E-vehicle makers, dealers to benefit from auto roadmap

MANILA, Philippines - Electric vehicle manufacturers, importers and dealers may benefit from incentives from the government after being included in a proposed roadmap for the auto parts industry to the Board of Investments.

The Electric Vehicle Association of the Philippines (EVAP) said in a statement yesterday EVs have been included in the proposed roadmap following the group’s request.

The proposed roadmap which was prepared by University of Asia and the Pacific professor Rafaelita Aldaba, seeks to strengthen the country’s position as a significant player in the automotive industry in the medium term and by 2020 by becoming a regional hub for completely built units and for auto parts.

The roadmap proposes to grant fiscal incentives for local assembly of auto parts and components, for new technologies such as EVs and for export activities starting 2013.

Proposed fiscal incentives to be granted include income tax holiday (ITH) from three to eight years; extended ITH for high technology activities such as EVs; tax and duty exemption on capital equipment, spare parts and on imported raw materials; additional tax deductions for labor expenses, export market development, and research and development; tax incentives for periodic increases in exports; and application of special tax rate of five percent on gross income after the ITH and exemption from local and national taxes.

In order to expand the domestic market, the roadmap is likewise recommending tax credits on domestically-purchased supplies and materials; reduction from 35 to 30 percent of the excise tax on vehicles with engine capacities of two liters or less; elimination of smuggling and banning of imported second hand vehicles; and government procurement of locally manufactured vehicles.

“We see these initiatives as a much-needed shot-in-the-arm for the sunrise EV industry and will ultimately help us be competitive in the region,” EVAP president Rommel Juan said.

Juan said that if the proposal is approved, the EVAP expects the country’s local completely knocked down assembly to double by 2019, and for the local value-added labor and parts to rise by 50 percent in the same year.

The country’s export sales of vehicles as a result of the approval of the proposed roadmap, he said, may rise to $6 Billion by 2015.

With the approval of the proposed roadmap, he said jobs in the mainstream auto and parts industries are expected to reach 150,000 while some 50,000 would be generated in the allied industries.

Given the benefits, he said, the EVAP is very supportive of the proposed roadmap for the auto parts industry.

“We expect that if the roadmap is approved, the prices of electric jeepneys, quadricycles, tricycles, buses, scooters and bicycles will be reduced by as much as 30 percent. Thus, we are confident that the EV industry will then also grow at the same, if not faster rate than the auto industry,” he said further.