The Department of Trade and Industry (DTI) has ordered carmakers to stop imposing safeguard duties on imported passenger cars (PCs) and light commercial vehicles (LCVs), ending the policy more than six months after it was enforced.
Those who paid extra on imported units can expect a refund coming their way
Trade Secretary Ramon Lopez signed the order dated August 6, in compliance with findings that there has been no undue surge in the number of imported vehicles relative to locally assembled units. He says that the order is expected to be published within the week, after which it will be forwarded by the Department of Finance (DoF) and the Bureau of Customs (BoC).
Once in effect through a BoC order, the duties will cease to be enforced, and all cash bonds previously paid by customers on the affected motor vehicles will be refunded by their respective importers.
Some vehicle importers opted to shoulder the added tariffs to avoid passing them on to customers
The tariffs were imposed on January 20, 2021 by the DTI in response to a complaint filed by the Philippine Metalworkers Alliance (PMA), a trade union federation of metalworkers including those in the automotive sector. In its petition dated 2019, the group alleged that a rise in imported vehicles has led to job losses in the local automotive industry.
As a result, the DTI ordered additional customs duties on complete built up (CBU) units brought overseas, amounting to Php 70,000 for PCs and Php 110,000 for LCVs. This would be in effect for 200 days pending an investigation by the Tariff Commission (TC) into vehicle sales figures from 2014 to 2020.
The Tariff Commission maintains that local vehicle assembly was not affected by the sale of imported units
“Considering that CBU passenger cars and CBU light commercial vehicles were not imported in increased quantities whether absolute or relative to domestic production during the period of investigation, the Commission hereby terminates its formal investigation and recommends that no definitive general safeguard measure be imposed on importations of the CBU passenger cars and CBU light commercial vehicles subject of this investigation,” according to the TC decision dated July 23, 2021.
The commission further stated that within the investigation period, six local vehicle assemblers had a collective output that complied with the domestic industry requirement defined in Section 4 of Republic Act 8800 or the Safeguard Measures Act, proof that the local auto industry was not adversely affected by the sale of imported vehicles.
In a previous report, the PMA says it will challenge any move to stop the imposition safeguard duties without the requisite public hearings on the issue.
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