CAMPI boss: Excise tax on pickups to impact vehicle sales

Last week, the House Committee of Ways & Means announced they recently passed an expanded bill that would levy an excise tax on pickup trucks.

According to House Committee Chair and Albay Representative Joey Salceda, Department of Finance (DOF) Secretary Benjamin Diokno voiced his concerns via a letter that automakers are taking advantage of the Republic Act 10963 (AKA the first phase of TRAIN Law).

While not yet a law, the possibility of pickup trucks being levied with excise tax means they could become more expensive in the future. Seeing that this could affect almost every automaker that sells a pickup truck, the Chamber of Automobile Manufacturers of the Philippines, Inc. (CAMPI) voiced its concerns about additional taxes on vehicles.

According to CAMPI president Atty. Rommel Gutierrez, the measure will definitely impact the sales of manufacturers that sell pickup trucks as a whole. Furthermore, he mentioned that they are still recovering from years of low sales.

“Of course, we are concerned about additional taxes. As we know, demand for vehicles is price-sensitive, so this will definitely impact the prices and we are still recovering - we have not yet recovered fully,” said Gutierrez.

This is not the first time manufacturers were concerned about a measure potentially affecting their sales performance in the country. Last year, CAMPI said that the DTI safeguard bond against imported vehicles would derail the recovery of the auto industry players and stakeholders.

But despite the possibility of putting an excise tax on pickups, Gutierrez said that CAMPI will continue working with the government. The executive went on to say that both parties were able to agree upon the DTI’s safeguard measures which were eventually removed last year.

“Even in the past administrations, it’s actually a collaboration between the private sector and the government sector. If you recall, even with the issue about safeguard bonds we were able to handle it with the government. There’s a need to strike a balance between the needs of the private sector and the government sector.

Since the measure is not yet final, Gutierrez added that they will also continue to discuss concerns regarding the proposed excise tax on pickup trucks. How the situation will play out in the future, remains to be seen. However, we can expect some legal maneuvering in order to avoid having to put an additional excise tax on pickup trucks.