Gov’t to gain P15.5B annually on luxury taxes

PRESIDENT Ferdinand R. Marcos Jr. has backed the proposed measure filed by Albay Rep. Joey Salceda that calls for the imposition of wealth taxes on so-called “super-rich” individuals to address economic inequality.

In an interview Tuesday following his attendance to the Bureau of Internal Revenue’s (BIR) 2023 National Tax Campaign Kickoff in Pasay City, President Marcos said the current tax imposed on luxury goods only covers very specific items, with demand remaining unaffected despite changes in the situation based on recent studies.

“For the rest of us, who are not necessarily consumers of luxury goods ay ramdam natin kapag bumagsak ang ekonomiya, ngunit kung titingnan ninyo, ‘yung mga luxury items, ‘yung mga magagarang kotse, ‘yung mga designer na damit at saka mga bag, hindi nagbabago ang presyo niyan dahil may kaya ang mga bumibili,” the President told reporters.

“So palagay ko naman, it’s reasonable that we will tax the consumption side of those who are consuming luxury items,” the chief executive added.

According to Salceda, principal author of House Bill No. 6993, the government can collect some P15.5 billion annually if the luxury taxes are raised from 20 percent to 25 percent.

These non-essential goods include luxury watches, luxury cars, private jets, sale of residential properties above P100 million, beverages priced at over P20,000 and leather goods costing above P50,000.

Salceda’s proposal pushes for imposing tax on non-essential goods on top of all other taxes being collected by the government.

The country’s tax system is flawed because it hasn’t taxed the rich, Salceda said in the bill’s explanatory note, as he stressed this “failure exacerbates inequality and promotes the concentration of financial resources crucial to the economy in the hands of very few individuals.”

The imposition of wealth taxes based on the net worth of the super-rich individuals will address this socioeconomic condition, the economist-legislator said.

Meanwhile, in the same interview, President Marcos said optimizing tax collection, which entails maximizing digitalization efforts, means more projects that will benefit more Filipinos.

“Kasama na diyan ‘yung mga bagong sistema, kasama na diyan ‘yung digitalization na ginagawa at ang mas masigasig na paghabol sa mga businesses at para matiyak naman na ‘yung buwis na kailangan bayaran ay nababayaran lahat,” the President said.

“Kami naman sa panig– sa Executive ay sinasabi namin asahan naman ninyo na kung ano man ang makolekta galing sa taong-bayan, galing sa mga negosyo ay asahan naman ninyo ito’y talagang mapupunta para sa ikabubuti ng ating ekonomiya, para sa pagpaganda ng buhay ng ating mga kababayan,” the President pointed out.