Albay Rep. Joey Salceda has filed a invoice in Congress that goals to impose a tax on sure luxurious objects that some extremely wealthy Filipinos typically take pleasure in.
Dubbed the “Louis Vuitton tax” (a pun on the internationally recognized French luxurious trend home that sells extremely priced merchandise), the proposed tax would apply to, amongst others, wristwatches, baggage and different leather-based items that value greater than P50,000; luxurious vehicles value over P5 million; and drinks priced at the least P20,000 per bottle.
In accordance with Salceda, the tax shall be along with the excise tax, value-added tax (VAT) and different taxes normally levied on these objects. It could allow the federal government to gather at the least P12.4 billion in extra revenues.
At current, a 20-percent tax is imposed on the wholesale value of jewellery (whether or not actual or imitation), valuable stones, perfumes and bathroom waters.
He mentioned the upper tax take might allow the federal government to decrease the VAT presently imposed on different merchandise.
In a way of talking, it’s a Robin Hood-like idea of stealing from the wealthy to present to the poor.
In a TV interview, an official of the Nationwide Financial and Improvement Authority had mentioned that tax was simpler to implement as a result of the topics of the tax have been seen and that, in contrast to a “wealth tax,” wouldn’t require the modification of different income legal guidelines which could possibly be tough.
As presently drafted, the invoice meets what are typically thought of as the weather of an efficient tax legislation, specifically: first, it’s progressive as a result of it’s direct in character, i.e., outrightly imposed on the taxpayer or can’t be shifted to another celebration; second, equitable as it’s primarily based on the taxpayer’s capacity to pay; and third, able to efficient administration as a result of the objects are visually verifiable and, most significantly, have paper trails.
From a rational perspective, there ought to be no purpose for Filipinos whose internet value or disposable earnings has 9 or extra zeros to complain concerning the further tax load as a result of they will afford it.
A further, say, 25- or 30-percent tax on their high-value sources of ego journey or social gratification shouldn’t trigger them sleepless nights or in any other case power them to make changes of their life-style.
That quantity would simply be a drop of their monetary bucket or, to make use of a Filipino saying, “patuka sa manok” (rooster feed).
Moreover, paying that tax would give them the chance to get pleasure from a point of “psychic happiness” with the thought that their profligate spending behavior in these instances of financial hardship can be a possibility to contribute to the nationwide coffers that the federal government can use for public functions.
It’s like a vice being reworked to a advantage.
What’s extra, the bragging rights over that benevolent act may make them the darlings of the rarefied world of the nation’s social or financial elite.
However making that Louis Vuitton tax a actuality isn’t going to be a stroll within the park. It faces huge social and political challenges.
Whereas the invoice might be able to breeze by the Home of Representatives’ methods and means committee which Salceda heads, there isn’t any assurance it will have simple crusing in plenary and even get to that stage.
The uber wealthy Filipinos who stand to be adversely affected by that tax might not like the thought of their conspicuous spending habits being unduly burdened or the breadth of their spending spree diminished.
They might not stand nonetheless and let Salceda’s brainchild attain fruition in the event that they may also help it.
Traditionally, any legislative proposal that tends, instantly or not directly, to disturb the established order within the proverbial 1 p.c of Philippine society at all times meets stiff opposition from that sector.
For one, this was confirmed within the failure of the previous Duterte administration to have the scope and protection of the financial institution secrecy and antimoney laundering legal guidelines amended regardless of it having the bulk within the two chambers of Congress and the worldwide watchdog on monetary frauds strongly lobbying for the amendments.
It bears watching whether or not that political clout can be wielded within the deliberations on the proposed Louis Vuitton tax. INQ
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