CBU duties have little impact on revenues

    Computation guidelines. Safeguards will not form part of the landed cost which is the basis in computing the VAT.

    Collection of the provisional safeguard duties on imported sedans and light commercial vehicles (LCVs) started Feb. 1, 2021 with the issuance by the Bureau of Customs (BOC) of a customs memorandum circular (CMC).

    But the P70,000 charged per unit for cars and P110,000 per unit for LCVs will not have any effect on the value-added tax (VAT) and excise taxes which means little impact on government coffers.

    The straightforward collection per unit of the provisional duties to be shouldered by the importer will cushion, to some extent, the increase in the prices of these vehicles.

    In CMO 6-2021, the BOC said the imposition of the provisional safeguard duty shall be reckoned from the issuance of the CMO, which was Feb. 1, 2021 as posted on its website.

    The Department of Trade and Industry issued the order on Dec. 29, 2020.

    The BOC added the provisional safeguard duty imposed and collected shall not form part of the landed cost that is used as basis for the VAT to paid upon importation.

    The BOC said for the purpose of computing excise tax, the provisional safeguard duty shall be deducted from the net importers price and suggested retail price.