Debate on used truck importation rages on

To ban or not to ban, that is the question.

The issue of used truck importation is now the subject of a raging debate between industry players, with one side calling for a total ban while the other side calling for an exemption.

The influential Truck Manufacturers Association (TMA) of the Philippines, in a letter to the press, said it is pushing for the total ban on the importation of used vehicles – from cars to trucks. It said it is affecting the industry by depriving legitimate manufacturers the possible earnings from buyers of used cars and trucks.

However, the Association of Logistics Providers of the Philippines (ALPP), a group supporting the importation of used vehicles, particularly trucks, criticized the TMA, accusing it of exerting too much pressure on the government on the issue. It said what TMA is doing is detrimental to the interest of small- and medium-scale businesses.

In a statement, Martin Noval, ALPP president, particularly cited the truck assemblers’ move to put pressure on the Department of Trade and Industry (DTI) to enforce the ban and its plan to ask the Land Transportation Office (LTO) stop the registration of used vehicle imports.

Noval said the latest move by the truck assemblers is another form of harassment meant to discredit the importation of cheap but reliable trucks to the country.

He said despite the presence of truck assemblers in the country for several decades, it has not helped small- and medium-based entrepreneurs owing to the high cost of brand new trucks.

The logistics association, Noval said, has been utilizing imported trucks from Subic which account to about 85-90 percent of trucks delivering dry goods to suppliers and dealers in Metro Manila.

Those who do not have the opportunity to own brand new vehicles purchase trucks and even construction equipment from Subic which are four to seven times cheaper than brand new ones.

The DTI has decided to liberalize the entry of used light truck imports through the Subic Bay freeport. These trucks primarily cater to the transport needs of small and medium enterprises and local government units for delivering basic goods and services from the urban centers of the metropolis to the province and vice versa.

Meanwhile, the Association of Philippine Auctioneers (APA) decried what it describes as a squid tactic being employed by car assemblers and dealers when it accused importers of second-hand vehicles and trucks from Subic of non-payment of taxes.

Romulo Armamento, APA president, said that contrary to the car dealers’ 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 Investment (BOI) ordered vehicle assemblers to settle unpaid duties. In fact, the issue has been brought to Congress after the House subcommittee on customs, tariff and related laws, citing BOI data, revealed that several automakers were found to be delinquent taxpayers.

House sub-committee chair 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.

"The car and truck industry is a pampered industry. It turned out that they are ones involved in various tax cheating schemes and yet they have the gall to dictate to the government their conditions," Armamento said, adding that contrary to the car dealers’ allegation, the auction industry had remitted to the government P3 billion worth of duties and taxes.