A lawmaker said on Tuesday that the tax exemption for salaried workers who make up to ₱350,000 annually will begin on January 1, 2027. This is the soonest the reform can be implemented, as the government’s budget depends on tax collection up until the last day of the year.
During a press conference to open the Second Session of the 20th Congress, Marikina City 2nd District Rep. Miro Quimbo explained that taxes to be collected until December 31, 2026 have already been factored into the government’s revenue projections, and so reducing the number of taxable citizens would negatively impact the national budget.
“Effectivity nito is January 1. Tiyak ako it cannot be earlier because masyadong mahirap para i-unwind. Today ang computation ng BIR, pati ‘yung ating budget, ay dependent doon sa tax collection. As computed on annual basis,” Quimbo said.
“Ibig sabihin, lahat ng ating budgetary expense today ay dependent sa collection na expected natin up to the end of the year. So kung ‘yan ay babawasan natin dahil nagbawas tayo ng source ng taxes ay makakaapekto ito, at para mas simple para sa ating mga manggagawa, ganoon naman ang ginagawa at the past is we make it effective January 1,” he explained further.
He assured that January 1 is “effectively” their “deadline,” and that the reform’s implementation cannot be enacted later than that.
Quimbo said the House aims to complete deliberations on a compensation measure this August, along with corresponding tax adjustments to offset the revenue losses the reform is expected to cause.
“Ang tantsa po namin dito, base sa informal discussions with si Speaker Bojie Dy tsaka kay Majority Leader Sandro (Marcos) is ngayong Agosto, tatapusin namin itong compensation, as well as ‘yung corresponding compensating taxes na ating gagamitin o i-impose or ia-adjust para mabawi ‘yung mawawalang pera because of the revenue loss na mangyayari dito,” the lawmaker said.
Amnesty for unpaid taxes, however, need not wait for next year, he said. The earliest a proposal may be passed is October 2026.
“Hopefully, bago kami mag-break ngayong October ay magawa na natin ito dahil inaantay na ito: ang estate tax amnesty, VAT, pati’t iba’t iba pang taxes na hindi nababayaran para sila’y manumbalik sa ekonomiya at magbayad uli, so that everybody gets a clean slate. Effectively, that’s our timeline,” Quimbo said.
During his State of the Nation Address (SONA) on Monday, President Ferdinand “Bongbong” Marcos Jr. proposed raising the income tax exemption threshold to cover individuals earning up to ₱350,000 annually.
