Review of tax exemption for pickup trucks compatible with Pasqual

The Secretary of Commerce, Alfredo E. Pascual, he supports a review of the selective tax exemption on double cab pickup trucks, as it is “a way of life out of the need for and access by MSMEs.” [micro-, small and medium-sized enterprises]. “

“The ordinary truck with a single cab and chassis – the true giant car – has always been exempt from production tax even before Train [Tax Reform for Acceleration and Inclusion law]Pascual told reporters.

The Chief of Commerce said the Train Act (Republic Act 10963) extended the exemption to a double-cabin pickup truck “ostensibly” to support freight transportation requirements for MSMEs.

However, Pascual said, “It appears that the imported double-cab pickup is often a passenger unit with full accessories.”

“Since the tax exemption applies to the entire vehicle, double cab pickup accessories are also exempt from the excise tax,” he added. With this, Pasquale said he supports the tax-exempt review.

Last August 24, the House Committee on Ways and Means for Public Approval passed the Passive Income Tax and Fiscal Intermediate (Pifita) or Package 4 of the Comprehensive Tax Reform Program (CTRP) and the proposed mining financial system, which is expected to provide 63.5 billion pesos in new revenue.

The committee agreed to include in the bill the proposal made by the Department of Finance (DOF), together with the Department of Trade and Industry (DTI), to remove the excise tax exemption for pickup trucks filed under RA 10963.

Finance Minister Benjamin E. Diokno said the proposal shows an additional revenue of 52.6 billion pesos from 2022 to 2026.

Representative Joy Sarti Salcida in Albay questioned the “economic rationale” behind exempting pickup trucks from vehicle taxes, noting that state enterprises lost 38 billion pesos from granting such an exemption.

“Why should the state, with taxes being its lifeblood, forgo taxes on pickups. What is the societal function? Why should we prefer 98 percent imported pickups over sedans?” Salcida asked.

The legislator issued his statement after local manufacturers announced that imposing the excise tax on pickup trucks would reduce government revenue because it would “negatively affect their sales volume and thus reduce revenue for the government.”

Salcida cited a letter he received from the Department of Trade and Industry that indicated that as a result of the tax exemption on pickup trucks, annual personal vehicle sales growth fell to 5 percent from 20 percent while sales of pickup trucks rose 17 percent.

The legislator added that exempting pickup trucks from selective taxes should be particularly debatable because it is considered a “chain of goods that are imported”.

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