The proposed changes on fuel and new vehicles under the Tax Reform for Acceleration and Inclusion (House Bill 5636) has been the biggest motoring headline for 2017.
It seems to folks that the Philippines stick to its original plan for raising excise taxes on automobiles. According to latest car news, several senators has voted for the latest Senate version of the first comprehensive tax reform package - Senate Bill (SB) 1592.
The Senate version is said to be accorded in part with the Lower House’s version – HB 5636 but also provided for expanded provisions. The SB 1592 was approved via a 17-7 vote and seeks to impose new automobile excise tax. These excise tax rates under the Senate version are relatively higher than the scheduled excise tax for 2018, but still relatively lower than the proposed excise tax rates for 2019 under the Lower House’s version.
Are you not alarmed? Well, think twice guys. Reports are saying that instead of gradually increasing the excise tax to the target level over two-phase increase proposed by HB 5636, the SB 1592 will see automobiles fetching high prices in a single phase (immediately by January 2018).
Tax reform version in Senate sets higher excise taxes on vehicles
Take cars tagged with P600,000 or less as an example. Under the Lower House’ version, the first bracket would see only a 3% raise next year, before increasing it to 4% in 2019. Under the Senate version, this price bracket will have a 4% raise immediately upon the implementation.
The full effects of the proposed excise tax for vehicles under the HB 5636 have not been felt. Perhaps the SB 1592 imposes the new tax structure with immediate effect.
The rates of SB 1592, which can be implemented by January 1, 2018, are as listed below:
|Net Manufacturer’s Price/Importer’s Selling Price||Rate|
|From P600,000 to P1.1 million||P24,000 + 35% of excess over P600,000|
From P1.1 million to P2.1 million
|P199,000 + 55% of excess over P1.1 million|
|From P2.1 million to P3.1 million||P749,000 + 90% of excess over P2.1 million|
|Over P3.1 million||P1,649,000 + 100% of excess over P3.1 million|