Import Duties on Used Motor Vehicles

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EXECUTIVE ORDER NO. 418: Import Duties on Used Motor Vehicles

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Title Supreme Court: Import Duties on Used Motor Vehicles

Law: Executive Order No. 418

Decision Date: Apr 4, 2005

President Gloria Macapagal-Arroyo's Executive Order No. 418 imposes new import duties and specific tariffs on used motor vehicles to balance environmental protection and public safety, while allowing for adjustments based on currency fluctuations.

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Legal Authority and International Trade Considerations

Article II:1(b) of the 1994 General Agreement on Tariffs and Trade allows unilateral imposition of additional duties on tariff items without previous concessions.
Motor vehicles are not covered by Schedule LXXV, hence they lack tariff bindings.
Section 401 of the Tariff and Customs Code empowers the President to modify import duty rates, forms of duty, and tariff nomenclature.

Scope and Subject of the Executive Order

Enumerated articles listed in Annex "A" under Section 104 of the Tariff and Customs Code will be subject to specified import duty rates.
Trucks, buses, and special-purpose vehicles are exempt from these specified duty modifications.

Imposition of Additional Specific Duty

Aside from regular import duties, listed used motor vehicles will incur an additional specific duty of PhP 500,000.00.

Indexation of Specific Duty Based on Exchange Rate Fluctuations

The Secretary of Finance will adjust the specific duty every two years if the Philippine peso's exchange rate against the US dollar changes by more than 10%.
If the exchange rate varies by more than 20% at any point within two years, adjustment will reflect the full rate of currency depreciation or appreciation.

Definition of "Used Motor Vehicles"

Motor vehicles are considered "used" if:
- They have been previously sold, registered, and operated on foreign roads/highways; or
- They have a mileage exceeding 200 kilometers regardless of model year.

Implementation and Enforcement

The new duty rates and additional specific duty will apply to the listed articles upon their entry and withdrawal from warehouses in the Philippines from the effective date.

Repeal and Modification of Conflicting Issuances

Any presidential issuances, or administrative rules and regulations inconsistent with this Order, are revoked or modified accordingly.

Effectivity of the Executive Order

The Order takes effect 30 days after its complete publication in two newspapers of general circulation in the Philippines.
Signed by the President and the Executive Secretary on April 4, 2005, in Manila.

END