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Car tax hike to hurt RP families

  • Written by Mario Fetalino Jr.
  • Published in Opinion
  • Read: 224

BEFORE, owning a car  was a dream very difficult to achieve for many Filipino families.  But with the availability of financing schemes nowadays,  that dream has now become a reality to many.

Buying a car is a major decision because it costs a lot. That’s why to majority of our countrymen today, they don’t see cars as a luxury  but a way to do business. A business that could serve as source of income to improve their plight.
   
In the absence of available jobs,  transport businesses offered by Grab and Uber become very helpful to Filipino car owners who want better lives by becoming self-employed.  In fact, a high number of employed Filipinos have turned Grab and Uber drivers because of the big pay it offers.
   
I know one construction worker who part times as an Uber driver and he’s making P15,000 a week or P60,000 a month.  He shares the amount with the owner of the car who fairly gets P30,000  per month which is not bad in these trying times.
 
If he knows how to save money, that construction worker could have his own brand new car in a year considering that a down payment for one could be as low as P10,000 and the same could be for the monthly amortization.
   
That’s how real the dream of  owning a car has become  today. And it makes Filipinos see a better tomorrow.
   
But such dream is presently under threat by a government plan to impose higher taxes in buying cars. Under the reform tax package of the present administration,   the Department of Finance eyes to increase excise tax of automobiles priced at P600,000 and  below to five percent from the current rate of two percent.
 
The DoF will also impose a tax rate of 20 percent for cars selling above P600,000 to P1.1 million, 40 percent for those selling over P1.1 million to P2.1 million, and 60 percent for cars with prices over P2.1 million.
   
As such,  car manufacturers expect sales of automotive vehicles to dampen  as additional taxes will be passed on to the buying public.
   
“Upon implementation, it will come out, and everybody will have to recalibrate -- the inventory, ordering, even the banks will have to recalibrate everything. So all of this recalibration will create the natural slowing down of the speed of buying,” Mitsubishi Motors Philippines Corp. (MMPC) first vice president Dante Santos said.
   
Another car firm executive, Isuzu Philippines Corp. senior vice president Arthur Balmadrid,  recalled that when the excise tax on Asian utility vehicles or AUVs was introduced, its sales went down by 20 percent.
   
It can be noted that AUVs are the most preferred by hardworking Filipinos like those working overseas because they can be used as UV Express shuttles or Uber and Grabcar units that provide additional income for their families.
   
Meaning, when taxes are raised, especially in the case when acquiring cars, it is the ordinary Filipino families that get affected. Instead of helping, higher taxes make life difficult for them.
   
More heartbreaking is that it also shatters dreams.
   
Considering this, the DoF may have a reason to rethink its plan to increase excise taxes in car sales. I was told that the plan was also hatched in a bid to reduce the high volume of vehicles in Metro Manila where bad traffic is being addressed.
   
But denying Filipinos to buy their own vehicles to solve the traffic mess is not fair especially when doing so would deprive them of the chance to engage in a high paying and legitimate transport business.
   
Traffic woes are solved through road discipline and construction of more infrastructure.

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