New automobile excise tax law now in effect
New automobile excise tax law now in effect
Posted: 9:20 PM | Oct. 06, 2003

AFX

THE DEPARTMENT of Finance said Monday a new automobile excise tax law, aimed at reforming the country's 20-year old motor vehicle taxation system, was now in effect.

The Republic Act 9224, effective on Oct. 4, likewise scrapped revenue regulations of the Bureau of Internal Revenue that tightened the tax exemption enjoyed by buyers of automobiles with seating capacity for 10 or more people.

The new law has instead removed the previous tax exemption, the finance department said, adding that it "addresses the weakness of the previous auto excise tax system by expanding the tax base and adopting a simple value based structure with more realistic tax rates."

The finance agency had 30 days, after the signing of the law, to draft the necessary rules and regulations. The law then became effective 15 days after publication of the rules on Sept. 18.

President Gloria Macapagal-Arroyo earlier said the measures would serve as a disincentive to tax evasion and smuggling, adding that it would also improve the prospects for global automotive manufacturers investing in and setting up operations in the Philippines.

Under the new law, vehicles with a net manufacturing price of 600,000 pesos, or less, will have an excise rate of two percent, like the previous system based on engine size.

Buyers of vehicles worth 600,001 pesos to 1.10 million will pay an effective tax rate of 2.00-10.20 percent, down from 15.00-50.00 percent.

Automobiles worth 1.10-2.10 million pesos will be have a tax rate of 10.20-24.40 percent, against 15.00-50.00 percent previously.

Vehicles over 2.10 million pesos will have a lower tax rate of 24.40 percent, down from 50 percent.

06/10/2003

Bron : Inq7.net

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