Lawmakers Studying Tax on Luxury Goods

The House Committee on Ways and Means Chairman had stated that the panel is looking into implementing taxes on luxury products.

Albay Rep. Joey Sarte Salceda made this statement in response to international organizations such as Oxfam International calling on the government to tax the super-rich of the Philippines.

These calls likewise come at a time wherein President Ferdinand R. Marcos Jr. attends the World Economic Forum.

“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 to other countries that will be happy to take them,” mentioned Rep. Salceda.

“But wealth induces luxurious lifestyles―what economists call conspicuous consumption. We can slap taxes on those items since they won’t mind paying them anyway.”

In Section 150 of the Tax Code, a 20% tax is imposed on jewelry, perfumes, and yachts.

Salceda says that the committee is looking into expanding the current list.

“But we will discuss which items can generate the most revenue for the least effort.”

Tax may be implemented on items such as watches, bags, and other leather items exceeding ₱50,000, private jets, luxury cars exceeding ₱5 million, residential properties worth more than ₱100 million, beverages exceeding ₱20,000 per bottle, and paintings more than ₱100,000.

“Generally, the point of the debate will be what can be universally considered ‘luxury,’”  mentioned Salceda.

“To me, it is when an item is beyond reasonable reach of the vast majority of the population and is not necessary for any essential function.”

Source: Business Mirror