The Department of Trade and Industry said over the weekend it dismissed the investigative case over an alleged surge in vehicle imports and lifted the provisional safeguard duties imposed against them.
Trade Secretary Ramon Lopez confirmed the agency and the Tariff Commission met and agreed on a common decision after finding out that importation of vehicles was actually on a downtrend in 2018 and 2019. The DTI signed a memorandum on Aug. 4 to implement the decision for publication within the week.
An industry source, however, said the DTI’s decision would still need guidance from the Department of Finance and the Bureau of Customs.
The source said once the BOC issues an order to stop the collection of safeguard duties, it is only then that car importers will stop charging customers with additional taxes.
“The DTI will forward the decision to DOF with a request to order the BOC to stop imposing cash bonds and return all cash bonds posted by importers on imported motor vehicles. That may take anywhere from one to two weeks,” the source said.
The source said “the lifting of the provisional safeguard duty will take effect upon issuance by BOC of an order to do so.” The BOC is the implementing/collecting agency of import tariff rates.
Under the provisional safeguard measures, vehicle importers were required to pay safeguard tariffs on imported vehicles ranging from P70,000 for sedan and passenger cars to P110,000 for light commercial vehicles starting Feb. 1, 2021.
The DOF mandated the collection of the safeguard duties in the form of landed cost which was used as basis for value added tax collected upon importation. The duties were deducted from the net importers’ selling price and suggested retail price.
The DTI acted on the petition for safeguard measures filed by the Philippine Metalworkers Alliance after the group raised concerns on increasing importation of passenger cars and light commercial vehicles.
Under Republic Act 8800, the Safeguard Measures Act, anybody may file with the DTI a verified petition requesting that action be taken to remedy the serious injury to the domestic industry caused by increased imports of a like or directly substitutable product.
Data submitted to the TC showed that imports of completely built units of motor vehicles were on an increasing trend from 2014 until 2017 but started to decline from 2018 to 2020. Total imports of CBU motor vehicles peaked in 2017 with 306,819 units, with 78 percent imported by the domestic industry and 22 percent by traders.
Imports of CBU motor vehicles went down to 233,346 units in 2018 from a high import level in 2017 and further declined to 108,770 units in 2020 amid the adverse economic effect of the COVID-19 pandemic.