NEDA mulls e-motorcycle tax breaks as key EV incentives issue

The executive order modifying the tariff rates for Electric Vehicles 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 chief Arsenio Balisacan had earlier said that Executive Order 12, series of 2022 -- the executive issuance granting tax breaks to several types of EVs - will have its mandatory review this month.

EO12 was uploaded in the Official Gazette last 19 January 2023 and took effect on February 20, 2023. It will be available for review beginning 21 February 2024, or a week from now, exactly a year after it took effect.

EO12 was enacted to complement the Electric Vehicle Industry Development Act, in a bid to mainstream EVs in the country to help promote green transport and help 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 electric vehicles and their components got lower tariff rates under the EO12, from the previous five to thirty percent to currently zero percent import duty.

NEDA was the agency that recommended EO12'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 EO12 since the start of 2023, noting its unfair snubbing to e-motorcycles to also receive tax breaks from the government, even though motorcycles comprise the majority of numbers among motorists in the country, according to data from the Land Transportation Office.

The Statista Research Department said that around 7.81 million private motorcycles and tricycles were registered in the Philippines in 2022.

This also prompted Albay Representative Joey Salceda to file House Bill 9573, which seeks to revise EO12, to include e-motorcycles in EVs benefitting from tax breaks.

"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.

In a 2021 study, international consulting firm Frost & Sullivan found that the Philippines' consumer market is excited about EV introduction in the Philippines, with the growing environmental awareness continuing to be mainstreamed.