A U T O     B U Z Z

Philippine Truck Manufacturers Unhappy with New Tax Scheme

MANILA - Truck manufacturers said the market will hold off purchasing commercial vehicles, previously exempt from excise tax, after the issuance of Revenue Regulation 4-2003 by the Bureau of Internal Revenue (BIR), which slaps excise tax to these vehicle segments.

In a statement, Truck Manufacturers Association (TMA) president Elizabeth Lee said buyers will hold off purchases of the affected models in anticipation of the more favorable price levels under the value-based excise tax scheme.

"Within this period, which may take several months until Congress passes the new law, we foresee a drastic reduction in the importation, production and sale of these vehicles," Lee said.

According to Lee, the previously exempt commercial vehicles (mostly light commercial vehicles) comprised 75 percent of the local market. These will now be subjected to a two-phase price adjustment, first under the existing engine-based excise tax structure and second, under the proposed value-based.

"The combined effect of this double-whammy within the same year will be grievous setback for all members of the industry," the statement said.

As a result, TMA has sought for a four-month reprieve to minimize the expected disruption in the market or until the new bill that is pending in Congress which seeks to revise the excise tax on motor vehicles from engine-based to value based is passed.

Truck manufacturers favor the pending bill in Congress because it would be the lesser evil of the two.

The legislative measure would only slap a minimum of 3 to 15 percent excise tax on light commercial vehicles with a 2,000 cc engine but the BIR Revenue Regulation will slap as much as 35 percent for the same vehicle.

[ BUZZ MAIN ]