House panels approve incentives for manufacture and assembly of hybrid vehicles

Two House committees have jointly approved a consolidated bill seeking to provide incentives for the manufacture, assembly and conversion of electric, hybrid and other alternative fuel vehicles.

The House Committees on Ways and Means and on Trade and Industry in a joint hearing approved the still unnumbered substitute bill which is a consolidation of House Bill 1 authored by former Rep. Ronaldo Singson and Rep. Jose Ma. Zubiri III (3rd District, Bukidnon); HB 4794 by Rep. Hermilando Mandanas (2nd District, Batangas); HB 5139 by Rep. Ryan Luis Singson (1st District, Ilocos Sur); and HB 5161 by Reps. Rufus Rodriguez (2nd District, Cagayan de Oro) and Maximo Rodriguez, Jr. (Party-list, Abante Mindanao).

Mandanas, Chairman of the House Committee on Ways and Means, said the proposal seeks to address the climate change problem by providing fiscal and non-fiscal incentives which will promote the market for “cleaner” vehicles, paving the way for the realization of a healthier environment.

“With the advent of environment-friendly cars, there will be less demand for the importation of traditional or conventional fossil fuels (gasoline and petroleum) and more for the production of alternative fuels like electric, solar, wind, hydrogen fuel cell, compressed natural gas (NCG), liquefied natural gas (LNG) and liquefied petroleum gas (LPG),” Mandanas said.

The bill defines “Hybrid Vehicle” as any vehicle that combines the technologies of using internal combustion engine (ICE) with a battery-powered electric motor to gain advantages of both propulsion

systems.

It defines “Electric Vehicle” as any vehicle that uses electric motors solely for propulsion while it refers to “Alternative Fuel Vehicle (AFV) as any vehicle using alternative sources of energy such as but not limited to solar, wind, hydrogen fuel cell, compressed natural gas (CNG) or liquefied natural gas (LNG) and liquefied petroleum gas (LPG), other than conventional sources of energy like petroleum and

gasoline for propulsion.

Under the bill,  manufacturers or assemblers shall be exempted from the payment of excise taxes and duties for nine  years upon the effectivity of the act for exporting completely knocked-down (CKD)

parts of electric, hybrid and other AFV, including the conversion of vehicles into electric, hybrid and other alternative fuel vehicles,  Likewise, the importation of raw materials, spare parts, components

and capital equipment used in the manufacture or assembly of electric, hybrid and other AFV including the conversion into such vehicles shall be exempted from the payment of value added tax for nine years.

The bill also provides that the sale of raw materials, spare parts, components and capital equipment used in the manufacture or assembly of electric, hybrid and other AFV, including the conversion into such vehicles shall be subject to zero percent VAT rate for nine years.

The importation of completely built units (CBUs) of electric, hybrid and other AFV shall also be exempt from the payment of excise taxes and duties for four years from the effectivity of the Act.

Under the bill, the manufacturers, assemblers, converters and importers of electric, hybrid and other AFV shall register with the Department of Finance in order to avail of the incentives.

According to the Rodriguez brothers there are very few hybrid vehicles being sold in the country because of their expensive prices caused by the high excise and other taxes imposed by the government.

Based on figures from Toyota Motor Philippines, Inc., dealer of Toyota Prius and Lexus hybrid vehicles, show that only about 100 hybrid vehicles were sold by the car company since starting to offer these

vehicles in the local market.

Zubiri said the duty-free and tax free importation of parts will make hybrid car assembly competitive with the production of normal gas-fed cars.

Singson said the tax incentives to manufacturers and importers of hybrid cars will make these vehicles affordable and available to Filipinos. He cited that to produce a hybrid car would cost $,5000 more than a conventional vehicle.

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