House approves tax incentives for alternative-fuel vehicles

MANILA, Philippines - The House of Representatives has approved on second reading a bill granting tax incentives for the manufacture, assembly, conversion, and importation of electric, hybrid and other alternative-fuel vehicles.

The bill titled “An act granting incentives for the manufacture, assembly or importation if electric, hybrid or alternative vehicles” aims to promote the use of hybrid vehicles to lessen the country’s dependence on oil and protect the environment from harmful carbon emissions.

It also aims to bring down the cost of such vehicles, which at present is beyond the reach even of taxpayers belonging to the middle class.

The final bill is a consolidation of several measures authored by Representatives Rufus Rodriguez of Cagayan de Oro City, Maximo Rodriguez of the party-list group Abante Mindanao, Hermilando Mandanas of Batangas, Jose Zubiri III of Bukidnon, Albert Garcia of Bataan, and Ryan Luis Singson of Ilocos Sur.

The measure defines “electric vehicle” as any vehicle that uses an electric motor solely for propulsion while “hybrid vehicle” refers to any vehicle that combines the technologies of using an internal combustion engine with a battery-powered electric motor to gain the advantages of both propulsion systems.

On the other hand, “alternative fuel vehicle” pertains to any vehicle using alternative sources of energy such as but not limited to solar, wind, hydrogen fuel cell, compressed natural gas, liquefied natural gas, and liquefied petroleum gas.

The bill exempts the payment of excise taxes and duties for nine years on the manufacture or assembly of electric, hybrid and other alternative fuel vehicles, including the conversion of vehicles into electric, hybrid and other alternative fuel.

It also exempts payment of value-added tax (VAT) for nine years on the importation and sale of raw materials, spare parts, components, and capital equipment used in the manufacture or assembly of electric, hybrid and other alternative fuel vehicles, including the conversion of vehicles into electric, hybrid and other alternative fuel.

The consolidated bill likewise exempts the payment of excise taxes and duties for four years on the importation of completely built units of electric, hybrid and other alternative fuel vehicles.