PBBM approves temporary cut on EV’s import duty rates

President Ferdinand Marcos Jr.

In a bid to boost the Philippines' electric vehicle (EV) industry, President Ferdinand Marcos Jr. has approved the temporary reduction of its import duty rates.

KEY TAKEAWAYS

  • When was Executive Order 12 signed?

    President Ferdinand Marcos Jr. signed the order last January 13.
  • What is the purpose of the Order?

    The order was made as a sign of support to the country’s transition to emerging technologies.
  • Based on the Executive Order (EO) 12, which was signed last January 13, taxes on the aforementioned vehicle category, parts and components prescribed under Republic Act  (RA) 10863 (also known as the Customs Modernization Act) shall be momentarily amended as a sign of support to the country’s transition to emerging technologies.

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    The move was also made to encourage consumers to consider EV as a cleaner and greener transportation option.

    The EO stated that under RA No. 11697 (commonly known as the Electric Vehicle Industry Development Act), the state shall “ensure the country’s energy security and independence by reducing reliance on imported fuel for the transportation sector.”

    “The state has the paramount obligation to protect the health and well-being of the people from hazards of pollution and greenhouse gases,” the order shared.

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    The EO also noted that the transportation sector is one of the largest sources of air pollution and energy-related greenhouse gas emissions in the country at 34 percent — with road transportation accounting for 80 percent of the emissions.

    RA 10863’s Section 1618 gives the country's chief executive the power to alter the existing import duty rates — in the interest of general welfare and national security and upon recommendation of the National Economic and Development Authority (NEDA).

    In November 24 last year, the NEDA Board recommended the provisional reduction of the Most-Favored Nation (MFN) tariff rates on certain e-vehicles and their parts and components for a period of five years. In a press release, the NEDA said the EO will temporarily reduce the MFN tariff rates to zero percent for five years on Completely Built Up (CBU) units of certain electric vehicles, except for hybrid-type EV.

    “It will also implement tariff modification on certain parts and components of EVs from five percent to one percent for five years… 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,” NEDA stated in its November 24, 2022 release.

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    Also, EO  12 stated that the MFN tariff rates shall be subject to review after one year from the implementation of the order.

    Photos from Presidential Communications Office,  Ruben D. Manahan IV

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