BOC to strictly impose P.5-M specific tax on used car imports

Customs Commissioner Alexander Arevalo vowed yesterday to strictly implement government’s policy of taxing used motor vehicles following an inter-agency meeting at the Board of Investments with the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), the Subic Bay Metropolitan Authority (SBMA) and the Philippine National Police to discuss several issues concerning the freeport and the continued importation of used motor vehicles.

Arevalo told The STAR that on the issue of the entry of used motor vehicles, the BOC would strictly impose the mandated import duties as well as the additional specific duty of P500,000.

He disclosed that the BOC since last month had already implemented a centralized checking of vehicles entering through the country’s freeport.

Likewise, the BOC is also coordinating with the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) regarding measures that could be imposed to monitor both locally manufactured and imported used cars.

One such measure involves the installation of a radio frequency device on automobiles which would contain information about the payment of taxes.

During the same meeting, the SBMA for its part stressed the need for a Department of Justice clarification regarding Republic Act (RA) 8506, which bans right hand drive (RHD) vehicles into the country, and a DOJ ruling that allows the importation of RHDs into the Subic Bay for conversion to left hand drive, provided that such vehicles are 100 percent reexported.

Another issue taken up during the meeting attended by Trade and Industry Secretary Peter B. Favila, BOI managing head Elmer C. Hernandez, Presidential adviser on economic matter Tomas I. Alcantara, BIR Commission Jose Buñag, Customs Commissioner Alexander Arevalo, newly-designated SBMA president Armand Areza and former SBMA president Alfredo C. Antonio, was the issue of the taxation of sin products such as cigars, cigarettes, distilled spirits, fermented liquors and wines.

While the Subic Freeport is supposed to be exempt from taxes, there is an existing law that imposed excise taxes on sin products.

BIR Commission Jose Bunag, for his part, said that the BIR would impose the necessary taxes on such products once they are brought out of the freeport and enter the Philippine customs territory.