Revisiting Luxury Taxation Towards Enhanced Policy Amendments Framework

Abstract

This study delves into the self-affirmation levels of luxury goods buyers and their concerns regarding House Bill 6993, which proposes higher taxes on luxury items in the Philippines. Employing an interpretive approach, the research conducts phenomenological interviews with affluent Filipino and Chinese students to capture rich, lived experiences and avoid group biases. The participants, primarily in their twenties or thirties, are luxury consumers with above-average incomes. The findings reveal that luxury consumers perceive luxury fashion as high-value commodities with added social and psychological significance, often akin to art. Millennials, particularly in China, are prominent consumers of luxury goods, prioritizing high-end tech gadgets, designer clothes, and jewelry. Filipinos predominantly invest in jewelry, exhibiting careful consideration, research, and a preference for value for money in their luxury purchases. Respondents view luxury fashion brands as artistic entities, appreciating them for their aesthetic excellence and identity. Yet, the democratization of luxury has confused, blurring the lines between accessible and traditional luxury. The study explores House Bill 6993's proposed 25% tax on non-essential luxury goods, suggesting the need for a nuanced approach to address societal inequality. Recommendations include implementing a timeline for the tax hike, continuing wealth tax, and focusing on reducing conspicuous luxury consumption without specifying goods, emphasizing the importance of defining "luxury" across diverse products, services, and areas. This research contributes valuable insights into luxury consumer behavior, perceptions of luxury, and the implications of tax policies, offering a comprehensive perspective for policymakers and stakeholders in the luxury goods industry.