MANILA – Lower excise tax rates for automobiles are reflected in the Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill compared to the House of Representatives’ version.
For cars with net manufacturer’s price or importer’s selling price of up to P600,000, Senate Bill No. 1592 imposes an excise tax of 2.0 percent, which is lower than the 3.0 percent rate in the House Bill No. 5636.
In the Senate version, automotive vehicles priced over P600,000 to P1.1 million will be slapped with excise tax of P12,000 plus 20 percent of value in excess of P600,000;
Cars selling over P1.1 million to P2.1 million will be imposed a rate of P112,000 plus 40 percent of value in excess of P1.1 million; and for automobiles priced at over P2.1 million, the new excise tax will be P512,000 plus 60 percent of value in excess of P2.1 million.
In the lower house’s version, cars priced:
• over P600,000 to P1.1 million have excise tax of P18,000 plus 30 percent of value in excess of P600,000;
• over P1.1 million to P2.1 million will have excise tax of P168,000 plus 50 percent of value in excess of P1.1 million;
• over P2.1 million to P3.1 million, excise tax will be P668,000 plus 80 percent of value in excess of P2.1 million; and
• over PHP3.1 million, tax rate will be P1.468 million plus 90 percent of value in excess of P3.1 million.
This would be the first tranche of imposing excise taxes on automobiles, but this would be implemented immediately in the Senate version, unlike HB 5636’s provision, which aims to implement the first tranche by Jan. 1, 2018.
Second tranche of excise tax
Early implementation of the second tranche of excise tax rates, which is set at the start of 2018, is also in the SB 1592, while the lower house’s version eyes the second tranche by Jan. 1, 2019.
Likewise, the Senate’s TRAIN bill gives lower excise tax rates in the second tranche compared to the House version, except for vehicles priced up to P600,000, for which both versions slap a 4.0 percent excise tax.
For vehicles priced over P600,000 up to P1.1 million, the Senate’s version imposes excise tax rate of P24,000 plus 35 percent of value in excess of P600,000, while the House of Representative imposes P240,000 plus 40 percent of value in excess of P600,000.
For over P1.1 million to P2.1 million, SB 1592 imposes P199,000 plus 55 percent of value in excess of P1.1 million excise tax — or lower than HB 5636’s rate of P224,000 plus 60 percent of value in excess of P1.1 million.
For vehicles priced over P2.1 million to P3.1 million, the Senate version imposes tax of P749,000 plus 90 percent of value in excess of P2.1 million excise tax, lower than the House of Representatives version of P824,000 plus 100 percent of value in excess of P2.1 million.
Cars priced over P3.1 million will have excise tax of P1.649 million plus 100 percent of value in excess of P3.1 million in the Senate bill. The House version eyes higher excise tax rate of P1.834 million plus 120 percent of value in excess of P3.1 million.