E-motorcyles likely included in review of tax breaks – NEDA

MANILA, Philippines — The executive order modifying the tariff rates for electric vehicles (EVs) will be up for review next week, with the possible inclusion of e-motorcycles in the list of vehicles that benefits from tax breaks.

National Economic and Development Authority Secretary Arsenio Balisacan said Executive Order 12 – the executive issuance granting tax breaks to several types of EVs  – will have its mandatory review this month.

EO 12 was uploaded in the Official Gazette on Jan. 19, 2023 and took effect on Feb. 20, 2023. It will be available for review beginning Feb. 21, 2024, exactly a year after it took effect.

EO 12 was enacted to complement the Electric Vehicle Industry Development Act (EVIDA) in a bid to mainstream EVs in the country and help promote green transport and reduce the country’s carbon emissions.

Except for e-motorcycles, which are not included in the tariff suspension and are still subject to a 30 percent import charge, different types of EVs and their components got lower tariff rates under EO 12, from the previous five to 30 percent to currently zero percent import duty.

NEDA was the agency that recommended EO 12’s enactment for five years, to modify the tariff rates for certain EVs and their parts and components.

EV industry stakeholders mounted their concerns with EO 12 since the start of 2023, noting that e-motorcycles also need to receive tax breaks from the government even though motorcycles comprise the majority of vehicles in the country, according to data from the Land Transportation Office.

According to Statista Research, around 7.81 million private motorcycles and tricycles were registered in the Philippines in 2022.

This also prompted Albay Rep. Joey Salceda to file House Bill 9573, which seeks to revise EO 12, to include e-motorcycles in EVs benefitting from tax breaks.

“Some 60 percent of EVs are two-wheeled, meaning that the vast majority of EVs do not benefit from the tax incentives granted under the law... encouraging electric cars while locking out electric motorcycles does not address congestion issues, but merely substitutes petroleum-fueled cars for their space on the road,” Salceda said.

“In order to address these issues, this proposal clarifies in its definition of terms that EVs include two-wheeled vehicles. Additionally, the measure provides a zero-percent duty treatment on completely-built electric vehicles to accelerate the shift to these types of vehicles,” he added.