The Finance Ministry is preparing to introduce a new top personal income tax band that would raise the marginal rate for higher earners to 27.5%, up from the current ceiling of 25%.
Individuals earning P33,333 per month and above would fall into the new bracket under proposals expected to be tabled during the next parliamentary sitting. The changes form part of a broader package that also includes increases to corporate tax rates and adjustments affecting companies operating within the International Financial Services Centre.
The proposed measures come as government revenue streams face sustained pressure. Mineral revenues, particularly from diamonds, have weakened amid softer global demand and price volatility. Diamonds account for a significant share of export earnings and fiscal income, making the economy sensitive to shifts in the global commodities cycle.
Recent data cited by Reuters indicates that southern African diamond producers have experienced declining sales volumes and lower average prices over the past year, reflecting slower luxury goods demand in key markets such as the United States and China. This has constrained fiscal space in economies reliant on extractive industries.
The proposed tax adjustments signal a shift towards domestic revenue mobilisation as authorities seek to stabilise public finances. If approved, the higher rates would increase the contribution of upper-income earners and corporates to the national budget at a time of constrained external income flows.