News

How Will The New Excise Tax Affect The Retail Prices of These Senators' Cars?

The Senate gets credit (or blame) for easing excise taxes on luxury vehicles. What will it cost them if they buy the same cars this year?
IMAGE Entrepreneur.com.ph
Comments


.

One of the oddest outcomes of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which came into effect last January 1, 2018, was the lopsided impact of the new tax law on low-priced and high-end vehicles.

While the new law increased the excise tax on low and mid-priced cars, it lowered excise taxes on luxury vehicles, especially those costing more than Php4 million. This went against the intention of the Department of Finance which wanted progressively higher taxes on more expensive vehicles.

ADVERTISEMENT - CONTINUE READING BELOW

Blame for the surprising result has been pinned on the Senate, whose version of the TRAIN bill reduced excise taxes on automobiles to just two tiers: 10 percent for cars costing Php1 million or less and 20 percent for those costing over Php1 million. In contrast, the House of Representatives adopted five tiers ranging from 3 percent to 90 percent. The final version settled on four tiers ranging from 4 percent to 50 percent compared to excise taxes ranging from two percent to 60 percent under the old revenue code.

.


ADVERTISEMENT - CONTINUE READING BELOW

.

The Senate move to ease excise taxes on high-end cars prompted many to wonder how the tax rates on automobiles will affect the retail prices of the brands and models of cars owned by the senators. Of course, the impact won’t be outright but will only manifest itself if and when the senators buy brand new versions of their existing vehicles.

To see how senators’ vehicles will be affected by the TRAIN Law, Entrepreneur Philippines checked out the vehicles declared by the senators in their latest Statements of Assets, Liabilities and Networth (SALN) as of end-2016.

Unfortunately, only 11 of the 24 senators listed specific brands and models of the vehicles that they owned. Another 11 senators said they owned vehicles but did not provide details while two did not include vehicles among the assets they owned.

.


ADVERTISEMENT - CONTINUE READING BELOW

.

The 11 senators who listed specific brands and models owned a total of 28 automobiles. Most of these are mid-priced vehicles that will likely see an increase in retail prices because of higher excise taxes. However, a third, or 10 of the 28 vehicles, will likely be subjected to lower excise taxes that will cut their retail prices. Of these, two were pickups (Mitsubishi Strada and Toyota Hilux) that were exempted from excise taxes under the TRAIN Law.

Grace Poe listed the most number of cars at five, followed by Leila De Lima with four. Francis Escudero, Richard Gordon and Juan Miguel Zubiri have three each. (Zubiri listed six vehicles in his SALN but three of it are cargo trucks). Ana Theresia Hontiveros, Gregorio Honasan, Franklin Drilon and Aquilino Pimentel III have two each. Only Antonio Trillanes and Paolo Benigno Aquino IV owned one each.

.

.

This story originally appeared on Entrepreneur.com.ph.

* Minor edits have been made by the Esquiremag.ph editors.

ADVERTISEMENT - CONTINUE READING BELOW
Comments
View More Articles About:
About The Author
Pauline Macaraeg for Entrepreneur.com.ph
View Other Articles From Pauline
Comments
Latest Feed
 
Share
Douglas MacArthur is famous for liberating us from the Japanese, but he's also known to have had a passionate affair with Dimples Cooper.
 
Share
This small detail might also point to a greater mystery in the show.
 
Share
Studio Lorico, the designer's creative space, will be a seasonal one.
 
Share
Catch up on these biopics of real-life heroes and let Pinoy pride swell.
 
Share
Before you let yourself get fooled, it pays to do your due diligence and look out for the telltale signs of a fake. Here are just a few of the dead giveaways.
 
Share
 
Share
The rulebook has been well and truly burnt, so why are we still adhering to it?
 
Share
The reality is that there are other popular apps tracking a lot more important information than a selfie.
 
Share
Rogue One and Solo were both marred by production issues.
 
Share
This is what would happen if the Philippines left the United Nations.
 
Share
It doesn't hurt to be prepared for what ever comes your way.
Load More Articles
Connect With Us