PRESIDENT Rodrigo Duterte on Monday sought to calm fears of car manufacturers on the administration’s plan to increase taxes on cars.
“Let me take this opportunity too to assure our stakeholders from the automotive industry that we will take due consideration of your concerns about our package fiscal reforms,” Duterte said in a speech during the launch of the first locally produced Mitsubishi Mirage G4 at Malacañang.
“We will ensure that its impact would be fair and supportive of your growth as participants in the CARS program,” the President added, referring to the Trade Department’s P27-billion stimulus Comprehensive Auto Resurgence Strategy package.
Car manufacturers have expressed opposition to the government’s plan to introduce a new tax on the sale of automobiles in the country, saying that it will imapct heavily on the vehicle industry and dampen the desire of locals to purchase a vehicle.
Currently, the taxes on the sale of cars in the Philippines are staggered, with a base fee determined by the value of the car, and an additional proportional charge, also set by the value of the car.
Data from the Finance Department showed that should the program push through, a Mitsubishi Mirage G4 GLS with a current SRP of P740,000 and a base tax of 2 percent determined by the value of the car, will have a new proposed SRP of P775,514 plus a 4 percent base tax.
Other car models will have higher excise tax which will be used to improve traffic management solutions, and fund climate change-resilient infrastructure.
The new tax was proposed as part of a wider plan by the government to shift the national tax system to a low-rate wide-base system, which would see taxes charged at a lower rate but on a greater number of items and transactions.
The government hopes that by raising the taxes on cars, it will be able to reduce the taxes levied on personal incomes.
Japanese firm Mitsubishi Motors Philippines Corp. announced on Monday the commencement of the local production of the Mirage G4 in its 21-hectare plant in Sta. Rosa City, Laguna starting this year, committing the production of 200,000 vehicles of their chosen model in a span of six years.
The vehicle industry accounts for approximately 4 percent of the country’s gross domestic product.
Prior to the Philippine-made Mirage G4, the Mirage is being built at Mitsubishi Thailand’s Laem Chabang plant, facility number three since April 2012.
