Vanity tax not viable, discriminatory

Vanity tax not viable, discriminatory (Photo: Senator Win Gatchalian/Facebook)

MANILA—Sen. Sherwin “Win” Gatchalian criticized the proposed vanity tax on cosmetics and beauty products on Friday noting that it was not only discriminatory but was also not a viable alternative to the fuel excise tax.

“Revenue projections make it clear that the vanity tax is not a viable alternative to the fuel excise tax,” Gatchalian said noting that it would not be enough to cover the income expected from the fuel excise tax it is meant to replace.

Gatchalian, chair of the Senate Committee on Economic Affairs, said the proposed 10 to 30 percent vanity tax is estimated to generate only PHP6 to 19 billion in tax revenue, which is only between 4 to 13 percent of the PHP148.2 billion revenue expected from the proposed fuel excise tax.

He explained it would be unwise to “unnecessarily” burden the domestic cosmetics industry, a PHP63.2 billion industry as of 2015 which has recorded a promising 4.8 percent annual growth rate over the past five years.

Moreover, he said that it was a discriminatory policy which would have affect women, the primary consumers of cosmetics.

It would also have a negative impact on rank-and-file wage earning women employed by industries which customarily require them made up in the workplace, including the retail, hospitality, and services sectors.

He further said that it was not right to think that it would affect only wealthy consumers who can afford high-end beauty products and services.

“The haphazard imposition of a vanity tax might end up slowing down the growth of a promising industry and destroying badly needed jobs in the domestic market. That doesn’t seem like a good move to make,” he added.

The vanity tax measure was proposed by Ako Bicol party-list Rep. Rodel Batocabe, who said that it was better than the proposed hike in excise tax on petroleum products which would affect mostly the poor.