Proposed new taxes of 500K on imported used cars

[hagiber]

Additional tax on imported used cars likely
By Marianne V. Go
The Philippine Star 10/07/2004

The technical committee of the Cabinet-level Tariffs and Related Matters (TRM) is set to approve a P500,000 additional tax on used imported cars in a bid to discourage the acquisition and importation of second hand vehicles.

The committee also plans to increase the Most Favored Nation (MFN) tariff on cars with an engine displacement of 2.1 liters and above to 40 percent while lowering the tariff on vehicles with an engine displacement of one liter and below to zero.

At the same time, local automotive manufacturers participating in the Automotive Export Development Program (AEDP) would be exempt from the higher MFN rates on the big cars provided that these are included in the list of vehicles that they are assembling locally.

According to Trade and Industry Secretary Cesar V. Purisima, the additional tax and higher MFN tariff rates are intended to generate additional revenues for the government and encourage more efficient cars.

By exempting participants of the AEDP from the higher MFN tariff rates, Purisima said, government is also encouraging more production and export of cars especially since the local market is so small.

Last year, Purisima said, local production only reached around 80,000 units.

With the exemption, government is hoping to motivate other local automotive manufacturers to join the AEDP.

At present, only Ford Motors Philippines is exporting to Thailand, Indonesia and Malaysia.

The additional P500,000 tax on used imported cars is meant to stop once and for all , the continued importation and sale of used imported cars which local automotive assemblers complain eats into the local car market.

[kramos22]

So no more cheap pajeros from subic?

[pink_cadillac]

In tandem with the 500,000 pesos tarriffs.

I would actually suggest they base tarriffs on fuel consumption in ratio to weight if the point is to encourage more fuel efficient and emissions-friendly vehicles.

Engine displacements, as we've known before, are a bad measure of both benchmarks stated above.

Imposing huge tarriffs on imported used vehicles alone without encouraging local industries to provide alternatives only deprives consumers of choice and utility.

If you want to protect consumers, make sure you don't coddle manufacturers too much.

But it seems this lobby is very one sided.

[kyle618]

i hate that they attack the 2.0 and above category... god damnit! they should measure it by fuel efficiencY!!!! those monkeys dont know sht! :mad: sila naman un sumasakay sa mga expeditions eh... ***!

[luckytruck]

ang mahal naman kasi ng mga brand new cars. can you imagine paying 700 to 800 thousand for an Adventure? converted surf na lang, 300,000 lang

andy

[pink_cadillac]

luckytruck, obviously a brand new car should be more expensive.

The interests of consumers and manufacturers differ greatly.

The latter though gives more to the government in form of revenue and balance of trade payments.

[luckytruck]

maganda siguro if someone from toyota, mitsu, nissan, or honda would give us a breakdown of what really goes into the brand new selling price of cars. this would give us a better idea as to where our money is going and whether we should empathize with the manufacturers or not.

andy

[boydapa]

regarding the cost of imported 2nd hand, at least mas malaki chance ko makabili ng landcruiser na converted kesa sa bumili ng bago na landcruiser na nagkakahalaga ng 3 million up----wala na alternative

[niky]

If you look at the inflation-adjusted prices of cars nowadays, you're getting good deals. Manufacturers are now offering financing schemes of 10% and UNDER. I think the industry is doing its best here, people.

While I disagree with an across the board 500k tax, something does have to be done. I think that there should be an official inspection fee and fines built up for safety/economy/general poor condition non-conformities, but then this would be abusable, so a hefty tax would seem the only solution.

I agree, the displacement tariff is ridiculous since it ignores economy. I'd rather pay a guzzler tax (on purchase) than have to pay extra for a crosswind JUST BECAUSE it's 2.5 liters.

Why can't the government just come up with a testing system, like the US EPA? That way, they can tax cars BASED on economy performance. The tax can even be hidden from the consumer by having it put on the manufacturer.

[Bogeyman]

Originally posted by luckytruck
ang mahal naman kasi ng mga brand new cars. can you imagine paying 700 to 800 thousand for an Adventure? converted surf na lang, 300,000 lang

andy

I can certainly imagine that, because I purchased one such brand-new Adventure two months ago. Shelled out 800K+. In cash payment. And I don't regret that decision one bit.

