Taxumo’s 2026 State of Online Taxation Report shows that more Filipinos are filing their taxes online. Freelancers, self-employed professionals, and small business owners are using digital tools to formally declare their income and build an official financial record.
At the same time, many are still facing financial challenges. While they are staying tax compliant, they continue to deal with irregular income and rising living costs. The report also shows that online tax filing is no longer used only by digital workers. People in traditional industries are also filing online to strengthen their credibility and improve access to financial opportunities.
"Skill affluent, financially exposed. Realities of the new poor."
consistent growth of philippine tax collection
In Taxable Year 2023, the BIR collected ₱2.52 trillion¹. By 2024, that grew to ₱2.85 trillion – the highest in two decades². 2025 saw continued growth, with full-year collections reaching ₱3.11 trillion against a target of ₱3.23 trillion³. For 2026, the government has set its highest target yet at ₱3.43 trillion⁴.
The numbers tell a clear story. Tax revenues are rising year after year, and the targets keep climbing with them. The tax collection system is working, but the question worth sitting with is whether the collected funds are working equally for everyone.
1Bureau of Internal Revenue, Annual Report 2023, p. 10. 2Bureau of Internal Revenue, Annual Report 2024, p. 19. 3Bureau of Internal Revenue, Revenue Memorandum Order No. 009-2026: Prescribing the Allocation of the CY 2026 BIR Collection Goal by Implementing Office, March 26, 2026, p. 1. 4Bureau of Internal Revenue, Revenue Memorandum Order No. 009-2026: Prescribing the Allocation of the CY 2026 BIR Collection Goal by Implementing Office, March 26, 2026, p. 1: “the BIR’s CY 2026 collection target was revised to ₱3.431 Trillion.”
did online tax payments grow?
On Taxumo, online tax payments have grown exponentially over the years, at a 43% compounding rate.
Taxumo Cumulative User Growth
Years shown refer to the taxable year.
SPENDING POWER OF FILIPINOS
Let’s take a look at the incomes declared by online taxpayers and determine their socioeconomic class based on these figures.
This is grounded on the latest available income classification framework from the Philippine Institute for Development Studies (PIDS), based on data from the PSA’s Family Income and Expenditure Survey (FIES) 2021, to determine socioeconomic status.
|
Socio-Economic Status (Income Group) |
Definition |
Monthly Income Threshold (PHP) |
|---|---|---|
|
Poor |
Per capita income less than official poverty threshold |
Less than ₱13,873 |
|
Low income (but not poor) |
Per capita incomes between the poverty line and twice the poverty line |
₱13,873 to less than ₱27,746 |
|
Lower middle income |
Per capita incomes between twice the poverty line and four times the poverty line |
₱27,746 to less than ₱55,492 |
|
Middle middle class |
Per capita incomes between four times the poverty line and seven times the poverty line |
₱55,492 to less than ₱97,111 |
|
Upper middle income |
Per capita incomes between seven times the poverty line and twelve times the poverty line |
₱97,111 to less than ₱166,476 |
|
Upper income (but not rich) |
Per capita incomes between twelve times the poverty line and twenty times the poverty line |
₱166,476 to less than ₱277,460 |
|
Rich |
Per capita incomes at least equal to twenty times the poverty line |
₱277,460 or more |
Socioeconomic scale with Taxumo
This year, we checked how many people earned more and moved up to a higher group, how many stayed in the same group, and how many earned less and moved down. This helps us understand how people’s financial situations changed between 2025 and 2026.
The socioeconomic groups are analyzed as:
- Poor
- Low Income (but not poor)
- Lower Middle Income
- Mid Middle Income
- Upper Middle Income
- High Income
- Rich
Socioeconomic profiles in this report are approximated from declared annual income on Taxumo and mapped directionally to PSA/PIDS classifications.
Percentage Distribution of Overall Socioeconomic Status Shifts, 2025–2026
Who Made More Money?
Despite being at the bottom of the socioeconomic category, the poor have made a significant net increase of 32.59%, moving to a higher socioeconomic class.
Who Stayed the Same?
The 2026 picture suggests that for many tax filers, socioeconomic position remains largely unchanged, with mobility happening only at the margins.
