Romulo Armamento, APA president, said that contrary to the car dealers association’s threat, it was the car industry which is under attack after it was learned that car assemblers in the country were involved in several tax avoidance schemes.
As early as October last year the Board of Investments (BOI) ordered vehicle assemblers to settle unpaid duties. In fact, the issue has been brought to Congress after the House sub-committee on Customs, Tariff and Related Laws, citing BOI data, revealed that several automakers were found to be delinquent taxpayers.
House sub-committee chairman Rep. Jesli Lapus, in a recent public hearing, questioned why, despite enjoying tax benefits from the government, car and truck assemblers in the country still managed to avoid paying duties.
He even required the assemblers to submit to Congress the list of their tax payments for the past several years they were found to have been violating provisions of the Motor Vehicle Development Program.
It was learned that car manufacturers have actually become "indentors" when their importations were mostly in completely built-up (CBU) form but declaring them as either complete knocked-down (CKD) or semi knocked-down (SKD) to Customs, thus avoiding bigger payments. Taxes being paid for a CBU unit, or almost complete unit, are much higher than a CKD or SKD.