Palace nod awaited on recommendation for e-motorcycle tax breaks

MANILA, Philippines – Tax breaks on e-motorcycles — considered by stakeholders as a win fort the electric vehicle (EV) industry — are just one signature away.

The National Economic Development Authority (NEDA) has green-lit the expansion of Executive Order (EO) No. 12, series of 2023. This means the EO, which grants tax breaks to EVs, will now include e-motorcycles, effectively removing tariffs on imported models.

During NEDA's 16th Board Meeting on Wednesday, the agency said that its board deliberated to approve the proposal of the Committee on Tariff and Related Matters to expand EO12's coverage until 2028, which also removes the tariff for e-motorcycles, e-bicycles, and nickel metal hydride accumulators.

The approved version of the revised EO12 is now in the hands of NEDA Chairman and President Ferdinand Marcos, Jr., for final approval and publication.

“Executive Order No. 12 is designed to stimulate the electric vehicle (EV) market in the country, support the transition to emerging technologies, reduce our transport system’s reliance on fossil fuels, and reduce greenhouse gas emissions attributed to road transport," NEDA Secretary Arsenio Balisacan said, as posted on the agency’s website.

E-motorcycles’ zero emissions are one of their most emphasized traits, as the transportation sector alone is responsible for emitting 35.42 million tons of carbon dioxide in 2022, which contributes to climate change, data from Statista showed.

“By encouraging consumers to adopt EVs, we are promoting a cleaner, more resilient, and more environmentally friendly transportation alternative,” he added.

Since EO12 took effect in February 2023, EV industry leaders have been campaigning for the inclusion of e-motorcycles under the executive issuance, questioning its intent and demanding its inclusion once the review takes place. 

Two of them, think tank Stratbase ADR Institute and advocacy network CitizenWatch Philippines, have been actively campaigning for tax breaks for e-motorcycles since 2023, noting their benefits to the country, environment, and economy once integrated into the country's traffic. 

The Electric Kick Scooter (EKS) of the Philippines, Electric Vehicle Association of the Philippines (EVAP), and other government agencies have also backed the removal of tariffs for e-motorcycles, as evident from their respective positions sent to the Tariff Commission after its public hearing in March. 

Under EO12's initial version, only e-motorcycles are still subject to a 30% import tax, while other types of EVs got reduced or removed from tariff rates. According to the Statista Research Department, motorcyclists will account for approximately 7.81 million registered vehicles in the country in 2022, making them the most popular vehicle type among motorists.

The Department of Energy also wants to increase the country's EV fleet by 50%, or an additional 2.4 million units, in hopes of making the green transportation sector help cut down the country’s 35.42 million tons of carbon dioxide emissions in 2022, which contributes to climate change, data from Statista showed.

EO12 was enacted to complement the Electric Vehicle Industry Development Act 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.