Vehicle Excise Tax News

[boybi]

meron naman talagang tax ang mga accessories. basta meron receipt, meron tax.

[kevinp]

i think wowiesy was referring to excise taxes on accessories. currently, VAT lang yata ang binabyaran dyan.

[boybi]

VAT and Sales/Income Tax.

[boybi]

also, pano pala papatawan ng excise tax ang mga accessories? gagawan din nila ng categories? like performance parts has a higher excise tax than cosmetic parts?

[mbt]

kevinp,

you're right there on all your points...

but i think the rates for Senate Bill 2517 are too prohibitive. to review:

"Under Senate Bill 2517, vehicles with price of P600,000 and below would be slapped with a two percent excise tax; over P600,000 to P1 million would be slapped with P12,000 plus 20 percent in excess of P600,000; over P1 million to P2 million would be imposed with P92,000 plus 100 percent in excess of P1 million; and over P2 million would be slapped with P1.092 million plus 150 percent in excess of P2 million."

i'm not sure if it's correct to compare with prices in other countries, but let us say that a stripped Patrol would sell for 1.5M (a Patrol M/T currently costs <1.8M, and the lowest-end Patrol in Australia costs 1.65M pesos). after taxes, it would work out to almost 2.1M pesos, a very significant difference.

SUVs are more expensive than sedans of the same relative class, and with the weak peso, i think stripper large SUVs, including the Pajero, Trooper, Patrol, etc, would have a pre-tax price of 1.4M (just under US$26,000, which is very cheap for a base model for this class of SUV in the states, i think) at the very least. after taxes, the cheapest large SUV would come out to almost 1.9M, and this is a model with very basic features. so even if manufacturers strip all their SUVs to lower the base price, the final price would still be prohibitively expensive.

this new tax law strikes me as specifically targeted towards making SUVs unviable precisely for this reason, that even stripped large SUVs would cost above 1M pesos...incidentally, the tax on the 1M-2M range suddenly jumps to the sky in relation to the 600K-1M range. hmmm...

to reiterate, i support the abolition of the senseless 10-seater exemption and support the shift to value-based taxation. the new tax law does that, but it shoots itself in the foot by imposing prohibitve levels of taxation.

i think the original proposal of the Senate Committee on ways and means (or is it the "House version"?) is far more reasonable:

"Under the committee report, vehicles with a price of P500,000 and below would be slapped with a three percent excise tax; over P500,000 to P1 million, would be slapped with and excise tax of P15,000 plus 15 percent in excess of P600,000; over P1 million to P2 million would be imposed with P90,000 plus 30 percent in excess of P1 million; and over P2 million would be meted P390,000 plus 50 percent in excess of P2 million."

[usokpower]

Originally posted by mbt
the CR-V argument and the 10-seater argument are on two different levels, two different matters. one is about whether or not Honda was "right" (or wrong) in AUV-izing the CR-V in relation to the government's allegation of being cheated of tax revenue; the other is a commentary about the inanity of the tax law in general.

the first is my opinion regarding Honda's gambit with the CR-V, and i'm saying that Honda is giving the consumer a good value *under the current circumstances*. as a result of the cheaper price, more units were sold and so the net collection of the government is increased compared to if the CR-V were sold at 1.3M to begin with. however, my argument for the merits of the AUV-ization of the CR-V is only in terms of tax revenue; i hold that the CR-V has become a much inferior vehicle by being made AUV-ized. bottom line: the 10-seater CR-V brought it within reach of the market (which is good), but it is not the optimal solution, and is in fact, an unsafe one, but car manufacturers really have no choice.

the second is my opinion that removing the 10-seat rule is the proper way to go (because cramming 10 seats into a vehicle designed for 5 or 7 at most [this includes such vehicles as a patrol, a venture, a pajero, etc... not just the cr-v] destroys comfort and makes the vehicle more unsafe for passengers). however, putting prohibitive taxes as a replacement is definitely NOT the way to go for the reasons i cited above.

therefore, my position may be better summarized as (emphasizing safety since you do):

1) Honda did consumers (and also the government, in a sense, but this is debatable) a service with the CR-V AUV. but safety is compromised by the AUV-ization

2) The government should amend the current tax law and promote the safety of the passengers however majority will be affected since not everyone can afford to buy a SUV

3) therefore, what government should do is to impose equitable levels of taxation for ALL types of vehicles and not give preferential option to sedans at the expense of SUVs. what would thus happen is that the vehicles would all be safe (since passengers are sitting as they should) and the government would collect greater net tax since the volume of sales would increase.

at least, that's what i think is wrong, and what i think should be done, and why.

