House Ways and Means Committee chair and Albay 2nd district Rep. Joey Salceda welcomed Department of Finance (DOF) Secretary Ralph Recto's withdrawal of the proposed tax increase on capital gains, which the lawmaker previously opposed.

Salceda earlier objected to Recto's suggestion in the draft of the "GROWTH Bill", as he said it could have a possible impact on the creation of middle class wealth.

The Bicolano commended the finance chief's "openness" to a dialogue as well as "his responsiveness to sound economic reasoning" and "trademark practical approach to fiscal policy".

The DOF, in a letter dated April 29, informed Salceda that it was withdrawing the proposed measure, citing stronger-than-expected revenue collections, a double-digit growth rate in tax collections, and steady progress toward the government's fiscal consolidation goals.

Salceda said such a decision reflects Recto's seasoned judgment as one of the country’s most experienced legislators on fiscal matters.

"Secretary Recto has as much experience in tax legislation as did. It takes that kind of practical wisdom to know when to push. When to recalibrate. When to sustain momentum without breaking growth," he said.

Salceda earlier raised concerns that raising capital gains taxes could trigger capital flight and impede the movement of land and investments into more productive hands.

"Our capital gains tax on land is already six percent of the gross selling price or zonal value — not just the gain. Add documentary stamp taxes. Add local transfer taxes. We are already among the highest in the region," Salceda explained.

"Taxing the transfer of assets more heavily discourages growth-enhancing reallocations. It sends the wrong policy signal — that we would prefer assets to remain idle rather than be reinvested productively," he added.

Salceda emphasized that such taxes would have hit the middle class the hardest. This includes families who are trying to sell land, build small businesses, or transfer assets across generations.

Salceda reiterated that luxury goods taxation would be a better option if additional revenues were necessary.

"Tax what you can spare. Not what you need to grow," he said. "That means the Louis Vuittons of this world, not the one-room condominiums of the working class."