Imposing higher tax on Filipino billionaires whose fortunes have reached more than one billion pesos may not be a good idea with Finance Secretary Carlos G. Dominguez III warning this will only result in capital flight out of the Philippines.
Dominguez said as he expressed doubts about the House Makabayan Bloc’s proposal seeking to raise P263.7 billion annually by imposing additional tax on the “wealthiest of the wealthy” Filipinos.
On Monday, members of the Makabayan bloc filed House Bill 10253 that once passed into law, will amend some provisions of the National Internal Revenue Code of 1997 by imposing one percent to three percent additional tax on ultra-rich individuals.
Revenues collected from the wealth tax are earmarked exclusively for health programs, and other social services for the poor, said the Makabayan bloc, composed of party-list representatives from Bayan Muna, ACT Teachers, Gabriela and Kabataan.
“This tax would further help shift the burden away from regressive consumption taxes towards the handful of the wealthiest who are capable of contributing more,” the lawmakers said.
While the Department of Finance promised to study the proposal, the initial comment of Dominguez is that a “wealth tax will drive capital out of the Philippines.”
Based on the 2021 Forbes’ list of the Philippines’ 50 richest, fortunes in the country have staged a robust recovery, increasing by 30 percent to $79 billion, equivalent to P3.96 trillion.
“The wealth of more than half the list members was up this year with four listees adding over $1 billion,” Forbes said.