The Bureau of Customs (BoC) is fully supporting amendments to the excise tax on automobiles, the bureau said in a statement on Friday.
House Bill 4774, filed by Representative Dakila Carlo, seeks to amend certain provision of the National Internal Revenue Code of 1997:
For vehicles worth P600,000 or below: an increase in excise tax from 2 percent to 4 percent
For vehicles worth P600,000 but not more than P1.1 million: to impose an excise tax of P24,000 plus 40 percent of value in excess of P600,000
For vehicles worth over P1.1 million but not more than P2.1 million: to impose an excise tax of P224,000 plus 100 percent of value in excess of P1.1 million
For vehicles worth over P2.1 million: to an excise tax of P1,224,000 plus 200 percent of value in excess of P2.1 million.
Buses, trucks, cargo vans, jeepneys, vehicles with single cab chassis, and special purpose vehicles are still exempted from the excise, as originally proposed by the Department of Finance.
According to the DoF, excise tax collections will be used to fund infrastructure projects of the Duterte administration.
The department has argued that higher automobile excise tax is a must due to the P139 billion revenue loss from lowering the personal income tax.
The proposal may result in “lower investments in the auto industry and job squeeze, which run counter to the intent of the government to revitalize and further advance the growth of the industry,” the BOC Legal Service has said, according to the bureau’s statement.
The BOC’s Legal Service and Collection Service, both under the Revenue Collection Monitoring , committed to continue studying the impact of the proposal. Once done, the bureau intends to convey the findings to the Office of the Commissioner and the DoF.
The DoF earlier said it did not expect car sales to decline as a result of additional excise taxes as workers will have a higher take home pay with the lower personal income tax.
BOC Commissioner Nicanor Faeldon said he “remains solid” in supporting the DoF proposal.