More than 6 million Filipino workers are expected to benefit from the proposed increase in the personal income tax exemption threshold while the proposed minimum corporate income tax exemption will provide relief to over 70,000 micro and small enterprises (MSEs), Finance Secretary Frederick Go said Wednesday.

President Ferdinand R. Marcos Jr. announced these proposed tax relief measures in his recent State of the Nation Address.

The President’s directive is to increase the personal income tax exemption threshold to PHP350,000 from the current PHP250,000.

In a briefing at the Bureau of Customs office, Go said the proposal will benefit at least 3.13 million Filipino workers, including an additional 1.2 million workers at the minimum who will no longer pay personal income tax.

This will increase the total number of tax-exempt workers from at least 5.1 million to 6.3 million.

“This is a timely and meaningful tax reform that puts more money in the pockets of millions of Filipinos,” Go said.

Go explained that those earning PHP250,000 to PHP350,000 annually will enjoy up to PHP15,000 in additional annual net income or net take-home pay.

Workers earning PHP350,000 and above can receive up to a maximum of PHP17,500 more in income tax relief that will translate to up to PHP17,500 more in annual take-home pay.

“So this means, of course, that there will be a bigger share of hard-earned income that can go towards everyday needs,” he said.

For the proposed minimum corporate income tax exemption, Go said more than 78,000 tax-paying micro and small enterprises are expected to benefit.

Under the current system, MSEs pay either the 2 percent minimum income tax based on gross income or the regular 20 percent corporate income tax based on net taxable income, whichever is higher.

Go said that through the reform, businesses operating at a loss will no longer have to pay a minimum corporate income tax.

“So this will really help our countrymen who are just starting or who are interested in doing business,” he said.

Go said that while revenue losses from the two tax relief measures amount to at least PHP66 billion, the government will look for ways to offset the losses.

“I think the most obvious sources of revenue are what we call excise taxes, right,” Go said. (PNA)