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[av_heading heading=’How will the proposed higher excise tax on cars affect the auto industry?’ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=”]
BY: ROEYNA MAY FAMISARAN
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Friday, February 24, 2017
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ILOILO City – An AmbisyonNatin 2040 survey from the National Economic Development Authority showed that 60 percent of Filipinos dream of owning a car. But with the proposed higher excise tax on motor vehicles, the dream now becomes obscured.
Executives of car companies in Iloilo lamented the excise tax which is part of the Comprehensive Tax Reform Package of the Department of Finance (DOF). They said it will affect their sales and the people involved in the automobile industry.
In an interview with Panay News, Volvo Iloilo president Paul Yap said the tax will make it harder for them to sell their vehicles.
“It will be really harder to sell. Imagine imposing a tax on cars costing P1.2 million pesos and above. That will be very sakit sa bulsa,” he said.
Volvo cars, according to Yap, cost around P2.4 million to P7.5 million.
Under House Bill 4774, tax on cars costing up to P600,000 will be up from 2 percent to 4 percent. Automobiles priced from P600,000 to P1.1 million will be taxed at P24,000 from P12,000, plus 40 percent of the amount in excess of P600,000.
Meanwhile, cars from P1.1 million to P2.1 million will be taxed at P224,000 plus 100 percent (up from 40 percent) of the amount in excess of P1.1 million, while cars priced at more than P2.1 million will be taxed P1.22 million.
Yap also believes that the proposed tax will affect the employees of car companies.
“The lesser the sales, the lesser the income. Employees will be affected by this,” he said.
On the other hand, Angelica Florence S. Bayot, general manager of Suzuki Auto Panay, said their company will not be “greatly affected” since their products range from P400,000 to P1.2 million.
“I believe we are not that affected. It will be an advantage for us since our cars are cheaper. More people will buy our cars if the tax will be implemented,” she said.
“People will have no choice but to buy cheaper cars,” Bayot added.
On Sunday, Makati City representative Luis Campos Jr. urged the Congress to consider imposing the taxes in portions.
“Assuming Congress decides to eventually approve the additional excise taxes, we may have to stagger or space out its application, particularly on cars priced up to P1.1 million, to make it easier on the pockets of low- and middle-income families,” Campos said in an interview which was published on GMA News Online.
For his part, DOF undersecretary Karl Chua said the move will help reduce congestion especially in Metro Manila./PN
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