A new car would cost around P500,000 more if the proposed tax reform of the Duterte administration was passed into law, Camarines Sur Rep. Rolando Andaya warned on Monday.
Andaya, one of the House Deputy Speakers, was referring to a provision of the tax reform program that imposes an excise tax of 40 percent of the net manufacturing importation price for cars priced over P1.1 million to P2.1 million–up from the existing excise tax rate of P112,00 plus the value in excess of P1.1 million for the bracket.
“A [Toyota] Innova would cost P400,000 more, while a [Mitsubishi] Montero would cost P600,000 more. For a Pajero, you could pay P1 million more. So if you can purchase a car now before this [tax measure]is passed, the better,” he told reporters.
The proposed tax measure also imposes a five percent of the net manufacturing/importation price as excise tax on cars priced P600,000 and below–a few notches more than the existing two percent.
This would mean that a compact car worth P590,000 based on net manufacturing/importation price will be worth P619,000 or up from its old price of P601,800 (including the two percent of the net manufacturing/importation excise tax).
Cars priced over P600,000 to P1.1 million, on the other hand, will incur a 20 percent excise tax instead of an existing income tax rate of P12,000 plus excess of P600,000 net price.
Those priced over P2.1 million will have a 60 percent excise tax instead of the rate of P512,000 at present plus the value in excess of P2.1 million.