Inequality has grown starker in the Philippines, with nine of the richest Filipinos having more wealth than 55 million others—or half the entire Philippine population, OxFam International reported recently.
The “Survival of the Richest” report also said that in the Philippines, the poor are unable to recover from the lingering impact of the COVID-19 pandemic and the high prices of commodities such as red onions.
This developed as the House of Representatives committee on ways and means on Monday said the panel is studying the imposition of taxes on non-essential goods or on several lines of luxury items.
Albay Rep. Joey Sarte Salceda, the panel’s chairperson, made the announcement in response to calls from international organizations such as Oxfam for the government to impose taxes on the country’s super-rich.
Oxfam is a British-founded confederation of 21 independent charitable organizations focusing on the alleviation of global poverty, founded in 1942 and led by Oxfam International.
The calls were made as President Ferdinand Marcos Jr. heads off to the World Economic Forum, where he will address the world’s richest individuals and countries.
In the Senate, Senator Sherwin Gatchalian said he sees higher take-home pay this year for most middle-income taxpayers due to the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
Gatchalian, who helped draft the law, said that starting 2023, taxpayers earning more than P250,000 a year but not over P8 million will be subject to lower income tax rates ranging from 15 percent to 30 percent from 20 percent to 32 percent previously.
But Oxfam Pilipinas Executive Director Erika Geronimo said: “Inequality experienced in the Philippines is starker with the nine richest Filipinos having more wealth than the bottom half or 55 million of the population.”
“It is quite disheartening to see many are dying due to lack of health care or are experiencing hunger amid high cost of food while the rich increased their wealth during the pandemic,” she added.
The report used data from Forbes’ Billionaires List and Oxfam.
Meanwhile, Salceda said: “I can’t target one specific section of the population for what they supposedly own. They will simply apply for foreign citizenship and move their money to other countries that will be happy to take them. But wealth induces luxurious lifestyles – what economists call conspicuous consumption. We can slap taxes on those items since they won’t mind paying them anyway.”
The Albay lawmaker was referring to Section 150 of the Tax Code, as amended, which currently imposes a 20-percent tax on the price of jewelry, perfumes, and yachts.
Salceda said: “The committee will definitely pass a measure expanding that list, but we will discuss which items can generate the most revenue for the least effort.”
“The committee is particularly studying taxing wristwatches, bags, and other leather items above P50,000, private jets, luxury cars above P5 million, the sale of residential properties above P100 million, beverages above P20,000 per bottle, traded paintings above P100,000, among other items.”
“Generally, the point of the debate will be what can be universally considered ‘luxury.’ To me, it is when an item is beyond reasonable reach of the vast majority of the population and is not necessary for any essential function,” he said.
Salceda added the correct valuation of real property in the country is “also an essential step in ensuring that we tax the rich properly.”
The following are the richest in the country according to the Forbes list Philippines’ Richest in 2022:
1. Sy siblings (net worth: $12.6 billion)
2. Manuel Villar (net worth: $7.8 billion)
3. Enrique Razon Jr (net worth: $5.6 billion)
4. Lance Gokongwei and siblings (net worth: $3.1 billion)
5. Aboitiz family (net worth: $2.9 billion)
6. Isidro Consunji and siblings (net worth: $2.9 billion)
7. Tony Tan Caktiong and family (net worth: $2.6 billion)
8. Jaime Zobel de Ayala and family (net worth: $2.55 billion)
9. Ramon Ang (net worth: $2.45 billion)
Since 2012, the number of those worth $5 million (P278.24 million) and above has increased by almost half or 43.5 percent, Oxfam said.
Geronimo said if a wealth tax was imposed on Filipino millionaires, the country could raise some $3.8 billion a year.
“This amount is enough to increase our health budget by two-fifths,” she said.
Oxfam said worldwide, billionaire fortunes are increasing by $2.7 billion a day even as at least 1.7 billion workers now live in countries where inflation is outpacing wages.
A tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty.
The richest 1 percent grabbed nearly two-thirds of all new wealth worth $42 trillion created globally since 2020, almost twice as much money as the bottom 99 percent of the world’s population, reveals a new Oxfam report today (see related story on Business page B3 – Editors).
During the past decade, the richest 1 percent had captured around half of all new wealth.
Oxfam is calling for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering. Decades of tax cuts for the richest and corporations have fueled inequality, with the poorest people in many countries paying higher tax rates than billionaires.
Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3 percent between 2014 and 2018. Aber Christine, a flour vendor in Uganda, makes $80 a month and pays a tax rate of 40 percent.
Worldwide, only four cents in every tax dollar now comes from taxes on wealth. Half of the world’s billionaires live in countries with no inheritance tax for direct descendants.
The report shows that taxes on the wealthiest used to be much higher.
Over the last 40 years, governments across Africa, Asia, Europe, and the Americas have slashed the income tax rates on the richest. At the same time, they have raised taxes on goods and services, which fall disproportionately on the poorest people and exacerbate gender inequality.
“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy. We need to do this for innovation. For stronger public services. For happier and healthier societies. And to tackle the climate crisis, by investing in the solutions that counter the insane emissions of the very richest,” said Bucher.
Oxfam is calling on governments to:
Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering.
• Permanently increase taxes on the richest 1 percent, for example to at least 60 percent of their income from labor and capital, with higher rates for multi-millionaires and billionaires.
• Tax the wealth of the richest 1 percent at rates high enough to significantly reduce the numbers and wealth of the richest people, and redistribute these resources. This includes implementing inheritance, property, and land taxes, as well as net wealth taxes.