Vehicle Excise Tax News

[artpogi]

AUVs fail '10-seater test,' lose tax privilege

Posted: 11:45 PM | Aug. 04, 2003
Clarissa S. Batino
Inquirer News Service


STARTING Sept. 9, only the Chevrolet Suburban will be exempt from an excise tax on vehicles. Eighteen other models, including top-sellers Toyota Revo, Mitsubishi Adventure, Isuzu Crosswind and Honda CR-V, failed a 10-seater criterion during a re-measurement by the Bureau of Internal Revenue (BIR) last week.

The excise tax break is a privilege given to two-wheel drive vehicles that can seat 10 or more people. Nine-seaters and four-wheel-drives pay an excise tax ranging from 15 to 100 percent, depending on engine displacement and fuel type.

"Once the new revenue regulation takes effect, only the vehicle that passed the re-measurement will continue to have the excise tax exemption," BIR commissioner Guillermo Parayno Jr. said Monday. "All others that did not make it will have to start paying excise taxes, unless Congress passes the amendments to the motor vehicle taxation before Sept. 9."

The BIR ruling will jack up the prices of 10-seater models by at least 15 percent. A Revo van that currently costs about 800,000 pesos will have to pay an excise tax of 120,000 to 250,000 pesos, depending on its engine displacement.

Parayno said that according to calculations by the Department of Finance, the lifting of the exemption should give the government additional revenues of about two billion pesos, assuming that demand for the vehicles will continue after the excise tax applies.

Finance Secretary Jose Isidro Camacho said the BIR decision underscored a need to pass a pending legislation on the rationalization of excise taxes on automobiles. The proposed legislation would shift the basis of taxation to price and would bring the tax rates lower.

"The re-measurement brings home the point of why there is a need to change the legislation to modify this bizarre situation wherein the manufacturers' brochure claim the vehicle is a 10-seater but in reality, it could not seat 10 people," Camacho said.

Parayno said the BIR used the definitions and measurements specified by the 1997 revenue regulation and departed from the looser provisions of the 1999 policy that used the manufacturers' brochure as the basis of seating capacity.

"We are responding to the requests of the car industry to remove the ambiguity and restore predictability in taxation to guide their business decisions as well as that of their customers," he said.

The BIR collected 55 billion pesos in excise taxes last year but the bulk came from the oil sector and the tobacco and liquor industries.

Camacho said excise tax payments of the automotive industry had been declining through the years because of the lax application of the exemption on 10-seaters.

Parayno admitted that in terms of price and engine displacement, the two-wheel Suburban was considered a luxury vehicle, but he added it passed the measurement standards, unlike the other vehicles that were being marketed for middle-class buyers.

"We took into account not only seat dimensions but we set a definite measurement as to where the seat should be reckoned from," Parayno said. "We also took into account such obstructions as built-in armrests, overhead air-conditioning ducts, protruding amplifier box or wheelhouse. We gave a provision on feet space, leg room, and head room."

Parayno noted that the 19 models currently availing themselves of excise taxes were re-measured in response to a congressional inquiry regarding alleged revenue losses from the tax breaks given to Honda CR-V.

He said forgone revenues on exemptions given to Honda CR-V were estimated at about 250 million pesos a year.

The new BIR regulation will be applied to units already in the Philippines, whether in the Bureau of Customs, in assembly plants, warehouses or showrooms as of Sept. 8. The list of inventory on this date should be submitted to the BIR not later than Sept. 13.

"All importers and/or assemblers shall submit a duly notarized list of inventory on-hand of completely assembled automobiles, including completely knocked-down and semi-knocked down units that are located within the assembly plant or warehouses or customs' premises as of September 8 indicating therein the engine, body and chassis numbers," said the revenue regulation.

Assemblers and importers must exhaust their inventory before Sept. 8.

[5Speed]

so...chevy suburban lang ang 'legitimate 10 seater vehicle' dyan sa pinas??

so mga magkano ang magiging presyo nyan atsaka nung mga hindi pumasa sa measurements?

may mali yata taxation laws na yan....

[ssaloon]

revo, from 650k magiging 950k na ang MSRP

eh kung bawas-bawasan kaya nila ang pangungurakot ng gobyerno imbis na patayin nila ang automotive industry para umangant naman ang standards of living natin??!?

my friend from toyota said that they stopped producing units of the revo na kasi di na magiging affordable or practical para sa target market nila. with that kind of money, they can buy the mini suvs na eh.

