A LAWMAKER on Thursday proposed higher excise taxes on luxury vehicles and other non-essential goods, while seeking to remove the tax on perfumes and toilet waters.
In a statement, Marikina Rep. Romero “Miro” S. Quimbo said House Bill No. 11465 seeks to amend Sections 149 and 150 of the National Internal Revenue Code of 1997 to make the tax system more progressive.
Under the bill, automobiles priced above P4 million but not exceeding P8 million would be subject to a 50% ad valorem tax, while vehicles priced above P8 million would face a 75% tax.
Existing excise tax rates for automobiles priced at P4 million and below would remain unchanged.
The proposed changes to automobile excise taxes are expected to generate an additional P3.91 billion in annual revenue, according to Mr. Quimbo, who chairs the House Committee on Ways and Means.
“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,” he said.
The bill would also increase the excise tax on non-essential goods under Section 150 from 20% to 25%.
It would specifically include yachts, jet skis, speedboats, aircraft, planes, jets and helicopters acquired for pleasure, private use or sport under the tax.
At the same time, the measure would remove perfumes and toilet waters from the list of goods subject to the tax under Section 150.
Mr. Quimbo said the proposed changes would shift a greater share of the tax burden toward high-value discretionary consumption.
“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,” he said. — Pexcel John Bacon