Drilon on restoring vanity tax to 10%: If you want to feel good by enlarging your breasts, you have to pay for it
Senators have agreed to a compromise on the “vanity tax” or imposition of an excise tax on cosmetic surgeries and procedures by cutting the tax rate from 20 percent to 10 percent.
Senate President Pro Tempore Ralph Recto was one of the senators adamant in scrapping entirely the said provision in the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN). But other senators like Minority Leader Franklin Drilon wanted it imposed because it would target mostly rich clients.
Initially, Recto proposed a mere 5 percent excise tax but changed mind after realizing that Drilon and other senators were digging in to impose the cosmetic tax, the first non-essential service to be levied with excise tax, which would generate P10 billion for the government.
“Because of this technicality we should give away P10 billion? On the other hand, we should impose higher excise tax fuel. Remember that the tax on fuel will affect our tricycle drivers, jeepney drivers, our fishermen. We refuse to tax it because it’s a first service to be subject to excise tax. Maiintindihan po ba ng taongbayan yun? Pag tumaas ang presyo ng pamasahe pwde ba nating sabihin na hindi pwedeng itaas yung tax sa pagpalaki ng suso dahil yan ay hindi dapat excise tax. Ang punto po dapat ay equity na yung mahihirap ay tataasan natin ng buwis sa mapapagitan ng mataas na excise taxsa gasoline. Ngunit yung mga mayayaman na nagpapalaki ng suso ay hindi dapat magbayad ng additional na buwis. Hindi po tama yan,” Drilon argued.
The opposition senator also contested the points raised by Sen. Richard Gordon, in supporting Recto’s amendment, that a zero excise tax cosmetic procedures could pave for so-called “medical tourism” just like in Thailand where it contributed to 60 percent of their $4.31 billion of their income in the tourism industry after the financial crisis in 2013 because it’s cheaper by 30 percent to 40 percent than Australia and 50 percent to 70 percent compared to the rates of services offered in the US and Europe.
“Matagal na po yung sinasabing yan na yung pagpapalaki ng suso sa ating bansa eh hindi naman nakaka-increase ng turismo. Wala namang medical tourism na lumalago. Ang lumalaki ibang bagay, hindi po yung turismo,” said Drilon.
“So sa akin po, regardless of whether or not this would not be subject to an excise tax, it is the equity principle. It is the principle that taxation should be progressive. Those who can afford to pay taxes should pay taxes. Those activities that are being taxed because it is unnecessary and luxurious eh dapat po magbayad,” he said.
Even the Bureau of Internal Revenue (BIR), Drilon said, admitted that vanity tax should be included in the subsequent package of the tax reform being pursued by the Duterte administration.
“Ibig sabihin, payag din sila because they see the validity of imposing cosmetic tax which will generate P10 billion. Kung ano man po ang pwdeng ilagay natin dito sa cosmetic, sa pampalaki ng suso eh baka pwede nating ibawas doon sa para sa mahihirap. Yun lang po that’s why I’m putting an objection,” he explained.
Recto, for his part, clarified that he’s not pushing for an increase in taxes of petroleum products but rather the reverse of it.
But on the issue on vanity tax, Recto pointed out that even the Department of Finance (DOF) was against its imposition because the reported P10-billion revenue was just “a wish number.”
“I have not seen any data to support that we will collect that P10B from the cosmetic procedure,” he said.
“I really feel passionate (about) because in principle I cannot accept that we will impose a tax on the poor and we will exempt the rich from taxation. If they want to feel good, then they should pay for it,” Drilon replied.
In the end, senators agreed to restore the provision but set the excise tax on cosmetic surgeries and procedure at 10%.