Senate may restore tax exemption of AUVs

There is a new move in the Senate to retain the tax exempt status of Asian utility vehicles (AUVs).

Sen. Gregorio Honasan is urging the government to "conduct a thorough study on the impact of keeping the AUV’s tax-free status or limit their excise tax to between one and three percent for models priced at P600,000 or less, in order to keep AUVs affordable to buyers."

According to Honasan, "AUVs are now widely used as an alternative mode of transportation that is a lot cheaper than a taxi."

Honasan observed that many retirees and returning overseas Filipino workers buy AUVs for their new source of livelihood.

Honasan warned that "if sales of AUVs decrease, many workers in AUV assembly plants would join the ranks of the unemployed. It would also spell the end for the entire automotive industry."

Honasan emphasized that "it is certainly unthinkable that the government would want to hamper the growth of the AUVs when it is keeping the automotive industry afloat."

Honasan cited statistics that show that AUVs account for 43 percent of total vehicle sales in the country.

At the same time, Honasan expressed preference for keeping the current excise system based on fuel type and engine size instead of shifting to the value-based on wholesale price excise tax system.