To help reduce the country’s carbon emissions and dependence on oil, the National Economic and Development Authority (Neda) is now pushing to make certain electric vehicles (EV) tariff-free.
In a press conference in Malacañang on Thursday, Socioeconomic Planning Secretary Arsenio M. Balisacan announced the Neda Board had endorsed a new Executive Order to President Ferdinand “Bongbong” R. Marcos, Jr. to implement the new tariff modification.
“The EO will temporarily reduce the most-favored nation (MFN) tariff rates to zero percent for five years and completely built-up or CBU units of certain EVs, except for hybrid-type EVs,” Balisacan said.
Currently, Balisacan said the tariff for e-vehicles range from 5 percent to 30 percent.
The zero-tariff policy will cover EVs such as passenger cars, buses, mini buses, vans, trucks, motorcycles, tricycles, scooters and bicycles among others.
Likewise, it will also reduce the tariff for certain component parts of EVs from five percent to one percent for five years.
However, the pending EO will exclude hybrid vehicles, which makes use of an electric motor and a traditional combustion engine, for now.
“We will review the performance of this reform after one year to see if there is a need to also include the hybrid,” Balisacan said.
EV industry growth
The measure together with other tax incentives for green-related initiatives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act are expected to help boost demands for EVs by making them more affordable.
Balisacan said they also hope the tariff adjustment will encourage the private sector to invest in “subsidiary auxiliary services” for EVs such as creating more charging stations to cater to such vehicles.
“The EO aims to expand market sources and encourage consumers to consider acquiring EVs, improve energy security by reducing dependence on imported fuel, and promote the growth of the domestic EV industry ecosystem,” Balisacan added.
Minimal revenue impact
HE also assumed that the zero-tariff for EVs will have minimal impact on the government revenue.
“We have really reduced the tariffs for those vehicles that are not actually yet locally produced. And as of now, the quantity of those vehicles is not that big,” Balisacan said.
Neda is still ironing out some of the details of the proposed EO before it can be signed by Marcos.
In September, the Department of Energy (DOE) said the zero-tariff policy is expected to be released before the end of the year.