Taxi operators buck new tax on vehicles

A group of taxi operators has opposed the proposed imposition of excise tax on Asian utility vehicles, which are now commonly used as public utility vehicles.

At a recent hearing by the Senate committee on ways and means headed by Sen. Ralph Recto, the Association of Taxi Operators (ATO) warned that approval of the proposed measure would provide them an additional burden when they are already hobbled by too many fees and requirements.

Leonora Naval, ATO president, said the small taxi operators should not suffer just because the government allowed some car manufacturers and importers to classify their vehicles as AUVs and lost some P1.4 billion in revenue in the process.

Recto has filed Senate Bill No. 2222 that seeks to impose an excise tax on motor vehicles based on their selling price. At present, the excise tax on vehicles is based on the fuel type and the level of engine displacement, which means that a stronger powered car is slapped with a higher tax.

Public utility vehicles and AUVs with a seating capacity of 10 are exempted by the current law from paying excise tax.

Recto noted that this tax exemption privilege, which was originally intended to benefit the middle class consumers of AUVs, has been exploited by importers of sports utility vehicles, who add jump seats in the SV compartment to enjoy the same tax exemptions enjoyed by AUVs.

Recto said imposing excise tax based on the selling price would generate up to P3 billion in additional revenues for the government.

The group of taxi operators, however, pointed out that the new tax measure would hurt buyers of PUVs and AUVs, while favoring buyers of luxury vehicles.

Naval said that AUVs, which used to be exempt, would now pay five percent excise tax, while the excise tax on luxury cars such as BMW, Jaguar, Volvo and Mercedes Benz will now pay only 50 percent excise tax from the current 100 percent.

They cited a study showing that a buyer of a BMW 7 series would save up to P3 million in taxes with the proposed reduction in the tax rate, while a buyer of a Tamaraw FX will pay P30,000 more. — Efren Danao