Tax On Luxury Goods More Feasible, Lawmaker Says

Philippine lawmaker Rep. Joey Salceda (Albay 2nd District) said imposing taxes on luxury goods like cars, bags, and other items is more feasible than having the super-rich pay up in taxes.

He added that wealth tax would only drive billionaires to run circles around the government but taxing expensive non-essential goods would require people to “pay for (their) conspicuous tendencies” upfront.

“Because when you tax wealth, [the wealthy] will run. So where will you get the 200 billion? I think it’s very mobile. There’s cryptocurrency. We have a bank secrecy law (that is) one of the strictest in the world. So how can you find that 200 billion?” Salceda said.

Salceda proposed a tax on luxury goods called the “Louis Vuitton tax” that could generate tax revenues of ₱12.4 billion for the government every year. The proposal also includes taxes on beverages above ₱20,000, luxury watches above ₱50,000, and residential properties above ₱100 million.

Salceda added that the tax on non-essential goods is “better than zero” since it would be difficult to track down the assets of the wealthy.

“In the first place, the non-essential goods tax is a very good start and it points us in the right direction in taxing the rich,” Salceda said. “And if you study the Philippine political economies since 1946, our most grievous and virtually mortal sin is our inability to tax the rich.”

Salceda also said that compared to the tax collection of neighboring countries in Southeast Asia, the Philippines has weak tax enforcement that allows tax evaders to go unnoticed.

“They have good tax morale. You don’t need to go after them to make them pay. I think the difference is not in the tax rates, but in the tax collection efficiency. We just have more smugglers and tax evaders,” Salceda added.

Earlier, Oxfam Pilipinas, an international organization advocating for poverty eradication, said that the number of millionaires in the country has increased by 43.5% since 2012.

The organization also estimated the net worth of the nine richest Filipinos exceeds the wealth of more than 55 million or half of the entire country’s population, based on a Forbes list of billionaires in 2022.

Source: Philstar