DOF, Congress at odds over auto excise tax

The Department of Finance (DOF) and Congress are at odds over the deferment of the controversial revenue regulation which will remove the exemption of Asian utility vehicles (AUVs) from the excise tax.

Arriving from his recently-concluded European roadshow, Finance Secretary Jose Isidro Camacho told reporters over the weekend that he is not inclined to approve the fifth deferment of the revenue regulation issued by the Bureau of Internal Revenue (BIR) despite the aggressive lobby by the local automotive industry.

Intense meetings were held last week among finance and trade officials, industry representatives and legislators, leading to the resolution filed by Rep. Julio Ledesma that sought the deferment of the BIR Revenue Regulation 4-2000 until a new excise tax law has been implemented.

According to Camacho, however, the government has already done everything that it could for the automotive industry.

"It’s too much. They (automakers) have already benefited (from this loophole) for too long," Camacho said, referring to the exemption of AUVs from the excise tax.

When RR4-2000 was issued, however, AUVs were re-measured by the BIR and only Chevrolet’s Urvan actually qualified for exemption. All other AUVs manufactured between Sept 8 and Oct 15 will be covered by the excise tax.

Camacho said RR 4-2000 was clear and the DOF has already issued another revenue regulation that removed all ambiguities in the transitory period.

In effect, all AUVs that are already in the inventory of vehicle manufacturers by Sept 8 would be covered by the old revenue regulation.

When RR4-2000 took effect on September 9, Camacho said all vehicles manufactured after the September 8 cut-off date would be covered by the regulation until the implementing rules and regulation of the new excise tax law on automobiles takes effect on or before Oct. 15, 2003.

Ledesma, however, wanted the DOF to defer RR4-2000 until the DOF has already issued the IRR. In effect, AUVs would continue to be exempted from the old excise tax law until the new law is implemented.