New tax on vehicle purchases?

[Guy F.]

We heard a rumor that one of Duterte's ideas is to legislate a new tax on vehicle purchases. Of course we heard it from someone who wants to sell a car to us, their reasoning being that it would be better to buy a car now than to wait until next year. I did a google search for "tax Philippines" and found no mention of such a new tax. It does make some sense though, since people who are buying cars are the ones who can better afford a new tax. Has anyone else heard about this?

[AlwaysRt]

I have heard that also, but like the PhilHealth increase, have not heard anything since the increase was supposed to be in effect 1 July.

[intrepid]

maybe this will help.      http://www.carguide.ph/2017/05/how-approved-excise-tax-bill-affects-20.html

[Lobstered]

There is a bill before the senate that will increase tax on cars especially expensive cars by a huge amount. The original plan had it coming into effect as soon as it was passed and would have increase something like a Toyota Fortuner by about 80%.

However that did not pass the senate and as I understand it they are still discussing it. The latest proposal is that the increase in tax will happen in two phases, the first phase in Jan 18 and the second in Jan 19

So yes as of January next year high value new cars will go up in cost a lot but the full impact will not be felt until 2019, If you are buying a cheaper car like a small hatchback then the cost will increase as well but the increase will be much smaller

[Old55]

This falls in line with what I heard last March. New cars will be taxed at higher rates per price. That is to say a base Honda percentage to be lower than a Mercedes. 

[stevewool]

2 hours ago, Lobstered said:

There is a bill before the senate that will increase tax on cars especially expensive cars by a huge amount. The original plan had it coming into effect as soon as it was passed and would have increase something like a Toyota Fortuner by about 80%.

However that did not pass the senate and as I understand it they are still discussing it. The latest proposal is that the increase in tax will happen in two phases, the first phase in Jan 18 and the second in Jan 19

So yes as of January next year high value new cars will go up in cost a lot but the full impact will not be felt until 2019, If you are buying a cheaper car like a small hatchback then the cost will increase as well but the increase will be much smaller

They must have heard i was coming then, so thats what they are waiting for.

[Gary D]

Applying Philippine logic the price of second hand cars will go up by similar amounts due to the increased cost of the equivalent new car. Even if bought at the old rate.

Edited August 5, 2017 by Gary D

[Dave Hounddriver]

2 hours ago, Gary D said:

Applying Philippine logic the price of second hand cars will go up by similar amounts

The price may not go up but depreciation never seems to kick in.  For example, people who bought a multicab 10 years ago for 140K pesos think they can give it a paint washover and still get 140K for it.  And ya know what?  They actually can and do, if the multicab is still in good shape.

[bigpearl]

The price is the price, 2017/18/19. Swallow and we live with the decisions and price hikes unfortunately, Electronics, white goods and cars will attract higher taxes aimed at those who can afford,,,,,,,,,, no different in most countries, sad but a fact of life, work harder to pay/secure your purchase/desire then enjoy.

Cheers, Steve.

[OnMyWay]

9 hours ago, Gary D said:

Applying Philippine logic the price of second hand cars will go up by similar amounts due to the increased cost of the equivalent new car. Even if bought at the old rate.

If you want to call if Philippine logic, so be it, but in this case, it seems like sound logic to me.  Even though it may not seem so sometimes, supply and demand principle is active here in the Philippines.

For example, using a 2017 p 1 million new Innova as an example, if the 2018 goes up 10% due to the tax, it will cost 1.1 mil.  That definitely might pull up the prices of the recent model used Innovas.  

A.  The new price will price some buyers out of the new Innova market.  Demand for new goes down, used, up.

B.  Used Innova demand will go up due to people trying to avoid the tax. 

B.  Used Innova supply is fixed for the old price years.  At the market level, supply of these will go down.

Most owners of recent model cars will price them based on what they see competitive sellers are asking, often on sites like OLX.  If I see that others are now asking p950,000 for a 2017, instead of p900,000 a few months before, I'm going to ask p950,000 for mine too.  I'm not going to price it lower based on the lower price I paid for it.

Time will tell.  One huge thing missing for used car buyers in the Philippines are used car pricing estimate web sites like Edmunds and Kelly Blue book in the USA.  They are not perfect but give you a good baseline to start your search from.

Edited August 5, 2017 by OnMyWay