After months of deliberation, President Rodrigo Duterte has finally signed into law Republic Act 10963, known as the Tax Reform Bill.
First passed by the House of Representatives as House Bill 5636 back in May of 2017, the Senate followed suit a few months after with Senate Bill 1592. All the discussions culminated in a bicameral committee version approved just a week ago.
The approved version, which President Duterte signed into law, will see, among other things, a four-tier tax system for vehicles. What this means is that vehicles will be levied:
- 4% up to P600,000
- 10% P600,000 to P1,000,000
- 20% P1,000,000 to P4,000,000
- 50% P4,000,000 and above
While this would mean increased vehicle prices, RA 10963 does exempt certain types of vehicles. These include hybrids (levied only half of their internal combustion engine counterparts), electric vehicles, owner-type jeeps, trucks, cargo vans, FB-body type vehicle or jeepney substitutes, single cab pickup trucks, and cement mixers or other vehicles used for construction.
Besides vehicles, RA 10963 also imposes taxes on fuel and fuel products. The structure for these products looks like this:
- Gasoline: P7.00
- Diesel: P2.50
- Kerosene: P3.00
- LPG: P1.00
Other commodities that will see higher prices are sugar, coal, and tobacco. Folks whose annuals earnings are P250,000 or less, however, will pay lower taxes. The tax reform package aims to raise P130 billion to fund various projects of the current administration.