Lawmaker bats for tax-free electric and hybrid vehicles

MANILA, Philippines — Sen. Francis “Kiko” Pangilinan has proposed to exempt electric and hybrid vehicles from taxes and duties in the next several years to encourage the manufacture, importation and use of carbon-reducing vehicles.

Pangilinan said carbon emissions raise temperatures globally and contribute to drastic changes in the climate. In the Philippines, vehicles contribute 36.1% of total carbon dioxide emissions.

The Department of Energy estimates that replacing 100,000 tricycles with electric and hybrid vehicles will reduce 260,000 tons of carbon dioxide emissions.

“Climate change is upon us, and the Philippines is most vulnerable to it. Proposed solutions must involve most of us in our everyday lives,” Pangilinan said.

Citing the 2019 Global Peace Index, Pangilinan said almost half or 47 percent of the country’s population are in areas highly exposed to climate hazards such as earthquakes, tsunami, floods, tropical cyclones, and drought.

In Senate Bill 638, Pangilinan seeks to provide the following incentives for the use of environment-friendly means of public transportation for manufacturers and assemblers, exemption from excise taxes and duties as well as suspension of value-added tax for capital equipment, spare parts, components, including charging stations for nine years from the effectivity of the law.

He said the bill also seeks to exempt importers from excise taxes and duties for three years of effectivity of the law; exempt owners and users from the number coding traffic scheme of the Metro Manila Development Authority (MMDA) and the motor vehicle user’s charge (MVUC) imposed by the Land Transportation Office (LTO); prioritize them in the registration and issuance of plate number, to prioritize in franchise application by the Land Transportation Franchising and Regulatory Board (LTFRB) -- all for nine years of effectivity of the law.

He said building owners must be required to provide exclusive free parking space.  Local government units, on the other hand, should allocate land and lot space for construction of charging stations. 

“Like our other bills, Senate Bill 638 is looking to the future. The climate crisis is real. And the Philippines is the most susceptible country to hazards brought about by climate change, according to scientists and experts worldwide,” Pangilinan said.

More incentives are being pushed to promote electric vehicle (EV) usage in the country as Congress works on a law that will institutionalize a comprehensive framework for continued development and sustainability of the sunrise industry.

Sen. Sherwin Gatchalian, who chairs the Senate committee on energy, said industry stakeholders are asking for incentives both on the EV supply and demand side to make EVs more affordable and attractive for Filipinos.

Department of Energy director Patrick Aquino said the agency is crafting a framework to promote the EV industry’s growth development.

The Department of Trade and Industry (DTI) is proposing to streamline fiscal and non-fiscal incentives under the Board of Investments (BOI) by crafting an Electric Vehicle Incentive Strategic Program (EVIS).

Gatchalian said the retail cost of EVs is still high, but it is projected to become competitive by 2030.

However, the life cycle or maintenance cost of the green vehicles are already comparable with that of gasoline-powered cars.

“The whole world is moving into EVs. Thailand has one of the most robust EV policy. What we want is to have a law now when technology becomes cheap. The forecast in by 2030, but it can be 2025. The goal is to have a law that will enable early adoption,” Gatchalian said.

The Senate is merging five bills dealing with the promotion of electric vehicles and environmentally compliant vehicles.

“I think we will see a lot of support for this bill during this Congress. Hopefully, we get the bill approved within the year considering there are five senators who filed similar bills,” Gatchalian said.