Public hearing on electric vehicle tax break review ends

MANILA, Philippines – The public deliberations on the mandatory review of Executive Order No. 12 has ended with the Tariff Commission saying it is still gathering more data before submitting its final report to the National Economic and Development Authority (NEDA).

“The Commission will not conduct another public hearing unless another petition is filed,” said tariff specialist Irma Olavario, who said that there is no timeline yet for NEDA’s review recommendation to the Office of the President.

Olavario added that further investigation and validation of the data gathered during the public discourse, including the position papers submitted, are still under “work in progress.”

A growth spurt in the electric vehicle industry is foreseen due to the ongoing talks on the revision of Executive Order No. 12, which articulated strong support for the inclusion of e-motorcycles in tax incentives.

Electric vehicle industry stakeholders made the forecast based on the data from the Department of Trade and Industry and Board of Investment (BOI), which showed that the country's EV fleet will most likely increase if e-motorcycles are given tax breaks after generating over P3 billion in import services pre-tax incentives.

BOI representatives have presented the figures during public deliberations on the EO12 review, which was organized by the Tariff Commission earlier this month.

Views, opinions and position papers offered during the discussions showed that Filipino motorists have already embraced the use of e-motorcycles as their transport option even if a 30% import tariff is added to the unit price.

Department of Energy Research Specialist Andre Reyes said that the department believes that making e-motorcycles more affordable will help the country transition to green transportation more quickly. 

This is by giving e-motorcycles tax breaks under EO12, which is also supported by most stakeholders who presented their findings and justifications to TC during the public forum.

“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.

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

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.

The DOE aims to increase the country's EV fleet by 50%, or an additional 2.4 million units.

BOI Specialist Elvin Raymond Garcia also said that the body has no objection to giving tax breaks to e-motorcycles but emphasized the need to look into their issues.

EO12's revision is mandated a year after it took effect, and the Tariff Commission (TC) and the National Economic Development Agency will lead its review and public hearings before submitting their recommendations to the Office of the President.

The revision of EO12 was formally started during a public hearing last March 13, where stakeholders from different industries attended and aired their support for giving incentives to e-motorcycles.

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.