House methods and means panel chairperson Joey Salceda of Albay on Wednesday mentioned his proposed expanded imposition of luxurious tax might be recognized as “Louis Vuitton tax” as a consequence of some Filipinos’ patronage of the product.
Salceda mentioned the extra taxes on luxurious items comparable to watches, automobiles, non-public jets, residential properties and costly wine, is predicted to generate at the least P12.4 billion value of presidency revenues, Salceda mentioned.
“The aim is to find some way to tax the rich consistent with the constitutional principle of progressivity in taxation. For now, my shortlist will generate P12.4 billion at least,” he mentioned in an announcement.
Interviewed individually on GMA’s Unang Balita, he made an enumeration of the posh gadgets purchased by the wealthy.
“What are the ones being consumed by the rich? Luxury watch is at P4.8 billion, luxury cars is at P11.5 billion. Private jets…it is around P200 million, while sale of residential properties is around P100 million,” Salceda, an economist, mentioned.
“Wine is at P10.3 billion, but for Louis Vuitton, it is at P11.3 billion. That is why Louis Vuitton’s owner had said that Filipinos are the ones who spend the most on their product. So we will call it the Louis Vuitton tax,” he added.
Salceda made the push for his proposal after non-profit group Oxfam International’s Survival of the Richest Report confirmed 9 richest Filipinos have extra wealth than the underside half (55 million) of the inhabitants.
Given the findings, Oxfam referred to as on the Philippine authorities to impose taxes on the nation’s wealthy folks to boost extra authorities income of $3.8 billion a 12 months which is already a major quantity to hike the nation’s well being finances.
Salceda mentioned the posh gadgets are non-essential items whose costs are past the attain of the majority of shoppers, and which aren’t vital or necessary inputs to different value-adding industries.
Further, he mentioned that the non-essentials items tax might be on high of all different taxes.
“The tax on luxury cars, for example, will be on top of the automotive excise tax, which is arguably a pollution and congestion tax but not yet a luxury tax. The tax on luxury residential properties will be on top of VAT and other taxes on its sale,” Salceda mentioned.
“Other items, such as sales of shares in exclusive membership clubs (Manila Polo Club, Tagaytay Highlands, etc), jacuzzis, all regatta equipment, and antiques are also being considered, but the revenue potential could be limited, and enforcement costs could outweigh revenue potential,” he added.
The extra revenues to be generated could be earmarked to the nation’s inventive sector, notably the Philippine-made luxurious gadgets.
“I think it’s time the Philippines becomes more than just a part of the whole assembly of luxury goods, and we should also look at the possibility of power cost or labor cost subsidies for companies who can fully design and manufacture luxury bags and other creative products in the country,” he added.
At current, Section 150 of the Tax Code imposes a 20% tax on the value of bijou, perfumes, and yachts.—LDF, GMA Integrated News
