DOF Says No to Wealth Tax, Yes to Higher Property Tax – Manila Bulletin
Finance Secretary Carlos G. Dominguez III has suggested that the government consider raising property taxes instead of imposing the wealth tax.
“I am against the wealth tax,” Dominguez said at a Financial Executives Institute of the Philippines (FINEX) virtual forum on Tuesday, February 22, citing that such a measure would encourage aggressive tax avoidance schemes. and drive capital and investment out of the Philippines. .
“Just look at the experience of some European countries, what happened particularly in France? I had a very good friend who was quite a wealthy person in France. What happened? They levy a wealth tax. You know what he did, he brought it to Switzerland,” Dominguez explained.
If implemented, Dominguez warned that the wealth tax would defeat his purpose of generating more revenue.
However, the CFO has also offered an alternative to this tax proposal currently pending in the House of Representatives.
Raise the “lot tax,” Dominguez said, referring to a property tax (RPT) or commonly known as an “amilyar” levied on the value of real estate a person owns.
“However, this [RPT] is not a national tax which is a local tax. And it depends on number one, how you assessed the tax. And number two, the value of the tax. It’s the kind of stuff you can tax because no one can hide it,” he said.
Earlier, the Local Government Finance Bureau (BLGF) reported that the share of TCNs in local tax revenue has decreased since the enactment of the Local Government Code.
Currently, TCNs contributed 9% of local tax revenue, less than corporate tax revenue, which accounted for 13% of total local government unit (LGU) revenue.
“Local authorities are the best placed to set up a truly effective tax on wealth, which is the tax on real estate. And yet it’s not happening because local mayors and provincial governors don’t want to be removed from office,” Dominguez said.
BLGF data showed that in 2019, about 98 of 146 cities and 46 of 81 provinces nationwide failed to meet the requirement to reassess properties in their respective jurisdictions once every three years.
In addition, 64% of LGUs have outdated property assessments, with the collection efficiency of TPRs from provinces and municipalities being only 68% and from provinces only 71%.
“That should be fixed. That is why we have included this proposal in our tax reform. Package three, basically to say, let’s value the property according to international standards,” Dominguez said.
SUBSCRIBE TO THE DAILY NEWSLETTER
CLICK HERE TO JOIN