Recto: Excise tax bill approved next week

The Senate and the House of Representatives are expected to approve the final version of the excise tax bill shortly, Sen. Ralph Recto said yesterday.

"We will have only one or two meetings with our House counterparts and recommend the final version possibly next week," he said.

Recto chairs the Senate ways and means committee and is principal author of Bill 2517, his chamber’s version of the excise tax measure.

He heads the five-member Senate panel in the bicameral conference committee that will reconcile the senators’ and congressmen’s versions of the excise tax bill.

Other senators in the panel are Joker Arroyo, Manuel Villar Jr., Edgardo Angara and Sergio Osmeña III.

The enactment of the tax bill will result in the imposition of an excise tax on Asian utility vehicles, pick-ups and sport utility vehicles, and the reduction of such tax on cars.

The final measure would convert the manner of imposing the tax from the present system that is based on engine displacement or seating capacity to one based on the manufacturer’s price.

Recto said the present system is unfair in that it exempts from the excise tax vehicles for the rich such as Ford Expedition, Chevy Suburban, Mitsubishi Pajero, and Nissan Patrol, while it levies a 15 percent rate on cars like Toyota Corolla, Honda Civic and Mitsubishi Lancer.

Even among cars, there is an inequality, he said, pointing out that a P1.4 million 1.6-liter BMW is taxed at 15 percent just like a Corolla 1.6.

He said since the present scheme exempts 10-seaters like AUVs vans and sport utility vehicles from the excise tax, 75 percent of all vehicles are not recovered by the levy.

He stressed that the proposed new system will cover all vehicles, from cars to SUVs, since it is based on the manufacturer’s price.

SUV makers and importers are lobbying with members of the bicameral conference committee for the reduction of the proposed tax rates for their luxury vehicles.

They claim that the rates will make SUV prices too prohibitive even for rich people.

It was Osmeña who suggested the high rates. He said the rich should have the money to pay for luxury.

Under the Senate version, a Ford Expedition, now selling for about P2 million, would cost P1 million more. Under the House version, it would cost an additional P400,000. – Jess Diaz