Politics

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.

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.

.


.

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.

Comments
View More Articles About:
About The Author
Pauline Macaraeg for Entrepreneur.com.ph
View Other Articles From Pauline
Comments
Latest Feed
 
Share
Politics, controversy, and the odd piece of good news defined our year, says data analytics company Research and Tech Lab.
 
Share
You shouldn’t feel pressured to give gifts to people if you don’t feel like it or you can’t afford to.
 
Share
 
Share
The lower house approved the proposed charter change on third and final reading on December 11.
 
Share
 
Share
The Mercer study also includes other market trends in hiring and employment.
 
Share
In real life, Coco Martin also has a motorcycle and a tank.
 
Share
There’s a timepiece for everyone (and we mean everyone) on your list. Don’t believe us? Let’s get down to the nitty-gritty. 
 
Share
The web giant's Year in Search 2018 report has some interesting news.
 
Share
World-famous graphic designer Kenya Hara details how it influences the minimal design of the lifestyle brand.
 
Share
Sex
We're number 1 when it comes to time spent per visit to the website.
Load More Articles
Connect With Us