A newly-filed bill in the House of Representatives seeks to raise excise tax on luxury vehicles, including cars, yachts, and aircraft. The proposed amendments would see vehicles priced between P4 million and P8 million subject to 50% ad valorem tax, while vehicles worth P8 million and above would be taxed at 75%.
House Bill 11465 was filed by House Ways and Means committee chairman Miro Quimbo, who describes its purpose as “to achieve greater tax progressivity and promote a more equitable distribution of wealth since luxury and high-value goods are generally purchased by consumers with greater disposable income and capacity to pay.”
If House Bill 11465 were to lapse into law, the tax hikes would take effect on January 1, 2027. It is estimated it would generate around P3.91 billion in annual government revenue. These collections would then be used to fund “government priority programs.” No tax rate adjustments were proposed for vehicles worth P4 million and below, however, as the bill’s explanatory note clarifies its focus is on high-value luxury vehicles.
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A tax hike for recreational vehicles is also being proposed. The bill explicitly covers yachts, personal watercraft, speedboats, sailboats, motorboats, aircraft, planes, jets, and helicopters acquired for “pleasure, private use, or sport.” Taxes on these vehicles would get bumped from 20% to 25%.
Quimbo commented further: “Strengthening the taxation of luxury consumption constitutes a practical means of enhancing the progressivity of the Philippine tax system.”
It was not specified how the proposed tax hikes would interact with the current tax exemption applied to BEVs under EVIDA. Perhaps we’ll learn more in the future.
