Pickup truck excise tax will return after PBBM signs CMEPA

Looking to buy yourself a brand-new pickup truck? Better buy one soon, as the excise tax for pickup trucks has returned. This comes after President Ferdinand “Bong Bong” Marcos Jr. recently signed the Capital Market Efficiency Promotion Act (CMEPA) [AKA Republic Act No. 12214], wherein the excise tax on pickup trucks has been reimposed, along with other tax reforms.

While the President vetoed several provisions of CMEPA, the re-imposition of the excise tax on pickup trucks was not among them. This means pickup trucks will soon receive the full excise tax and will have a higher sticker price.

Before, pickup trucks were granted tax exemption under the previous Duterte Administration under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, as they served a crucial role in allowing small businesses to transport goods or supplies for their business.

However, the Department of Finance (DOF) has long sought its return as they believe that most buyers who purchase pickup trucks use them mostly for personal mobility rather than for transporting goods. Since most buyers who buy a pickup truck use it as a passenger or lifestyle vehicle, the DOF believes that the tax exemption on pickup trucks no longer serves its original purpose.

With the excise tax on pickup trucks returning, we can't expect prices to jump up immediately. It will take time and full publishing of the law in the gazette and newspapers, as well as the involvement of technical working groups, among others. Right now, automakers that sell such vehicles to be calculating the impact on their sticker prices. As to how much pickup trucks will get more expensive, it's expected that an additional PHP 200,000 or more could be added to the suggested retail price of pickup trucks, depending on the NMISP.

For now, we'll be keeping a close eye on what will happen in the next few weeks. It will take time to do, as excise will likely be imposed on incoming stocks (new imports) rather than ones already in the market. We'll also be curious about the pricing of electrified pickups, which benefit from the EVIDA law but are still subject to excise tax due to the fact that they are pickup trucks.