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August 30, 2022

CAMPI President: No Excise Tax For Pickup Trucks (For Now)

At the press conference for the 8th Philippine International Motor Show (PIMS), CAMPI president Atty. Rommel Gutierrez had a definitive answer in connection to the government’s plan to levy excise taxes on pickup trucks, and buyers can breathe a sigh of relief (somewhat).

Gutierrez, the president of the Chamber of Automotive Manufacturers of the Philippines, Inc., which counts the country’s biggest pickup truck players—Toyota Mitsubishi, Nissan, Isuzu, and Mazda among their members says that would-be pickup truck buyers need not worry since it will take some time before the government is able to ratify any changes to the current excise tax on new vehicle.

“The house ways and means committee may have already passed a recommendation levying excise tax on pickup trucks, but as with any new rider to an existing law, this must be put to a vote in congress first before being ratified into law,” explains Atty. Gutierrez. “We hope to work with the new administration to find the appropriate balance similar to the way we worked with them on the issue of the DTI safeguard tariff.”

Atty. Gutierrez’s stand is echoed by Toyota Motor Philippines (TMP) president Atsuhiro Okamoto who said that part of the carmaker’s “wish list” under the new administration would be an economic environment that will help the automotive industry thrive in the face of continued challenges including the on-going global parts shortage. For TMP, he wishes for the continued incentivization of carmakers with local assembly as well as the continued excise tax exemption for pickup trucks.

Light commercial vehicles which include pickup trucks is the fastest growing segment in the country.

Furthermore, Gutierrez cautions that if the government does levy excise tax on pickup trucks, it will definitely result in more expensive vehicles and will limit the available choices for Filipino consumers. It will also derail the growth of the automotive industry.

To recall, under the current scheme which was passed as part of TRAIN, pickup trucks, regardless of price or positioning, are exempted from excise tax due to their nature as workhorses for businesses, especially micro- and small enterprises.

However, because the DTI has noted that pickup trucks are rarely used for their intended purposes, they have sent a recommendation to congress to remove their excise tax exemption; a recommendation which was acted on by the House’s ways and means committee.

Sadly, despite assurances that pickup trucks will not be slapped with excise tax, at least for the foreseeable future, industry sources say that several carmakers are poised to increase their prices in the coming months due to unfavorable exchange rates as well as the increase in production cost of new vehicles.

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