Vehicle makers push for lower excise taxes

MANILA, Philippines -  The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) will push for lower excise tax rates and wider price brackets in the Senate as the industry remains dissatisfied with the approved version in the House of Representatives.

CAMPI president Rommel Gutierrez said the industry is sticking to its position submitted last February to both chambers of Congress despite the watered-down version approved by the House of Representatives last month.

“Officially, that remains our position, what we submitted originally. We will stick with our original position paper. We just hope the Senate will consider our industry position,” he said.

“(We are seeking for) reasonable rates which is what we stated in our position paper. We will not deviate from that,” he added.

In its position paper, CAMPI and the Association of Vehicle Importers and Distributors (AVID) said the proposed increase in excise tax on automobiles under the original House Bill 4774 is too heavy and would “kill the legitimate dream of the youth to be able to afford to buy a brand new car” if implemented.

Under the structure in House Bill 4774, the brackets are divided into four – vehicles priced up to P600,000, over P600,000 to P1.1 million, over P1.1 million to P2.1 million, and those over P2.1 million.

The approved version in the lower House, meanwhile, known as HB 5636 or the Tax Reform for Acceleration and Inclusion bill, expanded the brackets into five and lowered the rates from HB 4774.

CAMPI and AVID, however, want the bracketing as follows: vehicles priced up to P600,000, over P600,000 to P1.1 million, over P1.1 million to P1.6 million, over P1.6 million to P2.1 million, over P2.1 million to P2.6 million, over P2.6 million to P3.1 million, and over P3.1 million.

For the rates, the groups are proposing the following increases: three percent for vehicles priced up to P600,000; P18,000 plus 30 percent in excess of P600,000 for those priced over P600,000 to P1.1 million; P168,000 plus 40 percent in excess of P1.1 million for those priced over P1.1 million to P1.6 million; P368,000 plus 50 percent in excess of P1.6 million for those priced over P1.6 million to P2.1 million; P618,000 plus 80 percent in excess of P2.1 million for those priced over P2.1 million to P2.6 million; P1.018 million plus 80 percent in excess of P2.6 million for those priced over P2.6 million to P3.1 million; and P1.4 million plus 90 percent in excess of P3.1 million for automobiles priced above P3.1 million.

“It is of course better than the original one,” Gutierrez said, referring to the House approved version.

CAMPI and AVID in the position paper said the motor vehicle industry will not be able to bear the resulting burden from the higher excise tax without having to pass on to, or share this with, the consumers and therefore result in significant market loss due to the corresponding progressive increases in the prices of automobiles.

The groups further said a corresponding decrease in car sales will translate into economic losses to the industry and related businesses and even to government revenue due to income losses.