THE Department of Trade and Industry (DTI) said the Department of Finance (DoF) has agreed to consider its proposal to impose a minimal excise tax of 1 percent to 2 percent on cars priced below P1 million under the DoF’s proposal to hike auto excise taxes.
“The small cars should have concessions, those [priced]below P1 million,” Trade Secretary Ramon Lopez told reporters on Tuesday during the Jetro Business Forum.
“Because it’s aligned with our Comprehensive Automotive Resurgence Strategy [CARS] Program, that for the first time will produce the Vios and Mirage and will create local employment, local content, and sourcing of parts [to boost the]local economy,” Lopez added.
Lopez was referring to local production of the Vios sedan by Toyota Motor Philippines Corp. and the Mirage model by Mitsubishi Motors Philippines Corp., the two participants in the government’s CARS program. Both of these models are priced at below P1 million each.
The DTI chief said that the DoF can come up with its own excise tax rates for vehicles priced higher than P1 million.
He is also positive that Congress will support his proposal.
He said the Trade department is closely watching the P1-million and below vehicle segment because this is where bulk of auto sales come from. Imposing a minimum of 1 percent to 2 percent for lower-priced cars will simplify the various versions for the automotive excise tax, he said.
Finance Secretary Carlos Dominguez 3rd earlier suggested that commuters use utility vehicles (UV) more as this category enjoys a lower tax rate.