This paper assessed the revenue performance of the excise tax on invasive cosmetic procedures. Republic Act No. 10963, also known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” Law, which took effect on 01 January 2018, inserted a new section indicated as Section 150-A under Chapter VI, Title VI of the National Internal Revenue Code of 1997, as amended, imposing a 5% excise tax on gross receipts derived from the performance of services, net of excise tax and VAT on invasive cosmetic procedures, surgeries, and body enhancements.
Although the 5% excise tax on invasive cosmetic procedures, surgeries, and body enhancements cannot be considered a major revenue-raising measure of the government, it improved the equity and progressivity of the TRAIN Law as only those belonging to the upper- and middle-income groups bear the burden of the tax. Also, the fact that some opted to pay the said tax in 2018, despite the absence of the rules and regulations issued by the Bureau of Internal Revenue to interpret the applicability of the 5% excise tax on invasive cosmetic procedures, surgeries, and body enhancements is an indication of the taxpayers’ willingness to contribute their fair share to the government. With Revenue Regulations No. 2-2019 now in place, it is believed that the revenue stream from the said tax will eventually increase.