Tax break for two-wheeled e-vehicles gains ground in House
MANILA, Philippines — Giving tax breaks for two-wheeled electric vehicles (EVs) is getting more support from Congress as a bill aiming for their inclusion in the list of vehicles benefiting from tariff reduction has been filed in the House of Representatives.
This was after Albay 2nd District Rep. Joey Salceda introduced House Bill 9573, which aims to amend the Executive Order No. 12 series of 2022, which modifies the tariff rates for certain EVs and their parts and components to boost green transportation in the country.
Two-wheeled electric motorcycles were not given tax breaks under EO12, even though they comprise the majority of electric vehicles in the country, Salceda said.
Under EO12, only kick scooters, self-balancing cycles, bicycles, and pocket motorcycles with auxiliary motors not exceeding 250w and with a maximum speed of 25 km/hour have 0% import duties. On the other hand, electric motorcycles are still subject to a 30% tariff rate.
The lawmaker also said that e-motorcycles were not given proper treatment, as these are the most affordable types of electric vehicles and can be adopted easily, and their non-inclusion is counterproductive when it comes to solving congestion.
“Some 60 percent of electric vehicles are two-wheeled, meaning that the vast majority of electric vehicles do not benefit from the tax incentives granted under the law… encouraging electric cars while locking out electric motorcycles does not address congestion issues, but merely substitutes petroleum-fueled cars for their space on the road,” Salceda said on the bill.
“In order to address these issues, this proposal clarifies in its definition of terms that electric vehicles include two-wheeled vehicles.
Additionally, the measure provides a zero-percent duty treatment on completely-built electric vehicles to accelerate the shift to these types of vehicles,” the lawmaker added.
Why revise?
The non-inclusion of e-motorcycles in the list of EVs gained the disapproval of different stakeholders of the industry, noting that it is unfair to the majority of motorists in the Philippines, including mobility advocates, business owners, and environmentalists.
In a study conducted by American business consulting firm “Frost and Sullivan” in 2018, a total of 93% of surveyed Filipinos said that they are open to buying electric vehicles in the future.
The Electric Vehicles Association of the Philippines projected the EV market to grow at an annual rate of 8% to 12% over the next 10 years. This equates to about P1.68 billion in revenue services and sales of 200,000 units by 2024.
EO12 is up for review by February 2024, per the National Economic Development Authority.
The push for EVs has been one of the primary ways that the Philippine government is introducing to help reduce carbon emissions. To ramp this up, the Electric Vehicle Industry Development Act (EVIDA) has been enacted into law to create an industry supporting the EV transition of the country.
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