It’s easy enough for most people to say that luxury goods should be taxed heavily, but that’s only because they themselves don’t have to deal with it. As for those who are interested in purchasing luxury goods, specifically a luxury car, then you’ll have to take a closer look at luxury car tax (LCT) and why people from the automotive industry tend to call for its abolition every now and then.
For those who are not that familiar with luxury car tax, then there are five things you may want to know about that Mercedes Benz tax.
What Luxury Car Tax is
Most of the time, luxury car tax is imposed on whoever is selling the car, but distributors tend to pass it on to the buyer. Luxury car tax is specifically applied to cars that reach a price threshold deemed to be the high end, and that threshold is subject to change depending on market and economic conditions.
Cats motor tax is usually charged on vehicles under two years old, although second hand luxury cars can have tax credit for the entire amount of the luxury car tax. Therefore, unless that car actually increased in value during that time, you won’t have to pay luxury car tax for a second hand luxury vehicle.
How is it calculated?
Here in the Philippines, it’s the upper bracket of what’s officially called Excise Tax for automobiles and other motor vehicles, and it has its own percentages apart from other taxable goods. Luxury cars are classified as those priced at PhP 2.1 million and over.
The excise tax rate for vehicles in that price range is PhP 512,000 plus 60% in excess of PhP 2.1 million. For example, you’re buying a car that’s priced at PhP 3 million, so that’s PhP 512,000 plus 60% of PhP 900,000, which is PhP 540,000. The total amount of excise tax for that car is PhP 1,052,000.
That does seem excessive, and that doesn’t even include other expenses to purchase and own that car like registration and such. That’s why you have to think carefully and plan ahead when considering the addition of a luxury car in your garage, even if you’re the luckiest person in the world who just won the lottery.
Just remember that 60%. It’s quite steep, and the PhP 512,000 flat rate for a car priced at PhP 2.1 million means you have to spend at least PhP 2.6 million for a “luxury” car. Most cars at that price range aren’t even strictly considered “luxury” in the first place, so you have to shelf out even more for a car that can actually be put in the luxury category.
Can I Get Exempted from Paying Luxury Car Tax?
This is pretty much the first question that comes to mind when dealing with any kind of tax. No one likes the tax man, no one invites him for Christmas dinner, and everyone makes it hard for him to do his job. Exemptions for luxury cars are few and far between, but they do exist.
There is mention of tax-exempt luxury cars in the Revenue Memorandum Circular no. 69-2004 which are registered or owned by Diplomatic Mission and Consular Offices or Officials, its officers, administrative staff, and technical staff members. There’s more information on this in Republic Act No. 9182, which is Special Purpose Vehicle Act of 2002 that details tax exemptions and fee privileges for special purpose vehicles.
So unless you’re a diplomat or maybe an official in a recognized religious organization like the Roman Catholic Church or such, then you’ll have to pay luxury car tax for that dream car you’ve always wanted.
Why There’s Luxury Car Tax
The luxury car tax is something that persisted throughout history in some form, and it does look like it won’t go away soon as a lot of people tend to think of it as a good idea. The idea of taxing what’s known as non-essential goods is as old as governance in human history, so luxury car tax is simply an extension of that sentiment.
The luxury car tax here in the Philippines is higher compared to other countries due to the current income brackets of the workforce, most falling under what would considered to be sufficient to reasonably purchase a luxury car without taking out a huge car loan. Therefore, those who buy luxury cars here tend to have to deal with a lot more hurdles.
Recent Changes to Luxury Car Tax
With the new administration, there have been adjustments to the taxation here in the Philippines, mostly benefiting low and medium income households. That does mean luxury car tax has increased to cope with the adjustment. The aforementioned formula above is pretty much along the lines of where it is now with the 60% rate, which has been publicly frowned by car companies which had been aiming to improve the local automotive industry for a while now.
About the Author: Kristel Cuenta is a freelance Social Media Manager and an Online Content Specialist based in the Philippines. She helps brands grow & engage on Social Media.
What can you Say?
Creative Pinoy Guy Makes Realistic Action Figures from Rubber Scraps
A lot of Filipinos are not just creative, they are also clever in that they can find ways to make the most of their situation. One such guy is Elmer Padilla, a street artist who makes realistic action figures from rubber scraps.
His story was shared on Facebook by netizen Adrian Soriano Bernabe who posted about his craft on the GUHIT Pinas public group page. According to Bernabe, he got curious why there were people crowding around Padilla one day while he was at the public market in Imus, Cavite.
He went closer to check out what was going on and discovered that the people were crowding around Padilla because of his awesome action figures. The toys looked so realistic and incredibly detailed that it was quite difficult to believe these were made from discarded flipflops and other rubber scraps.