- Poor at 67.41%
- Low income at 35.25%
- Lower middle at 50.13%
- Mid middle at 43.56%
- Upper Middle Class at 54.22%
- Upper Income at 57.25%
- Rich at 75.76%
No Change
Increase
Decrease
No shift
↓ 2025 |
2026 → |
||||||
|---|---|---|---|---|---|---|---|
Poor |
Low Income |
Lower Middle Class |
Middle Middle Class |
Upper Income |
Upper Middle Class |
Rich |
|
Poor |
No Change |
Increase |
Increase |
Increase |
Increase |
Increase |
No shift |
Low Income |
Decrease |
No Change |
Increase |
Increase |
Increase |
Increase |
No shift |
Lower Middle Class |
Decrease |
Decrease |
No Change |
Increase |
Increase |
Increase |
No shift |
Middle Middle Class |
Decrease |
Decrease |
Decrease |
No Change |
Increase |
Increase |
Increase |
Upper Income |
Decrease |
Decrease |
Decrease |
Decrease |
No Change |
Increase |
Increase |
Upper Middle Class |
Decrease |
Decrease |
Decrease |
Decrease |
Decrease |
No Change |
Increase |
Rich |
Decrease |
No shift |
No shift |
Decrease |
Decrease |
No shift |
No Change |
Changes & Shifts between Socioeconomic Statuses, 2025–2026
“No shift” denotes that no online taxpayer transitioned across socioeconomic boundaries, whereas “No Change” indicates that the subjects maintained their exact baseline socioeconomic status throughout the observation period.
Who made less money?
The downward shift of 32.34% of middle-middle-income earners moving into low middle income, low income, and poor income brackets suggests increased financial pressure among these classes.
While these individuals are classified into lower socioeconomic groups, their continued spending on business and compliance tools indicates that they remain active participants in the economy despite facing greater financial pressure.
As disposable income becomes more constrained, spending behavior appears to shift toward necessities and high-value investments, indicating a more deliberate and efficiency-driven approach to managing limited resources. This suggests that rather than withdrawing from economic participation, many individuals are reprioritizing their expenditures to maximize value and sustain income-generating activities.
WHAT CHANGED BETWEEN 2025 & 2026?
The path upward appears less accessible, with some individuals across socioeconomic groups moving into or remaining in poverty from 2025 to 2026.
And the floor is thin: some earners across all socioeconomic status fell back to poor (or remained poor) in the same period. This suggests that the system may help people stay afloat more than it enables them to move ahead.
With a staggering 67.41% that remained poor from 2025 to 2026, For Filipinos earning less than ₱13,873 per month, the financial reality is stark for Filipinos earning. With the peso’s purchasing power at 0.77 relative to 2018, ₱13,000 in take-home pay effectively holds at roughly ₱10,000 in real value today.
Even following the recommended 70/20/10 budget split for lower-income households — 70% for basic needs, 20% for savings, and 10% for personal spending — there is little to no room for emergency funds, leaving families highly vulnerable when circumstances take a turn for the worse.
online taxpayers across ages
Let’s take a look into the age of online taxpayers, informing us which generation prefers to pay their taxes online. Age groups or generations stated in this report are based on the Pew Research Centre definition.
Share of Users (%) by Generation, 2025 vs 2026
Comparing 2025 to 2026, there has been a 19% increase in Gen Z taxpayers. However, Millennials are still the top online taxpayers in 2026.
Median Revenue Filed by Generation, 2025–2026
The median annual income varied across generations, indicating differences in the typical tax contribution levels of online taxpayers. This suggests that online taxpayers from certain generations generally remit higher amounts of income tax, reflecting differences in income levels, business maturity, and earning capacity.
Revenue growth was strongest among Boomers (73.19%) and Gen Z (49.40%). In contrast, Millennials experienced a marginal decline in median revenue (-0.29%). While the Silent Generation recorded the weakest performance.
While the Silent Generation showed the weakest result, both Silent Generation and Boomer figures should be interpreted with caution because they have small sample sizes. The most reliable trends are seen among Gen Z, Gen X, and Millennials.
Magnitude of Change by Generation × Income Source, 2025–2026
The more reliable patterns appear among Gen Z, Gen X, and Millennials.
Gen Z shows broad-based growth, particularly in Professional income sources, while Millennials declined across all income-source categories. Gen X appears broadly stable, with weakness concentrated in Business income.
Silent Generation and Boomers were not included due to their small sample sizes.
online Taxpayer Count per industry
It’s important to note that this ranking is based on the number of taxpayers (how many individuals or businesses are filing taxes) — not the amount of tax paid.
The IT & Software Development industry ranks first in taxpayer count, underscoring Taxumo’s strong adoption among businesses that prioritize scalability, operational efficiency, and digital transformation. This suggests that companies in this sector increasingly prefer streamlined and technology-driven tax compliance solutions over traditional alternatives.
Rather than investing significant time and resources into developing internal tax workflows or relying solely on outsourced services, businesses in this industry appear to recognize the value of a platform that enables them to manage compliance seamlessly while focusing on growth and innovation.
Few Online Taxpayers, But Remits More Taxes
The top five industries with the highest typical tax remittance levels in the Philippines were:
- Agriculture & Farming
- Veterinary & Pet Services
- Wellness & Personal Services
- Hardware & Home Improvement
- Security & Investigation
Industry Median Revenue vs. Overall Median (2026)
Each point = an industry's median revenue as a % difference from the overall median
Dashed line = overall median (0%)
Among businesses that use digital tax filing, those in Agriculture & Farming, Veterinary & Pet Services, Wellness & Personal Services, Hardware & Home Improvement, and Security & Investigation tend to pay higher taxes than those in many other industries.
