The Department of Finance (DOF) is actively pursuing the removal of tax exemptions for pickup trucks that are not essential for small business operations.
According to the DOF proposal, the reintroduction of excise tax on pickup trucks marketed as "lifestyle passenger vehicles" will significantly increase their retail prices by at least P262,464 to P338,985 per unit.
During the Senate ways and means hearing, Finance Undersecretary Karlo Fermin S. Adriano highlighted the distinction between single-cab and double-cab pickup trucks, stressing the need to treat them differently.
Adriano explained that single-cab pickups are essential workforce vehicles for cargo and people transport, justifying their historical exemption from excise tax.
In contrast, he noted that double-cab pickups, marketed as "lifestyle passenger vehicles," should be subject to excise tax, similar to other passenger vehicles.
The tax exemption for double-cab pickup trucks was introduced as part of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which previously subjected to excise tax.
Pick-up trucks were given special tax treatment under the TRAIN law because they are believed essential tools for small business owners and professionals.
However, Adriano said that double-cab pickups are not widely used for various commercial purposes due to their cost, being 50 percent more expensive than single-cab pickup trucks, which are priced at only P900,000 per unit.
“These vehicles [single cab] also have much bigger cargo capacity (~1000 kg [kilogram] versus ~450 kg for the double cab) and design flexibility,” he said.
“This feature, together with their cheaper price, makes them (single cab) ideal vehicle solutions for various commercial applications,” he added.
Adriano also said that data from the Department of Trade and Industry showed that double cab pickups are not being utilized for commercial or industrial purposes, including agriculture.
“Anecdotal evidence abound that agri products are largely transported by hauler trucks (from La Trinidad and Central Luzon) and by cab chassis/van/jeepneys in local regional/provincial markets,” Adriano said. “NOT double cab pickups.”
The double cab pickups, such as the Ford Ranger Raptor, Toyota Hilux GR-S, Isuzu Dmax LS-E, Mitsubishi Triton, and Nissan Navarra PRO-4X, are priced between P1.8 million and P2.34 million, according to the DOF.
“Statistics will show that sales of [double-cab] pick-ups are mostly for personal use versus utilitarian use (agri, business, ect.),” Adriano said.