GT Capital Holdings Inc., the holding company of tycoon George Ty, is weighing the impact of the proposed increase in vehicle excise taxes on unit Toyota Motor Philippines Corp.
The Finance Department submitted to Congress last month the first package of tax reforms that aimed to help fund the Duterte administration’s 10-point socioeconomic agenda for inclusive growth.
Aside from restructuring the personal income tax system, the Finance Department also proposed the expansion of the value-added tax base by reducing the coverage of its exemptions and adjustment of excise taxes imposed on petroleum products; and restructuring the excise tax on automobiles except for buses, trucks, cargo vans, jeeps, jeepney substitutes and special purpose vehicles.
GT Capital chief finance officer Francis Suarez said that based on the proposal, the government planned to increase the excise tax on vehicles from 2 percent to 5 percent. This means that for a vehicle priced P600,000 and below, the tax will increase to P30,000 from current 12,000.
“That is an effective P18,000 increase in tax per unit. The P18,000 is more or less similar to the discount provided by the dealer whenever you purchase a car. So it will be probably the dealer absorbing the tax increase or it could also be passed on to the buyers,” Suarez said.