BoI proposes emission-based incentives to alternative fuel vehicles
MANILA, Aug. 2 (PNA) — the Board of Investments has proposed that incentive package granted to alternative fuel vehicles should be based on emission reduction rather than technology to ensure only those that really contributed to the reduction in carbon emission are eligible for incentives.
Trade and Industry Secretary Gregory L. Domingo raised this proposal in light of the bills being filed in Congress supporting the grant of incentives to alternative fuel vehicles.
“We are very supportive of the e-vehicle and the zero tariff but we need more consultation,” Domingo said.
Domingo, who is chair of the Board of Investments, told reporters of his position as the BoI and Senator Ralph H. Recto, author of the bill, have been discussing about the proposed legislative measure.
Earlier, however, Domingo cited as possible loophole in hybrid vehicles. thus, he called for the exclusion of hybrid cars from the incentive package to plug a possible loophole wherein some unscrupulous persons would just put in small converters or improvement on the car and call it a hybrid vehicle.
Hybrid vehicles have the flexibility to use electricity or gasoline.
“I’d rather promote CNG or pure electric vehicles,” Domingo said, noting that a five percent conversion of a fossil-fed vehicle does not merit an incentive.
Thus, an annual emission testing on the effectiveness of the technology that reduces carbon emission should be a must. the incentives should then be based on the amount of carbon emission the vehicle was able to accomplish.
Board of Investments managing head Cristino L. Panlilio, however, said that Sen. Recto had strong reservation on excluding hybrid vehicles, saying there is a need for a transition phase from hybrid to pure electric-run vehicles.
Panlilio said that electric cars and CNG buses are produced in China and Korea.
BYD Company, the largest battery manufacturer in China, had visited Panlilio over its plan to put up an assembly plant in the country.
A draft committee report on the consolidated measure likewise provides other “incentives” to the developing E-motor vehicle industry such as exemption from the Motor Vehicle User’s Charge and from color/number’s coding to ensure all-week driving.
Domingo has also proposed that assemblers of alternative fuel vehicles should not be exempted from payment of the 12 percent value added tax (VAT) on their imported parts and components and that the planned tax incentive package should only be for CNG and pure electric-fired vehicles, not hybrid.
Recto’s bill has called for the exemption of electric vehicle assemblers from paying excise tax and VAT for nine years to bring down the cost of importing and converting E-vehicles and their hybrid types, which should result to lower sticker price or dealer’s price for consumers.
“My proposal is to level the playing field because everybody pays the 12 percent VAT,” Domingo said.
Domingo said that exemptions to the VAT payment could disrupt this very good tax system. He also said that having a good tax system would redound to the benefit of the businessmen.
This means that prospective investors in alternative fuel cars would be eligible only to one percent duty on the importation of capital equipment and excise tax.
This tax incentive would apply to both assemblers and importers of alternative fuel vehicles.
Panlilio also explained that it would be difficult to tinker with the VAT system, which has a good traceability system, just to accommodate exemptions on the limited sales of alternative fuel vehicles. (PNA) DCT/BAC/utb
BoI proposes emission-based incentives to alternative fuel vehicles
carbon emission, converters, emission reduction, hybrid vehicle, incentives, recto