A Senate bill seeks to lower the tax rates on the taxable income of individuals by amending Section 24 of the National Internal Revenue Code of 1997.

Senate Bill No. 1685, filed by Senator Jinggoy Ejercito Estrada cited the government’s long-term vision, AmBisyon Natin 2040, which envisions Filipino families enjoying a stable and comfortable lifestyle with the security to provide for both expected and unexpected expenses. A key strategy to achieve this vision, he said, is to ensure adequate income for Filipino workers, consistent with the Constitution’s guarantee that workers are entitled to a living wage.

The bill highlights the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, enacted in December 2017 under Republic Act No. 10963, which updated the income tax structure for individuals to address bracket creep and enhance progressivity.

While TRAIN significantly increased the take-home pay of income earners, the measure noted that the law fell short in improving living conditions for many Filipinos.

Estrada cited a 2022 research article published in the Journal of Economics, Finance and Accounting Studies of the Al-Kindi Center for Research and Development, which found that the increase in income under TRAIN was offset by higher prices of goods and services, including essential items.

The study concluded that the gains from the tax reform were diminished by higher monthly expenses, particularly affecting low- to middle-income earners.

The proposed measure aims to address these shortcomings by increasing the take-home pay of Filipino income earners.

According to Estrada, the amendment would help workers achieve financial security, improve their standard of living, and enable them to contribute more actively to the economy through the exchange of goods and services.

Estrada said the filing of the bill was inspired by requests from constituents seeking relief from everyday expenses.

“Undeniably, the current economic conditions still make it difficult for workers to decently provide for their families,” the explanatory note stated. The senator emphasized that the proposed amendment seeks to deliver immediate and visible benefits to taxpayers.

-Paraluman News