The One-Month Income Tax Holiday Proposal: relief or risk?

PHILIPPINES - Report 14 Oct 2025 by Diwa Guinigundo and Wilhelmina Manalac

In the middle of last week, Senator Erwin Tulfo filed Senate Bill No. 1446, seeking to suspend income-tax withholding for one month as financial relief for workers. While the measure would temporarily raise take-home pay and slightly boost consumption, it would cost the government an estimated ₱50–₱80 billion in foregone revenue.

The main limitation is inequity: low-income earners—who already pay no income tax—would receive no benefit, while higher earners gain the most. The proposal thus offers minimal social impact, a short-lived economic boost, and a significant fiscal burden. Politically popular but economically weak, SB 1446 highlights the trade-off between visible relief and sound fiscal management. A more equitable approach would be to redirect resources toward targeted subsidies or cash transfers for low-income households.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2025 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.