This will take effect as soon as the bill restructuring excise taxes on automobiles is enacted. On Monday night, the Senate approved Senate Bill 2517 or the Act Rationalizing the Excise Tax on Automobiles on third and final reading.
A bicameral conference committee will now be convened to reconcile the Senate and House versions, although there are no major differences between the two.
The measures seek to convert the system of imposing an excise tax on automobiles (cars, vans, pick-ups, AUVs, and sport utility vehicles) based on engine displacement or seating capacity to a scheme based on the manufacturer’s price.
Thus, AUVs like Toyota Revo, Mitsubishi Adventure, Honda CRV, and Isuzu Hilander, and sport utility vehicles such as Ford Expedition, Mitsubishi Pajero and Nissan Patrol will soon be covered by excise tax and their selling prices will go up.
On the other hand, prices of cars like Toyota Corolla, Mitsubishi Lancer and Honda Civic will go down. At present, cars are levied a 15 percent rate but this will be cut to two to three percent for most variants.
As the bill covers all types of vehicles regardless of engine displacement, about 75 percent of vehicles will no longer be tax-free. This assures the government of additional revenues of up to P2.5 billion. Under the current system, only 25 percent of vehicles are taxed.
The approved tax rates under SB 2517 were as follows: two percent for automobiles whose manufacturer’s price is P600,000 or below; P12,000 plus 20 percent in excess of P600,000 for those costing P600,000 to P1 million; P92,000 plus 100 percent in excess of P1 million for those costing P1 million to P2 million, and P1,092,000 plus 150 percent in excess of P2 million for those costing more than P2 million.
Since most AUVs are in the P400,000 to P700,000 manufacturer’s price range, there will only be a small increase in AUV prices. The ones whose selling prices are expected to go beyond the P1 million level are Honda CRV and the high-end Isuzu XUVi turbo.
But SUVs, described by car dealers as toys for the rich, will cost at least P800,000 more. A Nissan patrol, now being sold for P1.95 million, would sell for P2.75 million, including excise tax, while an Expedition, now costing P2 million would cost P1 million more.
In the case of Toyota Corolla 1.6, the price would be cut from P790,512 to P701,000, or about P90,000. — With Rocel Felix