Cua: Proposed tax hike on cars partly due to traffic crisis

MANILA, Philippines -- A proposal to increase excise taxes on vehicles partly because of the traffic crisis in Metro Manila, according to House Ways and Means Committee Chairman Dakila Cua.

 

"May proposal nga po na dagdagan ng excise on vehicles, so that is, in part, a reaction also to the traffic crisis," Quirino Rep. Cua said during a press briefing on Monday afternoon.

 

"So kung magkano ang naging presyo ng importation or manufacturing, yung mas mura syempre mas mura ang excise. Tapos yung mas mahal, mas mataas, tapos yung pinaka mahal, yung luxury, pinaka malaking excise," Cua said.

 

Albay Rep. Edcel Lagman, who opposes the proposed increase, said earlier this month that the proposal will raise to the excise tax for automobiles priced below P600,000 to five percent from two percent. Excise taxes on vehicles sold for from P600,000 to P1.1 million will be 20 percent while vehicles priced between P1.1 million to P2.1 million will be taxed 40 percent. Vehicles selling beyond P2.1 million will be subject to a 60-percent excise tax.

 

READ: Tax hike on new cars opposed

 

Cua said he is not fully convinced that increasing the excise tax will reduce the volume of vehicles on the streets. Lagman said that this will mean more motorists will simply opt to continue using older, less environmentally friendly vehicles.

 

"This issue is limited to the urban areas like Metro Manila, Cebu, and a few other parts of the country. In parts of Mindoro or Quirino, traffic is not much of a problem," Cua said.

 

He also added that the people living in the provinces should have the option to purchase vehicles for less.

 

"I think it will really boil down to how much it will contribute to the revenue gain and how much losses we need to compensate for it because of the amendment of the personal income tax package," Cua said.