July 19, 2018, 3:58 am
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Lower tax take from auto

Senate is looking at ways how the excise taxes on automobile could reconcile the position of the industry and the House version despite a lower tax take that would result from the former’s offer.

Sen. Sonny Angara meanwhile said he supports the exemption of milk from the list of products to be affected by a planned excise tax on sugar-sweetened beverages (SSB) 

He added the Senate is considering sugar content and not volume as basis in slapping the tax, and instead of P10, would adapt a progressive system.

Angara, Senate ways and means committee chair, said the 7-tier tax proposal of the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) would result to P11 billion to P12 billion in tax take compared to House version’s five-tier, which would generate P14 billion in revenues on the first year alone. 

“There ’s (revenue estimate) on the second year which the Campi proposal does not have,” said Angara on the sidelines of the opening of the National Retailers Conference on Friday.

Angara said Campi had presented the impact of its tax proposal, which would only lead to P200 per month additional amortization on a Vios on a 10-year financing.

But according to the senator, the industry is not fretting so much over the effect of the tax on entry-level vehicles but is concerned more on the luxury segment due to the ascending nature of the proposed taxes. The higher the value of the vehicle, the higher the tax.

“They said the taxes would kill the (luxury) segment and could lead to smuggling. But on the (low-end), the effect is quite small,” said Angara.

He added: “We have to look at the figures; we have to balance the (interests)…”

The highest tax tier under the industry proposal is for vehicles valued at P3.1 million (net manufacturer’s price) to be slapped a tax of P1.418 million pus 90 percent of the value in excess of P3.1 million. 

The House version is similar except that a new rate would be in effect on the second year.

The Campi proposal has two more tiers in between the top tier and the low tier.

On milk, Angara cited the need to make the language of the SSB tax clear, saying the current wording is ambiguous.

“There is a phrase there which states `all milk products without added sugar…’ the implication (of that phrase) is that all those with added sugar should be taxed,… so there is a debate there which are actually covered,” he added.

He said with the plan to adopt sugar content as basis, “everyday” type of milk which Filipinos consume should “fall on the lower end or none at all.”

“The P10 I believe is on the high side…we are working on the numbers. We just agreed in principle but we are moving away from volume but still on sugar content… towards a scale,” Angara added. This means the higher sugar content, the higher the tax.
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