Two-wheeled EVs tax break gains ground

Backing for the proposal on giving tax breaks for two-wheeled electric vehicles is rising as a bill aiming for their inclusion in the list of vehicles benefiting from tariff reduction has been filed in the House of Representatives.

This comes as Albay Second District Representative Joey Salceda introduced House Bill 9573 which aims to amend the Executive Order 12 series of 2022 to modify the tariff rates for certain EVs and their parts and components to boost green transportation in the country.

In a statement, Salceda said that two-wheeled electric motorcycles were not given tax breaks under EO12, even though they comprise the majority of electric vehicles in the country.

Under the EO12, only kick scooters, self-balancing cycles, bicycles, and pocket motorcycles with auxiliary motors not exceeding 250w and with a maximum speed of 25 km/hour have 0 percent import duties. On the other hand, electric motorcycles are still subject to a 30 percent tariff rate.

The lawmaker also said that e-motorcycles were not given proper treatment, as these are the most affordable types of electric vehicles and can be adopted easily, and their non-inclusion is counterproductive when it comes to solving congestion.

"Some 60 percent of electric vehicles are two-wheeled, meaning that the vast majority of electric vehicles 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 electric vehicles 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.

The non-inclusion of e-motorcycles in the list of EVs gained the disapproval of different stakeholders of the industry, saying that it is unfair to the majority of motorists in the Philippines, including mobility advocates, business owners, and environmentalists.

In a study conducted by American business consulting firm “Frost and Sullivan” in 2018, a total of 93 percent of surveyed Filipinos said that they are open to buying electric vehicles in the future.

The Electric Vehicles Association of the Philippines projected the EV market to grow at an annual rate of 8 percent to 12 percent over the next 10 years. This equates to about P1.68 billion in revenue services and sales of 200,000 units by 2024.

EO12 is up for review by February 2024, as per the National Economic Development Authority.

The push for EVs has been one of the primary ways that the Philippine government is introducing to help reduce carbon emissions and to ramp it up, the Electric Vehicle Industry Development Act has been enacted into law to create an industry supporting the EV transition of the country.