Tax break for 2-wheeled EVs pushed

MANILA, Philippines —  It is high time to bring the “green” to Philippine roads by expanding current tax breaks to include two-wheeled electric vehicles (EVs), a leading think tank said.

“We commend the government’s issuance of Executive Order 12, which gives tariff incentives to importers of electric vehicles, but these have been limited to three- and four-wheeled units which only affluent Filipinos can afford,” said Dindo Manhit, president of The Stratbase Institute.

“Even the National Economic and Development Authority has recommended the amendment of the issuance to include the vehicles that more Filipinos can afford. It will also allow more to make a substantial contribution for the environment,” he added.

According to Statista Research, motorcycle riders account for approximately 7.81 million registered vehicles in the country in 2022, making them the most popular vehicle type among motorists.

Experts foresee a growth surge in the EV industry if the EO is expanded as many sectors are clamoring for. The country’s EV fleet is seen to rise especially since e-motorcycles generated over P3 billion in import tax without the incentives.

The Department of Energy (DOE) aims to increase the country’s EV fleet by 50 percent, or an additional 2.4 million units.

According to the DOE, using e-motorcycles is more efficient, as they only cost P0.34 and save 1.72 liters of fuel per kilometer compared to their gas-powered counterpart, which burns P1.20 per kilometer, which makes them not only cheaper to run but also more eco-friendly.

“E-motorcycles are already gaining popularity as a transport option even if a 30 percent import tariff is added to the unit price,” said Manhit.

“Imagine how much faster it could grow if the tariffs were done away with altogether. This will quicken the shift to e-motorcycles that will result in substantial reductions in harmful emissions from conventional combustion engines and at the same time reduce consumer dependence from expensive gasoline.”

Manhit added: “The public health hazard and economic loss caused by pollutants emitted from motor vehicles is another dimension that should be emphasized as constant exposure causes respiratory issues.”

EO 12, issued on Jan. 12, 2023, temporarily modifies the rates of import duty on electric vehicles, parts, and components under Section 1611 of Republic Act 10863 or the Customs Modernization and Tariff Act.

It was created to complement the Electric Vehicle Industry Development Act, creating an EV industry in the country to reduce emissions in compliance with the Philippines’ commitment to the Paris Agreement on climate change.

The EO seeks to modify the tariff rate for electric vehicles to help mainstream their use among Filipinos.

Manhit said that if the administration is serious about its approach to climate change, total inclusivity should be the approach in all green initiatives.

“The various sectors clamoring for the rectification of this glaring policy oversight in EO 12 will greatly appreciate the President’s swift action on this matter. This move will usher in a societal transformation to green transportation and encourage investments that will hopefully build a thriving EV industry in the Philippines,” he said.