03/10/2006
Neda hikes tariff on used motor vehicles, parts
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President Gloria Maca–pagal Arroyo has approved the increase in the tariff rates imposed on imported motor vehicles and parts after the Board of Investments found some traders guilty of “technical smuggling” of used vehicles. The tariff adjustment will be contained in an executive order containing the new comprehensive most favored nation tariffs program that has been approved by the National Economic Development Authority Board. The last comprehensive tariff reform program, which was done in 2003 already expired in December 2005. This means that pending the issuance of the executive order, the old MFN tariff rates remain in effect. Neda Director Brenda Mendoza said about 100 tariff lines, mostly on motor vehicles and motor parts, would be increased, while another 100 tariff lines on imported raw materials that could not be sourced from the Philippines would be reduced. “The bulk of about 11,000 tariff lines will be maintained. There were several considerations, foremost of which was the input of domestic producers not to increase tariffs,” Mendoza said. Mendoza said that the BoI has recommended the increase in motor vehicles and parts to avoid technical smuggling. Technical smuggling usually happens in special economic zones and free ports such as Subic and Clark where a used Toyota Hi-Lux can go for as low as $860 even if its blue book value is $19, 000. “That happens not just in the importation of the vehicles but even motor parts,” he said. Last month, the Supreme Court affirmed its decision prohibiting the importation of used motor vehicles, except those brought in through economic zones. In a six-page en banc resolution, the high tribunal dismissed for lack of merit the separate motions filed by Southwing Heavy Industries Inc., United Auctioneers Inc., Microvan Inc. and Subic Integrated Macro Ventures Corp.
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