Senate plans to soften impact of higher vehicle excise tax

MANILA, Philippines - The Senate Committee on Ways and Means will try to come up with an excise tax for vehicles that will not be too burdensome while helping alleviate traffic congestion, Sen. Sonny Angara said.

Angara, chairman of the committee, said he is thinking of imposing higher taxes on additional vehicles purchased by the same owner that will be collected through the motor vehicle user’s charge (MVUC).

“To free up road space, we will look into imposing higher taxes on the third or fourth vehicle that they will buy through the MVUC,” the lawmaker said.

The House of Representatives last month passed the Duterte administration’s tax reform package, which among others, seeks to lower personal income tax while raising excise tax for vehicles and fuel.

To offset the increase in excise taxes on oil, the government plans to put in place a program which aims to provide cash cards to public utility vehicles, and a public transport modernization program which aims to provide subsidies to PUVs to convert to more efficient engines.

Apart from jeepney modernization, Transportation Assistant Secretary Mark de Leon said the government is set to expand P2P bus services and open new routes to improve public transport system in the country.

The Senate will start deliberating on the measure when Congress resumes session on July 24.

Senators, however, are cool to several provisions, saying they could hit the poor most.

With the proposed adjustment of excise tax on automobiles, mass-market vehicles such as the base model Toyota Vios would increase by P10,000, Mitsubishi Mirage by P13,000, Toyota Innova by P43,000, while SUVs such as Toyota Land Cruiser will increase by as much as P950,000.

Angara noted the House was able to temper down the original proposal of the Department of Finance to ensure that most cars, especially low-end models, will remain affordable.