MANILA, Philippines — The current tax incentive scheme for electric vehicles (EVs) should be amended because it "lacks inclusivity," an official of an environmental business group said.
Philippine Business for Environmental Stewardship (PBEST) Secretary General Felix Jose Vitangcol issued the call after the Palace released Executive Order No. 12 series of 2023 that modifies the tariff rates for EVs to help mainstream its use among Filipinos.
EO12 lowered the tariff rate for certain types of EVs ranging to 0% import duty from 5% to 30%.
Under the EO, EVs such as kick scooters, pocket motorcycles and self-balancing cycles are included in the tax breaks. Two-wheeled electric motorcycles, on the other hand, are still subject to 30% import duty.
In a statement posted on their Facebook page, Vitangcol stated that there seems to be a problem in the EO since only a limited portion of the population can afford to buy four-wheeled vehicles.
“Only more affluent Filipinos — indeed a limited segment of the population — can afford to buy four-wheel vehicles, and hence enjoy these incentives,” Vitangcol said in a recent statement.
The organization reiterated that the majority of the motorists in the country are using two or three-wheeled vehicles including public utility jeepneys.
The Land Transportation Office documented that almost 8 million units of motorcycles are registered in their office in 2021.
“It is also they who are already perennially burdened by the soaring prices of basic goods and hampered by their limited income to provide for their families,” he added.
Shift to alternative energy
PBEST asserted that more Filipinos should be encouraged to shift to alternative energy regardless of their socio-economic status and the types of their vehicles.
“This is why the government must make these tax incentives more inclusive,” Vitangcol said.
Vitangcol also said that it is the government’s role to spearhead the country’s shift to electric vehicles as it will lessen the nation’s dependence on fossil fuels.
According to the Statista Research Department, the power production in the Philippines is still dominated by coal at 47.6%, followed by other fossils at 18%, and gas at 10.7%, which totals 76.3%.
Various types of renewable energy generation like wind, solar, bioenergy, hydro and other renewables share at 23.7% of the country's total power source.
The EO12 aims to help Filipinos to adapt to the usage of e-vehicles while decarbonizing and reducing the carbon emissions caused by the fueled-run vehicles.
As the Philippines is one of the most vulnerable countries to climate change, shifting to EVs is one of the country’s solutions to help weaken its effects and go full electric by 2040.
To help mainstream the use of EVs and the development of infrastructures that can cater the industry, Republic Act No. 11697, commonly known as the Electric Vehicle Industry Development Act, was passed along with other landmark policies.