Auto tax eyed to shift motorists to public transport: Dominguez

ABS-CBN News

Posted at Nov 29 2016 10:48 AM

MANILA - The government is pushing for higher excise taxes on cars to divert motorists to public transportation, boosting efforts to untangle chronic traffic jams, Finance Secretary Carlos Dominguez said Tuesday.

Dominguez said the automobile tax, if approved by Congress, should take effect in 2018, giving authorities ample time to fix the country's rail systems and put in place alternative modes of transport such as bus rapid transit lines.

“What’s the point of buying a new car and not moving in the streets?" Dominguez said in a statement.

“So we are going to make public transport more available. We have to discourage new cars because just look at the traffic, It’s not moving,” he added.

Under the "highly progressive" excise tax system, luxury vehicles will carry higher levies, according to the finance department.

Taxes on cars priced P600,000 and below will be raised to 5 percent from 2 percent while luxury cars worth over P2.1 million will be taxed 60 percent of the manufacture or import price, higher than the current tax of P512,000 plus 60 percent in excess of P2.1 million.

A Mitsubishi Mirage HB-8 model, for example, will carry a P15,000 tax increase while a Range Rover Sport SVR will be imposed an additional P838,000, the department said.

President Rodrigo Duterte has asked Congress for "emergency powers" to respond faster to the capital's traffic problem, which results in daily economic losses of P2.4 billion, according to a Japanese study.