[OTEP]

Stoopid talaga ang taxation dito sa atin. Palibhasa they're all covering up for their corruption.

Yung mga pang-masang sasakyan lalong nagmahal, yung mga 4x4 na pang-trabaho (at pang-laro) sana nawalan ng 4x4 system.

What's next? They're gonna tax pick ups based on the size of their beds? Grrrr....

[HBOY]

tsk..tsk..tsk. ayusin muna nila taxation.. langya... they're basing the vehicle taxation on engine displacement alone.. meaning basta over 2.0L ka.. luxury vehicle ka na.. regardless kung 3.0L diesel ka naman...

in other countries i believe they are basing their vehicle taxation according to gross weight as well as categories of the vehicles itself.. masyadong general kasi ang classification natin.. langya..

bwiset!

[ssaloon]

they're gonna kill the goose that layed the golden egg.

[HBOY]

i agree with you ssaloon.... the mainstream vehicles used by the massess would be too expensive for them. ano na babagsakan nyan??.. e pati nga pagimport ng surplus parts tatanggalin nila.. so nde rin makakagawa ng mga "jitney" or other chopped vehicles for their use... if only they could bring down prices.... tsk..tsk..tsk. unfortunately.. the government is looking for places to get their lost revenues in the wrong places... kung kunin kaya nila yun sa mga kinurakot nila!.. bwiset!!!!!!!!!!!!!!!!!!!!!!

[IMm29]

19 models were re-measured, and 18 failed? yikes! dami palang models ang exempted pala sa excise taxes. kala ko mga around 10 lang. 17 of 19 lang ang maisip ko. i wonder what the others are.

1. Expedition
2. Suburban
3. Tahoe
4. Venture
5. Carnival
6. Starex
7. Crosswind
8. Revo
9. CR-V
10. Serena
11. Vito
12. Space Gear
13. L300
14. L300 Exceed
15. Pajero
16. Patrol
17. Trooper

[5Speed]

tsk tsk tsk.... kawawa naman ang pinas...sariling gobyerno ang sumisira....

[zero]

sinong sira ulo kaya ang bibili ng fx na halos P1M??

paging Dept. of Finance...

[kevinp]

I think its just right that they plugged the 10-cheater tax exemption loophole. Tignan nyo nga yung CR-V. makakasakay ba ng 10 people yun!? The sad thing is, it takes something as bad and obvious as the CR-V passing off as a 10-seater for the people in government to notice. Even before it was launched, Honda was already making waves about its new CR-V that's gonna be cheaper than the old one because it seats 10 people. IMO, the gov't should've done something about it even before it came out (i.e. initial measurement). Siguro fault din ng gumawa ng unang Revenue Regulation (RR 2-1997 yata) because di well defined what a "seat" is.

I read RR 4-2003 and IMO it makes sense. I'm glad that the government is finally (albeit late) doing something about the 10-seater rule. I think this new tax scheme will bring maturity to the automotive industry. Stricto (maybe too strict) na yung definition ng "seat"

For a seat to be accepted as a "seat" it has to pass the following:
1. Access to the seats must be through a side-door and not the rear of the vehicle (sapul ang mga AUV)
2. When a passenger is occupying the seat, the backrest must at least be shoulder level (isa pang contra-AUV)
3. The seat must have enough headroom for a passenger and must not be obstructed by air-con vents, lights, etc.
4. The floor of the seat must be flat (ino transmission tunnel?) and must enable the passenger to place his/her feet on the floor in a natural position.
5. i forgot, meron pang iba.

If the "seat" does not pass any one of the above, it is not a seat. Meron din specific measurements ang seats (dimensions) and a half-seat is not considered a seat. As a result, vehicles with 9 seats and a half-seat or 9 seats and 2 half-seats will not be exempted from excise tax.

[kevinp]

Senate also passed the new Value-based taxation law yesterday. Taxes are no longer based on displacement, no of doors, and/or no of seats. This in effect makes the issues discussed in the article in the first post of this thread obsolete.

Retail price of up to 600k: 2% tax
600k-1M: P12,000 + 20% of Value beyond 600k
1M - 2M. P92,000 + 100% of Value beyond 1M
greater than 2M: P1.09M + 150% of value beyond 2M

Tataas nga ang pirces pero it still makes sense to me. I think this will promote mga bare-to-the bones models ng mga AUV and cars para below 600k yung price.

