Gatchalian seeks zero tax for P400,000 annual income, other earnings

MANILA, Philippines—  Sen. Sherwin Gatchalian is seeking to raise the take-home pay of workers through a bill that would exempt from tax those earning P400,000 and below annually.

The bill, “Granting Increase in Take-Home Pay for All Working Filipinos Act” or “Ginhawa,” was among the priority measures the senator lodged on Tuesday.

It will be an amendment to the National  Internal Revenue Code of  1997 which  currently exempts from income tax those who are earning P250,000 and below a year.

“So, we will increase it to ₱400,000 a year. This means that if you earn ₱400,000 a year, you will be exempt from income tax,” Gatchalian said in a press briefing.

“And for bonuses — currently, if your bonus is ₱90,000 a year, it’s tax-exempt. We will raise that to ₱150,000 a year, ” he added.

Other compensations for minimum wage earners such as night differential, overtime and holiday pays would also be free from income tax as proposed in the bill.

“So, all our fellow citizens who earn through overtime, hazard pay, or differential pay — those will also be made income tax-free,” said Gatchalian.

“Dahil, yung hazard pay, binibigay nga yan dahil hazardous yung trabaho mo. Pero, kakaltasan pa ng gobyerno. Kaya nga binibigay yan dahil delikado yung trabaho mo. Dapat hindi na kaltasan ng gobyerno,”  Gatchalian said.

“Hazard pay is given precisely because the work is dangerous. But the government is still going to deduct from it. It’s given because the job is risky, so the government shouldn’t reduce it,” he pointed out.

No income tax will also be imposed on service charge in restaurants if  his proposed measure becomes a law.

“So, this is what’s included in the Ginhawa Bill. What we want is to provide relief to our fellow citizens who belong to the income-earning segment,” Gatchalian said. /gsg