Restructuring The Excise Taxation of Motor Vehicles

NTRC Tax Research Journal Vol. X X I X .
1 Januaiy-February 2017
Restructuring the Excise Taxation

of Motor Vehicles *
I. INTRODUCTION
The Duterte administration commits to reduce the personal income tax (PIT) under its
Comprehensive Tax Reform Program Package (CTRP) such that there w i l l be huge revenue
loss that the government needs to compensate.
This study reviews the excise taxation o f motor vehicles as one o f the sources o f
revenues to compensate for the forgone revenue from the proposed lowering o f the PIT.
II. H I S T O R I C A L C H A N G E S ON E X C I S E T A X A T I O N O F A U T O M O B I L E S IN
T H E P H I L I P P I N E S ( S E E A N N E X A)
The excise tax on automobiles was first imposed i n 1986 via Executive Order
(EO) N o . 36'. The rates were three-tiered ranging from 5% to 20% based on the
manufacturer's or importer's selling price, net o f excise and sales tax, depending on the
engine displacement and fuel used i.e. whether it is gasoline or diesel-fed. The tax was i n
addition to the then 30% sales tax imposed on original sale o f automobiles except motor
vehicles classified as trucks, jeeps and utility vehicles. In 1988, EO 273^ imposed a 10%
V A T on the sale o f goods and services in lieu o f the sales tax, including those o f
automobiles. Relative thereto, it also prescribed a revised excise tax schedule for
automobiles, as follows:
* Prepared by Marry-Jean V. Yasol, Tax Specialist I I , reviewed and approved by Ma. Berlie L. Amurao,
Supervising Tax Specialist and Marlene L. Calubag, Chief Tax Specialist, Indirect Taxes Branch, NTRC.
' Entitled, "Further Amending Certain Sections o f the National Internal Revenue Code as Amended",
effective August 1, 1986
- Entitled, "Adopting a Value-Added Tax, Amending for this Purpose Certain Provisions of the
National Internal Revenue Code, and for Other Purposes", effective January 1, 1988
32 Restructuring the Excise Taxation of Motor Vehicles

NTRC Tax Research Journal Vol. X X I X . 1 January-February 2017
Table 1, E X C I S E T A X S C H E D U L E O N A U T O M O B I L E S U N D E R E O 273
1988 - 2002
Engine Displacement
Tax Rate
Gasoline Diesel
Up to 1600 cc Up to 1800 cc 15%
1601 -2000 cc 1801 -2300 cc 35%
2001 - 2700 cc 2301 -3000 cc 50%
2701 cc or over 3001 cc or over 100%
Tax base: Manufacturer's or importer's selling price, net of excise and V A T
In 1997, the term "automobiles" was defined w i t h the promulgafion o f Revenue

Regulations (RR) No. 14-97^ (dated November 5, 1997) implementing the provisions o f
Secfion 149 o f Title V I o f the National Internal Revenue Code ( N I R C ) , as amended,
imposing an excise tax on automobiles and other motor vehicles. It defined "automobile"
as any four (4) or more wheeled vehicle other than trucks specially designed for the
transport o f persons w i t h a seafing capacity o f less than ten (10) adult passengers,
including the driver. It included ufility or light commercial vehicles designed for
passenger use w i t h seating capacity o f less than 10 adult passengers, including the driver.
However, the seats in the rear cargo/luggage compartment were not to be counted as
passenger seats even i f these are factory installed and meet the area specifications. Jump-
seats, fold-away and fold-down seats were also treated i n the same manner. These
regulations were effective unfil the promulgation o f RR 14-99'' (dated October 13, 1999),
w h i c h amended Section 2 o f RR 14-97.
RR 14-99 provided, among others, that: (a) trucks and passenger jeepneys are not
covered; (b) closed or covered four-wheel drive vehicles, primarily designed to carry
passengers, regardless o f the number o f seats, are considered and taxed as automobiles
for purposes o f the said regulafion starting February 1, 2000; and (c) for the uniform
application o f the number o f seats criterion, the passenger seats must conform to the
f o l l o w i n g rules and area specifications:
(a) Each seat shall be a horizontal rectangular area with seat and feet space o f not
less than thirty-five centimeters (35 cm.) wide and sixty centimeters (60 cm.)
long for each passenger and fifty centimeters (50 cm.) wide and sixty
centimeters (60 cm.) long for the driver or operator.
(b) The requirement o f the Seatbelt Use Act o f 1999 (R.A. 8753) must be complied
with for a seat to be counted as such for purposes o f these regulations.
^ Entitled, "Revenue Regulations Governing the Imposition of Excise Tax on Automobiles and Other
Motor Vehicles."
•* Entitled, "Amending Section 2 of Revenue Regulations No. 14-97 Otherwise Known as Revenue
Regulations Governing the Imposition of Excise Taxes on Automobiles and Other Motor Vehicles."
Restructuring the Excise Taxation of Motor Vehicles 33

(c) In all cases where there is a variance in the determination o f the correct number
o f seats, the number o f seats shown in the manufacturer's certification and
catalogue or brochure shall prevail.
In August 2003, R A 9224^ revised the excise tax structure and based it purely on
the vehicle price regardless o f engine displacement and type o f fuel used. In particular, it
imposed an ad valorem tax ( A V T ) based on the manufacturer's or importer's selling price
( M I S P ) , net o f excise tax and V A T , i n accordance w i t h the following schedule:
Table 2. E X C I S E T A X O N A U T O M O B I L E S U N D E R R A 9224
2003 - P R E S E N T
Net Manufacturer's Price/

Rate
Importer's selling price
Up to PhP600,000 2%
Over PhP600,000 to PhP 1.1 PhPl 2,000 + 20% of value in excess of
million PhP600,000
OverPhPl.l million to PhP2.1 PhPl 12,000 + 40% of value in excess of
million PhP 1.1 million
PhP512,000 + 60% of value in excess of
Over PhP2.1 million
PhP2.1 million
It was through R A 9224 that the tax regime on automobiles was changed from
pure ad valorem tax where the rate is directly applied on the price or value o f the
automobile to marginal tax rates applied to the excess o f a pre-defined threshold vehicle
price i n the tax schedule (similar to income tax). Furthermore, it effectively reduced the
rates from the previous 15%-100% to 2%-60% and removed the distincfion between
gasoline and diesel-fed engines.
A new definition o f the term "automobile" was also provided under R A 9224, as
any four (4) or more-wheeled motor vehicle regardless o f seating capacity, which is
propelled by gasoline, diesel, electricity or any other mofive power. Buses, trucks, cargo
vans, jeeps/jeepneys substitutes, single cab chassis, and special purpose vehicles are not
considered as automobiles.
To implement the revised tax scheme on automobiles, RR 25-2003^ was issued

and amended previous regulations relating to automobiles which include the following:
•'' Entitled, " A n Act Rationalizing the Excise Tax on Automobiles, Amending for the Purpose the
National Internal Revenue Code of 1997, and for Other Purposes," approved August 29, 2003.
* Subject: Amended Revenue Regulations Governing the Imposition of Excise Tax on Automobiles
pursuant to the Provisions of Republic Act No. 9224, An Act Rationalizing the Excise Tax on Automobiles,
Amending for the Purpose the National Internal Revenue Code of 1997, and for Other Purposes. (Issued,
September 16, 2003)

NTRC Tax Research Journal Vol. XXIX. 1 January-February 2017
(a) Tax treatment o f imported automobiles not intended for sale - A person/entity
can import only one (1) unit o f vehicle within a twelve month period, which
would be taxed based on its total landed value^.
(b) Tax treatment o f subsequent sale, transfer or exchange o f a tax-exempt

automobile by a tax-exempt person/entitv to a non-exempt person/entitv - such
automobile shall be taxed based on the depreciated value o f the automobile at
the time o f sale, transfer, or exchange where depreciation rate shall be at 10%
per year, but i n no case shall the total amount o f depreciation be more than 50%
o f the original cost or value.
(c) Tax exempt removals for export - Automobile manufacturers for exporting
purposes** shall be exempt from the A V T . Moreover, firms involved in the
delivery o f automobiles may be exempt from the pre-payment o f A V T .
Customs Administrative Order ( C A O ) No. 07-2014^, prescribed the guidelines i n

the determination o f the rate o f depreciafion for No-Dollar i m p o r t a t i o n s ' ° o f motor
vehicles to w h i c h 10% is allocated for depreciation i n every year o f the automobile but i n
no case shall it be more than 50% o f the original cost or value and i n no case shall it
exceed 90% for used trucks and heavy equipment.
On the other hand. Customs Memorandum Order ( C M O ) No. 29-2014 prescribed

a uniform and simplified format i n the computation o f duties, taxes and other charges for
automobiles. It covers the following:
(a) Brand new automobiles consigned to car manufacturers or dealers, the net
importer's selling price (ISP) shall be the higher value;
(b) Used automobiles consigned to the following:
i. Returning Filipino Diplomats and/or Dept. o f Foreign Affairs' officials;
ii. Returning Filipino Residents who have resided abroad for at least one (1)
year {accumulated within 3 years o f his/her stay abroad immediately
preceding the date o f filing o f the Certificate o f Authority to Import ( C A I )
at the Bureau o f Import Services (BIS)};
iii. Immigrants holding 13A or 13G visas or those with dual citizenships
provided a prior Certificate o f Authority to Import had been issued by the
DTI-BIS prior to exportation.
^ The cost of the vehicle would include purchase price, freight, insurance and additional costs as
valued by the port.
** Carries a permit to export, direct delivery to vessel, proof of export and exporter's bond
' Subject: Revised Depreciation Schedule for Imported Motor Vehicles (Issued, October 29, 2014)
The No Dollar Importation (NDI) is a special privilege given by the goverrmient to returning
residents and other qualified individuals to bring motor vehicles into the country for personal use under certain
conditions.

(c) Used automobiles under the local purchase scheme, sold by privilege (duty/tax
exempt) persons to non-privilege (non-duty/tax exempt) individuals or those
sold by privilege to privilege individuals. The depreciated value o f the
automobile at the time o f sale, transfer or exchange shall be based on the
provisions o f C A O 07-2014.
HI. R E V E N U E P E R F O R M A N C E O F T H E E X C I S E TAX ON AUTOMOBILES,

1996-2015
Available data show that from a high collection o f almost PhP6.0 billion i n 1996, the
excise tax collection (ETC) on automobiles went down to PhP4.1 billion in 1997 and ftirther
to PhPl.5 billion in 2003 under EO 273. W i t h the fiill year implementation o f R A 9224 i n
2004, the collection hardly improved to PhPl.8 billion and remained more or less in that
level up to 2009. Starting 2010, the collection hit PhP2.0 biUion and more.
Figure 1. B I R C O L L E C T I O N S F R O M A U T O M O B I L E S , 1996 - 2015
7.00 0.26%
0.24%
6.00 0.22%
E 0 273 RA9224 0.20%
5.00
0.18%
0.16% a
4.00
l
JZ 0.14% Q
a 0.12%
c .3.00
0.10% 5?
u 0.08%
2.00
0.06%
1.00
0.00 fniMmMl 6^ •O- •O' V*- ^>

0.04%
0.02%
0.00%
iGDP
Source of basic data: BIR
Its percentage contribution to total excise tax collection, B I R collection, and GDP,
has been decreasing from percentage ratio o f 9.7% to 1.6%, from 1.1% to 0.2% and from
0.3% to 0.02%, respectively, from 1996 to 2015.

Table 3. V O L U M E O F R E M O V A L S ( V O R ) A N D E X C I S E T A X
C O L L E C T I O N S O N L O C A L L Y M A N U F A C T U R E D A U T O M O B I L E S , 1996-2015
(Amounts in Billion PhP)
Growth Rate Ratio of E T C to

No. of
Year ETC Total Total BIR
Units VOR ETC GDP
ETC Collections
Under E O 273
1996 83,935 5.98 - 9.67% 1.10% 0.25%
1997 65,852 4.13 -21.54% -30.94% 6.68% 0.76% 0.15%
1998 32,195 2.57 -51.11% -37.77% 4.16% 0.47% 0.09%
1999 26,697 2.38 -17.08% -7.39% 3.85% 0.44% 0.07%
2000 28,410 2.63 6.42% 10.50% 4.25% 0.48% 0.07%
2001 22,060 2.06 -22.35% -21.67% 3.33% 0.38% 0.05%
2002 28,240 2.00 28.01% -2.91% 3.24% 0.37% 0.05%
2003 31,649 1.50 12.07% -25.00% 2.43% 0.28% 0.03%
Ave. 39,880 2.91 -9.37% -16.45% 4.70% 0.54% 0.10%
Under R A 9224
2004 45,020 1.80 0.00% 0.00% 3.02% 0.38% 0.04%
2005 52,211 2.01 15.97% 11.77% 3.25% 0.37% 0.04%
2006 48,933 1.79 -6.28% -10.91% 3.07% 0.27% 0.03%
2007 54,606 1.82 11.59% 1.88% 3.31% 0.26% 0.03%
2008 54,080 1.66 -0.96% -8.73% 2.71% 0.21% 0.02%
2009 57,439 1.88 6.21% 13.28% 3.11% 0.25% 0.02%
2010 66,498 2.37 15.77% 25.93% 3.53% 0.29% 0.03%
2011 56,597 2.00 -14.89% -15.69% 2.94% 0.22% 0.02%
2012 61,643 2.34 8.92% 16.88% 3.23% 0.22% 0.02%
2013 67,722 2.35 9.86% 0.57% 1.98% 0.19% 0.02%
2014 69,082 2.33 2.01% -0.78% 1.72% 0.17% 0.02%
2015 74,347 2.45 7.62% 4.84% 1.55% 0.17% 0.02%
Ave 59,015 2.07 4.65% 3.25% 2.79% 0.25% 0.03%
Total
51,361 2.40 1.71% -4.01% 3.55% 0.36% 0.05%
Ave.
Source of basic data: BIR [
I
i
The bulk (76%) o f the volume o f removals came from the 20% tax bracket with the j
highest recorded i n 2015. Accordingly, total excise tax collection was highest under said
bracket which comprised 90% o f the total collection.

