Makabayan bloc files 'Tax the Rich' bill

MANILA, Philippines (Update 1, 6:18 p.m) — A bill seeking to impose additional taxes on the “super rich” has been filed in the House of Representatives Monday, with an aim of raising cash to fund government programs for healthcare and the poor.

Lawmakers in the leftist Makabayan bloc filed House Bill 10253 that, if enacted into law, would impose 1%-3% “wealth tax” on individuals with net value assets exceeding P1 billion.

For married billionaires, the bill provides that they separately compute their individual wealth tax based on their taxable assets, particularly the ones that were exclusively earned by either of the spouses.

Sought for comment, Finance Secretary Carlos Dominguez III said: "Will study the bill but my initial comment is that a wealth tax will drive capital out of the Philippines."

Legislators estimate that the measure would raise P236.7 billion annually just from the 50 richest Filipinos alone. Broken down, the bill earmarks 60% of tax revenues for healthcare programs while the rest will go to “social mitigating measures and investments” in education and employment, among others.

"Philippine taxation for the longest time has been largely collected from what people pay for, what they consume, or from what they earn, and have never implemented a tax on large fortunes,” the Makabayan bloc said.

“The billions in revenue from this tax would aid the government in pursuing its anti-poverty measures and other social programs that would help in closing the widening divide between the rich and poor,” they added.

The Makabayan bloc is composed of lawmakers representing progressive party-list groups namely Bayan Muna, ACT Teachers, Gabriela and Kabataan.

Tax bills are typically unpopular, especially in the run-up to elections. But should the bill get a support from the government and other lawmakers, the Philippines would follow the steps of countries like the US and China in finding ways to go after wealthy people and corporations in a bid to tackle inequality.

According to Forbes’ magazine, the 50 wealthiest people in the Philippines defied pandemic headwinds after their collective wealth went up 30% to $79 billion this year. Meanwhile, the government said the pandemic has reversed gains in poverty reduction. — with reports from Xave Gregorio and Ramon Royandoyan

Editor's note: Added Finance Secretary Carlos Dominguez III's comment.