The House committee on ways and means will hold its third deliberation on the Comprehensive Tax Reform Package proposal of the Department of Finance to focus on possible higher excise taxes on automobiles today.
The excise taxes on automobiles is contained in Chapter VI of House Bills 4774 and 4688 authored by Quirino Rep. Dakila Carlo Cua, committee chairman, and Albay Rep. Joey Salceda, vice chairman, respectively.
According to Cua and Salceda, their bills—both titled “Tax Reform for Acceleration and Inclusion” or TRAIN— aim to create a tax system that is simpler, fairer and more efficient, characterized by low rates and a broad base that promotes investment, job creation and poverty reduction.
Earlier, Finance Secretary Carlos Dominguez III said the government’s proposal to raise excise taxes on cars could help ease the worsening traffic problem in Metro Manila.
Cars are now “very cheap” and higher taxes would temper sales growth, he said.
The committee on ways and means invited officials of the departments of Transportation, Trade and Industry, Finance, Land Transportation Office, Land Transportation Franchising and Regulatory Board, Bureau of Customs and Bureau of Internal Revenue to give their views on the bills.
The committee also invited representatives from the automobile industry, including members of the Chamber of Automotive Manufacturers of the Philippines Inc., Association of Vehicle Importers and Distributors, Automobile Association Philippines, CATS Motors Inc., Jaguar Philippines Inc., Chevrolet Motors Philippines Inc., Philippine National Taxi Operators Association, Confederation of FX-AUV Operators and Drivers Association; Ford Motor Company Philippines Inc., Isuzu Philippines Corp., Nissan Philippines Inc., Mitsubishi Motors Philippines Inc., Toyota Motors Philippines Inc., PGA Cars Inc., Prestige Cars Inc., Berjaya Auto Philippines Inc. and Laus Group.
Under Cua’s HB 4774, the excise tax for automobiles shall be raised to four percent from the present two percent if the net manufacturer’s price/importer’s selling price is up to P600,000.
If the price is P600,00 to P1.1 million, the tax shall be P24,000 plus 40 percent of value in excess of P1.1 million. The present tax rate is P12,000 plus 20 percent of value in excess of P1.1 million.
If the price is over P1.1 million to P2.1 million, the tax rate shall be P224,000 plus 100 percent of value in excess of P1.1 million. The present tax rate is P112,000 plus 40 percent of value in excess of P1.1 million.
For high-end cars priced P2.1 million and above, the tax rate shall be P1.224 million plus 200 percent of value in excess of P2.1 million against the present rate of P512,000 plus 60 percent of value in excess of P2.1 million.