Politics

Automakers want pickup trucks to stay tax-exempt

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THE excise tax exemption being enjoyed by pickup trucks should remain as it helps local businesses, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI).

“The current setup for excise tax should be maintained because this is very helpful for small businesses,” CAMPI President Rommel R. Gutierrez said during an interview on the sidelines of the 8th Philippine International Motor Show (PIMS) in Pasay City last week.

Further, he said that the proposal to remove the excise tax exemption would not only affect the local automotive industry, but also local businesses.

“This excise tax is not just about the auto industry. It’s about the multiplier effect of these things because micro, small, and medium enterprises (MSMEs) are using these (pickups) for their businesses,” Mr. Gutierrez said.

However, Trade Secretary Alfredo E. Pascual told reporters in a Viber message over the weekend that he is in favor of a review of the excise tax exemption on double-cab pickup trucks.

Mr. Pascual said that a review is needed since the imported double-cab pickup truck is “often a fully accessorized passenger unit” and a “lifestyle vehicle.”

“The regular single-cab and chassis pickup, the real utility workhorse vehicle, has always been exempted from excise tax even before Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law. The TRAIN Law extended the exemption to the double-cab pickup ostensibly to support the cargo mobility requirement of the MSME sector,” Mr. Pascual said, adding that the imported double-cab pickup is “far from the need and reach of MSMEs.”

“Since the excise tax exemption applies to the whole vehicle, the double-cab pickup accessories also get exempted from the excise tax,” he said about favoring a review of the excise tax exemption on double-cab pickup trucks.

In August, the House Ways and Means Committee approved an expanded bill containing the fourth package of the Comprehensive Tax Reform Program, which also provided for the removal of the excise tax exemption on pickup trucks.

According to the Finance department, the elimination of the excise tax exemption is projected to generate P52.6 billion worth of additional revenues from 2022 to 2026.

Meanwhile, Mr. Gutierrez said that CAMPI is still preparing its position paper regarding the proposed removal of the excise tax exemption for pickup trucks.

“It is good that we have supporters from the Senate and House. We will discuss with them as soon as possible,” he said.

Mr. Gutierrez previously said that the proposal is a concern for the industry since it is expected to affect prices and sales.

He added that removing the excise tax exemption would hinder the recovery of the local automotive industry.

The Latest CAMPI data showed that industry sales from January to August 2022 increased by 25.1% to 212,872 sold units versus 170,112 units in the same period last year. — Revin Mikhael D. Ochave