Marikina 2nd District Rep. Miro Quimbo has filed a bill seeking to raise excise taxes on high-value automobiles and expand the coverage of non-essential goods while removing perfumes and toilet waters from the tax list.
House Bill No. 11465, filed Wednesday, proposes amendments to Sections 149 and 150 of the National Internal Revenue Code of 1997, as amended.
Under the measure, automobiles priced above P4 million up to P8 million would be subject to a 50% ad valorem tax, while those priced above P8 million would be taxed at 75%.
Existing excise tax rates for automobiles priced at P4 million and below would remain unchanged.
Quimbo, chair of the House Ways and Means Committee, said the proposal seeks to make the tax system more progressive by placing a greater tax burden on luxury and high-value discretionary purchases.
“The proposed measure aims to achieve greater tax progressivity and promote a more equitable distribution of wealth since luxury and high-value goods are generally purchased by consumers with greater disposable income and capacity to pay,” Quimbo said in a news release Thursday.
He said higher taxes on expensive discretionary purchases could also encourage consumers to redirect resources toward savings, investments or other productive spending.
The proposed automobile tax increases are estimated to generate an additional P3.91 billion in annual government revenue, according to Quimbo.
The bill states that the additional revenue may support government priority programs without increasing the tax burden on ordinary taxpayers.
HB 11465 also proposes raising the tax on non-essential goods under Section 150 from 20% to 25%.
It would expressly include yachts, jet skis, speedboats, sailboats, motorboats, aircraft, planes, jets and helicopters acquired for pleasure, private use or sport under the coverage of the tax.
At the same time, the bill seeks to remove perfumes and toilet waters from the list of goods subject to the tax under Section 150.
Quimbo said the measure would provide the government with additional revenue sources while avoiding undue taxes on goods and assets used for essential purposes, livelihoods, public transportation and productive activities.
“Strengthening the taxation of luxury consumption constitutes a practical means of enhancing the progressivity of the Philippine tax system,” he said.
“This measure would enable the Government to tap revenue sources that are readily identifiable and administratively accessible, while ensuring that goods and assets used for essential, livelihood, public transportation, or productive sources are not unduly burdened,” Quimbo said.
Photo courtesy of Manila Standard
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