FOREIGN CHAMBERS OF COMMERCE OF RP BUCK NEW AUTO EXCISE TAX
Manila, August 1, 2003 By Marianne V. Go (STAR) The Foreign Chambers of Commerce of the Philippines (FCCP) has expressed its concern about the automobile excise tax bill approved by the Senate last June 6.
"If the Senate version becomes law, it would have a disastrous impact on the Philippine auto industry," the group warned.
The FCCP said the punitive levels of excise tax on vehicles with net manufacturers’ price above P1 million ignores economic and business realities.
The group also said the bill overturns three years of collective effort by the Philippine automotive industry, the Department of Finance (DOF), the Department of Trade and Industry (DTI), the Board of Investments (BOI), the House of Representatives and the Senate.
According to the group, the final Senate bill "ignores the bills of the House and the Senate Committee on Ways and Means and Foreign chambers prescribes excise taxes so high as to result in both the loss of jobs in the manufacturing sector and potential revenue by the government."
Instead, the FCCP argued, "a sound excise tax should be applicable for the next 15 to 20 years."
The group pointed out that safety and emission standards, new technology and regulatory actions as well as inflation and the depreciation of the peso could easily raise car prices.
"In just a few years, most cars will be priced above P1 million and fall under the punitive 100 percent tax rate of the Senate bill," the group said.
Such punitive level of excise tax, the FCCP stressed would make the Philippines over time, " a dumping ground for low technology and obsolete products."
"A sound excise tax law should not handicap Philippine manufacturers in competing in the ASEAN market," the group said.
Reported by: Sol Jose Vanzi
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