The new tax reform bill has been signed by President Duterte today. The TRAIN, as it is commonly referred to, has adjusted taxes on several categories including a tax exemption on all personal income tax below Php250,000 (annually).
Likewise, automobiles will have a new or simpler tax structure. For cars, the new tax scheme is as follows:
Net Manufacturer’s / Importer’s Price
Up to P600,000 == 4%
P600,000 to 1,000,000 == 10%
P1,000,000 to 4,000,000 == 20%
Above P4,000,000 == 50%
Take note that these are based on Net Manufacturer’s Price or Importers Price.
Here’s a comparison table between the old and the new tax scheme.
Let’s do some examples.
Importer’s Price: Php600,000
Base Price (Old Tax): Php612,000
Base Price (New Tax): Php624,000
Importer’s Price: Php800,000
Base Price (Old Tax): Php852,000
Base Price (New Tax): Php880,000
Importer’s Price: Php1,00,000
Base Price (Old Tax): Php1,092,000
Base Price (New Tax): Php1,100,000
Importer’s Price: Php1,500,000
Base Price (Old Tax): Php1,772,000
Base Price (New Tax): Php1,800,000
Importer’s Price: Php2,500,000
Base Price (Old Tax): Php3,252,000
Base Price (New Tax): Php3,000,000
Importer’s Price: Php3,000,000
Base Price (Old Tax): Php4,052,000
Base Price (New Tax): Php3,600,000
Importer’s Price: Php4,000,000
Base Price (Old Tax): Php5,652,000
Base Price (New Tax): Php4,800,000
Importer’s Price: Php5,000,000
Base Price (Old Tax): Php7,252,000
Base Price (New Tax): Php6,000,000
With the Base Price, the dealers will still have to add their gross profit margins as well before we end up with the final selling price.