After heated debate, senators approve 10% tax on cosmetic surgeries
MANILA, Philippines – Senators on Monday, November 27, had a heated debate on the imposition of higher tax on cosmetic surgeries, ultimately deciding to impose an additional 10% levy.
Senate President Pro-Tempore Ralph Recto initially moved to remove the provision seeking to impose 20% tax on cosmetic procedures, surgeries, or body enhancements under "non-essential goods and services." Recto said services are not covered by excise tax.
Senate ways and means committee chairman Juan Edgardo Angara accepted Recto's motion but Senate Minority Leader Franklin Drilon opposed it. Angara said cosmetic surgery companies are already paying income tax and value-added tax (VAT).
But Drilon said it is "unjust" to not impose additional taxes on surgeries for aesthetic purposes when Filipino masses' use of fuel would be taxed more, thus increasing transportation costs.
"Maiintindihan ba 'yun ng taong bayan 'pag tumaas presyo ng pamasahe? Puwede ba natin sabihin, eh 'di puwede taasan paglaki ng suso dahil 'yan ay 'di dapat excise tax?" Drilon said.
(Will the public understand the situation when fares go up? Can we say that breast augmentation cannot be taxed because that is not covered by excise tax?)
"Ang punto po, Mr President, ay equity – na 'yung mahihirap ay tataasan ng buwis sa pamamagitan ng excise tax, pero ang mayayaman na nagpapalaki ng suso ay 'di dapat magbayad ng additional buwis. 'Di po tama 'yan," he added.
(The point, Mr President, is equity – the poor will face higher taxes because of excise tax, but the rich who undergo procedures like breast augmentation will not be paying additional tax. That's not right.)
Senator Cynthia Villar shared Drilon's sentiment and expressed support for his motion.
Villar, whose family runs real estate firm Vista Land, cited the removal of tax exemptions in housing. She expressed concern that lost revenues from cosmetic surgery tax would be imposed as additional tax on housing and other sectors.
"Every time we remove some taxes, we impose another tax to compensate because the target is always that amount," Villar said.
"Tinanggal na VAT [exemption] sa housing. Nag-suffer na housing do'n. Ang ipapalit 'yung documentary stamps, housing na naman 'yun. Lahat ng maglo-loan, magbabayad doble," she added.
(The VAT exemption has been removed for housing. The housing sector has suffered. The revenues will be sourced from documentary stamps instead, that's also for housing. All who take out loans would have to pay double.)
Belo's 'extravagant' wedding, medical tourism
Senator Richard Gordon, for his part, said the cosmetic surgery industry is "growing" and added that the Philippines could be a hub for medical tourism.
Drilon, however, did not buy this, saying cosmetic surgeries have long been done in the Philippines but the country has not become a medical tourism site.
"Matagal na po 'yung pagpapalaki ng suso, 'di naman po nakaka-increase ng turismo, wala naman hong medical tourism. Ang lumalaki ibang bagay," he said.
(Breast augmentation has long been done here, and yet tourism hasn't increased because of it, the country isn't known for medical tourism. Something else gets bigger.)
"It is the equity principle. Taxation should be progressive. Those who could afford should pay taxes," he added.
Drilon also said he cannot accept that new taxes would not be imposed on cosmetic surgeries when an "extravagant" wedding took place in Paris, apparently referring to the lavish wedding of celebrity doctor Vicki Belo and Hayden Kho.
"Labag talaga sa kalooban ko. I cannot accept this, that we will not impose tax, especially when we read about some extravagant wedding abroad. $2 million ginastos [sa] opera house sa Paris, tapos 'di natin bubuwisan? 'Di naman tama," Drilon said.
(It really goes against what I believe in. I cannot accept this, that we will not impose tax, especially when we read about some extravagant wedding abroad. $2 million spent on an opera house in Paris, and yet we won't impose tax on cosmetic surgeries? That's not right.)
In the end, instead of conducting a vote on the matter, Recto and Drilon reached a compromise: an additional tax of 10% – down from the original 20% – would be imposed on aesthetic procedures or operations.
The provision is not in the version of the House of Representatives. Once the Senate finalizes its version, both chambers of Congress have to convene a bicameral conference committee to thresh out differences. – Rappler.com