The Senate committee on ways and means might adopt the 7-tier tax proposal for automobiles espoused by car manufacturers and importers in place of the 5-tier tax package approved by the House of Representatives.
“We’re looking at numbers. There’s a lot of consideration especially for consumers. Based on proposal of car companies, the tax increase on small car models will still be affordable,” said Senator Juan Edgardo Angara.
Angara said car companies were not complaining so much for the lower end models, “I think its the higher end [models] they are worried about,” he said.
The tax proposal is on an ascending scheme, which means that the more expensive the model is, the higher taxes it will have.
Angara said this scenario might lead to smuggling, so the committee is “trying to balance the situation”.
“Others have even more grim expectations. They are scared that the proposed tax will have a heavy toll on the auto industry and may cause its demise,” he said.
The industry’s proposal for a 7-tier tax system seeks to establish a median between the current system and the government proposal. One of the suggestions involved the increase of the tier system to 7 tiers to include the segmentation of vehicular units.