MANILA, Philippines — House Committee on Ways and Means Chair and Marikina City 2nd District Representative Miro Quimbo has introduced House Bill 11465, aiming to modify Sections 149 and 150 of the 1997 National Internal Revenue Code to reform the country’s tax framework on high-value and non-essential items.
The proposed legislation seeks to increase excise taxes on luxury automobiles and high-end recreational vehicles while eliminating the tax currently applied to perfumes and toilet waters.
“The proposed measure aims to achieve greater tax progressivity and promote a more equitable distribution of wealth since luxury and high-value goods are generally purchased by consumers with greater disposable income and capacity to pay,” Quimbo said.
“By raising the cost of high-value discretionary purchases, the measure may discourage conspicuous consumption, and redirect part of household resources toward savings, investments, or socially productive expenditure,” he added.
Under the bill’s provisions, cars priced between ₱4 million and ₱8 million will incur a 50% ad valorem tax rate, while those priced above ₱8 million will be taxed at 75%. Vehicles valued at ₱4 million or less will retain their current tax rates.
Additionally, the proposal raises the tax rate on specified non-essential goods from 20% to 25%. Items subject to this increase include aircraft, helicopters, jets, private planes, speedboats, motorboats, sailboats, jet skis, and yachts acquired for personal, sporting, or recreational use.
Conversely, the bill removes perfumes and toilet waters from the list of taxable non-essential goods under Section 150.
Quimbo projects that the legislative changes will generate roughly ₱3.91 billion in supplemental annual revenue for the government.
“Strengthening the taxation of luxury consumption constitutes a practical means of enhancing the progressivity of the Philippine tax system,” Quimbo said.
“This measure would enable the Government to tap revenue sources that are readily identifiable and administratively accessible, while ensuring that goods and assets used for essential, livelihood, public transportation, or productive sources are not unduly burdened,” he added.