Land-based wealth tax better than net worth approach
Taxing high-value land may be the most practical way to impose wealth taxes in the Philippines, as net worth-based taxes risk being gamed through offshore and mobile assets, according to a research firm.
In a note, Salceda Research said a traditional wealth tax, which would theoretically target the country’s “super rich,” has structural flaws because wealth can easily be concealed.
“Legal tools exist to reclassify, relocate, and obscure wealth, making enforcement difficult even in jurisdictions with stronger institutions,” the note read.
With net worth taxes depending on tracking complex and hidden assets, the firm said it would fail to handle highly sophisticated taxpayers who can easily avoid or shield their wealth.
“This creates a risk that the tax becomes regressive in practice, targeting those who are transparent rather than those who are truly wealthy,” Salceda Research said.
By contrast, the research firm said land is immobile, exists within the tax jurisdiction and is taxable regardless of ownership. These make it fully practical and enforceable.
“Its administration relies on asset visibility and location within Philippine territory. It does not require information on offshore holdings, beneficial control structures or complex intergenerational asset arrangements,” the note said.
“While it does not reach the full spectrum of privately held wealth, it operates within the reach of Philippine tax administration and can be implemented with modest legal and operational reform. Its enforceability is a function of its simplicity and its reliance on verifiable and locally documented assets.”
The Philippines already imposes the real property tax, capital gains tax and documentary stamp tax.
But Salceda Research said these are not fully effective because they rely on outdated assessments and are mostly transaction-based or locally imposed, with limited scope and uneven enforcement. As a result, land remains under-taxed despite being the clearest indicator of wealth, the note said.
