Senate bill seeks tax exemption of electric, hybrid vehicles for next few years

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To encourage the manufacture, importation, and use of carbon-reducing vehicles, Sen. Francis “Kiko” Pangilinan has proposed to exempt electric and hybrid vehicles from taxes and duties for the next several years.

Sen. Francis “Kiko” Pangilinan

Carbon emissions raise temperatures globally and contribute to drastic changes in the climate. In the Philippines, vehicles contribute 36.1% of the total carbon dioxide emissions, and replacing 100,000 tricycles with electric and hybrid vehicles will reduce 260,000 tons of carbon dioxide emissions, as estimated by the Department of Energy.

“Climate change is upon us, and the Philippines is most vulnerable to it. Proposed solutions must involve most of us in our everyday lives,” Pangilinan said.

Almost half (47%) of the country’s population are in areas highly exposed to climate hazards such as earthquakes, tsunami, floods, tropical cyclones, and drought, he said citing the Global Peace Index 2019.

In Senate Bill 638, Pangilinan seeks to provide the following incentives for the use of environment-friendly means of public transportation:

  1. For manufacturers and assemblers, exemption from excise taxes and duties as well as suspension of value-added tax for capital equipment, spare parts, components, including charging stations for nine years from effectivity of the law;
  2. For importers, exemption from excise taxes and duties for three years of effectivity of the law;
  3. For owners and users, exemption from the number coding traffic scheme of the Metro Manila Development Authority (MMDA) and the motor vehicle user’s charge (MVUC) imposed by the Land Transportation Office (LTO); priority in registration and issuance of plate number; priority in franchise application by the Land Transportation Franchising and Regulatory Board (LTFRB) — all for nine years of effectivity of the law;
  4. For building owners, requirement to provide exclusive free parking space;
  5. For local government units, requirement to allocate land and lot space for construction of charging stations.

“Like our other bills, this Senate Bill 638 is looking to the future. The climate crisis is real. And the Philippines is the most susceptible country to hazards brought about by climate change, according to scientists and experts worldwide,” said Pangilinan.

According to the bill’s explanatory note, this move is in line with the Philippines’ ratification of the Paris Agreement on Climate Change in March 2017, with the country committing to reduce its carbon emissions by 70% by the year 2030.

“The proposal is good not only for the environment, but also for our tricycle drivers. This is projected to increase the income of tricycle drivers by 30% because electric vehicles can carry more passengers and charging it is cheaper than fuel,” he said.

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