President Ferdinand Marcos Jr. announced during his fifth State of the Nation Address (SONA) that the income tax exemption threshold will be raised from ₱250,000 to ₱350,000, giving workers a maximum additional take-home pay of ₱17,500, while micro and small businesses that are losing money or breaking even will be freed from the minimum corporate income tax, Finance Undersecretary Karlo Fermin Adriano said Saturday.
“Una nga po dito is itataas na po natin ‘yung tax exemption from 250,000 to 350,000. Ang magiging resulta po nito ay additional income na maximum of 17,500 sa kada pamilya,” Adriano said in an interview on DZRH News program Special on Saturday on August 8, as part of the DZRH SONA 2026 Series featuring the Department of Finance (DOF).
He said the income tax threshold increase will directly benefit compensation earners who are currently paying income tax on the portion of their salary between ₱250,000 and ₱350,000, effectively increasing their net take-home pay without any change in their gross salary.
The second relief measure exempts micro and small businesses from the minimum corporate income tax when they are operating at a loss or at break-even, removing a burden that previously required struggling businesses to pay a minimum tax even when they had no profits to show.
“At ang isa pa nga pong nabanggit ng ating Pangulo is i-exempt na po natin ang ating micro and small businesses sa minimum corporate income tax. Ibig po sabihin nito, kapag ikaw po ay nalulugi or break-even ka lang po, micro and small business ka, wala ka na pong babayaran na minimum corporate income tax,” Adriano said.
He said both measures are part of the Marcos administration’s broader commitment to providing tax relief to ordinary workers and small entrepreneurs, who have borne a disproportionate share of the tax burden compared to large corporations and wealthy individuals.
Adriano said the two SONA-announced measures complement the BIR’s ongoing One-Time Tax Abatement Program and the expansion of VAT-exempt medicines, creating a package of fiscal relief that reaches Filipinos across different income levels and business sizes.
