The Department of Finance (DOF) is urging the Department of Transportation and Communications to require “differently colored” license plates for vehicles imported through special economic zones.
Currently, the Land Transportation Office (LTO) issues green plates for private vehicles, red for government vehicles, yellow for public conveyance and blue for diplomatic use.
The DOF said issuing plates of another color would help improve tax compliance amid reports of “virtual car smuggling” through ecozones.
Finance Secretary Cesar V. Purisima said in a statement that the differently colored plates would ensure that tax-free importation of used vehicles would not be abused and help prevent the vehicles from being sold outside the ecozones.
The DOF proposal came as the Automotive Rebuilders’ Industry of Cagayan Valley was pushing for the release of more than 200 used cars and vans that arrived last week at the Cagayan Special Economic Zone and Freeport from South Korea. A shipment of some 400 vehicles from Japan is expected to arrive later this month.
Ecozone locators are allowed to import vehicles tax-free for their own use, but are banned from selling these vehicles outside of ecozones.
“We cannot have a level, competitive playing field if we do not strictly enforce the rules for everyone, even locators in ecozones,” Purisima said.
Citing LTO data, the finance chief noted a marked decline in the number of imported motor vehicles registered under the category of “special registration” from 36,737 in 2010 to 28,952 in 2012. The classification refers to vehicles exempted from tax.
Most of the motor vehicles come from Central Luzon, where a decrease was also observed from 19,619 in 2010 to 16,941 in 2012.
The drop in the number of vehicles with special LTO registration does not follow the trend of rising number of registered vehicles in all classifications and types from 2010 to 2012, according to the DOF.
The DOF said this implied that registered tax-exempt vehicles had been sold outside free ports in Central Luzon.
Last month, the Supreme Court Second Division affirmed a decision of the Aparri Regional Trial Court upholding Executive Order No. 156, which bans the importation of used cars in ecozones, except for trucks, buses and special purpose vehicles, for resale outside the free port in Sta. Ana, Cagayan.
The DOF has ordered the Bureau of Customs not to process vehicle importation in ecozones pending the finality of the high court’s decision.
Last week, Customs Commissioner Ruffy Biazon said the bureau was upholding the high court ruling affirming the validity of EO 156.