We last reported the Senate’s final version of their vehicle excise tax, which is part of the TRAIN (Tax Reform for Acceleration and Inclusion), and makes cars costing more than P2 million become less expensive. Rappler reports that the bicameral committee has reached a compromise between the house version and the senate version, and the compromise now is much better and makes the most sense in our opinion.
From the two-tier senate version, the bicameral version now sees a four-tier system.
Under P600,000: 4%
P600,000 to P1,000,000: 10%
P1,000,001 to P4,000,000: 20%
Above P4,000,000: 50%
The bicameral version also highlights that it exempts EVs and, strangely, pick-up trucks. Take note that many pick-ups aren’t used for business, and instead are meant for personal use, so we’re not sure how this solves the issue of congestion in the first place. Hybrids meanwhile will only receive 50% of the taxes of non-hybrid vehicles. We at Go Flat Out applaud the move for making eco-friendly vehicles receive zero to lower taxes.
The bicameral version will also see an increased excise tax on petrol fuel. P7 per liter in 201, P9 per liter in 2019, and P10 in 2020. Petrol currently is taxed P4.35 per liter. Diesel will be taxed P2.50 per liter in 2018, P4.50 in 2019, and P6 in 2020, and diesel currently is not taxed. LPG will also see an increase. P1 tax in 2018, P2 in 2019, and P3 in 2020.
Fuel produces used as input, feedstock, raw materials for refining or as replacement fuel is tax-exempted.