Senator Sherwin Gatchalian has filed a resolution calling on the Senate to conduct an inquiry into the rising incidence of luxury cars being smuggled into the country. 

Gatchalian, chairman of the Senate Committee on Ways and Means, said such incidents result to considerable revenue loss for the government. 

“Despite the penalties imposed on smuggling and the efforts of various government agencies to curb its incidence, the smuggling of high-end luxury vehicles remains prevalent,” Gatchalian stated in the explanatory note of Senate Resolution No. 1318.

“It bears stressing that smuggling causes a significant impact on the economy. Aside from revenue loss, the continued smuggling of luxury vehicles greatly affects the automotive industry, particularly legitimate businesses,” he pointed out. 

In February alone, the senator noted how the Bureau of Customs (BoC) were able to thwart the sale of luxury cars in three separate raids. 

The first raid, conducted last February 13 in a car shop in Pasay City yielded P1.4-billion worth of smuggled luxury vehicles.

The second raid conducted the following day, February 14, yielded P366-million worth of smuggled luxury vehicles.

The third raid, conducted on February 19 in a car shop in Taguig City, resulted in the seizure of P900-million worth of luxury vehicles.

Gatchalian said it is high-time the government reviews its approach in combating smuggling activities in the country amid the rampant smuggling of luxury vehicles. 

Under the National Internal Revenue Code, an ad valorem tax on automobiles is imposed based on the manufacturer or importer’s selling price, net of excise, and value-added tax (VAT).

For instance, a vehicle with a net manufacturer’s price or importer’s selling price of over P4-million shall be levied a 50 percent excise tax.