Ok now I get your point. But like what mr kevin is saying vehicles are taxed according to their value under the proposed bill. Unfortunately, Mahal ang suv compared to a car. If the new tax law will take effect, price for sedans will drop and price for suvs will increase.

Therefore, bad news for SUV buyers :mad: good news for car buyers.

[OTEP]

Mahal ang SUV's because mahal talaga ang cost of production nila. Underbody armor, 4wd systems, boxed frames, etc. But then again those are necessities if you intend to use the vehicle for its intended purpose.

[MAXBUWAYA]

siguro maraming model o SUV na lalabas na walang mga power amenities with rim wheels etc. Baka kahit aircon magkaroon ng optional.

d ba sa ibang bansa kahit dashboard clock ay optional?
kasi alam ko base sa value ang taxation nila.

Pabor ako sa new taxation na ito. I believe in the end consumer ang panalo

pero pabor ako dito sa new taxation na ito

[wowiesy]

now that the 2 bills are up for bicam deliberations.. its a whole new ball game.. it's another round of wheeling and dealing ang greasing...

i think that the house version is very sound... and the senate version is there as leverage...

leverage? so that lobbyists would all cram in their "lobbying" and "dealing".. putting the pressure up... we're in the final stages of the process na... so the concerned groups would give in to giving up more in terms of "lobby money"...

the whole point of the bicam deliberations is to agree to a compromise between the house and the senate version... at what level of lobbying would the senate agree to a compromise then?


but then again... this is just speculation...


on the comment of SUVs / AUVs being more and more a necessity with all the floods and bad roads we have...

i agree totally... but i guess the situation is that the years of corruption is really taking its toll.. the govt needs money now.. to catch up on long overdue stuff... even if it collects the excise taxes now.. it won't for sure be used to improve roads and drainage systems... and the continuous abuse of govt funds doesn't help any...

[wowiesy]

reasons why the senate version with the seemingly "ANTI-SUV" tax structure seems to be the best thing:

1. the DOF would love this since they get bigger taxes.. assuming sales levels constant... of course sales would go down for the first few months of the implementation... but if you badly need a vehicle... you would sooner or later purchase it and pay the price... in the long run it will still generate revenue for the govt... and i'm sure it will take a long time ( years) before they review if their initial assumptions are accurate... only if the consumers really stop purchasing SUVs and not much sales volume at the entry level (under 600t or under 500t) is generated will they review this...

2. it makes owning an SUV more a of a elite thing... sikat sila since they will be the only ones buying the SUVs (since the govt pays for their vehicles anyway and not coming from their own pockets and i'm not sure if govt purchases of vehicles are also subject to excise tax)

3. election related fund raising would now be easier... they'd know easily who to kidnap... dahil nga yung mga certified rich lang talaga ang makaka afford ng SUV... di na sila magkakamaling mag kidnap ng akala nila'y mayaman eh yun pala ay maporma lang...

on the other hand... here's what we can do...

we can get good friends who are diplomats (ang daming embassy ang naka setup dito sa pilipinas)... when you're buddies enough.. ask them a "favor"... have them purchase an SUV.... then after a few months in their use, you offer to "buy" it from them...

diplomats are not covered by taxes.... and the increasing number of vehicles i see on the roads with eu plates under the ordinary plates get me guessing kung ginagawa na itong raket...

[tebs]

i believe that if you buy a "used" vehicle from a diplomat, you will also be obliged to pay whatever taxes that is due that vehicle. which was previously exempted of the local tax.

on the other hand, quoting maxbuwaya about stripping of vehicles of its amenities. i would like to point out the base model of the jimny which doesn't have a clock, power windows, doorlocks, sidemirrors. and not even a full carpeting inside! (as told in their brochures)

[Automahn]

Originally posted by kevinp
...kasali lang sa bagong tax scheme are "Automobiles" as defined by BIR. AFAIK, pickups, LCVs (and siguro yung ADMax) will continue to be Excise Tax exempt.

