THE chairman of the House Committee on Ways and Means yesterday advised the public to buy new vehicles before Congress passes a new law that would impose 40 percent ad valorem tax or additional P480,000 for every vehicle whose price is P1.2-million.
In a press conference, Quirino Rep. Dax Cua, the panel chairman, said his committee is deliberating on the proposal that the Department of Finance (DoF) included in the tax reform package.
“That is a part of our reaction to traffic crisis. Kung maipapasa nga, better to purchase a vehicle before Congress passes [a law on it],” Cua told reporters after his colleague, Deputy Speaker and Camarines Sur Rep. Rolando Andaya Jr. who joined the same press conference asked him about the matter.
House Deputy Speaker and Batangas Rep. Raneo Abu backed the proposal to drastically reduce the number of vehicles causing traffic gridlock in major cities in the country.
“Kahit magparami at magpalaki tayo ng mga kalye, ganyan pa rin ang problema natin sa trapiko kaya dapat nating suportahan ang panukala,” Abu said who filed House Bill (HB) No. 1991 seeking to regulate the sale of motor vehicles by requiring proof of parking space or facility in a bid to case traffic in some key cities.
Abu’s “Proof of Parking Space Act” is only applicable in Metro Manila, Metro Cebu, Metro Davao and other highly-urbanized cities.
Under the proposal, a buyer of motor vehicle must first present a proof of parking space before he or she be allowed to purchase a motor vehicle and register with the Land Transportation Office (LTO).
For his part, Andaya also supported the proposal, but stressed the ad valorem tax should not be high.
“I am supportive of the measure, but the amount of tax to be imposed under the proposal is too much. There should be an adjustment,” Andaya said.
The bill said that there shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer’s or importer’s selling price, net of excise and value added tax (VAT).
Under the measure, if the net manufacturer’s price/importer’s selling price is P600,000 the excise tax will be 5 percent.
If the net manufacturer’s price/importer’s selling price is P600,000 to P1.1 million the excise will be 20 percent of net manufacturing/importation price.
If the net manufacturer’s price/importer’s selling price is P1.1 million to P2.1 million the excise tax will be 40 percent of net manufacturing/importation price.
If the net manufacturer’s price/importer’s selling price is P2.1 million the excise tax will be 60 percent of net manufacturing/importation price.
The bill said the brackets reflecting the manufacturer’s price or importer’s selling price, net of excise and VAT, will be indexed by the secretary of finance once every two years if the change in the exchange rate of the Philippine peso against the US dollar is more than 10 percent from the date of effectivity of this act