The Push for Tax Breaks on E-Motorcycles in the Philippines
In Manila, the Philippines, there has been growing support for the granting of tax breaks to e-motorcycles. This development comes as the mandatory review of Executive Order No. 12, which lowered taxes for electric vehicles (EVs), has commenced. The Tariff Commission has officially started public hearings to review EO 12, and stakeholders have been asked to submit their updated position papers by Monday, March 18, 2024.
Among the supporters of including e-motorcycles in the list of EVs eligible for tax breaks are the Department of Trade and Industry’s Bureau of Investment (DTI-BOI), the Department of Energy (DOE), Autohub Group, and the Electric Vehicle Association of the Philippines (EVAP), among others. These stakeholders believe that granting tax breaks to e-motorcycles will help accelerate the adoption of EVs in the country.
During the public hearing, Andre Reyes, a specialist from the DOE’s Energy Utilization Management Bureau, emphasized the potential benefits of providing tax breaks to e-motorcycles. He stated that such a move would send a clear price signal to consumers, encouraging them to switch to EVs, which are more efficient and cheaper to run per kilometer. Additionally, Reyes believes that this measure would contribute to energy self-sufficiency in the Philippines.
Currently, under EO 12, various types of EVs are eligible for tax breaks, but e-motorcycles are still subject to a 30 percent tariff rate. This exclusion has received criticism from different stakeholders who argue that it is unfair. According to the Statista Research Department, the majority of motorists in the Philippines own e-motorcycles, with approximately eight million registered units.
EVAP, for instance, proposes granting tax breaks to e-motorcycles for a limited time to stimulate the growth of the manufacturing industry in the country. In their position paper, EVAP suggests that the tariff exemption should only be applicable for one year, with a commitment to at least assemble the same model or another model in a completely knocked-down (CKD) form in the second year.
Recognizing the need for change, Albay 2nd District Representative Joey Salceda has filed House Bill 9573, which seeks to modify EO 12. Salceda highlights the fact that 60 percent of the nation’s electric vehicles are classified as two-wheeled, making it unfair to exclude them from tax breaks.
EO 12 was enacted to complement the Electric Vehicle Industry Development Act and to create an industry for EVs while reducing carbon emissions in compliance with the Philippines’ commitment to the Paris Agreement. The modification of tariff rates for EVs aims to mainstream their use among Filipinos.
Furthermore, the DTI has plans to phase out internal combustion engine cars as part of a comprehensive strategy to transition the nation towards a decarbonized road network, often referred to as “green traffic.” The Philippines has set a goal to become entirely electric by 2040.
The ongoing review of EO 12 and the support for tax breaks on e-motorcycles demonstrate the commitment of the Philippine government and various stakeholders to promote the adoption of EVs and create a sustainable transportation system. By incentivizing the use of e-motorcycles, the country aims to achieve energy self-sufficiency, reduce carbon emissions, and stimulate the growth of the EV manufacturing industry.
Source: The Manila Times
