NEDA exec says taxing luxury items part of tax reform

Taxing luxury items is part of the government’s tax reform program, a top official of the National Economic and Development Authority (NEDA) said Tuesday.

“This is still part of making the tax system simpler,” NEDA Undersecretary Rosemarie Edillon said in an interview on PTV’s public briefing.

Albay Representative Joey Salceda has suggested the imposition of non-essential goods taxes on several lines of luxury items instead of taxig the rich as proposed by Oxfam Pilipinas in its report. 

According to Oxfam, the nine richest Filipinos have more wealth than the bottom half, or 55 million, of the population.

Given its findings, Oxfam called on the Philippine government to impose taxes on the country's rich since imposing a wealth tax can raise additional government revenue of $3.8 billion a year, which it said was a significant amount to hike the country's health budget.

But according to Salceda, taxing much-needed capital will lead to more problems than solutions.

Edillon said taxing luxury goods was theoretically a tax on the wealthy.

“So maganda na rin ito para makatulong sa pagkuha ng revenue (This is a way to boost revenue). It's also a way for the more fortunate ones na makatulong (to help),” she said.

The NEDA official, however, said that good governance should compensate for higher and new taxes.

“[Dapat] napupunta sa maayos na proyekto na pang-development and poverty reduction (This should go to developmental projects and poverty reduction),” Edillon said.

Among the items that Salceda said were being studied to be taxed included watches, bags, and other leather items worth more than P50,000; private jets, and luxury cars worth over P5 million; the sale of residential properties worth more than P100 million; beverages worth above P20,000 per bottle; and traded paintings worth more than P100,000.

At present, a 20% tax is already imposed by Section 150 of the Tax Code on the price of jewelry, perfumes, and yachts. —NB, GMA Integrated News