[Ask the Tax Whiz] What do the proposed tax reforms in Marcos' 2026 SONA mean for you?

President Ferdinand R. Marcos Jr.‘s fifth State of the Nation Address (SONA) signals the beginning of what could become the country’s most significant tax reform package since the TRAIN Law. The challenge now is no longer whether tax relief should be granted, but how to provide it without weakening the country’s fiscal position.

Done right, these reforms can increase the take-home pay of Filipino workers, help MSMEs grow, improve competitiveness, and strengthen investor confidence. Done poorly, they could widen the fiscal deficit and leave future generations with a heavier debt burden.

Here are the key questions—and the policy choices that matter.

1. Why is the proposed increase in the income tax-exempt threshold from ₱250,000 to ₱350,000 important?

This is one of the most meaningful tax relief measures announced in the SONA. Raising the tax-free threshold to ₱350,000 means more than one million taxpayers earning between ₱250,000 and ₱350,000 annually would no longer pay income tax.