One can never be sure with second-hand cars; swerte mo na lang kung makatyempo ka ng maingat na owner. And I don't trust conversions, not unless iisa ang nagko-convert sa lahat ng imported vehicles para consistent ang quality.

I simply refuse to gamble my safety as well as that of my loved ones by scrimping on the vehicle to buy. The few hundred thousand pesos I save today, may end up in hospitalization or funeral expenses in the event of an accident, just because I acquired a faulty, poorly converted/maintained second-hand vehicle. Besides, pag nagkaproblema sa second-hand, the total cost of repairs may not be that far off from the cost of a brand-new vehicle altogether.

[van_wilder]

this is BS!!!! sige ubusin nila ang mayayaman sa pinas, para wala na mag-invest! para lalong maghirap... hindi pag-taas ng tariff ang sagot sa problema, hindi ba sila nagtataka? ang european union pati US nagbaba ng tariffs, tayo lang ang nagtataas. kung mahina ang benta ng local products, isa lang ang ibig sabihin nun, hindi tayo competitive...

BOGEYMAN: hindi po lahat ng pinoy may 800,000 na pwede ibayad ng cash payment para sa kotse...

[Bogeyman]

Originally posted by van_wilder
hindi po lahat ng pinoy may 800,000 na pwede ibayad ng cash payment para sa kotse...

Kaya nga may financing e. You can choose the kind of installment payment on the vehicle of your choice. I'm not saying that cash payments should be the norm for everyone. Kung lahat tayo may pera, shoot, go for it. Pero that's not the case, that's why there are options for brand-new cars. Sinwerte lang talaga kami ng misis ko.

I can always look to my in-laws as a good example. Father-in-law ko is a supervisor at a machine shop, hindi naman kalakihan ang sweldo niya. Mother-in-law ko, plain housewife, so you can imagine the state of their finances. Kaya when they bought their Adventure brand-new, they went for financing, because my mother-in-law didn't trust second-hand cars either. They bought the rights from a Mitsu employee's car plan. Five years to pay, mind you. Dinaan lang talaga nila sa tiyaga ang pagbabayad, and through hard work and budgeting, now they've practically finished paying for it, two years ahead of schedule. Daig pa nga nila ako e, kasi nagkaroon pa silang pambili ng accessories for their Adventure.

They're a living example for Filipinos na ginagawa nang mantra yung katagang, "wala akong pera, eh": Pag gusto, maraming paraan. Pag ayaw, mas marami ang dahilan.

[mbt]

ridiculous... although i agree that importing second-hand "junk" vehicles from other vehicles is unhealthy for the local industry, these dunderheaded government officials will just be shooting themselves in the foor after the gains of the "reformed" automotive tax system that was precisely meant to update the outdated engine displacement-based tax scheme.

sheesh. why resurrect a dinosaur from a bygone era? if they're really keen on promoting fuel efficiency, firstly, they have to fix traffic jams first by strict enforcement of ALL driving rules -- i think this is the most obvious and the most effective way of improving fuel efficiency across the board. second, if they're going the tax route, they had better use a better measure of fuel efficiency than engine displacement.

[Bogeyman]

Originally posted by mbt
if they're really keen on promoting fuel efficiency, firstly, they have to fix traffic jams first by strict enforcement of ALL driving rules -- i think this is the most obvious and the most effective way of improving fuel efficiency across the board.

This goes a little farther back by ensuring that all traffic enforcers know the very rules that they have been tasked to implement. Napanood ko sa Unang Hirit minsan, simpleng "Yield" sign lang, hindi alam ng traffic enforcer ang ibig sabihin!

Dapat siguraduhin din that all road projects are properly done and guaranteed to last for years. Diyan na lang sa Ortigas Ave. extension, every three months yata ang road repairs. Sobrang parusa ang traffic! Sa dami ng napipilitang mag-idling sa bawat bwiset na road project, no wonder ang lakas ng konsumo sa krudo sa Pilipinas.

