Rising Oil Prices Renew Push in Philippine Senate to Raise Income Tax Exemption Threshold
Key Takeaways
- •Senate President Sherwin T. Gatchalian said rising oil prices have renewed Senate support for the GINHAWA Act, which would increase the income tax exemption threshold to P400,000 from the current P250,000.
- •The bill would also raise the cap on tax-free bonuses to P150,000 from P90,000, with existing ceilings unchanged since the TRAIN Act took effect in 2018.
- •The Department of Energy reported on Sept. 22 that Middle East conflicts and the Russia-Ukraine war had pushed up crude oil and diesel prices.
- •Oil companies raised gasoline prices to P4.88 per liter, diesel to P8.82 per liter, and kerosene to P6.47 per liter following the increases.
- •Gatchalian said the GINHAWA Act's implementation should be sped up if the Middle East conflict continues, as high crude prices would further weaken Filipinos' purchasing power.
Rising oil prices have renewed calls in the Philippine Senate for a measure that would raise the income tax exemption threshold and boost Filipino workers' take-home pay, Senate President Sherwin T. Gatchalian said on Sunday.
In a statement, Mr. Gatchalian said the latest round of oil price increases is placing further pressure on Filipinos' purchasing power. The Department of Energy reported on Sept. 22 that continued conflicts in the Middle East and the Russia-Ukraine war had driven up crude oil and diesel prices. Oil companies subsequently raised gasoline prices to P4.88 per liter (L) from P4.80/L, diesel to P8.82/L from P8.80/L, and kerosene to P6.47/L from P6.40/L, the agency added.
Senate Bill No. 56, known as the GINHAWA Act — named after the Filipino word for relief or ease — seeks to ease the financial burden on ordinary workers by raising the income tax exemption threshold to P400,000 in annual income from the current P250,000. Under the measure, the cap on tax-free bonuses would also be lifted to P150,000 from P90,000. The existing ceilings date back to the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which took effect in 2018. Because income below the exemption threshold is not subject to personal income tax, the proposed P400,000 ceiling would spare a wider range of earners from income tax altogether.
"If the conflict in the Middle East continues, we need to speed up the realization of GINHAWA because the high prices of crude oil will further weaken," Mr. Gatchalian said in a statement. — Francessca S. Abalos
Source: BusinessWorld
