Senator Win Gatchalian called for an inquiry into the increasing incidence of luxury car smuggling, saying such incidents result in considerable revenue loss for the government.

“Despite the penalties imposed on smuggling and the efforts of various government agencies to curb its incidence, the smuggling of high-end luxury vehicles remains prevalent,” Gatchalian noted as he filed Senate Resolution 1318.

As chair of the Senate Committee on Ways and Means, Gatchalian said such activities have already caused substantial revenue loss for the government. “It bears stressing that smuggling causes a significant impact on the economy. Aside from revenue loss, the continued smuggling of luxury vehicles greatly affects the automotive industry, particularly legitimate businesses,” he pointed out. 

In February alone, three separate raids involving the sale of luxury cars were conducted by the Bureau of Customs. The first raid, conducted on February 13 at the AC Che Gong Miao car shop in Pasay City and Top Car Specialist and Trading, yielded P1.4 billion worth of smuggled luxury vehicles.

The second raid conducted the following day, February 14, yielded P366 million worth of smuggled luxury vehicles from the alleged seller, ACH High-End Motor Service Center. On February 19, a third raid was conducted at Auto Vault Speed Shop in Taguig City, resulting in the seizure of P900 million worth of smuggled luxury vehicles.

Amid rampant smuggling of luxury vehicles, the government needs to review its approach in combating smuggling in the country, Gatchalian emphasized. 

Under Section 149 of the National Internal Revenue Code, an ad valorem tax on automobiles is imposed based on the manufacturer or importer’s selling price, net of excise, and value-added tax.  For instance, a vehicle with a net manufacturer’s price or importer’s selling price of over P4 million shall be levied a 50% excise tax.