Table 4. V O L U M E O F R E M O V A L S A N D E X C I S E T A X C O L L E C T I O N S
F R O M L O C A L L Y M A N U F A C T U R E D A U T O M O B I L E S B Y B R A C K E T , 2009-2015
(Amounts in Million PhP)
No. of Units Total Excise Tax Collection

Year
2% 20% 40% Total 2% 20% 40% Total
2009 18,268 38,927 244 57,439 211.96 1,577.56 94.84 1,884.36
2010 21,171 45,176 151 66,498 254.15 2,097.83 20.99 2,372.97
2011 14,605 41,984 8 56,597 157.77 1,841.94 0.93 2,000.63
2012 12,389 49,032 222 61,643 130.11 2,118.84 89.38 2,338.33
2013 13,910 53,475 337 67,722 149.61 2,115.81 86.28 2,351.69
2014 15,649 53,258 175 69,082 171.67 2,119.54 42.20 2,333.40
2015 9,736 64,394 217 74,347 101.59 2,281.85 62.90 2,446.34
Ave. 15,104 49,464 193 64,761 168.12 2,021.91 56.79 2,246.82
Source o f basic data: BIR
The same observation is found on imported automobiles wherein processed data from
the B O C showed that the highest V O R and ETC came from the 20% tax bracket i n 2015.
Under the said bracket, excise tax collections amounted to PhP6.35 billion which comprised
58.2% o f the total collection while its V O R comprised 52.8% o f the total removals.
Table 5. E S T I M A T E D V O L U M E O F R E M O V A L S A N D E X C I S E T A X
C O L L E C T I O N S B Y B R A C K E T F R O M I M P O R T E D A U T O M O B I L E S , 2015
(In Million PhP)
Tax Excise Tax

No. of Units
Bracket Collections
2% 80,576 707.74
20% 106,947 6,350.28
40% 13,542 2,471.54
60% 1,351 1,380.87
Total 202,416 10,910.44
Source of basic data: BOC raw data as processed by NTRC
Thus, the combined total excise tax collection from both local and imported
automobiles is estimated to be PhP 13.36 billion, o f which 81.7% came from the BOC
collections.

Table 6. T O T A L E X C I S E T A X C O L L E C T I O N S B Y B R A C K E T FROM
L O C A L L Y M A N U F A C T U R E D A N D I M P O R T E D A U T O M O B I L E S , 2015
(In Million PhP)
Tax No. of Units ETC

Bracket Local Imported Total BIR BOC Total
2% 9,736 80,576 90,312 101.59 707.74 809.33
20% 64,394 106,947 171,341 2,281.85 6,350.28 8,632.13
40% 217 13,542 13,759 62.90 2,471.54 2,534.45
60% - 1,351 1,351 - 1,380.87 1,380.87
Total 74,347 202,416 276,763 2,446.34 10,910.44 13,356.78
It is noted that prior to R A 9224, automobile excise taxation was based on engine
displacement. Such policy was based on the premise that motor vehicles inflict damage to the
environment and thus the heavier the motor vehicle is, the greater the environmental damage,
hence, heavier taxes". However, policy-makers have decreed that value-based taxation is
more transparent and easier to administer.
IV. C O M P A R A T I V E E X C I S E T A X A T I O N O F M O T O R V E H I C L E S IN O T H E R
COUNTRIES
A. Excise Taxation of Motor Vehicles in A S E A N Countries (Annex B )
A l l A S E A N member-countries impose "excise tax", "excise duty" or an

equivalent excise tax- like levy on motor vehicles ( M V ) . In particular, the Philippines,
Lao PDR, Thailand and Vietnam impose the excise tax while Brunei, Malaysia and
Singapore collect the excise duty. Other member-countries have their own unique
excise taxes, the Specific Tax on Certain Merchandise and Service Tax in Cambodia,
Excise Tariff-Luxury Sales Tax i n Indonesia and Commercial Tax i n Myanmar.
A l l A S E A N member-countries impose ad valorem tax rates based on the price

or value o f the M V . However, the Philippines is the only member-country that imposes
marginal tax rates wherein the rates are applied on the excess over a pre-defined
threshold amount i n the tax schedule (similar to the income tax) while all others
directly apply the tax rates to the price or value o f the M V .
Brunei imposes a standard rate o f 20% based on the value o f the M V except for
certain types o f tractors which are taxed at 15%. Singapore also collects 20% excise tax
except on motorcycles which are taxed at 12%.
" APTF ASEAN Excise Tax Study Group Discussion Paper. available at
www. iticnet.org/images/Phase_ II_Discussion_Paper.pdf, viewed October 2015

Myanmar applies two-tiered rates o f 25% and 5% o f selling price depending on

the type o f M V . In particular, light vans, saloons, sedans, light wagons, estate wagons
and coupe are taxed at 25% while bicycles, tractors, train engines, ships, vans and
buses, cranes and winches cars, among others are taxed at 5%.
Cambodia imposes three-tiered rates o f 10%, 20% and 30% o f ex- factory
selling prices o f automobiles based on their tariff headings and engine displacement.
The higher the engine displacement, the higher is the excise tax.
Indonesia, Lao PDR, Malaysia, Thailand and Vietnam apply multiple tax rates
depending on the type o f M V and engine displacement. I n particular, Indonesia
imposes rates ranging from 10% to 125%; Lao PDR, from 10% to 150%; Malaysia,
20% to 105%; Thailand, 10% to 50%; and Vietnam, 10% to 60%.
Thailand is the only country that imposes the excise tax based on the
emission rate o f each type o f M V and engine. The higher the emission rate, the higher
the excise tax rate.
Indonesia, on the other hand, considers the seating capacity o f the M V aside
from the type o f engine and cylinder in its excise tax structure. In particular, it levies
higher tax on M V s used for transporting less than 10 passengers including the driver
than on those with 10 up to 15 passengers and exempts M V s with 16 or more seating
capacities. Vietnam also considers the seating capacity i n its excise tax structure with
higher rate imposed on passenger cars o f nine (9) seats or less and lower rate on those
with 16 to 24 seats.
The Philippines levies a four-tiered excise tax with rates ranging from 2% to
60% depending purely on the manufacturer's or importer's selling price net o f excise
and V A T .
The Philippines imposes the lowest minimum rate o f 2% on taxable M V s

compared with 5% or 10% minimum tax rate in other member-countries. On the other
hand, Lao PDR imposes the highest tax rate o f up to 150% on large vehicles.
In terms o f the coverage o f the excise tax, the Philippines imposes the tax on
"automobiles" which include any four (4) or more wheeled motor vehicle regardless o f
seating capacity, which is propelled by gasoline, diesel, electricity or any other motive
power. Buses, trucks, cargo vans, jeeps/jeepneys/jeepney substitutes, single cab,
chassis, and special purpose vehicles are not considered as automobiles; hence, not
subject to excise tax.
Unlike the Philippines which limits its excise tax in any four (4) or more
wheeled M V s , eight (8) A S E A N member-countries namely Brunei, Cambodia,
Indonesia, Lao PDR, Malaysia, Myanmar, Singapore and Vietnam impose excise tax
on two- wheeled M V such as motorcycles. Thailand similarly does not collect excise
tax on motorcycles like the Philippines.

