Gatchalian: Tax breaks on e-vehicles to help promote ‘green’ transportation in PH

FILE PHOTO: Senator Sherwin Gatchalian. Photo from Senate PRIB

MANILA, Philippines – Senator Sherwin Gatchalian said the newly imposed tax breaks for certain types of electric vehicles (EVs) will help Filipinos adapt to the regular use of EVs, which may reduce carbon emissions in the country.

Gatchalian, the principal author of the Republic Act 11697 or the Electric Vehicle Industry Development Act (EVIDA), said that the modified tariff rates would help make EVs more affordable for local consumers.

The senator made the statement following the issuance of Executive Order No. 12 series of 2023, which halted the import duty of electric vehicles for the next five years to help mainstream EV usage and create a new industry to support it in the country.

Under EO12, several EV types have received tariff reductions and removal from the previous rates ranging from five to 30 percent.

“We expect that tariff exemption of EVs will lead the country to usher in an EV ecosystem that is vibrant, responsive, and dynamic,” the senator said in a statement.

‘Inclusivity needed in the EO’

While EO12 reduces the tariff for certain EV types, the International think-tank and research organization, Stratbase ADR Institute, said this could be done better by including e-motorcycles in the measure.

Under the directive, e-motorcycles are still subject to a 30 percent tariff, while the taxes for kick scooters, pocket motorcycles, and self-balancing cycles were reduced to zero.

Stratbase President Prof. Dindo Manhit said that the EO should be modified as workers and students use motorcycles to commute to work while four-wheeled vehicles are often only afforded by higher-income individuals.

In 2021, the Land Transportation Office recorded that almost 8 million units of motorcycles were registered in the agency.

Environmental effects

Meanwhile, environmentalists have been proposing the shift to EVs in the country to help mitigate the effects of climate change. Along with this is the call to shift to renewable energy production as the country is still sourcing its electricity mainly from fossil fuels and coal.

According to the Statista Research Department, the power production in the Philippines is still dominated by coal at 47.6 percent, other fossils at 18 percent, and gas at 10.7 percent, which totals 76.3 percent.

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