Diokno Favors Improved Tax Admin Over Luxury Tax

According to the Department of Finance (DOF) Secretary Benjamin E. Diokno, he would prefer to improve the current tax administration to create more revenues as opposed to luxury taxes.

“We will look at the proposals. Right now, I’m happy with the current tax system. It’s not perfect, it can be improved, but we will be concentrated on better tax administration,” mentioned Secretary Diokno.

“In fact, our debt-to-gross domestic product (GDP) ratio is 60.9%, and that’s basically because of better tax collection, appreciation of the peso, and higher GDP,” he says.

Recently, Albay Rep. Jose Ma. Clemente S. Salceda had filed House Bill No. 6993 which would impose a 25% tax on non-essential or luxury goods.

With the proposed bill, non-essential goods would include real or imitation jewelry, perfumes, eau de toilette, wristwatches, yachts, wallets, bags, belts worth more than ₱50,000, residential property worth more than ₱100,000 per square meter, and non-alcoholic and alcoholic beverages worth more than ₱20,000 per liter.

If this bill becomes law, the government is expecting to generate over ₱15.50 billion annually.

For Secretary Diokno, the government is studying the value-added tax (VAT) refund program for international travelers.

“Right now, we’re trying to find out the most favorable modality, or the global practice. I think it’s the third parties that usually take care of the refunds,” added Secretary Diokno.

Malacañang has previously stated that the government is looking into issuing more foreign currency bonds, specifically euro and dollar-denominated bonds.

“There is demand for the dollar and euro-denominated bonds. We will accelerate the process… [because] there is really strong interest,”  mentioned Secretary Diokno.

Source: Business World