While the Philippines does not subject buses and trucks to the excise tax, Lao
PDR and Myanmar include them i n the coverage o f their respective excise tax
structure. Singapore also subject buses to the tax.
While the Philippines does not tax special purpose vehicles, Brunei, Indonesia
and Singapore impose the excise tax on these. In particular, Brunei imposes the excise
tax on crane lorries, concrete mixer lorries, road sweeper lorries, fire fighting vehicles,
mobile radiological units while Indonesia imposes the tax on special vehicles made for
golf, snow, on the beach, on the mountain and the like. Singapore also subject to the tax
special vehicles designed for travelling on snow, golf cars, ambulance and hearses,
among others.
Thailand and Vietnam give preferential rates on eco-fiiendly automobiles by

imposing lower rates. In particular, Thailand imposes lower rates for eco-cars while
Vietnam impose lower rates on electric cars, cars running on bio-fliel or cars running
on gasoline in combination with electricity or bio-fiiel.
B. T A X A T I O N O F L U X U R Y CARS O R M O T O R V E H I C L E S IN O T H E R
COUNTRIES
Among the A S E A N member-countries, it is only Indonesia that imposes a

Luxury-Goods Sales Tax (LST) on certain manufactured taxable goods such as motor
vehicles. The tax is charged only once either on importation o f the good or on delivery
by the manufacturer to another party. It is accounted for every month together with
V A T . The importer or the manufacturer o f the goods is held responsible for the
settlement o f the LST. The current LST rates are between 10% to 125% but according
to the V A T and LST Law, the rate may be increased up to 200%. The LST on motor
vehicle is based on the cylinder capacity o f the motor vehicles.''^
In Australia, cars with value over the luxury car tax ( L C T ) threshold are subject
to an L C T rate o f 33%. The tax is applicable to the portion o f the car's value that is
above the threshold, and not the total value o f the car. The tax is levied against the
seller - the car retailer, wholesaler or manufacturer but the seller may pass this
substantial cost on to consumers by adding the amount o f LCT paid on top o f the car's
retail price. The L C T is payable on imported luxury cars unless the car is covered by a
specified Customs duty concession item or L C T exemption. For LCT purposes, a car is
a motor vehicle (but not a motorcycle) designed to carry a load o f less than two (2)
tonnes and fewer than nine (9) passengers. However, a limousine is classified as a car,
regardless o f the number o f passengers it is designed to carry.
The following table lists the L C T thresholds for the relevant financial year - the
financial year the car was imported, acquired or sold.
'- Pwc, Indonesian Pocket Tax Book 2015, https://www.pwc.coni/id/en/pocket-tax-book/ptb-2015-

Final-eng.pdf. viewed August 5, 2016.
Australian Government Australian Taxation Office, Luxury Car Tax,

https://www.ato.gov.au/Business/Luxury-car-tax/

Table 7. A U S T R A L I A ' S L U X U R Y C A R T A X T H R E S H O L D S
Australian Dollars Peso Equivalent (In Billion PhP)

Financial
year Fuel-efficient Other Fuel-efficient Other
Vehicles Vehicles Vehicles Vehicles
2009 $75,000 $57,180 2.69 2.05
2010 $75,375 $57,466 2.71 2.06
2011 $75,375 $57,466 2.71 2.06
2012 $75,375 $59,133 2.71 2.12
2013 $75,375 $60,316 2.71 2.16
2014 $75,375 $61,884 2.71 2.22
2015 $75,375 $63,184 2.71 2.27
2016 $75,526 $64,132 2.71 2.30
Source: https://www.ato.gov.au/rates/luxurv-car-tax-rate-and-thresholds/. viewed
September 19, 2016; Forex: Australian $1 = PhP35.89
V. PROPOSED E X C I S E T A X R E F O R M ON A U T O M O B I L E S
House B i l l ( H B ) No. 4774 proposes that the lowest bracket be increased irom 2% to
4% and the succeeding marginal tax rates from 20%-60% to 40%-200%. Below is the
comparative schedule o f the proposed vis-a-vis the present excise tax rates on automobiles.
Table 8. P R O P O S E D E X C I S E T A X R A T E S O N A U T O M O B I L E S
Net Manufacturer's Price /

Importer's Selling Price Present Proposed
(NMISP)
Up to PhP600,000 2% 4%
Over PhP600,000 to PhP 1.1 PhP 12,000 + 20% of value in PhP24,000 + 40% of value in
million excess ofPhP600,000 excess ofPhP600,000
Over PhP 1.1 million to PhP2.1 PhPl 12,000+ 40% of value PhP224,000 + 100% of value in
million in excess of PhP 1.1 million excess of PhP 1.1 million
PhP512,000 + 60% of value PhP 1,224,000 + 200% of value
OverPhP2.1 million
excess of PhP2.1 million in excess of PhP2.1 million
Table 9 shows the comparative maximum tax and maximum effective excise tax rates
(ratio o f excise tax to NMISP) per tax bracket under present and proposed schedules.
At N M I S P o f PhP600,000 in the first bracket, the tax under present tax schedule
amounts to PhP 12,000. The tax w i l l increase to PhP24,000 under the proposed tax schedule.
A t NMISP o f PhP 1.1 million i n the second bracket, the present tax amounts to PhPl 12,000.
It w i l l double to PhP224,000 under the proposed excise tax. The effective tax rate w i l l also

double from 10.2% to 20.4%. In the third bracket, the tax for NMISP o f PhP2.1 million
amounts to PhP512,000 but it w i l l more than double to PhP 1.224 million under the proposed
excise tax rate. In the fourth bracket, the increase i n the tax w i l l more than double or triple
depending on the NMISP o f motor vehicles.
Table 9. C O M P A R A T I V E E F F E C T I V E E X C I S E T A X R A T E S P E R T A X
B R A C K E T U N D E R P R E S E N T A N D H B 4774
Net Manufacturer's/ Maximum Tax Maximum E T R

Importer's Selling Price Present Proposed Present Proposed
Up to PhP600,000 12,000 24,000 2% 4%
Over PhP600,000 to PhPl .1 M 112,000 224,000 10.2% 20.4%
OverPhPl.l to PhP2.1 M 512,000 1,224,000 24.4% 58.3%
OverPhP2.1 M
@ PhP2.5 M 752,000 2,024,000 30.1% 80.1%
(a) PhP5.0 M 2,252,000 7,024,000 45.0% 140.5%
@PhP10.0M 5,252,000 17,024,000 52.5% 170.2%
Table 10 shows the impact o f the proposed excise tax on suggested retail price (SRP).
Assuming a 20% dealers' profit margin, with the proposed excise tax rates, SRP o f sample
motor vehicles w i l l increase by 2% to 14% i n the first to third brackets. The increase w i l l be
more for other higher-priced brands/models falling under the third bracket. On the other
hand, the increase in the SRP o f sample motor vehicles in the fourth bracket w i l l range fi-om
34% to 59%. Again, the increase could be more for higher-priced brands/models falling
under the fourth bracket.
Table 10. I M P A C T O F T H E P R O P O S E D E X C I S E T A X
ON T H E S E L L I N G P R I C E O F A U T O M O B I L E S
Suggested Retail Price Excise Tax