[mbt]

of course... strict law enforcement would entail proper training and that cliche called political will, pero ganun naman talaga dapat.

it's kinda stupid to go for the "easy to implement solution" like taxation while letting a bigger and deeper problem fester, but this just indicates everything that is wrong with our country today... tsk tsk

[theveed]

Originally posted by luckytruck
maganda siguro if someone from toyota, mitsu, nissan, or honda would give us a breakdown of what really goes into the brand new selling price of cars. this would give us a better idea as to where our money is going and whether we should empathize with the manufacturers or not.

andy

No offense to Subic Jap SUV owners, but you have to know why these SUV's/Vans are here in the first place? They're no longer considered as viable in terms of emmision, safety, etc in Japan that's why they dump it here, they're supposed to be junked if it stayed in their country, they send it to us for parts and whatever we want to do with it... For the "mautak" people who imports, they convert it to LHD and sell it as is....

As to justifying the cost of the unit, they're very justifiable for the most part, the amount of R&D spent to develop a car is enourmous, matching components, engines to a particular chassis requires countless hours of work and of course, you have to pay these educated engineers to do it... The cost of equipment to manufacture a particular model is high as well... Add the legalities, patents, marketing, shipping, dealer markup, etc... The cost can be itemized if you wish, but no seller will ever, ever do that, that won't make sense at all. It'll be like asking your neighborhood sari-sari store why a piece of candy costs 3 for P2.00, you won't expect him/her to say...

"Oh sugar costs Pxx.xx per kilo, they use x grams hence x cost... the wrapper base plastic costs Px.xx, the color and print of the wrapper, etc etc etc..."

It's just not logical.

Just the same, how can you justify your salary to employers, how do you compute for the cost per hour that you charge the company...

Diba? ;)

[mazdamazda]

The committee also plans to increase the Most Favored Nation (MFN) tariff on cars with an engine displacement of 2.1 liters and above to 40 percent while lowering the tariff on vehicles with an engine displacement of one liter and below to zero.

At the same time, local automotive manufacturers participating in the Automotive Export Development Program (AEDP) would be exempt from the higher MFN rates on the big cars provided that these are included in the list of vehicles that they are assembling locally.

read and digest first!!!

this is move is meant to stimulate our automotive industry.

haven't you noticed but, save for ford & mazda, the other car manufacturers aren't exporting vehicles.

the ford/mazda model is actually very good. thailand gets to produce all pick-ups, while the philippines gets to produce all mini-SUVs and compact sedans. this spells out efficiency and savings for the said company - not to mention the tax breaks that they are getting.

so, if we just lower our tariffs on imported vehicles, are we slowly killing ourselves by relying on automotive companies to just import vehicles - while they don't have the capability to export vehicles?

[Bogeyman]

Originally posted by theveed
No offense to Subic Jap SUV owners, but you have to know why these SUV's/Vans are here in the first place? They're no longer considered as viable in terms of emmision, safety, etc in Japan that's why they dump it here, they're supposed to be junked if it stayed in their country, they send it to us for parts and whatever we want to do with it... For the "mautak" people who imports, they convert it to LHD and sell it as is....

Agree ako dito. It's the same with a lot of those buses plying the city routes. Those are surplus buses which are being dumped here because they're already obsolete in Japan. The government thought it was doing everyone a favor by importing these units as a solution to the transport shortage, but the safety and environmental risks involved are already taking their toll.

Nakakalungkot lang isipin na para sa mga dayuhan, ang Pilipinas eh basurahan na lang ng mga sasakyang pinagsawaan na ng iba, o kaya'y hindi pumasa sa mga standards nila. At tuwang-tuwa naman tayo. By tolerating and continuing this process, we're only justifying the impression that Filipinos are nothing but scavengers and beggars to the world at large.

[mbt]

well, with gloria at the helm, we truly have become that hehe

[van_wilder]

Proposed new taxes of 500K on imported used cars

ooops! sorry i didnt saw na used cars lang pala... hahaha... akala ko pati mga SUVs kasama eh... kasi lalong nagmamahal ang brand new dahil sa tax, kung wala sanang tax or effective ang tax system natin, ang 2.3L na Civic ay nasa P850-950Thou eh... 2L nga lang P970T na eh...

kaya naman kasi marami bumibili ng subic cars kasi almost the same ang nakukuha na benefits ng buyer pero ang layo ng gap sa price... pero ako masaya na ako sa 2nd hand, pero galing sa parents ko... hehehe...

wala ng pag-asa na dumami ang skyline R-34 at supra sa pinas... tsk tsk...