The country’s leading commercial vehicle (CV) manufacturer, Isuzu Philippines Corporation (IPC), has just announced its new suggested retail prices (SRP) that take into account the Tax Reform for Acceleration and Inclusion (TRAIN), otherwise known as the excise tax.

As expected, vehicles that fell in the P 1.4 million to P 2 million-peso SRP bracket (as of December 2017) sees the biggest increase this January. In particular, IPC’s best-selling mu-X gets slapped by anywhere between 4 to 16 percent increase effective today. The variant that gets penalized the most is the 4x2 LS-A Blue Power whose SRP jumps P 247,000 to P 1,845,000 followed by the 4x4 LS-A Blue Power that ends up breaching the two-million-peso mark to P 2,145,000 (from 1,908,000).

Meanwhile, D-MAX prices remain steady for January since IPC says they are all 2017 stocks. IPC will be announcing prices taking into account the pickup truck’s exemption from the excise tax at a later date.

Perhaps the oddest news with IPC’s January 2018 price list is the increase in SRP for its Euro 2 emissions compliant vehicles which are being phased out. Although the Crosswind has seen its model variants reduced significantly (from ten to three), they have all seen increases in the 5 to 7 percent bracket.

Here is a possible explanation:

Under the Bureau of Internal Revenue (BIR)’s Revenue Regulation No. 25-2003, it states that assemblers pay the excise duty for locally manufactured automobiles “before removal from the place of production/assembly.”

This has been reiterated under the recently released BIR Revenue Regulation 05-2018 that details the transitionary period between pre- and post-TRAIN.

In Section 6, it reads:

“All manufacturers/assemblers or importers shall submit a duly notarized list of inventory on-hand of Completely Built-Up (CBU) automobiles, including Completely Knocked Down (CKD) and Semi-Knocked Down (SKD) units, that are located within the manufacturing/assembly plant, storage facility or warehouse or customs’ premises for which import duties have been filed as of the day immediately before the date of effectivity of these Regulations [January 1, 2018], indicating therein the brand, year model, engine, body and chassis numbers thereof. The list shall be submitted to the Commissioner of Internal Revenue within seven (7) working days from the date of effectivity of these Regulations. Failure to submit the inventory list on the part of the manufacturers/assemblers/importers shall be construed that the said manufacturers/assemblers/importers do not have any inventory on hand of CBUs, CKDs, and SKDs as of the day immediately before the date of effectivity of these Regulations.”

In other words, IPC could have opted not to report that they had Crosswinds ready to be delivered to Isuzu dealers and thus, are affected by TRAIN.

But if this is the case, can IPC claim to sell Crosswinds that are built before January 1, 2018 (based on CSR) but are subject to excise tax that took effect on January 1, 2018? Conversely, can they sell non-Euro 4 emissions compliant Crosswinds with CSRs issued after January 1, 2018?

We have reached out to IPC regarding this matter and this is what they had to say:

Euro 2 emission compliant vehicles such as the Crosswind already at the dealerships have CSRs issued and are subject to the old excise tax scheme. However, all IPC stocks (located in manufacturing or storage facilities) are subject to the new excise tax.

Check out the full prices below: