Parts makers support car assemblers in excise tax issue

Automotive parts manufacturers are likely to support automotive assemblers in their stand on the excise tax issue.

Randy Yulo, officer-in-charge of the Association of Consolidated Automotive Parts Producers of the Philippines (ACAPPP), said auto parts manufacturers do not have as yet a solid position on the excise tax issue.

However, Yulo acknowledged that "the viability of the auto parts industry is anchored on assemblers." He admitted further that "we are dependent on the auto assemblers because they give us the business."

The auto parts industry, Yulo said, is facing a "double whammy" with the forthcoming removal of the local content requirement as pushed by the World Trade Organization (WTO) and the continued lowering of tariffs on auto parts.

The auto parts industry has already petitioned the Tariff Commission to retain tariff rates on auto parts and components at a range of 20 percent to 30 percent for parts that are locally produced and maintain a rate of one percent for parts and components not locally manufactured.

Without the tariff wall, the local auto parts industry would face competition from imported auto parts which local automotive assemblers could resort to with the scrapping by July this year of the local content requirement.

Local auto parts makers are also urging the government to resume the ASEAN Industrial Cooperation (AICO) scheme for the automotive industry which would put tariffs on automotives to zero as against the current zero to five percent level allowed under the ASEAN Free Trade Area-Common Effective Preferential Tariff (AFTA-CEPTA) scheme.

Local auto parts makers are hoping that local automotive assemblers would continue to patronize local auto parts which provides employment for over 60,000 workers.