In a bid to clarify any confusion or miscalculations of vehicles prices being circulated in the internet, the Department of Finance (DOF) has recently released the new suggested retail prices (SRP) of certain vehicles should the new excise tax laws take effect.
The official table, released by the agency shows the differences between the current SRP of vehicles against the new SRP with revised excise tax. Noticeably, there is a smaller difference between the two compared to when it was first proposed. Most of the country's best-selling cars, such as the Toyota Vios and Mitsubishi Mirage G4, see a relatively marginal increase from their original SRPs. Over to the luxury market however, the new tax law sees prices jump up significantly.
Despite the markup on prices, the DOF says that vehicles in the A and B segment will still remain affordable to those in the middle class familes. This is due to the personal income tax rate that is also set to be introduced soon, which the government agency says will offset the new vehicle SRPs.
The DOF also mentioned that they are proposing to increase the automobile excise tax further in the future. At the moment, this is only the first phase of implementation of the proposed auto excise tax. As previously stated, the introduction of the second phase is expected to take effect at the beginning of 2019.
The House of Representatives has passed their version of the tax reform bill, while the Senate is conducting a thorough review to ensure that the proposal made by the DOF will not be a burden to the public.