Honda Cars Philippines, Inc is set to adjust retail prices to reflect the change in VAT from 10% to 12% on February 1, 2006. Prices of all Honda models will be adjusted between P10,000 to P40,000 depending on the type of vehicle upon effectivity of the 12% EVAT rate.
The Government has announced its intention to increase the VAT to 12 % on February 1 as stipulated by the EVAT Law. A form of sales tax, the VAT is a tax on consumption levied on the sale of goods and services. It is an indirect tax that can be passed on to the consumer.
"We encourage all those who are planning to buy a Honda car to place their orders now before the additional EVAT takes into effect. Customers may also inquire from our dealers for special deals and promos so they can get the best value for their hard-earned money," said Arnel Doria, Deputy Head for Marketing of Honda Cars Philippines, Inc.
The expanded VAT law took effect in November last year, expanding the coverage of VAT to electricity, automotive fuels, kerosene and liquefied petroleum gas. Basic commodities, however, like fish, meat, rice, vegetables and fruits are exempted.
However, the law allows the President of the Republic to increase VAT rate from 10% to 12% on goods and services including automobiles to generate additional revenue to cover the government deficits from the previous year.