The 2009 Philippine Blog Awards

Tuesday, December 15, 2009

TAX TALKS: Are Jeepneys considered Automobiles?

In Wikipedia, an automobile is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor. Most definitions of the term specify that automobiles are designed to run primarily on roads, to have seating for one to eight people, to typically have four wheels, and to be constructed principally for the transport of people rather than goods.

With the above definition, No doubt that Jeepney is an automobile. Jeepneys are everywhere in Manila - all shapes, sizes and colour configurations. It is the most popular means of public transportation in the Philippines particularly in the cities and towns. In fact, jeepney is the most efficient and cheapest mode of transportation in big cities including Metro Manila and Cebu, and for long distance destinations in the provinces.

So why am I asking whether the jeepney is considered an automobile?

Well, under Republic Act No. 9224 which was approved into law last August 29, 2003, Jeep/jeepney/jeepney substitutes are not considered automobile for the purpose of excise tax.

Under the Act, there shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer's or importer's selling price, net of excise and value-added taxes. As used in the Act, Automobile shall mean any four (4) or more wheeled motor vehicle regardless of seating capacity, which is propelled by gasoline, diesel, electricity or any other motive power: provided, that for purposes of this Act, buses, trucks, cargo vans, jeeps/jeepneys/jeepney substitutes, single cab chassis, and special-purpose vehicles shall not be considered as automobiles.

Thus, "Philippine jeep or jeepney" as defined in the Act as the jitney type locally designed and manufactured generally from surplus parts and components as well as jeepney substitutes that are manufactured from brand-new single cab chassis or cowl chassis and locally customized rear body that has continuous sideway row seats with open rear door and without retractable glass windows are not considered automobiles. And no ad valorem tax can be levied or collected.