Ranking solon bucks 100% excise tax on luxury vehicles

Rep. Harry C. Angping, chairman of the House committee on trade and industry, is opposing the proposal of the Department of Trade and Industry (DTI) to impose an excise tax of 100 percent on luxury vehicles valued from P2 million and above.

Instead, Angping favors setting the maximum tax rate at 60 percent.

"Imposing an excise tax rate of 100 percent on luxury vehicles valued at P2 million and above appears to send the message that the government is discouraging the sale of such vehicles," Angping said.

However, Angping pointed out, there is a market for luxury vehicles and some buyers are willing to pay the price for such vehicles.

The sudden jump from the 40 percent tax rate for vehicles valued at P1.5 million up to P2 million to 100 percent for vehicles above P2 million, Angping said is "too abrupt."

At the same time, Angping said, imposing a 100 percent tax rate on luxury vehicles would only make buyers resort to smuggling.

Angping said he prefers setting the tax rate for vehicles valued at P2 million and above at between 50 percent and 60 percent.

Congress still has to legislate the eventual tax rates for the value-base/ progressive excise tax system.

The DTI is backing the shift from engine-displacement based tax to value-based excise tax.

Angping said he supports the P500,000 minimum value base so that Asian Utility Vehicles (AUV’s) will continue to be affordable to most buyers.