House leader proposes incentives for manufacture and importation of hybrid vehicles

Thursday, 30 June 2011 01:54

A House leader has proposed several fiscal and non-fiscal incentives for the manufacture, assembly, conversion and importation of electric, hybrid and other alternative fuel vehicles as one of the country's steps to address climate change.

According to Rep. Hermilando Mandanas (2nd District, Batangas), chairman of the House Committee on Ways and Means, these incentives will promote the market for cleaner vehicles, paving the way for the realization of having a healthier environment. In addition to this expected boon, the country will also provide an answer to its fuel-saving woes, Mandanas said.

"With the advent of these 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 (LGP)," he said.

Mandanas said considering the country's location, high population and low adaptive capacity, the Philippines is considered a climate change hot spot vulnerable to sea level rise, flash floods, extreme and longer hot and rainy seasons, cyclones, storm surges, droughts and a host of other serious consequences.

"It is thus imperative for the country, in line with the solutions to global warming being undertaken by the world, to step up its own efforts in dealing with this global concern. This can very well be done by legislating measures to lessen, if not eradicate, the emission to the atmosphere of the so-called harmful gases which cause the earth to warm up way beyond the normal levels," he said.

In House Bill 4794, which shall be known as the "Electric, Hybrid and Other Alternative Fuel Vehicle Incentives Act of 2011," Mandanas proposed that the manufacture or assembly of completely knocked-down (CKD) parts of electric, hybrid and other alternative fuel vehicles, including the conversion of vehicles into electric, hybrid and other alternative fuel vehicles, shall be exempt from the payment of excise taxes and duties for nine years from the effectivity of the Act.

Moreover, the imposition of the value added tax (VAT) for the purchase and importation of raw materials, spare parts, components and capital equipment used in the manufacture or assembly of electric, hybrid and other alternative fuel vehicles shall be suspended for the next nine years from the effectivity of the Act.

The bill also provides the importation of completely built units (CBUs) of electric, hybrid and other alternative fuel vehicles shall be exempt from the payment of excise taxes and duties for nine years from the effectivity of the Act.

Likewise, electric, hybrid and other alternative fuel vehicles shall be exempt from the payment of the Motor Vehicle User's Charge (MVUC) imposed by the Land Transportation Office (LTO) under Republic Act 8794 otherwise known as the MVUC Act.

Non-fiscal incentives include priority in registration and issuance of a special plate number by the Land Transportation Office; priority in franchise application by the Land Transportation Franchising and Regulatory Board (LTFRB); exemption from the Unified Vehicle Volume Reduction Program (UVVRP) or Number-Coding Scheme being implemented by the Metro Manila Development Authority (MMDA) and other local government units concerned; as well as mandatory provision for parking spaces in new establishments for all electric, hybrid and other alternative fuel vehicles.

To avail of these incentives, the bill provides that manufacturers, assemblers, converters and importers shall register with the Department of Finance. The DOF and the Department of Trade and Industry shall meet regularly to monitor and review the implementation of these fiscal and non-fiscal incentives.

Mandanas said it is the policy of the State to safeguard life and the environment by encouraging the use of alternative sources of energy for vehicles intended for public and private use.

It is also the State's policy to protect the well-being and promote the economic condition of the people as well as promote energy independence and security in the midst of development and innovation in technology according to him.