Auto industry proposes seven tiers of excise tax

THE auto industry has proposed seven tiers of excise tax brackets for automobiles instead of just four under the comprehensive tax reform program.

“We are looking at that, we will compute and I will let you know, because there is no revenue estimate on the impact of their proposal,” Finance Undersecretary Karl Kendrick T. Chua told reporters in a chance interview at the House of Representatives yesterday.

In a joint position paper, the Car Assemblers and Manufacturers of the Philippines, Inc. (CAMPI) and Association of Vehicle Importers and Distributors ( AVID) proposed the following brackets:

If the net manufacturer’s price/importer’s selling price is up to P600,000, the excise tax will be 3%;

At between P600,000 and P1.1 million the excise will be P18,000 plus 30% of the value in excess of P600,000;

At between P1.1 million and P1.6 million the excise will be P168,000 plus 40% of the value in excess of P1.1 million;

At between P1.6 million and P2.1 million the excise will be P386,000 plus 50% of the value in excess of P1.6 million;

At between P2.1 million and P2.6 million the excise will be P618,000 plus 80% of the value in excess of P2.1 million;

At between P2.6 million and P3.1 million the excise will be P1,018,000 plus 80% of the value in excess of P2.6 million; and

At over P3.1 million, the excise tax will be P1.418 million plus 90% of the value in excess of P3.1 million.

The two associations said that the proposed increase in auto excise tax under the House Bill 4774 is “too heavy” and the industry “will not be able to bear the resulting burden without having to pass on to, or share it, with the consumers...”

CAMPI and AVID also asked the panel to “provide lead time” of six months to implement the new tax schedule “to enable the industry to make the necessary adjustments.”

The Finance department earlier said the increase in take-home pay would offset the potential loss of sales due to the proposed additional excise tax on automobiles.

Under House Bill 4774, excise tax on automobiles will be raised to 4% from the present 2% if the net manufacturer’s price/ importer’s selling price is up to P600,000.

At between P600,000 and P1.1 million, the tax will be P24,000 plus 40% of the value in excess of P1.1 million. The present rate is P12,000 plus 20% of the value in excess of P1.1 million. —