QuestionsQuestions (EXECUTIVE ORDER NO. 491)
EO 491 exempts covered motor vehicles from the imposition of the additional specific duty of Php 500,000.00 under EO 418 upon their subsequent sale or transfer to non-tax exempt individuals in the local market.
EO 418 imposed an additional specific duty of Php 500,000.00 (on articles listed in Annex 'A' thereof) to mitigate the impact of used motor vehicle trading on air quality and road safety.
Covered are: (1) embassy officials, (2) members of the diplomatic corps and international organizations, (3) Filipino diplomats, (4) recalled personnel of the Department of Foreign Affairs (DFA) or any DFA officer/employee returning from a regular assignment for reassignment to the DFA home office, (5) government offices whose vehicles were imported tax and duty free under relevant laws and international agreements (including foreign loans and donations), and (6) other similarly situated individuals.
EO 491 cites the Vienna Convention, the ADB Headquarters Agreement, and other relevant international agreements for embassy/diplomatic and similar personnel; and it cites Republic Act No. 7157 for Filipino diplomats and recalled DFA personnel.
EO 491 removes the additional Php 500,000.00 duty when the covered vehicles are sold or transferred to non-tax exempt individuals, preventing their exemption from being effectively nullified through a penalty that would discourage disposition.
EO 491 cites Section 401 of the Tariff and Customs Code of 1978, as amended, which empowers the President to increase, reduce, or remove existing rates of import duty and to modify the form of duty and tariff nomenclature under Section 104 of the Code.
The triggering condition is the “upon the sale or transfer” of the covered vehicles to non-tax exempt individuals in the local market; EO 491 exempts the vehicles from the additional specific duty at that point.
EO 491 states that some vehicles were brand new when withdrawn from customs warehouses and first operated on Philippine roads, so their subsequent transfer would not further increase the environmental risk intended to be mitigated.
EO 491 revokes or modifies all other presidential issuances, administrative rules and regulations, or parts thereof, that are inconsistent with EO 491.
EO 491 takes effect thirty (30) days following its complete publication in two (2) newspapers of general circulation in the Philippines.
No. EO 491 specifically exempts the covered vehicles from the additional specific duty of Php 500,000.00 under EO 418 upon sale/transfer to non-tax exempt individuals. It does not state elimination of regular import duties.
It indicates that the exemption from the additional Php 500,000.00 duty applies at the moment of sale/transfer to non-tax exempt individuals, not necessarily at the time of importation.
It includes them among the covered motor vehicles, exempting them from the Php 500,000.00 additional specific duty upon subsequent sale or transfer to non-tax exempt individuals in the local market.
EO 491 references Section 104 of the Tariff and Customs Code of 1978, as well as Section 401 for the President’s authority. It mentions EO 418’s use of classification under Section 104.
Students should identify: (1) whether the vehicle belongs to one of the covered groups listed in EO 491, (2) whether the vehicle was originally imported tax and duty free under the cited laws/international agreements, and (3) whether the exemption is claimed upon sale/transfer to a non-tax exempt individual.