This does not mean these industries paid the most taxes overall. It means the typical taxpayer in these industries paid more than the typical taxpayer in other sectors.
The figures are based on the median tax amount, which gives a better picture of what is normal for each industry.
Digital tax filing is no longer limited to tech companies or large businesses. Traditional industries and service-based businesses are also adopting digital tools to meet their tax obligations.
The PSA also shows that services and agriculture remain major parts of Philippine employment, with services accounting for 62.3% and agriculture for 19.4% of employed persons in April 2026. This supports why it is meaningful that traditional and service-based industries appear strongly in a digital tax-filing dataset.
Which industries lead in high-volume tax Filers?
However, there’s another side to the story. Some industries contribute a lot in taxes not just because each taxpayer pays a lot, but because there are many taxpayers in that industry. Together, they generate a large amount of tax revenue. These are High-Volume Contributors (Many Taxpayers).
User Share vs. Average Revenue per User by Industry (2026)
Bubble size = share of users · height = average revenue per user
Dashed line = all-industry average · label = % vs average
These industries may not rank highest in median tax remittance, but they contribute significantly because there are many taxpayers in these sectors. Showing you the top 5 high volume contributors:
- IT & Software Development: 13.81% of all Taxumo filers. Each taxpayer on average earns around ₱1.04M a year, 36% above the Taxumo average of ₱0.77M.
- Other Services: 12.12% of all filers. At ₱0.82M per filer, earnings are just slightly above the Taxumo average.
- Business & Management Consulting: 11.27% of all filers. At ₱0.85M per filer, they sit 11% above the Taxumo average.
- Creative & Digital Media: 10.39% of all filers. At ₱0.58M per filer, they earn 25% below the Taxumo average, a large group, but an underearning one.
- Virtual Assistant & Admin Services: 8.47% of all filers. At ₱0.53M per filer, they earn 31% below the Taxumo average, the starkest gap in the top 5.
The ₱0.77M average may look high because a few high earners pull the number up. But most filers likely earn much less than that.
This is why many Taxumo filers still fall under the poor and lower-middle-income brackets. A small group earns a lot, but the majority remain far below the average.
ONLINE TAXPAYERS BY GENDER
When creating a Taxumo account, you’ll be asked to indicate the gender you identify with. The available options are:
- Male
- Female
- Non-Binary
- N/A (for non-individual or corporate accounts)
Gender identity refers to how you personally understand and experience your gender—it’s not the same as your sex assigned at birth. It can reflect being male, female, both, neither, or somewhere in between. Only you can define your gender identity.
We value the diversity of our community. Everyone has unique needs and challenges, and knowing more about our users—such as their gender identity—helps us and others develop more inclusive, personalized solutions. Now, let’s look at the age of online taxpayers to understand which generation is most likely to pay taxes online. The generational brackets used in this report follow the definitions set by the Pew Research Center.
From 2025 to 2026, declared income among Taxumo filers increased by 12.45% for men and 4.79% for women, while non-binary filers recorded a 35.56% decrease. However when all gender groups are viewed collectively, declared income taxes filed through Taxumo still grew in 2026, suggesting stronger overall income tax activity across the filer base.
This points to a promising trend: many Taxumo filers are not only staying compliant, but also reporting higher income and participating more actively in the formal economy.
Taxumo serves users across different income levels, from early-stage freelancers and professionals to more established businesses. The presence of high earners shows what upward mobility can look like, while the broader filer base highlights Taxumo’s continued relevance to everyday Filipino taxpayers.
GENDER ACROSS SOCIOECONOMIC GROUP
We discovered that most Taxumo filers are poor or lower-middle-class .
The largest group of filers falls under the Poor income bracket. Within this bracket, Women account for 17.8% and men 10.0%, bringing the combined share to nearly 28% of all filers.
The Lower Middle Income bracket also represents a significant portion of the filer base, with women accounting for 13.9% and men 7.5% of all filers. Together, these two brackets make up close to half of all Taxumo users.
By contrast, the Rich segment is among the smallest, with women accounting for 0.8% of all filers and men 1.1%. This is consistent with how higher-income individuals often manage their taxes through accountants or employer-supported arrangements, reducing the need to self-file.
Socioeconomic Class of Online Taxpayers by Gender, 2025
However, non-binary filers account for less than 1% of the total filer base, so their representation in the data remains limited and should be interpreted with caution.
This suggests that Taxumo is not primarily serving high-income taxpayers. Our user base is concentrated among Filipinos in the poor and lower-middle-income brackets who are taking steps to formalize their income and economic activity.
