SENATE Deputy Minority Leader Ana Theresia “Risa” N. Hontiveros-Baraquel sees the passage of Real Property Valuation Reform bill and the mandatory public co-ownership of digital platforms as better options at this time instead of just trying to tax wealth in the country.
In a recent webinar tackling wealth tax, Hontiveros admitted that she still can’t see a clear political way forward yet for the “more radical proposals” to tax wealth in the country.
“I wish to be proven wrong. But I also want to get a handle on the political prerequisites of wealth taxation,” Hontiveros said in her pre-recorded video message during the forum titled “Wealth Tax for Tax Justice: A Call Whose Time Has Come.”
Given this, Hontiveros said she intends to support the passage of the Real Property Valuation Reform bill (House Bill 4664), which was among the priority measures being pushed by the Department of Finance as well as President Ferdinand R. Marcos, Jr. himself.
The bill seeks to broaden the tax base used for property and property-related taxes of the national and local governments, thereby increasing government revenues without raising the existing tax rates or devising new tax impositions.
The senator said the passage of the bill would not only make it easier for the government to levy capital gains taxes when properties change hands but it would also make it possible to “operationalize land value capture” in the future, particularly for parcels that are closely located to publicly financed projects.
Hontiveros recalled that she introduced special legal provisions in the budget of the Department of Housing that would enable it and the Department of Transportation to expand project footprints of the train stations and secure parcels for social and economic housing around and towards the upcoming train stations in north and south of Tutuban.
“In effect, this approach can preempt, instead of just taxing the income and wealth creation from land speculation by some of the biggest property developers and their politician allies,” she explained.
Apart from this, Hontiveros also pitched the idea of implementing mandatory public co-ownership of digital platforms instead of just trying to tax the wealth that they create.
“In this way, the public shares in the super-profits instead of levying a wealth tax, and the public also gets a direct say in the internal governance of these novel and often fantastical economic creatures,” she said.
For Jomo Kwame Sundaram, senior advisor at Khazanah Research Institute, emphasized the importance of having a well-designed wealth tax system to avoid the risk of capital flight and tax avoidance.
“How do we tax wealth appropriately? And in this regard, I think it is important for us to look at the taxes on wealth as a stock compared to other type types of taxes, including income taxation,” added Sundaram, who is also visiting fellow at the Initiative for Policy Dialogue at the Columbia University. “It is very important because you do not want to create a situation where the rich basically hide all their wealth and the rich who refuse to invest in you have an investment strike and the possibility of the economy coming to a grinding halt.”
Finance Secretary Benjamin E. Diokno earlier said imposing wealth tax in the country must be “appropriately designed,” noting the feasibility of its implementation as well as its potential impact on investors in the country.
However, Diokno also pointed out that it might be more difficult to collect wealth tax rather than a value-added tax.
Before taking over the chairmanship of Senate Ways and Means Committee, Senator Sherwin T. Gatchalian earlier said he is eyeing to file a bill seeking to impose an additional tax or increase the tax rate of wealthy individuals.
Think tank Ibon Foundation Inc. is also pushing for the imposition of wealth tax, saying this could yield substantial revenues for the government to expand its social and economic services while reducing inequality.
A wealth tax on the 50 richest Filipinos alone can raise up to P224 billion in revenues, based on earlier estimates by IBON Foundation.
The forum was organized by the Freedom from Debt Coalition, Asian People’s Movement on Debt and Development, the UP Center for Integrative Development Studies (Alternative Development Program) and Bukluran ng Manggagawang Pilipino.