Solon changes mind on proposed vanity tax

MANILA, Philippines — A party-list lawmaker on Monday decided not to push for the so-called vanity tax on cosmetic products and beauty services following sentiments from Filipino netizens against the proposed measure.

Ako Bicol Partylist Rep. Rodel Batocabe earlier proposed the imposition of 10- to 30- percent excise tax on cosmetic products and beauty services as an alternative to imposing additional tax on petroleum.

Budget Secretary Benjamin Diokno, however, said that the government has enough funds for now.

Batocabe said that the vanity tax was proposed in good faith to avoid the imposition of excise taxes on fuel products.

"But then, we do realize from sentiments that taxing beauty products would also adversely affect certain sectors, which according to some, would also deprive them of their basic happiness. Hence, this decision," Batocabe said in a statement.

"We hope that the strong sentiment generated against taxing beauty products and services will transform into encouragement for our people to urge the [Bureau of Internal Revenue] and the Bureau of Customs to collect taxes more effectively and efficiently in the oil and beauty industries," Batocabe added.

The lawmaker vowed to look for other ways for the government to raise revenues while continuing to oppose excise tax on petroleum.

"As such, we shall devote our efforts to ensure efficiency in tax collections and plug leakages in the petroleum and beauty industries, which according to market analysts, could run to billions of pesos," the lawmaker said.

The party-list lawmaker noted that value added tax collection efficiency is below 50 percent.

Diokno earlier said that the so-called vanity tax cannot substitute for a government plan to raise excise tax on petroleum.

“Vanity tax is based on a narrow base and elastic, meaning easy to avoid. Tax on gasoline and diesel oil is broad-based and inelastic," Diokno said.