One of the most impactful reforms under the Tax Reform for Acceleration and Inclusion (TRAIN) Law is the reduction of personal income tax rates, particularly benefiting middle-income earners. In 2025, the TRAIN Law continues to deliver on its promise of providing greater take-home pay for Filipino workers by further lowering income tax brackets.
Under the TRAIN Law, individuals earning between ₱250,000 and ₱8 million annually have already experienced substantial tax relief since the law’s phased implementation began in 2018. By 2025, the final reduction phase will fully take effect, reducing tax rates for these earners even further. For example, those earning an annual income within the middle brackets will now be taxed at a significantly lower rate compared to pre-TRAIN levels, with some rates dropping to as low as 15% to 20%, depending on the income band.
This move is intended to increase disposable income, stimulate household spending, and encourage savings and investment among the broader working population. It also aligns with the government’s broader goal of fostering a more equitable tax system—one that lessens the financial burden on the middle class while ensuring that the wealthiest sectors continue to contribute their fair share.
The reduced rates offer middle-income earners a real opportunity to enhance their financial well-being and participate more actively in the country’s economic growth. However, taxpayers are still encouraged to stay updated on the detailed tax tables and filing requirements to maximize the benefits offered by these reforms.
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