Senator Pushes Income Tax Free for P400,000 Annual Income
MANILA, Philippines—Senator Sherwin Gatchalian is pushing to boost Filipino workers’ take-home pay by introducing a bill that exempts those earning ₱400,000 or less per year from income tax. This move aims to ease the financial burden on many working Filipinos.
The bill, titled “Granting Increase in Take-Home Pay for All Working Filipinos Act” or “Ginhawa,” was submitted as one of the senator’s priority measures. It proposes an amendment to the National Internal Revenue Code of 1997, which currently exempts only those earning ₱250,000 or less annually from income tax.
Raising the Income Tax Exemption Threshold
“We plan to increase the exemption limit to ₱400,000 a year,” Gatchalian explained during a press briefing. “This means anyone earning up to ₱400,000 yearly will not have to pay income tax.” This change would directly increase workers’ net income, promoting financial relief for many families.
Additionally, the bill proposes raising the tax-exempt bonus cap from ₱90,000 to ₱250,000. “So, if your bonus is ₱150,000, it will still be exempt from income tax,” he added, highlighting the bill’s intent to protect additional earnings.
Tax-Free Benefits for Minimum Wage Earners
Gatchalian’s proposal also seeks to exempt other compensations from taxation, including night differentials, overtime pay, and holiday pay. These benefits often supplement the income of minimum wage earners but currently face tax deductions.
“All our fellow citizens who earn through overtime, hazard pay, or differential pay will also be exempt from income tax,” Gatchalian said. He emphasized the unfairness of taxing hazard pay, which is meant to compensate workers for dangerous jobs. “Dahil, yung hazard pay, binibigay nga yan dahil hazardous yung trabaho mo. Pero, kakaltasan pa ng gobyerno. Kaya nga binibigay yan dahil delikado yung trabaho mo. Dapat hindi na kaltasan ng gobyerno,” he stated.
Protecting Hazard Pay and Service Charges
The senator further pointed out, “Hazard pay is given precisely because the work is dangerous. But the government is still going to deduct from it. It’s given because the job is risky, so the government shouldn’t reduce it.” This reflects a strong stance to shield essential compensations from taxation.
Moreover, the bill proposes that service charges collected by restaurants should also be exempt from income tax. This measure intends to provide further relief to workers in the service industry.
Relief for Filipino Workers
In summary, the “Ginhawa” bill aims to increase the income tax exemption threshold and protect bonuses, hazard pay, and other compensations from tax deductions. “So, this is what’s included in the Ginhawa Bill. What we want is to provide relief to our fellow citizens who belong to the income-earning segment,” the senator concluded.
For more news and updates on income tax reforms, visit Filipinokami.com.