Auto Industry Agrees to 3% AUV Excise Tax; Progressive Rates for Cars, SUVs.(Business)

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The domestic automotive industry has agreed to a three percent excise tax on Asian utility vehicles (AUVs,) pick-ups and passenger vans and a progressive excise tax rates of up to 35 percent for cars and sports utility vehicles based on the size of the engine to break the impasse on the taxation issue on automobiles.

Industry players belonging to the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) voted 10 to 1 in favor of engine-based excise taxation. Ford Motor Co. Phils. Inc. was the only member that voted in favor of the value-based excise tax system.

The industry position has been submitted to the Board of Investments (BOI), which spearheads the review of the excise tax system on automobiles together with the Finance Department.

Under the proposal, cars and SUVs will have a progressive excise tax rates of 10, 15, 25 and 35 percent while trucks and buses are exempted at zero rate.

"A three percent excise tax on AUVs is most affordable because this will only mean an additional P30,000 per unit on the current AUV prices," an industry official said.

The BOI, which earlier supported excise taxation based on the value of the vehicle, appeared amenable to the industry's proposal especially that it means a positive revenue generation for the government.

The industry, however, has yet to come up with the estimated revenue generation from its proposed excise tax system.

There are gray areas, however, on the exemption of trucks and buses because a question was raised on whether tourist buses have to be slapped with excise tax. …