Need for meaningful reforms

The government is proposing tax measures under the ProGRESS bill that could provide some relief to Filipinos from their tax burdens. The key proposal is to raise the personal income tax-exempt threshold from P250,000 to P350,000, and remove the minimum corporate income tax for micro and small enterprises. President Marcos proposed this increase in his State of the Nation Address last July.

The Department of Finance (DOF) endorses the proposal through the ProGRESS bill, which has been approved by the House ways and means committee. It is expected to be included in the order of business for second reading soon. The measure aims to benefit over six million Filipino workers whose personal incomes would become tax-exempt, potentially giving them an additional P150,000 in take-home pay each year.

However, this tax relief comes at a cost to the government, as it could result in a P80 billion loss in annual revenues. To offset this, the DOF is proposing a new package of higher taxes on sweetened beverages, e-cigarettes, flexible plastic products, luxury vehicles, and private aircraft. The package includes increasing the excise tax on beverages using caloric or non-caloric sweeteners from P6 to P20 per liter, and on beverages using high-fructose corn syrup from P12 to P40 per liter.

It also proposes a unified P72.93 excise tax on e-cigarettes and heated tobacco products, a P157.21 excise tax on distilled spirits, and a P150-per-kilo excise tax on certain plastic bags. While the income tax measures are intended to help ordinary Filipinos cope with rising living costs, critics argue that these tax relief measures may not have a significant impact on their purchasing power, as food, transport, and electricity costs continue to rise.

The real measure of tax reform should focus on improving families' ability to afford basic necessities, rather than merely increasing take-home pay on paper.