Brand Model
Present Proposed Increase % Change Present Proposed Increase % Change
Net Manufacturer's or Importer's Selling Price*
1. Up to PhP600 thousand
Suzuki Alto 800 Deluxe 438,000 446,588 8,588 2% 6,390 12,780 6,390 100%
Hyundai Eon GLX Navi 525,000 535,294 10,294 2% 7,659 15,319 7,659 100%
Suzuki Super Carry Jeepney 550,000 560,784 10,784 2% 8,024 16,048 8,024 100%
Toyota Wigo 1.0 G 561,000 572,000 11,000 2% 8,185 16,369 8,185 100%
Kia Picanto 1.0 EX 575,000 586,275 11.275 2% 8,389 16,778 8,389 100%
2. thousand to PhPl.1 Million
Mitsubishi Adventure TX 690.000 703,529 13,529 2% 10,067 20,133 10,067 100%
Ford Fiesta 1 5 Ambiente 4DR 698,000 711,686 13.686 2% 10,183 20,366 10.183 100%
Hyundai Accent 1.6 GL CRD VGT 4DR 748,000 762,667 14,667 2% 10,913 21,825 10,913 100%
Toyota Avanza 1.3 E 807,000 825,198 18,198 2% 11,807 23,615 11,807 100%
Honda City 1.5 V X N a v i M U G E N 1,063,000 1,119,207 56,207 5% 41,820 83,641 41,820 100%
3. P h P l . l Million to PhP2.1 Million
Toyota Corolla Altis 2.0 V 1,215,000 1,296,540 81,540 7% 60,670 121,339 60,670 100%
Isuzu Crosswind Sportivo X 1,245,000 1,331,540 86.540 7% 64,390 128,780 64,390 100%
Mazda BT-50 2.2 4x2 1,300,000 1,395.707 95.707 7% 71,210 142,421 71,210 100%

Suggested Retail Price Excise Tax

Brand Model
Present Proposed Increase % Change Present Proposed Increase % Change
Toyota RAV4 2.5 Premium 2WD 1,863,000 2,113,845 250,845 13% 161,760 348,401 186,640 115%
Hyundai Sonata 2.4 GLS Premiuin 1,898,000 2,163,845 265,845 14% 169,201 367,002 197,801 117%
4. OverPhP2.1 Million
BMW 520d Luxuiy Essential 3,990,000 5,361,090 1,371,090 34% 645,781 1,665,938 1,020,156 158%
Volkswagen Touareg 3.0 TDI Sport Edition 4,290,000 5,923,590 1,633,590 38% 729,487 1,944,955 1,215,469 167%
Honda Legend 4,385,000 6,101,715 1,716,715 39% 755,993 2,033,31 1 1,277,318 169%
Poi^clie 718 Cayman 5,950,000 9,036,090 3,086,090 52% 1,192,656 3,488,854 2,296,198 193%
Nissan GT-R 7,350,000 11,661,090 4,311,090 59% 1,583,281 4,790,938 3,207,656 203%
*Nel of excise tax and VA T
On the other hand, Table 11 presents the impact o f the proposed excise tax on auto
financing. Assuming a 20% down payment and 27.28% and 36.10% interest rates for five (5)
years o f Bank A and Bank B, respectively, on car loans, there w i l l only be minimal increases
in the monthly amortizations on motor vehicles. Based on sample motor vehicles, the
increase i n monthly amortizadons under a 5-year installment period only ranges fi-om
PhP 146 to PhP4,512 for Bank A and PhP 156 to PhP4,824 for Bank B. The increase is still
affordable for low-priced motor vehicles but the impact becomes heavier as the price o f the
motor vehicle goes up.
Table 11. I M P A C T O F T H E P R O P O S E D E X C I S E T A X O N A U T O
FINANCING FOR FIVE YEARS
Brand Model Increase in Monthly Amortization

Bank A @ 27.28% Bank B @, 36.10%
Present Proposed Diff. Present Proposed Diff.
Net Manufacturer's or Importer's Selling Price*
1. Up to PhP600 thousand
Suzuki Alto 800 Deluxe 7,433 7,579 146 7,948 8,104 156
Hyundai Eon GLX Navi 8,910 9,084 175 9,527 9,714 187
Suzuki Super Carry Jeepney 9,334 9,517 183 9,981 10,176 196
Toyota Wigo 1.0 G 9,521 9,707 187 10,180 10,380 200
Kia Picanto 1.0 EX 9,758 9,949 191 10,434 10,639 205
2. PhP600 thousand to P h P l . l Million
Mitsubishi Adventure T X 11,710 11,939 230 12,521 12,767 246
Ford Fiesta 1.5 Ambiente 4DR 11,846 12,078 232 12,666 12,915 248
Hyundai Accent 1.6 GL CRD VGT 4DR 12,694 12,943 249 13,574 13,840 266
Toyota Avanza 1.3 E 13,695 14,004 309 14,644 14,975 330
Honda City 1.5 V X Navi MUGEN 18,040 18,994 954 19,290 20,310 1,020
3. P h P l . l Million to PhPZ.l Million
Toyota Corolla Altis 2.0 V 20,619 22,003 1,384 22,048 23,528 1,480
Isuzu Crosswind Sportivo X 21,128 22,597 1,469 22,593 24,163 1,570
Mazda BT-50 2.2 4x2 22,062 23,686 1,624 23,591 25,327 1,737
Toyota RAV4 2.5 Premium 2WD 31,616 35,873 4,257 33,807 38,359 4,552
Hyundai Sonata 2.4 GLS Premium 32,210 36,722 4,512 34,442 39,267 4,824

Brand Model Increase in Monthly Amortization

Bank A @ 27.28% Bank B (g 36.10%
Present Proposed Diff. Present Proposed Diff.
4. Over P h P l . l Million
BMW 520d Luxury Essential 67,713 90,981 23,268 72,405 97,286 24,881
Volkswagen Touareg 3.0 TDI Sport Edition 72,804 100,527 27,723 77,849 107,493 29,644
Honda Legend 74,416 103,550 29,134 79,573 110,726 31,153
Porsche 718 Cayman 100,975 153,348 52,373 107,973 163,975 56,002
Nissan GT-R 124,734 197,896 73,162 133,378 211,610 78,232
*Assuming a 20% down payment of the SRP of sample motor vehicles presented in Table 10
VI. C O N C L U S I O N AND R E C O M M E N D A T I O N
The present tax o f 2% tax on the first bracket under the Philippine tax schedule is the
lowest compared with the 5% or 10% minimum tax rate in other A S E A N member-countries.
The proposed increase in the minimum tax from 2% to 4% i n the first bracket and from 20%
to 40% in the second bracket w i l l make the rates comparable with its A S E A N peers.
Moreover, given the tax savings on personal income tax and low increase in the monthly
amortization i n case o f car financing, buying a car i n the first and second brackets w i l l still
be affordable among middle income employees.
On the other hand, the significant increase in the proposed marginal tax rates ranging
from 100% to 200% on high-priced automobiles under the third and fourth brackets w i l l
enhance the progressivity o f the tax and is justified on the ability to pay o f potential buyers.

