Recto tax bill to cut car prices

Good news for people who are planning to buy new cars.

According to Sen. Ralph Recto, car prices should go down as soon as the vehicle excise tax rationalization bill is enacted.

"The bill reduces the excise tax rates on cars from 50 percent and more to a range of three percent to 15 percent. Now, that is a substantial reduction which should translate into a substantial price cut," said Recto, chairman of the Senate ways and means committee.

He said manufacturers should not keep prices at their present levels once the tax reduction comes into effect.

Otherwise, it is the carmaker who benefits from the windfall, he added.

Recto is sponsoring the measure. The Senate is on its final stage of plenary discussion on the bill.

Recto said while car prices, including those of luxury sedans, should go down, prices of Asian utility vehicles like Isuzu Hilander, Toyota Revo and Mitsubishi Adventure, would go up.

He said these vehicles would be slapped an excise tax once the bill is enacted. At present, 10-seaters such as AUVs are exempt from excise tax.

Recto said the system of imposing excise taxes under the bill is based on values or prices and not on configuration or seating capacity.