Gov’t looking into tax relief, increasing tax-free ceiling - Marcos

Metro Manila, Philippines - The government is looking into tax relief measures and increasing the ceilings for tax-free benefits, President Ferdinand Marcos Jr. said on Saturday, Oct. 25, as the administration seeks ways to ease the burden of employees.

In a speech before departing for Malaysia, Marcos said the Bureau of Internal Revenue (BIR) will recalibrate its priorities.

“We will uphold fairness in our tax system,” he said, promising micro, small, and medium enterprises and large corporations who have been paying their taxes will be “treated justly.”

The chief executive then announced the study of tax relief measures.

“[The] Department of Finance has also instructed the BIR (Bureau of Internal Revenue) to look into the possible exemption of certain taxpayer segments from the obligation of withholding and remitting creditable withholding taxes, and the simplification and lowering of the applicable creditable withholding tax rates,” Marcos said.

“With this we hope to provide relief to [the] majority of our taxpayers burdened by complex tax compliance requirements without revenues to be foregone,” he said.

Increasing tax-free benefit limits

Marcos also said the DOF and BIR proposed to the administration to increase the ceilings for the tax-exempt de minimis benefits.

“These changes are not just about numbers — they are about fairness and dignity in the workplace,” he said. “Every Filipino worker deserves to benefit from the nation’s growth.”

“These increases will have minimal impact on the government revenues but will definitely make a significant difference for our workers,” Finance Secretary Ralph Recto also said in a statement.

Under their proposal, Recto said public and private workers “will enjoy higher non-taxable allowances and benefits to account for inflation and rising living costs as well as enhance competitiveness across sectors, while maintaining prudent fiscal management.”

The DOF said that the tax-exempt ceiling for monetized unused vacation leave credits for private employees will be increased from 10 to 12 days. The current uncapped benefit for government employees’ monetized vacation and sick leave will be retained.

The limit for medical cash allowances for dependents will be raised from P1,500 to P2,000 per semester.

The agency said rice subsidies will be adjusted from P2,000 to P2,500 per month or its market equivalent.

The non-taxable threshold for uniform and clothing allowance will go up from P7,000 to P8,000 per year.

Other proposed adjustments were the following:

- Increasing the ceiling for actual medical assistance from P10,000 to P12,000 per year

- Laundry allowance from P300 to P400 per month

- Employee achievement awards from P10,000 to P12,000 per year

- Christmas or anniversary gifts from P5,000 to P6,000 per year

- The tax-free limit for meal allowance for overtime or night-shift work will be increased from 25 percent to 30 percent of the minimum wage

- The combined ceiling for collective bargaining agreement and productivity incentives will be raised from P10,000 to P12,000 per year.

Meanwhile, Marcos said the government hears the call for state interventions to lower the price of goods.

He said the maximum suggested retail price for imported premium rice was strictly enforced and the P20 per kilogram rice program remains.

“The Department of Trade and Industry continues to monitor and work with the manufacturers to temper prices, especially in time [for] the holiday season,” the president said.