Senate approves two-tier excise tax on automobiles

The Senate approved on Monday a two-tier excise tax structure for automobiles under its proposed Tax Reform for Acceleration and Inclusion Act (TRAIN).

During a hearing on the proposed measure, the Senate approved an excise tax of 10 percent for automobiles valued at P1 million and below, and 20 percent for P2 million above.

Senator Ralph Recto, who proposed the amendment to the measure, cited as too high the excise tax on automobiles under the Senate bill and would prompt smuggling of vehicles into the country.

"Pag masyadong mataas 'yung rate what happens? May smuggling," he said.

With the two-tiered excise tax, Recto said the government would generate as much as P16.65 billion in the first year of implementation and P93.86 billion from 2018 to 2022.

The six-tier excise tax on automobiles under current version of the proposed TRAIN Act would generate only P14.94 billion. — VDS, GMA News