Metro Manila (CNN Philippines, May 30) — Repealing the excise tax exemption on pickup trucks and the imposition of more taxes on motorcycles will certainly affect the market, an automotive industry expert said.
“Taxes are, by nature, passed on to the consumers and that will certainly impact demand,” GT Capital Auto and Mobility Holdings chairman Vince Socco told CNN Philippines’ Traffic Center.
He added that the imposition of taxes on pickup trucks will result in a 20% increase in prices and would be an added burden to the public on top of rising fuel prices.
During the first quarter of the year, Socco stressed that the local car market has shown positive signs of improvement.
“From January to March, automotive sales are starting to show signs of recovery. But still on a year-on-year basis the whole market has grown only by 0.8% and that still puts the auto industry at about 78% of pre-COVID levels,” he explained.
The Chamber of Automotive Manufacturers in the Philippines (CAMPI) predicts that the market will only be at 80% pre-COVID levels by the end of the year, he noted.
According to Socco, motor vehicles are probably seen as a sector that can be taxed because they are considered luxury products, but stressed that they are essential products and necessary for economic growth.
“What many fail to take into account is that motor vehicles are a driver of economic growth. It’s not just for private use. But even then, when it’s for private use, it takes some of the burden off what is an already seemingly overburdened mass rapid transport system,” he said.
Socco also hopes the government and the motor vehicle and motorcycle sectors could meet halfway as the country continues to emerge from the pandemic.
“The government and the motor vehicle sector, including motorcycles, should be able to have a dialogue and find out how we can get to a point where the industry is now strong and ready for a more sustained growth trajectory,” he said.
