ALBAY 2nd District Representative and House Ways and Means Chair Joey Sarte Salceda today expressed his appreciation to Finance Secretary Ralph G. Recto for withdrawing the Department of Finance’s proposal to increase capital gains, donor’s, and estate taxes under the draft “GROWTH Bill.”
Salceda earlier opposed the measure for its possible impacts on middle class wealth creation.
“I welcome and deeply appreciate the Department of Finance’s decision to withdraw consideration of the capital gains, donor’s, and estate tax hikes,” Salceda said. “I thank Secretary Recto for his openness to dialogue. His responsiveness to sound economic reasoning. His trademark practical approach to fiscal policy. Thanks, Sec. Ralph.”
In a letter to Salceda dated April 29, 2025, the Department of Finance confirmed that it is withdrawing the proposed measures, citing stronger-than-expected revenue collections, a double-digit growth rate in tax collections, and steady progress toward the government’s fiscal consolidation goals.
Salceda emphasized that the decision reflects Recto’s seasoned judgment as one of the country’s most experienced legislators on fiscal matters. “Secretary Recto has as much experience in tax legislation as I do,” Salceda added. “It takes that kind of practical wisdom to know when to push. When to recalibrate. When to sustain momentum without breaking growth.”
Salceda had earlier raised concerns that raising capital gains taxes could trigger capital flight and impede the movement of land and investments into more productive hands. “Our capital gains tax on land is already 6 percent of the gross selling price or zonal value — not just the gain. Add documentary stamp taxes. Add local transfer taxes. We are already among the highest in the region,” Salceda explained.
“Taxing the transfer of assets more heavily discourages growth-enhancing reallocations. It sends the wrong policy signal — that we would prefer assets to remain idle rather than be reinvested productively,” he added.
Salceda emphasized that such taxes would have hit the middle class the hardest — families who are trying to sell land, build small businesses, or transfer assets across generations. “The middle class is the country’s strength. It is the backbone of our economy. We must make it easier, not harder, for them to grow their dreams and build wealth across generations,” Salceda said.
Instead, Salceda reiterated that luxury goods taxation would be a better option if additional revenues were necessary. “Tax what you can spare. Not what you need to grow,” he said. “That means the Louis Vuittons of this world, not the one-room condominiums of the working class.”
Nonetheless, Salceda reaffirmed his full support for the Department’s broader fiscal consolidation agenda. “Secretary Recto’s leadership ensures that fiscal prudence and economic dynamism will go hand in hand. The right tax, at the right time, for the right reason. That’s the way forward,” Salceda emphasized.
Salceda also reassured Secretary Recto that he will remain a steadfast supporter of the country’s fiscal consolidation efforts. “Even as I transition out of Congress, I will continue to offer my advice and support to the Department whenever it may be helpful. Fiscal responsibility is a shared national commitment. It transcends terms of office,” Salceda added.
The Department of Finance, in its letter, also affirmed its continued efforts to advance key economic reforms such as the CREATE MORE Act, the Ease of Paying Taxes Act, and measures to attract investments and sustain growth momentum.
“I look forward to working closely with Secretary Recto and the Department of Finance. Growth and stability must go together. I am ready to help ensure that they do,” Salceda concluded.
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