Welcome to the topic “Prices of pickups set to increase under DOF tax reforms!“
We don’t want to cause panic here, but if you’re considering buying a pickup… you should probably take this as the perfect sign for you to buy one now! You might want to think about pulling the trigger at your dealership sooner rather than later.
As part of the Department of Finance’s (DOF) ‘fiscal consolidation and resource mobilization plan’, pickup truck buyers will soon have to carry a much bigger and heftier burden with regards to the cost of purchasing the said vehicle.
This is all to help make up for debt incurred due to the Covid-19 pandemic and the government’s Build Build Build program, among other reasons.
In the past, and even with the train law passed in 2018, pick up trucks were considered as trucks or work horses of the MSME to help them in their businesses and were thus exempt from excise taxes on automobile.
|Net Manufacturer’s Price/Importer’s Selling Price||Tax Rate|
|Up to P600,000||4%|
|Over 600,000 to 1,000,000||10%|
|Over 1,000,000 to 4,000,000||20%|
With the high spending and deficits, our government had to find ways to increase our taxes so recently the law has been passed in the House level removing the exemption of pick ups from excise taxes. Excise tax on pickup trucks are set to yield P53 billion additional revenues.
With the possible repeal of the exemption from excise tax, this will mean an increase of at least 64k for a pick up costing 1M now and more than 10% for higher value pick ups.
We will illustrate the effects of this new tax reform on some of the best value for money pick-up trucks here in the Philippines:
One example is the Mitsubishi Strada – a surprisingly well-packaged 4×4 pick-up truck. The Mitsubishi Strada is probably one of the most comfortable 4X2 pick-up trucks here in the country. It prides itself for having a quiet engine, especially as a diesel powered unit and even has improved a number of its safety equipment. Currently it is priced at ₱ 1,764,000, but the law may add P216k more to the price.
Next is the Ford Ranger, a very popular 4×4 pick-up truck and is one of the upcoming cars this 2022. It has the best quality sound and has a pretty amazing ride comfort. The Ford Ranger also boasts of a very big size compared to its rivals. It is presently priced at ₱ 1,540,000, however, the additional tax may add P172k to your cost.
Another viable 4×4 pick-up truck is the Isuzu D-Max 3.0 AT. This vehicle has rock solid reliability and is even the first energy efficient vehicle (EEV) certified pick-up in the country. Premium costing is now at ₱ 1,825,000 . The added cost would likely be around P229k.
Lastly, we have the Toyota Hilux 2.4G which now comes with a tougher exterior and exudes a powerful presence on the road. It currently costs ₱ 1,325,000, and the new law will add P129k to your cost.
Well there you have it! So, what are you waiting for? Save up on some of your hard earned cash by purchasing that pick-up today, or you’ll soon end up with regret once the new tax reform is already in place.
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