New Tax for Cars Signed into Law

The new tax reform bill has been signed by President Duterte today. The TRAIN, as it is commonly referred to, has adjusted taxes on several categories including a tax exemption on all personal income tax below Php250,000USD 4,260INR 361,150EUR 4,058CNY 31,025 (annually).

Likewise, automobiles will have a new or simpler tax structure. For cars, the new tax scheme is as follows:

Net Manufacturer’s / Importer’s Price
Up to P600,000 == 4%
P600,000 to 1,000,000 == 10%
P1,000,000 to 4,000,000 == 20%
Above P4,000,000 == 50%

Take note that these are based on Net Manufacturer’s Price or Importers Price.

Here’s a comparison table between the old and the new tax scheme.

Let’s do some examples.

Importer’s Price: Php600,000USD 10,224INR 866,760EUR 9,738CNY 74,460
Base Price (Old Tax): Php612,000USD 10,428INR 884,095EUR 9,933CNY 75,949
Base Price (New Tax): Php624,000USD 10,633INR 901,430EUR 10,128CNY 77,438

Importer’s Price: Php800,000USD 13,632INR 1,155,680EUR 12,984CNY 99,280
Base Price (Old Tax): Php852,000USD 14,518INR 1,230,799EUR 13,828CNY 105,733
Base Price (New Tax): Php880,000USD 14,995INR 1,271,248EUR 14,282CNY 109,208

Importer’s Price: Php1USD 0.02INR 1EUR 0.02CNY 0.12,00,000
Base Price (Old Tax): Php1,092,000USD 18,608INR 1,577,503EUR 17,723CNY 135,517
Base Price (New Tax): Php1,100,000USD 18,744INR 1,589,060EUR 17,853CNY 136,510

Importer’s Price: Php1,500,000USD 25,560INR 2,166,900EUR 24,345CNY 186,150
Base Price (Old Tax): Php1,772,000USD 30,195INR 2,559,831EUR 28,760CNY 219,905
Base Price (New Tax): Php1,800,000USD 30,672INR 2,600,280EUR 29,214CNY 223,380

Importer’s Price: Php2,500,000USD 42,600INR 3,611,500EUR 40,575CNY 310,250
Base Price (Old Tax): Php3,252,000USD 55,414INR 4,697,839EUR 52,780CNY 403,573
Base Price (New Tax): Php3,000,000USD 51,120INR 4,333,800EUR 48,690CNY 372,300

Importer’s Price: Php3,000,000USD 51,120INR 4,333,800EUR 48,690CNY 372,300
Base Price (Old Tax): Php4,052,000USD 69,046INR 5,853,519EUR 65,764CNY 502,853
Base Price (New Tax): Php3,600,000USD 61,344INR 5,200,560EUR 58,428CNY 446,760

Importer’s Price: Php4,000,000USD 68,160INR 5,778,400EUR 64,920CNY 496,400
Base Price (Old Tax): Php5,652,000USD 96,310INR 8,164,879EUR 91,732CNY 701,413
Base Price (New Tax): Php4,800,000USD 81,792INR 6,934,080EUR 77,904CNY 595,680

Importer’s Price: Php5,000,000USD 85,200INR 7,223,000EUR 81,150CNY 620,500
Base Price (Old Tax): Php7,252,000USD 123,574INR 10,476,239EUR 117,700CNY 899,973
Base Price (New Tax): Php6,000,000USD 102,240INR 8,667,600EUR 97,380CNY 744,600

With the Base Price, the dealers will still have to add their gross profit margins as well before we end up with the final selling price.