The Finance Department said it is willing to listen to the Trade Department’s position on vehicle taxes.
Finance Secretary Carlos Dominguez said his agency was willing to lend an ear to the automotive sector and the Trade Department and could possibly consider what they could present on the table.
“We will certainly give them a good hearing. We will give it good consideration,” Dominguez told reporters Monday night at the sidelines of the induction of the 2017 board members and officers of the Economic Journalists Association of the Philippines.
The Finance Department’s tax reform program includes imposing higher tax rates on vehicles. The Trade Department, on the other hand, is pushing for a higher floor value on vehicles that will be affected by the proposed tax reforms.
Trade Secretary Ramon Lopez said the department proposed to adjust the floor price on vehicles that will face higher taxes to P1 million, compared to the Finance Department’s proposal of P600,000.
Dominguez said the critical objective of adjusting taxes on automobiles was “to give relief on the number of cars on the road.”
He said with a great volume of cars being added on the road each year, not a single vehicle was being taken out of the cities where traffic had a debilitating effect on the economy.
Vehicle sales in 2016 reached 403,000 units.
“You’re jamming the roads with more cars and traffic gets worse and worse. More than 60 percent [of vehicles sold] are in the megacities,” Dominguez said.
The Finance Department is inclined to impose lower tax rates on utility vehicles”•the preferred vehicles in the provinces due to their multi-service features. The agency is also carefully reviewing proposals to retire aging cars.
Dominguez said the Finance Department did not want to rein in auto sales, but the government should resolve traffic woes.
“It’s not because we’d rather not. Our situation on the road is like pouring water in a glass that is already overflowing,” he said.
The Trade Department earlier disclosed a proposal to impose the higher tax on vehicles with value of at least P1 million, instead of the Finance Department’s bracketing of P600,000 and below.