Proposed new taxes of 500K on imported used cars

[hagiber]

Additional tax on imported used cars likely
By Marianne V. Go
The Philippine Star 10/07/2004

The technical committee of the Cabinet-level Tariffs and Related Matters (TRM) is set to approve a P500,000 additional tax on used imported cars in a bid to discourage the acquisition and importation of second hand vehicles.

The committee also plans to increase the Most Favored Nation (MFN) tariff on cars with an engine displacement of 2.1 liters and above to 40 percent while lowering the tariff on vehicles with an engine displacement of one liter and below to zero.

At the same time, local automotive manufacturers participating in the Automotive Export Development Program (AEDP) would be exempt from the higher MFN rates on the big cars provided that these are included in the list of vehicles that they are assembling locally.

According to Trade and Industry Secretary Cesar V. Purisima, the additional tax and higher MFN tariff rates are intended to generate additional revenues for the government and encourage more efficient cars.

By exempting participants of the AEDP from the higher MFN tariff rates, Purisima said, government is also encouraging more production and export of cars especially since the local market is so small.

Last year, Purisima said, local production only reached around 80,000 units.

With the exemption, government is hoping to motivate other local automotive manufacturers to join the AEDP.

At present, only Ford Motors Philippines is exporting to Thailand, Indonesia and Malaysia.

The additional P500,000 tax on used imported cars is meant to stop once and for all , the continued importation and sale of used imported cars which local automotive assemblers complain eats into the local car market.

[kramos22]

So no more cheap pajeros from subic?

[pink_cadillac]

In tandem with the 500,000 pesos tarriffs.

I would actually suggest they base tarriffs on fuel consumption in ratio to weight if the point is to encourage more fuel efficient and emissions-friendly vehicles.

Engine displacements, as we've known before, are a bad measure of both benchmarks stated above.

Imposing huge tarriffs on imported used vehicles alone without encouraging local industries to provide alternatives only deprives consumers of choice and utility.

If you want to protect consumers, make sure you don't coddle manufacturers too much.

But it seems this lobby is very one sided.

[kyle618]

i hate that they attack the 2.0 and above category... god damnit! they should measure it by fuel efficiencY!!!! those monkeys dont know sht! :mad: sila naman un sumasakay sa mga expeditions eh... ***!

[luckytruck]

ang mahal naman kasi ng mga brand new cars. can you imagine paying 700 to 800 thousand for an Adventure? converted surf na lang, 300,000 lang

andy

[pink_cadillac]

luckytruck, obviously a brand new car should be more expensive.

The interests of consumers and manufacturers differ greatly.

The latter though gives more to the government in form of revenue and balance of trade payments.

[luckytruck]

maganda siguro if someone from toyota, mitsu, nissan, or honda would give us a breakdown of what really goes into the brand new selling price of cars. this would give us a better idea as to where our money is going and whether we should empathize with the manufacturers or not.

andy

[boydapa]

regarding the cost of imported 2nd hand, at least mas malaki chance ko makabili ng landcruiser na converted kesa sa bumili ng bago na landcruiser na nagkakahalaga ng 3 million up----wala na alternative

[niky]

If you look at the inflation-adjusted prices of cars nowadays, you're getting good deals. Manufacturers are now offering financing schemes of 10% and UNDER. I think the industry is doing its best here, people.

While I disagree with an across the board 500k tax, something does have to be done. I think that there should be an official inspection fee and fines built up for safety/economy/general poor condition non-conformities, but then this would be abusable, so a hefty tax would seem the only solution.

I agree, the displacement tariff is ridiculous since it ignores economy. I'd rather pay a guzzler tax (on purchase) than have to pay extra for a crosswind JUST BECAUSE it's 2.5 liters.

Why can't the government just come up with a testing system, like the US EPA? That way, they can tax cars BASED on economy performance. The tax can even be hidden from the consumer by having it put on the manufacturer.

[Bogeyman]

Originally posted by luckytruck
ang mahal naman kasi ng mga brand new cars. can you imagine paying 700 to 800 thousand for an Adventure? converted surf na lang, 300,000 lang

andy

I can certainly imagine that, because I purchased one such brand-new Adventure two months ago. Shelled out 800K+. In cash payment. And I don't regret that decision one bit.

One can never be sure with second-hand cars; swerte mo na lang kung makatyempo ka ng maingat na owner. And I don't trust conversions, not unless iisa ang nagko-convert sa lahat ng imported vehicles para consistent ang quality.

I simply refuse to gamble my safety as well as that of my loved ones by scrimping on the vehicle to buy. The few hundred thousand pesos I save today, may end up in hospitalization or funeral expenses in the event of an accident, just because I acquired a faulty, poorly converted/maintained second-hand vehicle. Besides, pag nagkaproblema sa second-hand, the total cost of repairs may not be that far off from the cost of a brand-new vehicle altogether.