Any one-percenters here looking to add a brand-new Ferrari or Lamborghini to their garage? Yeah, you might want to act fast—because a bill has been filed in Congress that may cause luxury car prices to shoot up considerably.
House Bill no. 6993, also referred to as an act amending section 150 of the National Internal Revenue Code, was recently filed in Congress by representative Joey Salceda. Long story short? It aims to increase taxes collected from non-essential luxury goods like jewelry, art, watches, and supercars from 20% to 25%.
To be specific, this bill has its sights set on motor vehicles, whether brand-new or secondhand, that cost P10 million or more. Wristwatches valued at P50,000 or more will also be impacted by this move.
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Salceda estimates that the Philippine government could stand to gain around P15.5 billion from the proposed luxury tax increase. Of that sum, P2.87 billion is expected to come from taxes collected from luxury cars and P1.21 billion from luxury watches.
Also worth noting is that this non-essential goods tax will be on top of all other taxes currently being collected.
“The tax on luxury cars, for example, will be on top of the automotive excise tax, which is arguably a pollution and congestion tax but not yet a luxury tax,” Salceda explained.
Salceda also said that the failure to tax the rich is the “most crucial flaw” in the Philippine tax system. “This failure exacerbates inequality and promotes the concentration of financial resources crucial to the economy in the hands of very few individuals,” he explained.
You can check out the bill in its entirety here. Are you in favor of this?
