The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group, said Wednesday the proposal to tax luxury items should be time-bound.
In a chance interview with reporters in Taguig City, PCCI president George Barcelon said the government can implement measures it believes can help improve the country’s situation.
"Whatever is helpful in the meantime for the challenges that we are facing, they can implement," Barcelon said when asked about the PCCI’s stand on the proposed tax on luxury items.
"But it cannot be in perpetuity. There must be a timeline," he said.
Albay Representative Joey Salceda has suggested the imposition of non-essential goods taxes on several lines of luxury items instead of taxing 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 people.
Oxfam then called on the Philippine government to impose taxes on the country's rich so that it can raise additional revenue of $3.8 billion a year, which it said was a significant amount to hike the country's health budget.
Salceda, however, said taxing much-needed capital will lead to more problems than solutions.
Among the items that the lawmaker said were being studied to be taxed were 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 more than 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.
The National Economic and Development Authority said that taxing luxury items is part of the government’s tax reform program.
Barcelon said that taxes on luxury items can be imposed until the government’s budget deficit reaches a comfortable level.
"At this time, these are abnormal times wherein our country, because of the challenges that we have, the government deficit is mainly of concern," he said.
The PCCI chief also said that taxing luxury items should be carefully studied, and conditions and criteria for designating an item as luxury should be properly in place.
"Look at it seriously, and then what are the conditionalities that should be part of that law that will be implemented," Barcelon said.
"When you say luxury, the price of the item has reached a certain amount where it’s really for those who can afford it. All products have that range of luxuriousness. Bags, shoes, wine, clothing, even cars," he added.
Barcelon said that offering luxury brands at a cheaper price is also a way to attract tourists.
"We need them also on that side of the tourist business," he said. —VBL, GMA Integrated News