GATEWAY Motors Group, which offers various car brands in the Visayas, is bracing for higher prices of vehicles next year if the next stage of the tax reform proposal hurdles Congress.
In September, the Senate passed Senate Bill (SB) 1592, which provided for new excise tax rates starting in January 2018.
“Now, we have jitters on the effects of the excise tax, but that won’t stop us, we are still optimistic about the future,” said Gateway Motors executive vice president Michael Goho, during the launch of the BMW 5 series in the BMW showroom in Nivel Hills, Cebu City.
He said the most affected vehicles will be the luxury cars segment, including BMW, one of the brands the Gateway Group carries in Cebu.
The Senate’s version imposes higher increases than that of the Lower House’s version, House Bill 5626. For instance, the House of Representatives’ proposed excise tax is three percent for vehicles with an NMISP (Net Manufacturer’s/Importer’s Selling Price) of P600,000 or less, but the Senate proposed four percent. Currently, this is at two percent.
However, cars with net prices of between P600,000 and P1.1 million will be charged P24,000 on top of 35 percent of the value exceeding P600,000, the Senate has said. Goho pointed out that prices of BMW cars do not fall below P2 million per unit.
For the Gateway Group, the Cebuano executive still sees growth, although this may be at a slower rate starting next year. He assured car buyers that the company will continue to offer flexible financing packages to make car ownership more affordable.
The group carries Kia, Peugeot, Nissan, Suzuki, Mahindra, and BMW. It also runs its own used car business in Cebu.
At least 268,424 vehicles were sold from January-August 2017, a jump of 16.7 percent compared to last year’s 229,919 units, according to two industry groups. (JOG)