PRESIDENT Ferdinand R. Marcos, Jr. has backed a legislative proposal seeking to increase the tax rate on luxury goods.
At the same time, the Philippine leader praised the Bureau of Internal Revenue’s (BIR) intensified campaign against tax evasion as the country needs more funds for its economic recovery programs.
“I think right now the tax on luxury goods only covers very specific items and luxury goods,” Mr. Marcos told reporters on the sidelines of the BIR’s national tax campaign event in Pasay City.
He noted demand for luxury items such as high-end bags, jewelry, cars, private jets, among others, does not easily change “whatever the situation is.”
House Committee on Ways and Means Chair Jose Maria Clemente S. Salceda has filed a bill increasing the taxes on non-essential goods or luxury items to 25% from 20% previously — a move that could generate about PHP 15 billion in additional revenues for the government.
“I think it’s reasonable that we will tax the consumption side of those consuming luxury items,” Mr. Marcos said.
Mr. Salceda last month said his proposal was in response to calls from international organizations for the imposition of a wealth tax in the Philippines.
Oxfam International and its Philippine affiliate have said the inequality experienced in the Philippines is “starker” with the nine richest Filipinos having more wealth than the bottom half or 55 million of the population.
The government’s fiscal consolidation plan includes measures that would generate fresh revenues to pay for the national debt that reached PHP 13.42 trillion at the end of 2022.
In his speech at the BIR event, Mr. Marcos urged Filipinos to pay the correct amount of taxes on time “to support the country’s economic recovery and expansion so critical in this time.”
Mr. Marcos also cited the tax bureau’s accomplishments last year, including an “intensified” anti-tax evasion campaign, which he said resulted in the filing of 15 cases with the Department of Justice amounting to PHP 5.1 billion in tax liability. — Kyle Aristophere T. Atienza