Vehicle Excise Tax News

**artpogi** · August 5th, 2003 09:26 AM

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** · August 5th, 2003 10:06 AM

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** · August 5th, 2003 10:07 AM

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** · August 5th, 2003 10:21 AM

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** · August 5th, 2003 10:48 AM

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** · August 5th, 2003 10:58 AM

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

**HBOY** · August 5th, 2003 11:05 AM

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** · August 5th, 2003 11:29 AM

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