Proposed Tax Bill on Cars goes up to 60%

Abe Olandres October 19, 2016 · 1 min read

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Since traffic and the sheer volume of cars in Metro Manila has been one of the biggest problems for so many years, the current administration have been looking for ways to decongest the streets especially EDSA.

This is the reason why the No-Window Coding Scheme has been implemented this week and it was eventually extended up to 8PM. However, MMDA monitoring showed only about 10 minutes of travel time has been saved which isn’t really that much.

In other fronts, the House of Representatives are looking into reducing the volume of cars by increasing the Ad Valorem Tax. This is perhaps similar to what Singapore is doing to reduce sales of new cars.

The proposed bill will add the following tax brackets into sold cars at different price levels:

Php600,000 and below: 5% (+Php30,000)

Php600,000 – Php1,100,000: 20% (+Php120,000 – Php220,000)

Php1.1M – Php2.1M: 40% (Php440,000 – Php840,000)

Over Php2.1M: 60% (Php1.26M and higher)

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Abe Olandres

Editor-in-chief

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

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30 Comments

Anonymous · 10 years ago

I also heard of one of the top 3 major car brand’s management cutting back on budgets because of this move. The business climate is surely to be greatly affected by this. Not gonna be good for business.

Anonymous · 10 years ago

Coupled with increase in tax on fuel also proposed by Duterte, the fare will go up for those taking public transpo like Grab and Uber.

All of these because of high cost of vehicles, high cost of fuel, and still no abundant & efficient mass transport. Good thinking, huh?

KULANTRO DE KULEBRA · 10 years ago

AND WHERE WILL YOUR TAXES GO? THOSE FUCKING IDIOTIC CONGRESSMEN WILL MOST PROBABLY GET THE CHUNK OF THEM. MAKES SENSE! YOUR TAXES WILL GO WHERE IT CAN FUCK YOU. ISN’T THAT MORE FUN?

Will · 10 years ago

What we need is a stronger implementation of our traffic rules and heftier punishments for the rule breakers as well as integrating basic traffic laws in the schools’ curriculums at an early age.

Most Filipinos, both drivers and pedestrians, seem to have this blatant disregard for the rules. For instance, they cut in line, switch lanes like every 5 seconds, park their cars wherever and generally have this very impatient “me first” attitude. No qualms about the negative ramifications of their actions to everyone else behind. Others see it happen and think since one or two does it, it’s okay for them to break the rules, too. They think they can do whatever they want with impunity while expecting the government to make things get better overnight. Then they blame the government as the sole cause of traffic jams or anything that goes awry in our country. Their lack of discipline, consideration, common sense and responsibility is appalling and hypocritical.

I’m not saying the government doesn’t have its shortcomings either. Their members are guilty of tolerating and even joining in on this behavior and not putting pressure on the police or MMDA to reinforce the laws enough.

How can we expect change to happen when many of us contribute to the problem?

Anonymous · 10 years ago

Nice. As if the prices of cars here are cheap. As compared to other 1st world countries where cars are cheap and salary is big. Those in the middle income families work hard to be able to buy cars as a necessity. These will be greatly affected. While those rich with businesses won’t have as significant an impact as those in the middle income range. Taxis, delivery trucks, pickups will become expensive also that would also translate to increase in cost/price of services/commodities. The rich will recoup their costs thru the same way also.

Truth is the gov’t is in dire need for more taxes to be redirected to it’s objective (distributing funds to develop Mindanao region). So that when the federalism is in effect, will detach and leave each region to fend for themselves.

When does the prices of cars goes back down and become affordable again? It’ll just be a dream for the most of us.

Haroro · 10 years ago

pabor lng dito yung 2ndhand dealer e.
ano ba yan bibili pa naman ako e

Baxter · 10 years ago

Singapore can do this because they have a very good and efficient Subway system which is integrated very well within the city. but what will happen to manila Pila pa more and wait 15mins til the next train arrive. This is not the real solution. Built and improve a modern subway or Mrt system that can accommodate 10-20 carriage in 1 go. then implement this …

123456 · 10 years ago

Seriously? Then, the number of cars sold per year decrease which will result in lower sales and income for the company. Then, what? The company will have to cut down manpower to make up for lost sales and income? Don’t address those private vehicles. Instead address those public means of transportation. The buses, jeepneys, and of course, your ever failing mass transport systems.

Ezy · 10 years ago

This is bad idea.
Why would a solution to a problem in metro manila (include Metro Cebu if you want) affects the entire country??
Kawawa naman yung mga gustong bumili ng bagong sasakyan na nasa probinsya kung dadagdagan pa ang presyo ng sasakyan. Bat kailangan nila mag suffer kng sa metro cities lng naman ang may problema sa traffic? Metro Manila does not equate to the entire Philippines.

Aaron John Wee · 10 years ago

Looks good. This is how Singapore maintains their traffic condition.. but I’m not saying that it is the only way.. they also have a great public transportation system which I hope the government is working on..

But I’d like to reverse the tax scheme.. as cheaper cars are coming out from the market, the people would more of those than the luxury.. so here’s my proposed tax scheme:

Below 600k + 50%
600k – 1.1M + 40%
1.1 – 2.1M + 20%
2.1M and up + 15%

All of those would also be entitled to road tax of 20,000 a year + registration fee of 5,000

aslag · 10 years ago

This idea would be great if the mass transport system are convenient and comfortable. Buti pa sanang bawasan nlang ang mga jeep, city buses and taxi. Lalo na madaming mga jeep na hindi na nakarehistro pero nasa daan parin nakikipag-agawan ng pasahero. Mga jeep na hindi nmn sumusunod sa safety standards tulad ng hindi umaandar na headlight and taillight, smoke belchers and walang early warning device dapat hinuhuli para mabawasan ang traffic.

mgem · 10 years ago

Should have addressed the mass transport system first.

Stefa Dumbrique · 10 years ago

Man, that’s stupid. Ang baba na nga ng sahod sa Pinas tapos lalo pang gagawing unaffordable ung mga sasakyan? Mga gago eh.

Imagi · 10 years ago

hay… what do we expect from a congress that spent 4 days presenting witnesses after witnesses with nothing to show for it? tax the cars ang sagot with traffic… great effing idea.