Finance Secretary Carlos Dominguez III said Thursday the proposed adjustments in car excise taxes will not hurt the local automotive industry which enjoyed robust growth over the past few years.
Dominguez said in a statement the manageable price hikes in mass-market vehicles would be readily absorbed by buyers who, in effect, would increase their take-home pay by way of substantially lower personal income taxes.
He said buyers would also hardly feel the effects of the price adjustments for mass market cars such as the Toyota Vios and the Mitsubishi Mirage from the proposed excise tax increase because of the flexible financing schemes offered by car dealers that stretch to as long as seven years for some models, which would become even more affordable amid the country’s low interest-rate regime.
Dominguez said while there might be an initial slowdown in car sales, the industry would be able to quickly recover and continue its robust pace of growth as it did in the past two years, when car sales went up by 25 percent.
“We think that the sales will continue to grow at a healthy rate. With the increasing incomes of people, the drop in the income taxes, you know, [the car industry] can hit very well another 20 percent a year,” Dominguez said.
“So, I don’t think this will kill the industry, it might slow down the sales, but the sales growth is still going to be very healthy,” he said.