Tax breaks for e-motorcycles gains backing in opening talks

MANILA, Philippines – Giving tax breaks for e-motorcycles has received major support from different stakeholders and government agencies alike, amid the ongoing review of the executive issuance that gives tax breaks to electric vehicles (EVs).

This developed as the Tarriff Commission formally started the public hearing to review Executive Order No. 12 series of 2023, last Wednesday, March 13, more than a year after the EO initially took effect.

Agencies like 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, all supported giving tax breaks to e-motorcycles.

According to DoE Energy Utilization Management Bureau Specialist Andre Reyes, giving tax breaks to e-motorcycles will help with faster EV adoption in the country.

“This proposed coverage expansion will send a clear price signal for consumers to switch to EVs, which are more efficient and cheaper to run per kilometer, and assist in energy self-sufficiency,” Reyes said during the public hearing.

Under EO12, different types of EVs got tax breaks, while e-motorcycles are still subject to a 30% tariff rate. 

The exclusion of e-motorcycles in the tax breaks had been criticized by different stakeholders, noting the “unfair” treatment that these modes of transport received while holding the majority of numbers among motorists in the country with around 8 million registered units, according to the Statista Research Department.

EVAP, on the other hand, wants to give tax breaks to e-motorcycles for a limited time, to help create an industry for their manufacturing in the country.

"The granting of tariff exemption should be limited only to one year with a commitment to at least do a CKD of the same model or another model on the second year," EVAP said in its position paper.

TC also asked the stakeholders present in the meeting to submit their updated position papers by Monday, March 18, 2024.

Albay 2nd District Rep. Joey Salceda also filed House Bill No. 9573 to apply modifications to EO12, as the lawmaker noted that 60% of the nation's electric vehicles are classified as two-wheeled, which makes it unfair for them to be excluded from tax breaks.

EO12 was enacted to complement the Electric Vehicle Industry Development Act (EVIDA) to create an industry for EVs in the country and help reduce carbon emissions, in compliance with the Philippines' commitment to the Paris Agreement. It modifies the tariff rates for EVs to help mainstream their use among Filipinos.

The DTI also plans to phase out internal engine combustion cars as part of a comprehensive plan to transition the nation to what environmentalists refer to as "green traffic," or a decarbonized road network.