DTI endorses tax exemption of AUVs

Trade and Industry Secretary Manuel Roxas II gave his assurance yesterday to local Asian utility vehicles (AUV) manufacturers that the Board of Investments (BOI) is endorsing the preservation of the current tax-exempt status of low-priced AUVs.

"The BOI wants to assure the local automotive manufacturers, along with parts makers, of the government’s commitment to protect the viability of the domestic auto market," Roxas said.

He said, "AUVs are the most popular and affordable public utility vehicles that allow our kababayans to stay within their limited budgets, and are also the preferred service transports that lower the cost of doing business for our small and medium enterprises."

"We also want to continue developing their strong export potential and ensure the viability of our local automotive industry and auto parts makers," he added.

He further stated that "with the government thrust of strengthening our domestic market as the engine for growth, we need to sustain support for the development of AUVs at this time, and not put pressure that will raise their prices."

However, Roxas was also quick to clarify that the tax-exempt status for AUVs would not be applicable to sports utility vehicles or SUVs which are generally higher priced and are of the luxury type and may be subject to a different excise tax structure.

Local AUV markers are opposing the proposed 15-percent excise tax, pointing out that AUVs are the most affordable vehicles for most Filipinos who need not only a passenger car but a practical and useful vehicle as well.

Meanwhile, automotive workers asked President Arroyo yesterday to scuttle a plan by the Department of Finance (DOF) to impose a 15-percent excise tax on Asian utility vehicles (AUV), saying this would kill the already dying automotive industry.

According to the Automotive Industry Workers Alliance (AIWA), the proposed tax will result in an automatic increase in the market cost of an AUV, making it unaffordable to average-income families.

AIWA, an alliance of workers in the automotive industry, particularly the local parts suppliers, said they recognize the government’s need for additional revenues but an excise tax on AUVs is not the only way to raise funds.

"AUV is the only type of vehicle that gives life to the automotive industry after the demand on passengers and luxury cars dropped significantly in the past years," said AIWA president Francisco Mero.

If AUVs will be priced out of the reach of average wage earners, Mero said about P50,000 workers of Nissan, Isuzu, Mitsubishi and Toyota would be affected. – Marianne Go and Cecille Suerte Felipe