24 FEB

BOC expresses its support to amend excise tax on automobiles

The Bureau of Customs (BOC) has expressed its full support to the proposed bill in the Congress to restructure the system for excise tax on brand-new automobiles.

The proposed restructuring of the excise tax system is provided under Section 24 of House Bill No. 4774 introduced by Rep. Dakila Carlo Cua, which seeks to amend certain provisions of the National Internal Revenue Code of 1997. It suggests modifying the excise tax given the following criteria:

• i. For vehicles worth P600,000 or below: increase excise tax from 2% to 4%
• ii. For vehicles worth P600,000 but not more than P1.1 million: impose an excise tax of P24,000 plus 40% of value in excess of P600,000
• iii. For vehicles worth over P1.1 million but not more than P2.1 million: imposing an excise tax of P224,000 plus 100% of value in excess of P1.1 million
• iv. For vehicles worth over P2.1 million: impose an excise tax of P1,224,000 plus 200% of value in excess of P2.1 million.

Exceptions to the excise tax still include buses, trucks, cargo vans, jeepneys, vehicles with single cab chassis, and special purpose vehicles, as the Department of Finance (DOF) had originally proposed.

According to Commissioner Nicanor Faeldon, he remains solid in supporting DOF in this proposal.

The proposed adjustment in the excise tax on automobiles is included in the tax reform package that the DOF submitted to the Congress.

As part of the package, the DOF said the automobile excise is meant to raise revenues equitably to fund the infrastructure program of the Duterte administration.

The DOF said that this proposal would make up for the estimated P139 billion in revenues that would be lost from the planned reductions in personal income tax rates.

Moreover, DOF said it does not expect car sales to dampen as a result of the additional excise because take-home pay of car buyers will increase significantly with the lowering of personal income tax.

The BOC’s Legal Service initially expressed concerns that the said proposal may translate to “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.”

But BOC’s Legal Service, in coordination with the bureau’s Collection Service, both under the Revenue Collection Monitoring Group (RCMG), committed to continue studying the impact of the proposal, and once done, to convey its findings to the Office of the Commissioner and the DOF.

source: http://customs.gov.ph/boc-expresses-its-support-to-amend-excise-tax-on-automobiles/