THE chairman of the House Committee on Ways and Means has filed a bill seeking to increase excise taxes on luxury automobiles, expand the coverage of non-essential goods subject to excise tax, and remove perfumes and toilet waters from the list of taxable goods.
Marikina Rep. Miro S. Quimbo, the panel chairman, filed House Bill 11465 to strengthen the taxation of luxury and other non-essential consumption. The bill states that the proposed changes are intended to promote a more progressive tax system by requiring individuals with greater capacity to pay to contribute a larger share toward government revenues.
The bill amends Sections 149 and 150 of the National Internal Revenue Code (NIRC) of 1997, as amended.
‘The measure aims to achieve greater tax progressivity and promote a more equitable distribution of wealth since luxury and high-value goods are generally purchased by consumers with greater disposable income and capacity to pay,’ Quimbo said.
He added that increasing taxes on high-value discretionary purchases may discourage conspicuous consumption and encourage the allocation of resources toward savings, investments, or socially productive expenditures.
Under HB 11465, starting January 1, 2027, the excise tax structure for automobiles would be adjusted by creating higher tax brackets for luxury vehicles.
Automobiles priced above P4 million up to P8 million would be subject to a 50-percent ad valorem tax, while vehicles priced above P8 million would be subject to a 75-percent tax. Vehicles priced at P4 million and below would retain their existing excise tax rates.
Under the proposed automobile excise tax schedule, vehicles with a net manufacturer’s price or importer’s selling price of up to P600,000 would continue to be subject to a 4-percent excise tax, while those priced above P600,000 up to P1 million would remain covered by a 10-percent tax rate. Automobiles priced above P1 million up to P4 million would continue to be taxed at 20 percent.
Quimbo said the proposed increase in automobile excise taxes is expected to generate approximately P3.91 billion in additional annual revenue, which may be used to support government priority programs without increasing the tax burden on ordinary taxpayers.
The bill also proposes raising the excise tax on non-essential goods under Section 150 of the NIRC from 20 percent to 25 percent. It expands the coverage of the tax to include luxury recreational assets such as yachts, jet skis, speedboats, sailboats, motorboats, aircraft, planes, jets, and helicopters acquired for pleasure, private use, or sport.
The measure clarifies that ordinary passenger vehicles, motorcycles, and commercial vehicles such as trucks and cargo vans would not be affected by the proposed increase. According to the bill’s explanatory note, the tax adjustments are focused on a narrow segment of high-value luxury transactions.
At the same time, HB 11465 removes perfumes and toilet waters from the coverage of the excise tax on non-essential goods.
The bill also notes that removing perfumes and toilet waters from the tax coverage would eliminate an existing tax on personal-care purchases while allowing the government to focus excise taxation on luxury consumption.
‘Strengthening the taxation of luxury consumption constitutes a practical means of enhancing the progressivity of the Philippine tax system,’ Quimbo said.
The lawmaker added that the proposed amendments would allow the government to access additional revenue sources that are identifiable and administratively manageable while ensuring that goods used for essential needs, livelihood, public transportation, and productive purposes are not unnecessarily burdened.