CAMPI seeks dialogue on excise tax exemption

MANILA, Philippines — The Chamber of Automotive Manufacturers of the Philippines (CAMPI) will seek a dialogue with the government regarding the proposal to remove excise tax exemptions on pickup trucks.

“We will seek opportunities to present/discuss our position with concerned legislators and appropriate government agencies,” CAMPI president Rommel Gutierrez said in a text message to reporters.

According to news reports, the House of Representatives’ Committee on Ways and Means approved last week various measures, including the removal of the excise tax exemption of pickup trucks under the bill formerly known as the Passive Income and Financial Intermediary Taxation Act (PIFITA).

In a press conference for this year’s Philippine International Motor Show (PIMS), Gutierrez affirmed the auto industry’s concerns on the addition of taxes as it will mpact prices.

“We are still recovering, we have not yet recovered fully to pre-pandemic levels,” Gutierrez said.

He said pickup trucks account for around 17 percent of total vehicle sales in the country.

He expressed the need for the industry and government to work together to address concerns on the additional excise taxes for vehicles.

“It’s really a collaboration between the government and private sector. So we want to strike a balance of government intention and the situation of the auto industry,” Gutierrez said.

The Department of Finance (DOF) earlier said the removal of tax exemption on pickup trucks under the remaining tax reform package would provide P53 billion in additional revenues for the government.

In a letter to House of Representatives ways and means committee chairman Rep. Joey Salceda, Finance Secretary Benjamin Diokno said the DOF has proposed additional measures under Package 4 of the tax reform package or PIFITA.

Backed by the Department of Trade and Industry (DTI), Diokno is pushing for the removal of the excise tax exemption of pickup trucks under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

TRAIN was the initial package of the tax reform program of the Duterte administration.

Pickup trucks were granted special tax treatment for their utility as workhorses for small business owners and professionals.

“But DTI has observed that manufacturers modify pickup trucks to serve as passenger, leisure or sports utility vehicles. This scheme allows manufacturers to circumvent the provision of the law and purpose of the exemption,” Diokno said.

“Subjecting pickup trucks to excise tax will result in an estimated additional revenue of P52.6 billion until 2026,” he said.

PIFITA aims to simplify the fiscal structure for passive income, financial services and transactions, as the reform seeks to cut the number of tax rates for such instruments.