Marcos Wants Workers Earning Up to P350,000 to Pay No Income Tax
That’s up to P15,000 more in your pocket each year if passed.
Published on Jul 27, 2026
(SPOT.ph) A little more of your salary could stay in your pocket—should Congress act on one of President Ferdinand "Bongbong" Marcos Jr.’s requests during his 5th State of the Nation Address (SONA).
During his SONA on July 27, Marcos urged Congress to exempt workers earning up to P350,000 a year from income tax—a move that could save eligible workers as much as P15,000 annually.
“Dagdagan natin ang mga manggagawang malilibre sa buwis sa kanilang kita. Isasama na natin ang mga kumikita nang hindi lalagpas sa P350,000 kada taon,” Marcos said during his speech.
The proposal would raise the current tax-exempt threshold by P100,000. Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, individuals with annual taxable income of P250,000 or less do not have to pay income tax. Income above that amount is already taxed, starting at 15% of the portion exceeding P250,000.
But before you start recalculating your monthly budget, this is not in effect yet. Congress has to pass a bill first.
Also read: NCR Minimum Wage Will Reach P780 After Its Biggest Hike Yet
Who will be covered by this income tax exemption?
If approved, the higher exemption would cover workers whose annual taxable income does not exceed P350,000.
That is equivalent to around P29,167 in taxable income a month, but that is not necessarily the same as a worker’s gross salary. Contributions to SSS, PhilHealth, and Pag-IBIG are deducted before taxable income is calculated. Thirteenth-month pay and other benefits are also tax-free up to a combined P90,000 a year.
A proposal matching Marcos’ call is already pending in the House of Representatives. House Bill 9383, or the proposed Fair Tax Act, was filed by Bataan First District Representative Tony Roman III. The bill seeks to raise the tax-exempt threshold from P250,000 to P350,000 starting January 1, 2027. It would also require personal income-tax brackets to be reviewed and adjusted every three years based on inflation.
Marcos’ SONA endorsement could now give this measure a stronger push in Congress.
Other lawmakers want an even higher exemption
P350,000 is not even the highest exemption being proposed. A few days before SONA, other lawmakers had proposed higher exemptions. Senator Loren Legarda filed the KITA Act on July 21, seeking to exempt annual income of up to P400,000. The following day, the Makabayan bloc filed the TRAM Bill, which proposes an even higher P500,000 threshold.
Similar proposals have come up before. In 2016, former senator Sonny Angara filed Senate Bill 130, which sought to automatically adjust the tax table every three years based on inflation. Congress eventually passed the TRAIN Law in 2017, which established the current tax-exempt threshold beginning in 2018. That ceiling of P250,000 has remained unchanged even as prices have increased.
Also read: GUIDE: Income Tax Brackets in the Philippines
Micah believes that writing is always political. Beyond the byline, you’ll find her spinning on a pole, doting on her beagle, or performatively reading at the beach. Reach her at micah@spot.ph.