Auto Excise Tax: Here’s An Updated List Of Cars And Their 2018, 2019 Prices

The comprehensive tax reform package under House Bill 5636 will now be known as the Tax Reform for Acceleration and Inclusion bill, or TRAIN. It covers the increase in auto excise tax rate for brand-new vehicles.

The House just passed on third and final reading of the bill before the first regular session of the Congress adjourned. The House voted 246 for, only 9 against, the bill, and a single abstention. So far, the bill seems to be on track as the target effectivity date of the comprehensive tax program is on January 1, 2018.

Auto Excise Tax: Here's An Updated List Of Cars

Under the TRAIN, the current tax system will be overhauled. Income tax brackets will be reclassified, with people earning less than P250,000 to be spared from income tax.

Meanwhile, there will be an expansion of value-added tax (VAT) as well as excise tax on petroleum products. However, one of the biggest items drawing attention in the said bill is the proposed excise tax on vehicles.

How will this affect your purchasing power? We’ve rounded up some of the most famous vehicles in the country and did the math so you don’t have to.

Current vs. 2018 and 2019 prices of cars

In a nutshell, the TRAIN bill will implement a tiered levy system that will impose taxes on vehicles based on their value. The raise will be gradual and divided into two phases.

The following rates and tiers below will be followed against the Net Manufacturer’s/Importer’s Selling Prices (NMISP) once the bill gets the signature of President Rodrigo Duterte:

Excise tax effective as of January 1, 2018 Excise tax effective as of January 1, 2019
Bracket 1 NMISP* Below P600,000 Below P600,000
Excise (fixed) None None
Excise (variable) 3% flat rate 4% flat rate
Bracket 2 NMISP* P600k to under P1.1 million P600k to under P1.1 million
Excise (fixed) P18,000 P24,000
Excise (variable) 30% of value in excess of P600,000 40% of value in excess of P600,000
Bracket 3 NMISP* P1.1 million to under P2.1 million P1.1 million to under P2.1 million
Excise (fixed) P168,000 P224,000
Excise (variable) 50% of value in excess of P1.1 million 60% of value in excess of P1.1 million
BRACKET 4 NMISP* P2.1 million to under 3.1 million P2.1 million to under 3.1 million
Excise (fixed) P668,000 P824,000
Excise (variable) 100% of value in excess of P2.1 million 100% of value in excess of P2.1 million
BRACKET 5 NMISP* P3.1 million and above P3.1 million and above
Excise (fixed) P1,468,000 P1,824,000
Excise (variable) 120% of value in excess of P3.1 million 120% of value in excess of P3.1 million

Among the noticeable amendments featured in TRAIN’s version that passed the congress are the inclusion of a fifth tier for cars worth P3.1 million and above, and lower rates for cars valued at P1.1 million and above.

If approved by the Senate once it reconvenes next month, then determining the prices of vehicles once the law takes effect will be easy, given that the rest of the price factors remain constant.

(Read: The Real Cost Of Owning A Car In The Philippines: Key Figures)

Motoring site says that in order to get the new suggested retail price under the new excise tax scheme, one has to get the net selling price. This means subtracting costs such as the 12-percent value added tax, around 15-percent overhead split between the manufacturer and the dealer, and the excise tax from the old taxing scheme.

Thinking of buying a car next year when the TRAIN is in effect? These will be the prices of some of the cars available on the Philippine market, based on the estimates of

Model Current price 2018 price with excise tax (estimate) 2019 price with excise tax (estimate)
Hyundai Eon GLX P508,000 P512,980 P517,961
Suzuki Ciaz 1.4 GLX P888,000 P904,040 P920,080
Toyota Vios 1.5 G P919,000 P937,623 P956,247
Honda BR-V 1.5 V Navi P1,119,000 P1,154,290 P1,189,580
Honda Civic RS Turbo P1,403,000 P1,461,957 P1,520,913
Chevrolet Trailblazer 2.8 Z71 P1,881,888 P1,976,993 P2,071,977
Ford Everest 3.2 Titanium 4WD P2,109,000 P2,220,267 P2,331,534
Lexus NX200t P2,848,000 P3,012,053 P3,176,105
Lexus IS 350 F Sport P3,228,000 P3,419,195 P3,610,391
BMW X1 xDrive20d xLINE P3,340,000 P3,539,195 P3,738,391

Based on the data provided, the effect of the new auto excise tax scheme varies on the tier of the vehicle. Expect cars priced below seven digits to have a slight price increase. Meanwhile, luxury cars in the Philippines will be more unattainable and, perhaps, exclusive to the truly affluent class.

Will the TRAIN bill be a boon or bane for Filipino consumers? Share your thoughts in the comments.