Annex A
E X C I S E T A X R A T E S AND DEFINITION OF A U T O M O B I L E S
Legislation
(Date of Tax Schedule
Effectivity)
E O 36 Engine Displacement Imposed an Ad V

(August 1, 1986) Tax Rate depending on eng
Gasoline Diesel used, in addition
5% 1201 to 1600 cc 1851 to 2050 cc
10% 1601 to 1800 cc 2051 to 2250 cc
20% 1801 cc or over 2251 cc or over
E O 273 15% Up to 1600 cc Up to 1850 cc Increased the num

(January 1, 1988) upgraded the leve
35% 1601 to 2000 cc 1801 to 2300 cc
50% 2001 to 2700 cc 2301 to 3000 cc
100% 2701 cc or over 3001 cc or over
Defined the term

RR 14-97 Same schedule under EO 273
more wheeled veh
(November 5,
under RA 4136 a
1997)
gasoline, diesel o
specially designed
not used primaril
merchandise: Pro
shall be less than
driver. It shall inc
Legislation
Effectivity)
vehicles designed
capacity of less th
the driver. The se
compartment sha
seats even if thes
the area specifica
down shall also b
R R 14-99 Same schedule under EO 273 Amended RR 14-

(October 13, 1999) 2000, closed or c
primarily designe
of the number of
on automobiles.
Deleted the follow
"The seat in the

shall not be coun
these are factory
specification. Jum
shall also be trea
"Automobile" is
wheeled vehicle o
jeepneys, which i
electricity or any
designed to trans
transport freight
utility or light co
Legislation
Effectivity)
passenger use wit
passengers, inclu
RA 9224 Net Manufacturer's Selling Revised the excise

Tax Rate
(August 29, 2003) Price / Importer's Selling Price on the vehicle pri
displacement.
Up to PhP600,000 2%
Over PhP600,000 to PhPl.l PhP 12,000 + 20% of value in "Automobile" as
million excess ofPhP600,000 motor vehicle reg
is propelled by ga
Over PhP 1.1 million to PhP2.1 PhPl 12,000+ 40% of value other motive pow
million in excess of PhPl.l million jeeps/jeepneys su
special purpose v
OverPhP2.1 million PhP512,000 + 60%ofvalue
automobiles.
in excess of PhP2.1 million
Prepared by: Indirect Taxes Branch, National Tax Research Center

Date Prepared: October 20, 2016
Annex B
C O M P A R A T I V E E X C I S E T A X A T I O N O N M O T O R V E H I C L E S IN A S E A N C O
Country Particulars Tax Base
Philippines Automobiles Manufacturer's or importer's selling pr

(Excise Tax) net of excise tax and value-added tax
> Any four (4) or more wheeled motor (VAT), in accordance with the following
vehicle regardless of seating capacity, schedule:
which is propelled by gasoline, diesel,
electricity or any other motive power. Net manufacturer's price/
Importer's selling price
> Buses, trucks, cargo vans,
jeeps/jeepneys/jeepney substitutes, Up to PhP600 thousand
single cab, chassis, and special purpose
vehicles are not considered as Over PhP600 thousand to PhPl.l millio
automobiles; hence, not subject to
excise tax.
Over PhPl .1 million to PhP2.1 million
OverPhP2.1 million
Brunei' 1. Tractors (other than tractors of heading Value of goods

(Excise Duty) 87.09)
2. Motor vehicles for the transport of 10 Value of goods

or more persons, including the driver
3. Motor cars and other motor vehicles Value of goods

principally designed for the transport
of persons (other than those of heading
87.02), including station wagons and
racing cars.
4. Motor vehicles for the transport of Value of goods

goods
5. Special purpose motor vehicles, other Value of goods

than those principally designed for the
transport of persons or goods (for
example, breakdown lorries; crane
lorries, fire fighting vehicles, concrete-
mixer lorries, road sweeper lorries,
spraying lorries, mobile workshops,
mobile radiological units).
6. Chassis fitted with engines, for the Value of goods

motor vehicles of headings 87.01 to
87.05
' http://www.mof gov.bnyaUachments/article/187/EXCISE%20DUTIES%20ORDER.%202006%20(S%2040%2

ORDER,%20(l).pdf viewed March 03, 2016
Bodies (including cabs), for the motor Value of goods
vehicles of headings 87.01 to 87.05
s
Motorcycles (including mopeds) and Value of goods
cycles fitted with an auxiliary motor,
S-
with or without side-cars; side-cars
I Trailers and semi-trailers; other Value of goods
vehicles, not mechanically propelled;
parts thereof
B'
3
Cambodia- Automobiles classified under the Domestic - ex-factory selling price whic
(Specific Tax on harmonized tariff heading 8703 with an is 90% of the invoice price excluding
Certain engine displacement of more than 2000 VAT and specific tax
Merchandise and cc, and spare parts for those
Services) automobiles Imported - tax is calculated inclusive o
customs duty and CIF value"*
Automobiles classified under the
harmonized tariff heading 8703 with an
engine displacement of up to 2000 cc,
and spare parts for those automobiles
A l l types of motor vehicles and spare

parts classified under the harmonized
tariff headings 8702, 8704.21 through
^ Cambodia, "Law on Taxation", http://www.cambodiainvestment.gov.kh/content/uploads/2012/02/Law-on-Tax

March 2016.
^ PricewaterhouseCoopers (Cambodia) Ltd., "Cambodian 2015 Tax Booklet", http://www.pwc.coni/kh/en/publi

tax-booklet.pdf, viewed 11 March 2016.
NTRC Tax Research Journal
Vol. X X I X . 1 January-February 2017
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Indonesia (cont.) • Cylinder content capacity
I 2500 cc up to 3000 cc
• Cylinder content capacity

more than 3000 cc
iii. Double drive axle (4x4)

up to 1500 cc

1500 cc up to 3000 cc

more than 3000 cc
(b) Compression ignition engine

(diesel or semi-diesel)
i. Sedan or station wagon

up to 1500 cc

1500 cc up to 2500 cc

more than 2500 cc
ii. Single drive axle (4x2)

Indonesia (cont.) • Cylinder content capacity
up to 1500 cc

1500 cc up to 2500 cc

more than 2500 cc
iii. Double drive axle (4x4)

up to 1500 cc

1500 cc up to 2500 cc

more than 2500 cc
2. Motor vehicles for transporting 10 up

to 15 passengers including the driver
(a) Spark-ignition internal combustion

engine, all cylinder content
capacity
(b) Compression ignition engine

(diesel or semi-diesel), all cylinder
content capacity
Indonesia (cont.) (c) Used for the official vehicle of the
Indonesian Armed Forces (TNI) or
Indonesia National Police's Patrol
Vehicle (Polri)
3. Motor vehicle for transporting 16

passengers or more including the driver
4. Double cabin vehicles for passengers

exceeding 3 persons but not exceeding
6 persons including the driver and has
opened or closed bed for transport of
goods, using spark-ignition internal
combustion engine or compression
ignition engine (diesel or semi-diesel),
using single drive axle (4x2) or double
drive axle (4x4), for all cylinder
content capacities with the weight not
more than 5 tons
5. Special purpose vehicles
(a) A l l types of special vehicle that are

produced for golf
(b) Special vehicle made for travelling

on the snow, on the beach, on
mountain and the like
(c) Trailer or semi-trailer of type

caravan, housing or camping
Indonesia (cont.) (d) Motor vehicle in the form of
ambulance, hearse, fire fighter
vehicle, detainee vehicle, and
public transportation vehicle
(e) State protocol Vehicle
(f) Patrol vehicle of TNI or Polri
6. Two wheel motor vehicles
- Motorcycle (including moped) and

bicycle equipped with additional
motor, with or without sided
carriage, includes side carriage
(a) Cylinder content capacity up to

