Senator Joseph Victor “JV” Ejercito is now pushing for a bill seeking to exempt workers and employees earning up to P50,000 per month—or P600,000 annually—from income tax. 

Ejercito, in filing Senate Bill No. 2341, which seeks to amend the National Internal Revenue Code to exempt individuals earning P600,000 or less per year from income tax, said the measure aims to increase the take-home pay of millions of Filipino workers in the face of inflation.

SB No. 2341 primarily raises the threshold from the current P500,000 set under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

“This is not merely a simple tax reform. It is for our middle-income earners who work honorably, pay taxes, and contribute to the economy despite the high cost of goods. They are the true backbone of our economy,” Ejercito said. 

According to Ejercito, it is time to align the existing income tax system with the current economic conditions facing Filipino families, particularly middle-income earners. 

“Our tax system must remain responsive to the changing economic realities faced by every Filipino family,” the Senior Deputy Majority Leader said. 

Even though the Tax Reform for Acceleration and Inclusion (TRAIN) Law changed the income tax system in 2017, Ejercito lamented that the persistent change in the economy driven by inflation, rising oil pries, and rising prices of basic commodities, has decreased workers’ purchasing power. 

"With stagnant wages, persistent inflation, and rising tax obligations, many middle-class earners face declining disposable income while remaining ineligible for government assistance programs primarily intended for low-income households," he pointed out.

Under Ejercito's proposal, employees earning P50,000 or less per month or P600,000 or less per year will no longer pay income tax. 

But those earning more than the said amount will still be taxed based on the new graduated income tax schedule. 

Based on the 2024 Philippine Statistics Authority (PSA) Labor Force Survey, an estimated 17.6 million full-time wage and salary workers in the private sector earn less than P600,000 per year and could benefit from the bill. 

The senator also stressed that the measure is not just a temporary response to inflation but a long-term measure to help Filipino families. 

“Our primary objective in proposing this measure is not to offer temporary relief, but to provide Filipino families with decent take-home pay from their hard-earned income. This measure seeks to acknowledge the value of middle-income earners and address their current vulnerable position," Ejercito said.