Gov’t lost P7.4B in uncollected taxes from used car trade — PAFI

The Philippine Automotive Federation Inc. (PAFI) estimates that the Philippine Government has lost between P5.2 billion to P7.4 billion in uncollected tax revenues from used motor vehicle trading.

This was disclosed by PAFI president Vicente Mills during the recent 7th Asia-Pacific Economic Cooperation (APEC) Automotive Dialogue held at the New World Renaissance Hotel.

On the other hand, Mills pointed out, the local automotive industry has brought in P76 billion worth of foreign direct investments that has generated employment for 77,000 and resulted in exports amounting to $1.8 billion.

In contrast, Mills further cited, the local automotive industry has paid P1.95 billion in excise taxes and P9.6 billion in value-added taxes and import duties.

Data from the Land Transportation Office, Mills said, showed that registrations last year reached almost 227,000, but actual sales of the local automotive industry accounted for only 88,000.

The continued entry of imported used motor vehicles is, thus, strangling the local automotive industry, Mills said.

The Philippines appealed to its APEC dialogue partners to help address the problem.

Following the dialogues, the APEC partners of the Philippines officially recognized the used car problem and accepted the legitimacy of policy moves to restrain the entry of such vehicles into the country.

Such acknowledgment would strengthen the Philippines’ effort to stop the importation of used motor vehicles which is adversely impacting both the environment and economic viability of the new motor vehicle manufacturing industry.

However, the APEC automotive dialogue participants could not offer any further commitment to control the export of used motor vehicles to less developed country members.

In fact, it was stressed in the dialogue that stopping the entry of imported used motor vehicles "is the primary responsibility of the receiving country."