Taxing the rich? Bill seeks expanding list of non-essential goods, increase tax
FILE PHOTO: Albay Rep. Joey Salceda. INQUIRER
MANILA, Philippines — Albay 2nd District Rep. Joey Salceda filed a bill seeking to expand the list of non-essential goods and increase its tax rate.
House Bill 6993, filed on Monday, seeks to increase the tax rate of non-essential goods to 25 percent.
This is an amendment of Section 150 of the National Internal Revenue Code, which imposes on jewelry, perfumes, and yachts a tax of 20 percent based on the wholesale price or the value of importation used by the Bureau of Customs in determining tariff and customs duties, net of excise tax and value-added tax (VAT).
The said bill also seeks to expand the list of non-essential goods, adding the following:
- Wristwatches worth more than P50,000;
- Bags, wallets, and belts worth more than P50,000;
- Sale of residential properties above P100,000 per square meter (Provided that the threshold shall be adjusted annually
- based on the housing consumer price index);
- Beverages above P20,000;
- Paintings above P1 million, sold by persons other than the artist;
- Antiques worth more than P100,000 per item;
- Automobiles whether brand new or second hand above P10,000,000;
- and private aircraft and parts except those for use by the Philippine government or airlines and logistics companies.
According to Salceda in the bill’s explanatory note, the bill is the easiest way to tax wealth through “conspicuous or luxurious consumption and through taxation of immovable assets (i.e., land).”
Article continues after this advertisement“Consumption taxes can be imposed at the point of importation or sale, making them easier to enforce. Similarly, property taxes on immovable assets are difficult to evade,” said Salceda.
Article continues after this advertisement“An increase in real property tax rates across the board will be painful and counterproductive, but the proper valuation of luxury real estate (such as those in gated subdivisions and golf courses) will help increase revenues and make the tax system more progressive,” he added.
Salceda also noted that the said bill also sees a non-essential good as a good whose prices are beyond the reach of the bulk of consumers and which are not significant or important inputs to other value-adding industries.
Under the bill, the non-essentials goods tax will be on top of all other taxes.
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