The Department of Trade and Industry (DTI) is asking for extra support to local manufacturing, specifically medium-duty passenger vehicles, in view of the passage of the first tax reform package.
Trade Secretary Ramon Lopez said the added support may be considered for local manufacturers now that the House of Representatives has approved on final reading the Tax Reform Acceleration and Inclusion bill, the first in a series of tax reforms that will lower personal income taxes while raising excise tax on oil and vehicles, expanding the value-added tax base, and imposing tax on sweetened beverage and lotto winnings.
The bill quickly passed its second and third reading on the same session day, following the certification as urgent by President Rodrigo Duterte.
The DTI earlier acknowledged that the Department of Finance has adopted its proposal of giving consideration to the cars priced below P1 million with only a minimal excise tax of 1 to 2 percent.
The trade department is closely watching the P1 million below bracket because this is where most of the sales come from.
Imposing a minimum of 1 to 2 percent for lower-priced cars will simplify the various versions for the automotive excise tax according to Lopez.
Finance secretary Carlos Dominguez 3rd, earlier, said that the consumers must use utility vehicle for a lower tax rate.