The Bureau of Customs has warned the public against buying second-hand but imported cars with blue plates at very cheap prices as they could actually cost more than buying local used cars once the duties and taxes are included in the computation of the cost.

The BOC instead encouraged the public to take heed of the “new” customs depreciation schedule for imported tax-exempt motor vehicles such as those owned by embassies and diplomats.

BOC Commissioner Angelito Alvarez said Customs Administrative Order No. 5-2011 approved recently by Finance Secretary Cesar Purisima provides a set of guidelines in the determination of the rate of depreciation for tax and duty-free privilege of motor vehicles that are to be publicly disposed, sold or even donated to parties not enjoying tax and duty-free privileges.

Alvarez explained that for tax-exempt vehicles such as those used by diplomats and consular offices, the rate of depreciation will follow the straight line method at 10 percent every year.

A two-year-old vehicle will be assessed a depreciation rate of 20 percent; a three-year-old, 30 percent, and so on until it reaches the maximum limit of 90 percent of the vehicle rate.

For the purpose of computation, Alvarez  said the ad valorem for tax exempt vehicles where the value is based on the depreciated rate at the time of sale or transfer, the depreciation rate shall also be at 10 percent every year but the total amount of depreciation shall not exceed 50 percent of the original cost.

”The same rule applies for the 'No-Dollar Importation of Motor Vehicles' which shall follow a straight line computation method with an annual depreciation value of 10 percent. Depreciation value on the fifth year and onwards is pegged at maximum of 50 percent. The 'No-Dollar Importation of Motor Vehicles' program is a special privilege given by the government to returning residents and other qualified individuals to bring motor vehicles into the country for personal use under certain conditions,” Alvarez said.

He also said that for imported trucks and heavy equipment, the rate of depreciation shall follow the straight line method at 10 percent per year but in no case shall it exceed 90 percent. *PNA

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