If Bernabe had not seen Padilla create some of the action figures, he probably wouldn’t believe the ones the vendor was selling really came from the rubber scraps. Indeed, it’s difficult to believe that but this only means Padilla is a highly talented artist.
Bernabe said that Padilla had a lot of action figures there, including Deadpool, Hellboy, some Transformers robots, and various well-known superheroes and characters. But the artist in him did not just stop at figures he can copy from existing creations because he also made his own robot designs.
According to the amazed netizen whose story was later posted on Viral Manila, he learned that Padilla hails from Catbalogan, Samar but had gone to Cavite to try his luck there. His main bread and butter is being a construction worker but he enjoys making the action figures on his free time and sells his craft to interested customers.
What are Action Figures?
Action figures are dolls or little figures that represent a real person or a fictional character known for ‘vigorous action’. These poseable characters often come with jointed limbs to allow the owner to change how the character looks.
Diligent Grade 12 Student Sells Corn to Go to Private School
Working students are truly inspiring because they found a way to solve the challenge of not having enough money, as long as they can go to school. Netizens express admiration over a young man who sells corn so he can go to school.
Facia Lois Estive shared on Facebook how she and a friend were just having some snacks when the latter noticed that the vendor selling corn across the street was wearing a school uniform. The two observed that there were a lot of people buying from this young man.
It was only when most of the customers had finished buying corn that Facia and her friend went closer to check out this inspiring young man.
They learned that he is already in Grade 12, taking up the Humanities and Social Sciences (HUMSS) strand at the University of the East (UE), a private educational institution in Manila, Philippines.
During his free time, this hardworking student sells corn and remits his earnings so he could pay for his tuition fees!
At the time Facia and her friend took his photos, the student was wearing a uniform and a pair of slippers but he revealed that he usually changes into ‘civilian’ clothes.
Inspired by this young man, Facia shared his story and photos on Facebook where it quickly went viral.
While they had forgotten to ask for his name, they later discovered that he is Joel Mendiola. His Facebook account confirms that he’s from UE and that he’s not ashamed about selling corn even if he studies at a private school – because it is the very reason why he can go to school, after all.
Kudos to you, Joel Mendiola! Good luck.
What is a Working Student?
As the term implies, a working student is someone who earns money in various ways so he/she could go to school. A lot of schools
Ferrari Insult Reportedly Gave Rise to Lamborghini
Most business owners need an inspiration to start their business but it is widely believed that an insult by Ferrari’s owner would lead to the rise of the Lamborghini brand.
Born to grape farmers of Cento in the Emilia-Romagna region, Italy, a man named Ferruccio Elio Arturo Lamborghini would use his knowledge as a mechanic to start a business of tractor manufacturing back in 1948.
He would also launch several businesses but his prowess as a tractor manufacturer would bring the Lamborghini name much fame. As he grew richer, Lamborghini began to collect expensive cars – and he had a Ferrari, a Jaguar, and a Mercedes 300 SL, among others.
According to several stories, Lamborghini encountered problems with the clutch of his Ferrari. So, he went to the brand’s founder and owner Enzo Anselmo Ferrari to talk about the issue but was allegedly insulted as the latter told him to stick to making tractors and stop dabbling with the manufacturing of cars – or so the urban legend goes…
After getting insulted by Ferrari, Lamborghini was so angry that he began to build his own brand of cars to specifically become Ferrari’s competitor. Soon enough, the Lamborghini brand would catch up with the Ferrari brand and became a well-known manufacturer of fast cars, taking a chunk off Ferrari’s market.
Even to this day, it’s hard to say who is more popular, Ferrari or Lamborghini. But what’s quite amazing is that if the story of the insult was for real, then Ferrari made one of the biggest mistakes in his life when he insulted Lamborghini.
But it would seem that the ‘insult’ thing was just urban legend. On a biography posted on Lambo Cars, the writer claimed that Ferrari refused to meet Lamborghini regarding his complaint; thus, if they never met to talk about it, then the ‘insult’ couldn’t have happened.
How Did Lamborghini Fix His Broken Ferrari?
As to how Lamborghini fixed his broken Ferrari, the same biography wrote:
“He noticed the clutch fitted to this Ferrari wasn’t any different from the ones Lamborghini mounted in their tractors, so he drove the Ferrari to the Cento factory and had a Borg & Beck clutch installed straight from the parts list of one if the tractor models … the problem never returned after that.”
- Lifestyle2 weeks ago
Teen Angelina Jolie Wannabe Admits She’s a Fraud, Reveals Real Face
- Health2 weeks ago
Retired Soldier Left By Family Finds Help Through Social Media
- Health2 weeks ago
Doctors Argue In The Operating Room, Tragically Killing A New Born Baby
- Videos2 weeks ago
Indian Grandma Earns Flak for “Laundry Style” Bathing of 2-Week-Old Baby