News Top Stories

Senate OKs Higher Automobile Taxes, Creates New Version Of Tax Reform

Is the senate version of the tax reform better?

We’re probably sure you’ve been alarmed by House Bill 5636 or the Tax Reform for Acceleration and Inclusion (TRAIN) due to the higher taxes that will be implemented into new cars. Apparently, our Senators are on board the TRAIN (pun intended), but they are on their way to creating their own version known as Senate Bill 1592.

What’s the difference you may ask? Well, there’s good news and bad news. The bad news is that, instead of the two-stage implementation, wherein, for example, a P600,000 car will have a 3% tax in 2018, and the full 4% in 2019, the revised version instead will implement the full force immediately once it has been implemented.

The good news, meanwhile, is that, the taxes are now slightly lower than before. How much lower, here are the figures

HB 5636 (Original Version)

Vehicles priced up to P600,000 – 4%
Over P600,000 to P1.1 million – 24,000 + 40% of value in excess of 600k
Over P1.1 million to P2.1 million – P224,000 + 60% of value in excess of P1.1 million
Over P2.1 million to P3.1 million – P824,000 + 100% of value in excess of P2.1 million
Over 3.1 million – P1,824,000 + 120% of value in excess of P3.1 million

SB 1592 (Senate Version)

Vehicles priced up to P600,000 – 4%
Over P600,000 to P1.1 million – P24,000 + 35% of excess over P600,000
Over P1.1 million to P2.1 million – P199,000 + 55% of excess over P1.1 million
Over P2.1 million to P3.1 million – P749,000 + 90% of excess over P2.1 million
Over 3.1 million – P1,649,000 + 100% of excess over P3.1 million

For a brief perspective, here is the Department of Finance’s simulation of the original version of the tax reform in a number of popular cars currently on sale.

Advertisements

0 comments on “Senate OKs Higher Automobile Taxes, Creates New Version Of Tax Reform

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: