House panel estimates luxury tax will generate P12.4B a year
THE House Committee on Ways and Means said it expects its proposed luxury tax to raise at least P12.4 billion a year.
“I’m looking at a short list of additional items… Basically, the aim is to find some way to tax the rich consistent with the constitutional principle of progressivity in taxation. For now, my short list will generate P12.4 billion at least,” Albay Rep. Jose Ma. Clemente S. Salceda, the committee chairman, said on Wednesday.
His initial shortlist includes high-end watches, cars selling for more than P5 million, private jets, residential property valued at more than P100 million per unit, beverages above P20,000 per bottle, and leather goods selling for more than P50,000.
Mr. Salceda said the mechanism will be the amendment of Section 150 of the National Internal Revenue Code, which currently taxes jewelry, perfume, and yachts. He is also looking to increase the tax rate to 25% or 30% from 20%.
The main target of the amendment is “non-essential goods whose prices are beyond the reach of the bulk of consumers, and which are not significant or important inputs to other value-adding industries,” Mr. Salceda said.
Mr. Salceda added that the luxury car tax will form part of the automotive excise tax, while the tax on high-end residential property “will be on top of the value-added tax and other taxes on its sale.”
He said the committee is also considering taxing club shares, jacuzzis, fur, boats, and antiques.
Mr. Salceda said the resulting revenue could be “funneled into the country’s creative sectors, particularly our own creators of luxury items,” saying that the Philippines should be “more than just a part of the whole assembly of luxury goods.” — Beatriz Marie D. Cruz