A new legislative measure aims to reshape the taxation of high-value goods in the Philippines by raising excise taxes on luxury vehicles and recreational transport while eliminating duties on everyday cosmetic items like perfumes.
Introduced by Marikina 2nd District Rep. Atty. Miro S. Quimbo, House Bill No. 11465 seeks to amend Sections 149 and 150 of the National Internal Revenue Code of 1997, focusing tax obligations on affluent consumers to foster a fairer economic framework.
“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,” said Quimbo, who serves as the chairman of the House Ways and Means Committee.
“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 provisions of the proposed bill, vehicles valued between ₱4 million and ₱8 million would face a 50 percent ad valorem tax, while those priced over ₱8 million would be taxed at 75 percent. Rates for automobiles priced at ₱4 million and below would remain unchanged. Proponents estimate this restructuring of motor vehicle excise taxes will generate an additional ₱3.91 billion in annual government revenue to support priority programs.
In addition to high-end vehicles, the tax rate on non-essential goods would increase from 20 percent to 25 percent. The measure explicitly expands this coverage to include leisure craft and aircraft acquired for private use or sport, such as yachts, jet skis, speedboats, sailboats, planes, and helicopters. Conversely, the bill removes perfumes and toilet waters from the non-essential goods tax category altogether.
“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.