2018 and 2019 Vehicle Excise Tax Rise

That's good to know. It means all the locals and some foreigners will still be able to buy an Eon for 5K pesos down and 9K pesos a month (for a lot of months). And thus it means there will still be cheap repos available at the banks because people find out they don't want to pay 9K pesos a month for a lot of months.

Win win. Well except for those people who come here expecting to live like a king on their pension.

 

I understand this tax that way that if you want to purchase in year 2019 a car with base value of 5.1 M php you will have to pay in addition 1,824,000 and 120% of the difference between 5.1 M and 3.1 M equals 2.4 M (120% off 2M).
Together it results into 4,224,000 php additional tax. The car price increases by a whooping 80%.

Yeh it looks like a luxury tax. (Or another attempt to get more money out of foreigners but it affect rich pinoys also.)
A 600k php car will cost 24k PHP more.
OOOOK then we should try to get cheaper cars.

In addition this tax will also give a huge hit to the used car market because the prices for used cars will climp also.

 

The most relevant price tiers (up to 2 M PHP) are not getting a huge increase. It looks really like an increase of a luxury tax. But I believe that the tax increase will also affect used car prices indirectly.

You forgot in your calculation the second tier. (600k to 1.1M)

The fixum values are correct. I did checked the list and it is correct.

 

There are so many ridiculously cheap used cars for sale why would anyone want to buy a new car? New cars get trashed on the roads here real quick.

 

"Fewer" new cars, Doctor, "fewer"...

 

From what I read NMISP stands for Net Manufacturer's/Importer's Selling Price.

That means that the base the tax is applied to is less than what you actually see on the price tag (margin of the dealer and VAT are not part of the NMISP). The second thing I take away from this fact is that this tax only applies to new cars being sold (and probably imported used cars sold here for the first time) .

In general I think taxing income less and consumption more is a good thing. Easiest way to make sure that the people who fill up the roads with their huge cars also pay their share, independently of how and where the money used to buy the thing was earned.

 

Even without the new excise tax being applied to sales of second hand vehicles, I would fully expect the price levels in the second hand market to reflect the new tax eventually.
On the other hand, if many new car buyers would try to "beat the deadline", there might be over-supply in the used car market for a while.