250 cc
(b) Cylinder content capacity more

than 250 cc up to 500 cc
(c) Cylinder content capacity

above 500 cc
7. Completely knocked down (CKD)

motor vehicle
- Motor vehicle in the condition of

disassemble becomes its parts
includes its equipment as well as
principal property of the motor
vehicle in question
Indonesia (cont.) 8. Car chassis
- Vehicle frame that has been

completed with the motor fuel and
its transmission as well as steering
system and axle installed for the
motor vehicle
9. Good transporter vehicle
- Motor vehicle with the single cabin

in the form of open-bed vehicle or
close-bed vehicle, with the sum of
passenger not more than 3
passengers including the driver,
which is used for the good
transportation activity either for
personal or public purposes
Lao PDR5 1. Motorbikes:

(Excise Tax)
(a) from 110 cc or less Domestic - wholesale or retail value
(excluding VAT and the excise tax)
(b) from 111 cc - 150cc
Imported declared value for customs
(c) from 151 cc - 250 cc (CIF) plus import tax and other fees (i
any)
(d) from 251 cc or more
^ Lao PDR, "Tax Law (amended) No. 05/NA", http://www.laotradeportal.gov.la/index.php?r=site/displav&id=62

OO

Lao PDR (cont.) (e) motorbike run by electricity
2. Large Vehicles:
(a) Categories of vans, buses, trucks, Purchase price

soft and hard roof jeeps, sedan cars
and pickups
(b) Imported cars of the international

organizations, cars of foreign aid
projects in Lao PDR
(c) Temporarily imported cars for the

use of project according to the
investment agreement which is
approved by the National
Assembly
(d) Cars that are imported, produced

and assembled domestically for
professional use of State
organizations as provided for in
specific regulations
(e) Other types of large vehicles which

are not vans, buses, trucks, soft and
hard roof jeeps, sedan cars and
pickups
3. Vehicle spare parts Domestic - wholesale or retail value

(excluding VAT and the excise tax)
(a) Spare parts imported by Imported -- declared value for customs
manufacturing plants to produce (CIF) plus import tax and other fees (if
complete vehicles in the country any)
4. Vehicle accessories
5. Speed boats, yachts, motorized sport

boats, including their components and
spare parts
Malaysia^ 1. Motor Cars (including station wagons.

(Excise Duty) sports cars and racing cars)
(a) engine capacity < 1800 cc
(b) engine capacity 1800 cc - 1999 cc
(c) engine capacity 2000 cc - 2,499 cc
(d) engine capacity above 2500 cc
2. Four Wheel Drive Vehicles
(b) engine capacity 1800 cc 1,999 cc
(c) engine capacity 2000 cc - 2,499 cc
Malaysian Automotive Association, "Duties & Taxes on Motor Vehicles", http://www.maa.org.mv/info dutv.htm
of International Trade and Industry, "Domestic Automotive Duty Structure for CBU and CKD", http://www.miti.gov.mv/
PRESS%20RELEASE%20 ENGLISH.xls. viewed 11 March 2016
s

Malaysia (cont.) (d) engine capacity above 2500 cc
Others (MPV & Van)
(a) engine capacity < 1,500 cc
(b) engine capacity 1,500 cc - 1,799

cc
(c) engine capacity 1,800 cc - 1,999

cc
(d) engine capacity 2000 cc - 2,499 cc
(e) engine capacity above 2,500 cc
Commercial Vehicles
(a) All classes
Motorcycles
(b) engine capacity > 150 cc
Singapore' 1. Motor vehicles for the transport of 10 Customs Value*

I (Excise Duty) or more persons including stretch
limousines but excluding coaches,
buses, minibuses or vans
t
' Singapore Customs; http://www.customs.gov.sg/leftNav/trad/val/List+of+Dutiable+Goods.html. viewed March 0
* Cost + Insurance, and Freight (CIF) value

Singapore 2. Other vehicles specially designed for

(cont.) travelling on snow; golf cars and
similar vehicles excluding motor
vehicles in (1)
3. Motor cars (CKD and Non-CKD)

including station wagons, SUVs and
sport cars but excluding vans
(a) compression ignition internal

combustion piston engine diesel or
semi-diesel with engine
displacement not over 1500 cc to
over 3000 cc
(b) spark-ignition internal combustion

reciprocating piston engine with
engine displacement not over 1000
cc to over 3000 cc
(c) other than spark and compression

ignition internal combustion piston
engine, regardless of engine
displacement
4. Other motor vehicles (CKD and Non

CKD)
Singapore (a) compression ignition internal
(cont.) combustion piston engine diesel or
over 2500 cc

cc to over 3000 cc
(c) other than spark and compression

ignition internal combustion piston
engine, regardless of engine
displacement
(d) electrically powered
5. Ambulances

over 2500 cc

cc to over 3000 cc
at
w .s
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S
CO 4>
U
2
e a E a
•s > a .-g s CO
u o •a 2 •ti o
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>. O
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a. XI
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> S S
III
S S CO
CJ
s 2
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o
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c o
Restructuring the Excise Taxation of Motor Vehicles

engine displacement over 1500 cc
Singapore to over 3000 cc
(cont.)
8. Motor homes

over 2500 cc

cc to over 3000 cc
9. Motorcycles (including mopeds) and

cycles fitted with an auxiliary motor,
with or without side-cars; side-cars
(a) CKD and non-CKD electrically

powered motorcycles
(b) Other cycles excluding

reciprocating internal combustion
piston engine & electrically
powered
Singapore i. Other CKD cycles with engine

(cont.) displacement not over 200 cc to
over 500 cc
ii. Other Non-CKD cycles

regardless of engine
displacement
(c) Motorcycles (including mopeds)

and cycles with reciprocating
internal combustion piston engine
i. CKD and non-CKD mopeds and

motorized bicycles with engine
displacement not over 50 cc but
not over 250 cc
ii. CKD and non-CKD motorcross

motorcycles with engine
displacement over 50 cc to over
800 cc
iii. CKD and non-CKD motorcycles

(with or without sidecars)
including motor scooters with
engine displacement over 50 cc
but not over 250 cc
Singapore iv. Other CKD and non-CKD

(cont.) cycles with engine displacement
not over 50 cc but not over 800
cc
V. Other CKD and non-CKD

motorcycles and motor scooters
with engine displacement not
over 50 cc
10. Chassis fitted with engines
(a) For ambulances
(b) For motor cars
(c) For other motor cars and motor

vehicles principally designed for
transport of persons
(d) For motor cars for transport of 10

or more persons including stretch
buses, minibuses or vans
11. Bodies including cabs
(a) For ambulances
(b) For other motor cars and motor

vehicles principally designed for
transport of persons
(c) For motor cars for transport of 10

or more persons including stretch
buses, minibuses, or vans
Thailand'^ 1. Passenger car

(Excise Tax)
(a) Engine capacity less than 3000 cc
i. Carbon dioxide
emission rate less than 150
g/km
http://www.thaiauto.orth/2012/news/news-detail.asp?news_id=3198 and http://www.boi.go.th/upload/content/B

20150325 7Q298.pdf. viewed on May 23, 2016
In order to promote green technology, the Thailand government has restructured automotive excise taxes to bette
be effective on 01 January 2016. http://www.boi.go.th/upload/content/BOI-brochure%202015-automotive-20150325_7029
Thailand (cont.) ii. emission rate 150g/km up
to 200 g/km
iii. emission rate more than

