Bill mandating ‘solidarity contribution’ from wealthy Filipinos filed in House

A MEASURE exacting tax contribution from the wealthy has been filed at the House of Representatives in a bid to provide additional funding source for the country’s Universal Health Care (UHC) program and climate change resiliency projects.

House Bill (HB) No. 11127, “Solidarity Contribution Act of 2024,” introduced a provision, creating a “solidarity contribution” system, where Filipinos with a net worth of over P300 million, but not more than P500 million would be levied with a 1.5% base contribution rate. It increases by increments of 0.25% up until 3% for individuals with a net worth of more than P2.5 billion.

The bill also provided a base fee rate for rich Filipinos, starting with individuals worth more than P500 million. They would be charged P3 million on top of the bracket’s contribution rate; while persons with a net worth of more than P2.5 billion shall pay a contribution fee of P51 million to the Bureau of Internal Revenue (BIR).

The proposed law will help plug an “asymmetry in tax contributions among socioeconomic classes,” Party-list Rep. Percival V. Cendaña and Basilan Rep. Mujiv S. Hataman said in the bill’s explanatory note, citing that rich Filipinos “pay little” in taxes relative to their net worth.

“[The bill] proposes that the State should exact contributions from individuals who could very well afford to contribute towards the welfare of ordinary Filipinos,” they said in the bill, which was filed on Nov. 20.

The revenues from the measure will be used to fund health care services under the UHC Act as well as funding other health-related projects, such as the construction of new public hospitals.

The bill, which was filed after the Philippines was battered by a series of strong typhoons in a span of two weeks, also proposed to earmark revenues generated for the state’s calamity response. It will particularly allocate a portion of the revenues to the People’s Survival Fund, the Calamity Fund, and the Quick response Fund.

Climate change poses a major developmental risk for the Philippines, according to a 2022 World Bank report, saying it could shrink the country’s gross domestic product by 13.6% by 2040 if left unmitigated.

The Philippines, which faces an average of 20 typhoons yearly, also remained as the most disaster-prone country for the 16^th consecutive year, according to the latest World Risk Index.

Typhoons have racked up about P673 billion worth of damage from 2011 to 2021, according to HB No. 11127. The authors said expenses from climate disaster have drained the country’s coffers.

“The marginalized sectors deserve all the support they need, especially during the aftermath of the pandemic, and the onslaught of climate change disasters,” the authors said.

“This will allow them to live a life of dignity, thus placing them in a position to contribute even more to economic growth and the welfare of the entire country.”

Finance Secretary Ralph G. Recto had said in October that he is not in favor of a “wealth tax,” saying the government already imposes wealth taxes to a certain degree. — Kenneth Christiane L. Basilio