MANILA – President Rodrigo Duterte’s plan to raise excise taxes on cars could slow luxury vehicle sales, German automaker BMW said Friday.
BMW has sold 1,000 cars in the Philippines since 2015. It sells twice as many units in Vietnam, said Axel Pannes, managing director of BMW Group Asia.
Luxury car sales in the Philippines are “not growing that fast,” even as the economy is expanding at one of the fastest paces in the world, Pannes told ANC’s “The Boss.”
Sales could slow “for a couple of months” once higher taxes are approved, Pannes said, adding some buyers are likely to advance their purchases.
According to one proposal, cars worth more than P2.1 million would be taxed with P1.224 million plus 200 percent of the price in excess of P2.1 million. The increase is not as severe for entry-level sub-compacts and sedans.
Duterte is seeking higher auto and fuel taxes and fewer exemptions to offset a reduction in income tax rates that he promised during last year’s presidential elections.
BMW assembles cars in Indonesia and Thailand and hopes to expand operations as Association of Southeast Asian Nations pursues economic integration, Pannes said.
With a growing technology sector, the Philippines can supply cameras and sensors for luxury cars, he said.
“I would encourage Filipinos to look at their strengths and how they can support the automotive industry.”
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