TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s. No. ^67
25 JIJL-8 P5-42
IV.T,: i
Introduced by Senator Paolo Benigno "Bam" A. Aquino IV
AN ACT
INCREASING THE INCOME TAX EXEMPTION CEILING FOR INDIVIDUAL 
TAXPAYERS TO FOUR HUNDRED EIGHTY THOUSAND PESOS (P480f000) 
ANNUALLY, AMENDING FOR THE PURPOSE SECTION 24(A)(2)(a) and (b) 
OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
EXPLANATORY NOTE
The Philippine Constitution mandates that taxation shall be uniform and 
equitable, and that Congress shall evolve a progressive system of taxation.
Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion 
(TRAIN) Law, updated the personal income tax brackets in 2017 and set the 
exemption threshold for individual taxpayers at P250,000 annually. While this 
adjustment was intended to align tax rates with income levels at the time, the real 
value of the exemption has since been eroded by inflation.
The rising cost of living, driven by increases in food, fuel, utilities, and 
transportation expenses, has significantly reduced the purchasing power of ordinary 
Filipino workers. At the same time, wages have not kept pace with these increases. 
As a result, many low- and middle-income earners now face tax liabilities that strain 
their already limited take-home pay.
This bill seeks to amend the National Internal Revenue Code of 1997, as 
amended, to increase the personal income tax exemption ceiling from P250,000 to 
P480,000 annually, or P40,000 monthly. This proposed increase aims to restore the 
real value of the exemption, provide meaningful relief to working individuals, and help


ensure that the tax system remains equitable and responsive to current economic 
conditions.
Raising the exemption threshold will allow workers to retain more of their 
income, stimulate household consumption, and support inclusive economic growth. 
This reform reflects the continuing effort to build a more just and progressive system 
of taxation.
In view of the foregoing, the passage of this bill is earnestly sought.


•a*;** o; .
TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
25 JUL-8 P5 -42
SENATE
S. No.
26'
IV.V,.
Introduced by Senator Paolo Benigno "Bam" A. Aquino IV
4
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AN ACT
INCREASING THE INCOME TAX EXEMPTION CEILING FOR INDIVIDUAL 
TAXPAYERS TO FOUR HUNDRED EIGHTY THOUSAND PESOS (P480,000) 
ANNUALLY, AMENDING FOR THE PURPOSE SECTION 24(A)(2)(a) and (b) 
OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
Section 1. Section 24 of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows:
"Sec. 24 Income Tax Rates. -
"(A) Rates of Income Tax on Individual Citizen and Individual Resident 
Alien of the Philippines. -
(1) XXX
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(2) Rates of Tax on Taxable Income of Individuals. - The tax shall be 
computed in accordance with and at the rates established in the 
following schedule:
[(a) Tax Schedule Effective January 1, 2018 until December 31,
2922t
Not over P250,000............................................................0%


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0vor P250,000 but not over P400,000.........................................
■20% of the excess over P250,000
©vef—P4QQ,0Q—btrt—not over—P800,000.................................
P30,000 I 25% of the excess over P400,000
©vef—P800/000—btrt—net—©vef—P27000/000.........................
P130,000 I 30% of the excess over P800/000
Over P2,000,000 but not over P8/000,000.....................................
P4QQ,000 I 32% of the cxco55-ovef -P-2,000,000
Over P8,QQ0,Q00......t......................................................................
P2,410,000-1-35% of the excess over P8/000/000
(b)Tax Schedule Effective Jonuory 1, 2023-ond onwardst
Not over P250,000.............................................. :..................0%
Qvor P250/000 but not over P4Q0,000...............
15% of the excess over P250,000
Over P400,000 but not over P800,000..........................................
P22/500 I 20% of the excess 0ver-P/lOO-,OOO
Over P809,-000 but not over P2y000}000:~..::.................................
P102,500 I 25% of the excess over P800/000
Over P2,000,000 but not over P8,000,000....................................
P402,500 I 30% of tho excess over P2,000,000
Over P8,000,000............................................................................
P2/202,500 I 35% of-the excess over P8/OQ0,000]
NOT OVER P480/000.......................................................... 0%
OVER P480,000 BUT NOT OVER P650,000............................
15% OF THE EXCESS OVER P400/000
OVER P650,000 BUT NOT OVER Pl,300/000........................
P37/500 + 20% OF THE EXCESS OVER P650/000
OVER PI,300,000 BUT NOT OVER P3,200,000..................
P167,500 + 25% OF THE EXCESS OVER Pl,300,000
OVER P3,200,000 BUT NOT OVER P12,800,000.................
P642,500 + 30% OF THE EXCESS OVER P3,200,00 
OVER PI2,800,000 ...................................................................


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P/3522,500 + 35% OF THE EXCESS OVER PI2,800,000
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(b) Rate of Tax on Income of Purely Self-employed Individuals and/or Professionals
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Whose Gross Sales or Gross Receipts and Other Non-operating Income Does Not
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Exceed the Value-added Tax (VAT) Threshold as Provided in Section 109(BB). - Self-
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employed individuals and/or professionals shall have the option to avail of an eight
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percent (8%) tax on gross sales or gross receipts and other non-operating income in
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excess of [Two] FOUR hundred [fiftyj EIGHTY thousand pesos [(P250,000)]
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(480,000), in lieu of the graduated income tax rates under Subsection (A)(2)(a) of
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this Section and the percentage tax under Section 116 of this Code.
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Sec. 4. Implementing Rules and Regulations. - Within sixty (60) days from the
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effectivity of this Act, the Secretary of Finance shall, upon the recommendation of the
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Commissioner of Internal Revenue, promulgate the necessary rules and regulations to
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implement the provisions of this Act.
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Sec. 5. Repealing Clause. - All laws, decrees, orders, rules, and regulations or
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parts thereof inconsistent with this Act are hereby repealed or modified accordingly.
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Sec. 6. Separability Clause. - If any provision of this Act is declared
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unconstitutional or invalid, the remaining provisions not affected thereby shall
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continue to be in full force and effect.
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Sec. 7. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
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complete publication in the Official Gazette or in a newspaper of general circulation.
Approved,