Naisahan pala pinsan ko, napabili sya ng Strada 2 weeks ago kasi tataas daw ang presyo pag nabago ang tax scheme. :mad:

[OTEP]

The "SUV's are for the elite" thing really sucks. Buti pa nung 80's. Konti lang kaming nagpapantasya na magka-SUV. Now every Tom, Dick, and Harry wants one. Hay life nga naman.

The base model of the Pajero really looks good, though. Pati yung base model LC100.

[MAXBUWAYA]

if i were tom dick and harry

id sure be a dick.

anyway bababa kaya presyo ng jimny?
SUV ba calssification nito?

[OTEP]

Mura lang puhunan sa Jimny. I think hindi siya tataas.

[tebs]

right now, ang base model price nila is 560K.

but i believe after the tax law changes, it will still go down! due to it being a 1.3L, less than 600K price right now ( to think that that already has tax included in that price)

[mbt]

maxbuwaya,

sa tingin ko kahit stripped to the bone yung SUV, the base price will not drop below 1.3M or 1.4M (depending on the vehicle, siguro 1.3M for a pajero/trooper and 1.4+M for a patrol), and these are already very generous estimates. if so, then the after-tax price of a stripper SUV would be at least 1.692M to 1.892M... which seems very unreasonable for an extremely basic truck. dagdag mo yung mga basic power features, clock, radio, aircon, etc etc, and the price will come out to almost 2M or more :whoa:

mahal talaga yung mga large SUVs even in other countries... we won't be seeing stripped Patrols with a base price of P999,000 (to escape the tax) anytime soon.

but that gives me a thought... given that this tax law effectively discriminates against large SUVs (regardless of its "luxuriness" or lack of it), perhaps it would make more business sense for the manufacturers to bring in the smaller, less expensive mid-size SUVs here (4Runner/Hilux Surf, Pathfinder, montero sport, etc). i think those SUVs would stand a better chance of having an after-tax price of below 1.5M. plus, they now have the option to bring in gasoline V6 or diesel powerplants (if available) in those trucks

[kevinp]

mbt,

siguro nga kung ganyan yung price range na sinasabi mo, talagang prohibitive. I was imagining that the luxuries and amenities na nilalagay sa mga SUVs in the market ngayon is worth around 500k-700k.

Well, I think this is another problem with regards to the tax law. How often will the government review the price range ng mga sasakyan na itatax. At the rate this country is going, the Altis (assuming its price would be lowered to around 700+k after the tax) would probably have a retail price of more than 1M in 10-years' time. E di sangkatutak na yung tax by that time.

OT: yung central bank regulates the car plans of mga top execs ng mga banks. When my dad was working for this small bank last year, inofferan siya ng car plan. Pero dahil sa batas ng BSP, 750k lang daw yung max (yung butal will be paid out of the exec's own money) dahil ayaw ng BSP na masyadong "luxurious" yung mga sasakyan ng mga bank execs. This law was put into effect nung mga early 90's when the price of a Galant/Corona was around 700+. Ten years after, di parin nagbabago yung rules ng BSP.

Ganito rin kaya mangyayari sa excise tax law na ito?

[triggerman]

BUT, how do you define luxury? It is the engine displacement or the price that dicates the kuxuriness of a vehicle. The current tax law a vehicle to be luxurious if it goes over a certyain engine displacement. Hell with it ... that is only advantageous to the Japanese and Korean manufacturer's. I guess everyone knows that the Asian cars has an average engine displacement of 1.6L while the US and Europeans are at the 3.0L. And their prices could be relatively close. What makes them a big difference over here in terms of prices is that the Japanes/Korean gets away with a small tax base while the US/European gets slapped with a kuxury tax.

Now, pantay pantay ang laban. Eveyrthing is dictated by the price as it should be be.

IMHO.

[mbt]

hmm... i do not think a stripped SUV is a luxurious vehicle by any means, yet the new tax law seems to count them as such... which leads me to conclude na hindi pantay-pantay yung labanan ;)