filipino workers by allowing them to keep more of their hard-earned income. As the cost of living continues to rise, our tax system must also respond to the changing economic realities faced by working families,” Cayton said.

Cayton said the proposed adjustments could benefit an estimated 3.13 million workers, and about 1.2 million taxpayers could be removed from the personal income tax rolls if the bill is enacted.

As a House bill, Cayton’s proposal must undergo committee deliberations, win approval in the House plenary, and obtain Senate concurrence before it can be transmitted to the President for signature. By Rachel Magday