Senator plans to refile wealth tax proposal

MANILA, Philippines — The implementation of a wealth tax is looking more complicated than expected, but the measure is still needed to generate additional revenues for the Philippines, a senator said.

On the sidelines of the International Tax Conference late Thursday, Senate ways and means committee chairman Sherwin Gatchalian said that he would still pursue a wealth tax.

Gatchalian earlier said he wanted higher tax rates for the wealthy population following the concept of progressivity.

“Personally, I will pursue that, but based on our research, it’s not as simple as what we thought,” Gatchalian told reporters.

“If it’s based on assets, how do you capture the assets of every individual? It’s very difficult and not every individual declares his assets, and a lot of them are covered under different names, corporations,” Gatchalian said.

In the Lower House, Albay Rep. Joey Salceda has proposed a law that will tax luxury items and non-essential goods among the wealthy Filipino population.

Such a measure is specific and does not encompass the wealth tax that advocacy groups are hoping for.

“We are still doing our own research in order to achieve some form of wealth tax, not just taxing the asset. You can increase certain taxes of the rich on land, luxury goods and other things,” Gatchalian said.

The lawmaker said that he plans to file such a bill during the next Congress after “final touches” are done in his proposal.

“We are open to looking at Salceda’s proposal but we are filing our own version also,” Gatchalian said, adding that “we have to work together. Taxation is something that both houses should work on.”

Research and advocacy group IBON Foundation earlier argued that while higher taxes on luxury goods is desirable, it cannot be a substitute for a wealth tax which could raise more revenues for social and economic development.

It is estimated that at least P12.4 billion in revenues can be added to state coffers through the purchase of luxury lifestyle items such as jewelry and bags, wines and art, cars, private jets, and residences, among others.

But IBON said that a wealth tax can generate way more revenues at about P468.8 billion annually.

This would come from close to 3,000 billionaires in the country who collectively have P8.2 trillion in wealth.

Data showed that median wealth per adult in the country is at P140,000 as of 2021. Only 10 million, at most, out of the current 110 million Filipinos have more than P1 million in wealth.