ONLINE Taxpayer Contributions BY REVENUE DISTRICT OFFICE
With over 143,000 online taxpayers nationwide, Taxumo caters to taxpayers across various Revenue District Offices (a localized branch of BIR that collects taxes) in the country.
| Region / City | % of users |
|---|
Here are the top 5 Revenue District Offices in Luzon, Visayas, and Mindanao that recorded the highest number of Taxpayers and the most remitted Annual Income Tax Revenue.
Luzon: Corporate and Industrial Dominance
Luzon’s high concentration of taxpayers heavily aligns with its total tax remittances, driven by integrated corporate infrastructure and dense urban residential hubs.
Highest Number of Taxpayers:
Taguig-Pateros
Novaliches (Quezon City)
Pasig, Marikina
Trece Martirez City (East Cavite)
- Kawit (West Cavite)
Top by Remittance:
Taguig-Pateros
Pasig
Novaliches (Quezon City)
Trece Martirez City (East Cavite)
Kawit (West Cavite)
Taguig-Pateros (home to BGC) completely dominates both volume and revenue. While Novaliches has a higher residential taxpayer population, Pasig outpaces it in revenue due to its central business district. Meanwhile, Cavite’s strong appearance on both lists highlights the rapid industrialization of the CALABARZON region.
Visayas: Multi-Centered Economic Powerhouses
Unlike Luzon, the Visayas region shows a fascinating split between where individual taxpayers are clustered and where heavy industrial revenue is generated.
Highest Number of Taxpayers:
Mandaue City
Cebu City North
Cebu City South
Iloilo City
Talisay (Cebu)
Top by Remittance:
Ormoc City
Mandaue City
Cebu City North
Dumaguete City
Cebu City South
Cebu naturally holds the highest concentration of individual service and BPO workers. However, Ormoc City claims the number one spot for tax remittances due to massive industrial operations, such as geothermal energy plants, which inject massive revenue into a smaller taxpayer base.
Mindanao: Agro-Industrial Hubs
Mindanao’s economy operates on a hub-and-spoke model, with clear commercial capitals anchoring population density, while resource-rich districts generate substantial tax revenue.
Highest Number of Taxpayers:
West Davao City
East Davao City
Cagayan de Oro City
Butuan City
Tagum (Davao del Norte)
Top by Remittance:
West Davao City
East Davao City
Cagayan de Oro City
Bayugan City (Agusan del Sur)
Ozamis City
Davao and Cagayan de Oro securely anchor the island’s human capital and primary business revenue. However, despite lower population counts, Bayugan City and Ozamis City leap into the top five for remittance, indicating high-yield agro-industrial processing or resource extraction in those districts.
Final Thoughts
This is the state of online taxation today: it sits at the intersection of aspiration and anxiety.
Filipinos are building livelihoods across both digital and traditional lines of work, with many using online tools and platforms to support how they earn, operate, and grow. They are skilled, adaptable, and ambitious, but many taxpayers still face irregular income, rising costs, and constant industry shifts in the nature of work.
For many online tax filers, BIR registration is more than a compliance requirement. It is a step toward legitimacy, credibility, and fuller participation in the formal economy.
At the same time, this path is not always straightforward. Many tax filers are still expected to keep up with filing requirements even when their income is irregular or no tax is due.
As a result, taxation becomes not only a financial responsibility, but also a process that calls for time, effort, and careful attention.
The challenge, then, is not simply how to make more Filipinos pay taxes. The deeper question is how to make the tax system feel like a pathway.
They need a formal economy that offers something back: access to loans, protection, benefits, credibility, and stronger support for long-term growth.
The Filipino taxpayers of today do not fit the stereotypical image of the working poor or the middle class. Instead, they represent a growing group of financially vulnerable earners: capable of participating in a global and digital economy, yet still vulnerable to disruptions such as illness, delayed payments, natural disasters, penalties, or sudden changes in technology.
To understand this group is to recognize that compliance is not the only goal. Inclusion matters just as much.
The future of online taxation should be shaped not only by enforcement, but by the value of being recognized, supported, and counted. Their work deserves a clear place in the country’s economic future.
References: Manila Times. (2026, March). Government neglects middle class. https://manilatimes.net; Manila Times. (2026, April). Middle class punched. https://manilatimes.net; Philippine Institute for Development Studies [PIDS]. (2026). Middle class and vulnerability to income poverty. https://pids.gov.ph; Philippine Institute for Development Studies [PIDS]. (2026, March). Escaping poverty is not enough. https://pids.gov.ph; Philstar. (2026, February). The abused middle class. https://philstar.com
VIEW LAST YEAR'S STATE OF ONLINE TAXATION
Filipino freelancers and online micro-entrepreneurs have become a force to be reckoned with — 1.5 million on global platforms and growing fast...
READ MORE