Oreta slams 15% excise tax on Asian utility vehicles

Sen. Tessie Aquino Oreta has assailed the plan of the Arroyo administration to slap a 15-percent excise tax on 10-seater Asian Utility Vehicles (AUV) used generally as passenger-carrying mega taxis.

"The move betrays the bias of President Arroyo’s economic dream team against ordinary Filipinos," Oreta charged, while warning that this could jack up the retail prices of AUVs by almost P100,000 each.

She claimed that the move, spearheaded by Finance Secretary Jose Isidro Camacho, was made to make up for the "dismal failure" of the government’s revenue agencies to raise enough cash and plug tax leakages.

"Instead of imposing taxes on low and middle-income groups, why doesn’t the country’s economic dream team go after big time tax evaders?" Oreta asked.

Newspapers have reported about Malacañang’s approval of a revised Motor Vehicle Development Program, which removed the exemption of 10-seater AUVs from the imposition of 15-percent excise tax.

The revised program imposed a three-percent excise tax on vehicles costing P500,000 and below, and 15 percent on those costing above P500,000 but below P1 million. Vehicles priced between P1 million and P1.5 million will be taxed 25 percent, while those between P1.5 million and P2 million will be taxed 40 percent.

Luxury vehicles, or those priced above P2 million will be taxed 100 percent.

Oreta said that AUVs will cost P100,000 more under the revised program because they fall beyond the P500,000 range. A check by her office with car dealers yesterday showed that a bare Mitsubishi Adventure now sells for P650,000, and Isuzu Hilander, P640,000 and a Toyota Revo, P586,000.

"With AUVs becoming more expensive as a result of this excise tax scheme, the automotive industry could suffer huge losses as consumers shy away from buying these more expensive cars," Oreta argued.

She warned that mega taxi operators would now have no choice but to hike their fares to compensate for the higher acquisition cost of AUVs.