200 g/km
(b) Engine capacity more than 3000

cc, regardless of emission rate
2. Passenger car using E85 or compressed

natural gas (CNG)
iv. Engine capacity less than 3000 cc
i. emission rate less than

150 g/km
ii. emission rate 150 g/km up

to 200 g/km
iii. emission rate more than

200 g/km
V. Engine capacity more than 3000

3. Hybrid vehicles

100 g/km
ii. emission rate 100 g/km up

to 150 g/km
Thailand (cont.) iii. emission rate 150 g/kin up
to 200 g/km
iv. emission rate more than

200 g/km

4. Eco cars
(a) Engine capacity 1300 cc up to

1400 cc

100 g/km
ii. emission rate more than

100 g/km
(b) Using E85 ftiel

100 g/km

100 g/km
5. Pick-up trucks
(a) Single cab

200 g/km
-4
O

Thailand (cont.) ii. emission rate more than
200 g/km
(b) Space cab

200 g/km

200 g/km
(c) Double cab

200 g/km

200 g/km
6. Passenger pick-up trucks

200 g/km

200 g/km

Vietnam'" 1. Cars under 24 seats
(Excise Tax)
(a) Passenger cars of 9 seats or less, Domestically produced goods - selling
except those specified at Points price set by the producer
1(e), 1(f) and 1(g)
i. With cylinder capacity of 2000 Imported goods - import-duty calculation

cm'' or less price plus the import duty
ii. With cylinder capacity of 2000

cm^ to 3000 cm^^
iii. With cylinder capacity

exceeding 3000 cm"*
(b) Passenger cars between 10 to less

than 16 seats, except those
specified at Points 1(e), 1(f) and
1(g)
(c) Passenger cars between 16 to 24
seats, except those specified at
Points 1(e), 1(f) and 1(g)
(d) Cars for both passenger and cargo

transportation, except those
specified at Points 1(e), 1(f) and
1(g)
http://www.customs.gov.vn/Lists/EnglishDocuments/ViewDetails.aspx?language=en-US&ID= 1061, viewed on M

Vietnam (e) Cars running on gasoline in

(Excise Tax) combination with electricity or bio-
fuel, with gasoline accounting for
not more than 70% of the used fuel
(f) Cars running on bio-fuel
(g) Electric cars
i. Passenger cars of 9 seats or less
ii. Passenger cars between 10 to

less than 16 seats
iii. Passenger cars between 16 to

24 seats
iv. Cars for both passenger and

cargo transportation
2. Two-wheeled and three-wheeled

motorcycles with cylinder capacity
more than 125 cm-^
Myanmar" 1. Bicycles Domestic - Proceeds of the Sale
(Commercial
Tax) 2. Tractors, other industrial motor trucks, Imported - Landed Cost
parts and accessories thereof
3. Tractors, other industrial motor trucks,

parts and accessories thereof
4. Train engines, train locomotives,

5' coaches, spare parts and accessories
thereof
I 5. Sea-going ships, other ships, motor
boards, schooners, spare parts and
accessories thereof
6. Electric motors
7. Lorries, trucks and trailers above ton
8. Vans and buses
9. Bowsers'^
10. Cranes and winches cars
" http://www.mof.gov.mm/sites/default/Files/CommercialTaxLawEnglish 1.pdf viewed March 07, 2016
A bowser is a generic name for a tanker of various kinds. In the United Kingdom, it is used by water companies
to distribute fresh water in emergency situations. It also describes a fuel tanker used to deliver fuel to aircraft at airports or
boats that supply seaplanes, and vehicles that fill heavy construction equipment such as hydraulic excavators and bulldoze
http://evervthing.explained.today/Bowser (tanker)/, viewed 20 April 2016)
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NTRC Tax Research Journal Vol. X X I X .

Restructuring the Excise Taxation

32 Restructuring the Excise Taxation of Motor Vehicles

In 1997, the term "automobiles" was defined w i t h the promulgafion o f Revenue

Restructuring the Excise Taxation of Motor Vehicles 33

Net Manufacturer's Price/

To implement the revised tax scheme on automobiles, RR 25-2003^ was issued

34 Restructuring the Excise Taxation of Motor Vehicles

(b) Tax treatment o f subsequent sale, transfer or exchange o f a tax-exempt

Customs Administrative Order ( C A O ) No. 07-2014^, prescribed the guidelines i n

On the other hand. Customs Memorandum Order ( C M O ) No. 29-2014 prescribed

(b) Used automobiles consigned to the following:

i. Returning Filipino Diplomats and/or Dept. o f Foreign Affairs' officials;

Restructuring the Excise Taxation of Motor Vehicles 35

HI. R E V E N U E P E R F O R M A N C E O F T H E E X C I S E TAX ON AUTOMOBILES,

Figure 1. B I R C O L L E C T I O N S F R O M A U T O M O B I L E S , 1996 - 2015

0.00 fniMmMl 6^ •O- •O' V*- ^>

Source of basic data: BIR

36 Restructuring the Excise Taxation of Motor Vehicles

Growth Rate Ratio of E T C to

Restructuring the Excise Taxation of Motor Vehicles 37

No. of Units Total Excise Tax Collection

Tax Excise Tax

38 Restructuring the Excise Taxation of Motor Vehicles

Tax No. of Units ETC

A. Excise Taxation of Motor Vehicles in A S E A N Countries (Annex B )

A l l A S E A N member-countries impose "excise tax", "excise duty" or an

A l l A S E A N member-countries impose ad valorem tax rates based on the price

Restructuring the Excise Taxation of Motor Vehicles 39

Myanmar applies two-tiered rates o f 25% and 5% o f selling price depending on

The Philippines imposes the lowest minimum rate o f 2% on taxable M V s

40 Restructuring the Excise Taxation of Motor Vehicles

Thailand and Vietnam give preferential rates on eco-fiiendly automobiles by

Among the A S E A N member-countries, it is only Indonesia that imposes a

'- Pwc, Indonesian Pocket Tax Book 2015, https://www.pwc.coni/id/en/pocket-tax-book/ptb-2015-

Australian Government Australian Taxation Office, Luxury Car Tax,

Restructuring the Excise Taxation of Motor Vehicles 41

Australian Dollars Peso Equivalent (In Billion PhP)

Net Manufacturer's Price /

42 Restructuring the Excise Taxation of Motor Vehicles

Net Manufacturer's/ Maximum Tax Maximum E T R

Suggested Retail Price Excise Tax

Restructuring the Excise Taxation of Motor Vehicles 43

Suggested Retail Price Excise Tax

Brand Model Increase in Monthly Amortization

44 Restructuring the Excise Taxation of Motor Vehicles

Brand Model Increase in Monthly Amortization

Restructuring the Excise Taxation of Motor Vehicles 45

E O 36 Engine Displacement Imposed an Ad V

E O 273 15% Up to 1600 cc Up to 1850 cc Increased the num

Defined the term

R R 14-99 Same schedule under EO 273 Amended RR 14-

Deleted the follow

"The seat in the

RA 9224 Net Manufacturer's Selling Revised the excise

Prepared by: Indirect Taxes Branch, National Tax Research Center

Country Particulars Tax Base

Philippines Automobiles Manufacturer's or importer's selling pr