MANILA - Higher excise taxes on cars could reduce demand by 10 to 20 percent, automobile manufacturers said Wednesday, as the Senate deliberated on the government's tax reform program.
Limiting the car industry's growth could also affect jobs and other support services, Chamber of Automotive Manufacturers of the Philippines president Rommel Gutierrez told lawmakers.
Finance Undersecretary Karl Kendrick Chua countered during the same hearing that the auto tax would be offset by higher take-home pay due to lower income tax rates.
Citing government simulations, Chua said the auto tax would translate to an additional P200 monthly payment for Toyota Vios, Mitsubishi Mirage and Toyota Innova loans.
Mitsubishi is seeking an exemption for L300 since it is being used in the transport business.
President Rodrigo Duterte's economic managers are seeking higher taxes on cars, fuel and sugar-sweetened beverages to make up for a planned reduction in income tax rates.
The tax reform seeks to shift the burden to the ultra-rich from the middle class and raise money for Duterte's P8-trillion infrastructure program.