MEMBERS of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion (Train) have been able to reconcile differences in provisions concerning automobile excise tax adjustments and tax exemptions on the 13th month pay and other bonuses of taxpayers.
Senate and House of Representative contingents on Thursday agreed to set new excise tax rates on vehicles that would not have much impact on prices of lower-end automobiles compared to what were being proposed by the Senate.
According to a source, lawmakers agreed on a four-tiered system based on net value of the automobiles but retained the exemption on electric vehicles.
Under the rates approved by the committee, vehicles with net value of up to P600,000 will be taxed at 4 percent, while automobiles priced at P600,001 but not more than P1 million will be taxed at 10 percent and those that are valued above P1 million will be taxed at P20 percent.
The members of the bicameral conference committee also agreed to impose 0.5 percent excise tax on hybrid vehicles depending on which of the four tiers they would fall under.
The new version is different from what is being proposed in the Senate version–10 percent on vehicles not exceeding P600,000 and 20 percent on those valued at P1 million and above.
It does away with the two-year implementation period in the version of the House of Representatives.
The committee further agreed to raise the tax-exemption ceiling on the 13th month pay and other bonuses to P90,000.
Sen. Juan Edgardo Angara, chairman of the Senate ways and means committee, said the Senate and House of Representatives contingents were able to reconcile the differences in the two versions of the bill setting the tax-exempt ceiling for bonuses at P90,000 effective 2018.
Under the current law or Republic Act 10653, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, are exempted from tax if they do not exceed P82,000.
The Senate, in its approved Train bill, retained the tax-free ceiling but the House of Representatives in its version raised it to P100,000.
During the bicameral conference committee hearing, the lawmakers who were tasked to reconcile the differences in the two versions reached a compromise and set the rate at P90,000.
Angara said the new rate is 300 percent higher than the rate in 2015 wherein tax-exemption covered only bonuses and the 13th month pay not exceeding P30,000.
He added that the newly approved tax-exemption ceiling on income tax and the13th month pay would mean that taxpayers could enjoy annual income of up to P340,000 tax- free.