Raising tax exemption threshold to create revenue hole — DEPDev
THE Department of Economy, Planning, and Development (DEPDev) said the proposed increase in the income tax exemption threshold will require Congress to find replacement funding to make up for the forgone revenue.
“Of course, that would increase the purchasing power of workers, especially the lower-income groups,” Economy Secretary Arsenio M. Balisacan told reporters on the sidelines of a briefing on Thursday.
However, he said that replacement revenue will be needed for key spending items like infrastructure, schools, hospitals, and government services.
“If you remove those taxes, how are you going to support those important critical projects that are especially needed by the poor and low-income groups?” he said.
“We have always urged Congress that if they have to remove a tax, they will have to find a way to generate replacement (revenue),” he added.
He said however that he favors reducing the tax burden on the poor and the middle class.
“But we have to find a replacement for very much-needed tax revenue and unless you are able to do that, what you remove might actually hurt the very group that you are trying to help,” he said.
“The thrust of the Marcos administration is to bring services as close to the people as possible, which means spending more for quality services. And so we are sensitive to that,” he added.
Earlier this week, Senator Sherwin T. Gatchalian called for the immediate passage of the Granting Increase in Take-Home Pay for All Working Filipinos Act.
Senate Bill No. 56 seeks to raise the income tax exemption threshold from P250,000 to P400,000 annually.
According to the Senate’s website, the bill, which was filed in July 2025, is still in committee. — Justine Irish D. Tabile
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