I think the main problem here would be how often they move the price brackets in relation to inflation. Mejo mababa nga ang 600k na initial bracket. sana 2% tax on all vehicles below 1M na lang. Mahal na nga ngayon kahit mid-size sedans e.

[green]

AFAIK, hindi yata retail price yung basis ng new taxation scheme. I think it will be based on wholesale price . I was talking to someone in Toyota about this and they said na mumura yung Altis ng about 150k after this new law. Kaya on hold muna yung car shopping ko...

[Kennon_road]

Pag na implement yan di talaga ako bibili!!!, ok lang sana kung
may mapupuntahan yung tax, gaya ng maayos na traffic, kalsada,
para lang maimprove yung transportation system sa Pinas eh ang kaso ginagawa lang to para may cource of revenue ang hinayupak na gobyerno para mapagtakpan yung corruption nila #%$%^& .. puso ko...:mad:

[pajerokid]

I really find it stupid that such a big not to mention un-environmentally frienly SUV like the suburban will be exempted. What? were all gonna drive buses now?

[Kennon_road]

Originally posted by Kennon_road
Pag na implement yan di talaga ako bibili!!!, ok lang sana kung
may mapupuntahan yung tax, gaya ng maayos na traffic, kalsada,
para lang maimprove yung transportation system sa Pinas eh ang kaso ginagawa lang to para may cource of revenue ang hinayupak na gobyerno para mapagtakpan yung corruption nila #%$%^& .. puso ko...:mad:

source of revenue pala...

[BlackMagic]

PK, i think gusto makatipid ng mga officials kasi sila lang bibili ng SUburban.

[kevinp]

PK, dun sa bill na pinass ng senate, walang auto na exempted sa tax. kahit 20 pa ang seating capacity, may tax parin.

Green, talagang mumura ang mga passenger cars ngayon kasi di naman exempted sa tax yan. the current tax scheme is 10% Vat + 35% tax for 1600-2000cc cars, 50% for 2000cc-2700cc and 100% for cars with greater than 2700cc displacement.

That means yung sticker price ng altis ngayon na around 940k is retail price of 648k + 65k VAT + 227k Excise tax.

With the new scheme by the senate, sticker price ng Altis would be 648k + 65k VAT + 12k + 20% of 48,000 (Value of car above 600k) = P734,600 for the Altis 1.8

Sample computation lang po ito.

Sample kung Revo VX2200 naman assuming a current price of 850k (no excise tax). The 850 includes a 10% VAT so the actual price of the unit would be something like 773k.

The new price would be 773k + 77k VAT + (12k + (20% of 173k)) = 896,600.

Di gaano kalaki ang itataas ng price kung below 1M yung price ng sasakyan.

[kevinp]

Kung expedition kaya:

Assuming 1950k yung current sticker price (including 10% VAT and 0% Excise Tax).

Breakdown is 1773k + 177k VAT

New price would be 1773k + 177k + (92k + 100% of 773k) = 2815k for an Expedition!

[HBOY]

Originally posted by kevinp
PK, dun sa bill na pinass ng senate, walang auto na exempted sa tax. kahit 20 pa ang seating capacity, may tax parin.

Green, talagang mumura ang mga passenger cars ngayon kasi di naman exempted sa tax yan. the current tax scheme is 10% Vat + 35% tax for 1600-2000cc cars, 50% for 2000cc-2700cc and 100% for cars with greater than 2700cc displacement.

That means yung sticker price ng altis ngayon na around 940k is retail price of 648k + 65k VAT + 227k Excise tax.

With the new scheme by the senate, sticker price ng Altis would be 648k + 65k VAT + 12k + 20% of 48,000 (Value of car above 600k) = P734,600 for the Altis 1.8

Sample computation lang po ito.

Sample kung Revo VX2200 naman assuming a current price of 850k (no excise tax). The 850 includes a 10% VAT so the actual price of the unit would be something like 773k.

The new price would be 773k + 77k VAT + (12k + (20% of 173k)) = 896,600.

Di gaano kalaki ang itataas ng price kung below 1M yung price ng sasakyan.

sir kevin... walng differentiation kung gasser or diesel??.. lugi naman ata mga dieselers... eh usually.. you get high displacements for diesel.. and yet they are not necessarily pegged as luxury vehicles.... the taxation should be based probably on classification or gross weight....i think....