Rampant smuggling of used vehicles is causing an estimated P21 billion in revenue loss or tax leak, apart from being a major obstacle keeping the automotive industry from realizing its full potential, government think-tank Philippine Institute for Development Studies said on Tuesday. Traders use free ports and other special economic zones to avoid paying correct duties and taxes when they bring in used cars, Aldaba noted. Smuggled cars—which sell 30 to 50 percent lower in the market—directly competes with the auto industry. The study—“Can the Philippine Auto Industry Survive Smuggling? penned by PIDS senior research fellow Rafaelita Aldaba—noted significant statistical gaps in the number of registered vehicles and auto sales when comparing data from Land Transportation Office (LTO) and Chamber of Automotive Manufacturers of the Philippines.
