House bill seeks to attract more foreign investments in car industry

Government is setting the necessary groundwork to attract foreign investments in the automotive industry, particularly the manufacture of vehicles powered by alternative fuel.

A bill has been filed in the Lower House that would amend the National Internal Revenue Code specifically to exempt vehicles using alternative fuel from payment of excise taxes.

House Bill No. 4989, introduced by Rep. Junie E. Cua of Quirino Province seeks to amend the National Revenue Code of 1997 specifically to exempt compressed natural gas vehicles, electric vehicles, flex-fuel vehicles and hybrid vehicles from the payment of excise taxes.

In his explanatory note, Cua said that it is essential to encourage the manufacture and use of vehicle powered by alternative fuel which also promotes the judicious use of the country’s indigenous energy resources.

Cua pointed out that promoting alternative fuel vehicles would also address the problem of ever increasing cost of fuel in the world market, the need to reduce air pollution caused by automobiles and to develop the Philippines as a manufacturing hub in ASEAN for certain motor vehicles, parts and components.

By exempting alternative fuel vehicles from the payment of excise taxes, Cua explained, the country would attract additional investments, create employment, generate tax revenues and provide positive export earnings for the country.

The Board of Investments (BOI) which is crafting an incentives program for alternative fuel investments is fully supporting HB 4989.

BOI managing head Elmer C. Hernandez expressed full support for the bill, noting that aside from promoting more investments into the sector, it would also be beneficial to the environment and would utilize the country’s indigenous resources such as coconut in the form of coco methyl esther and sugar in the form of ethanol.