Metro Manila (CNN Philippines, January 16) – Luxury and non-essential goods may be slapped with higher taxes in a move under study in the House of Representatives, a lawmaker said on Monday, amid calls to impose levies on wealth.
“The committee is particularly studying taxing wristwatches, bags, and other leather items above ₱50,000, private jets, luxury cars above ₱5 million, the sale of residential properties above ₱100 million, beverages above ₱20,000 per bottle, traded paintings above ₱100,000, among other items,” said Albay Rep. Joey Salceda, Ways and Means Committee chairman.
Salceda’s panel handles all matters directly and principally related to the fiscal, monetary and financial affairs of the national government. All tax bills emanate from the House.
“We can slap taxes on those items, since they won’t mind paying them anyway,” Salceda quipped, referring to the proprietors of such luxury items.
Non-essential good levy on jewelry, perfumes, and yachts and other vessels intended for pleasure or sports are currently taxed 20%. The committee’s suggestion would be an expansion of the law.
“If we can raise more consumption taxes on luxury items, we might be able to begin lowering the VAT [value added tax] for most other things,” Salceda said.
Wealth tax
Salceda revealed his panel’s intention in response to calls during the World Economic Forum (WEF) in Davos, Switzerland – which President Ferdinand Marcos Jr. is currently attending – that urged governments to impose wealth taxes on billionaires in their respective countries.
READ: Marcos to highlight PH economic gains, role as ‘driver of growth’ during WEF
At the WEF, Oxfam International presented its policy paper titled “Survival of the Richest” demanding permanently increased taxes on the richest one percent of the population in order to reduce the number of multi-millionaires and billionaires.
Salceda said he wasn’t on board with the idea of a wealth tax on the ultra-rich.
“I can’t target one specific section of the population for what they supposedly own. They will simply apply for foreign citizenship and move their money in other countries that will be happy to take them,” he said. “But, taxing much needed capital will lead to more problems than solutions. I want the rich to keep their money in the Philippines and spend it on our development. Driving them away by taxing highly mobile assets solves nothing for the country.”
He added: “Instead of taxing highly mobile or movable capital such as cash, stocks, bonds, and other financial instruments, we can tax luxury real assets better. And we won’t have to create new taxes, because we are supposed to value those properties correctly anyway.”
