Since I first released our position as CitizenWatch Philippines convenor and wrote a column pointing out the exclusion of electric two-wheeled and three-wheeled vehicles from the temporary suspension of import taxes, many groups have spontaneously come out with published statements harping on the same call for Malacañang to rectify Executive Order 12 which provides zero import duties (from the current 30 percent for five years.
This covers four wheeled electric powered vehicles (EVs) that only the well-off minority of our population can afford.
The initial media publicity framed EO12 as an aggressive environment friendly policy.
Well, it definitely is going at the right direction and aligns with a global movement to reduce carbon emissions that scientists have warned in so many climate change summits and campaigns, that it must be controlled and reversed to avert a planetary disaster that existentially threatens the entire human race.
But, like any government policy, the devil is in the details.
With the help of some tax experts, some provisions of EO 12 will need to be clarified. To translate how experts explained it, Section 1 of the order that only vehicles specifically listed in its “Annex A,” which is a table that indicates it is zero import tax for five years.
The last paragraph of the section further states that:
“The rates of import duty on tariff headings and subheadings which are not listed in Annex A hereof, and those listed but represented by the symbol XXX shall remain in full force and effect.”
The item in table of Annex A with the heading number 87.11 is described as “Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side cars.”
The listed tariff code number 8711.60 described as “with electric motor for propulsion” is followed by the “XXX” and the corresponding import tax column is blank which according to the provision in Section 1, is “exempt” from the EO’s coverage.
On the other hand, Kick scooters (item 871160.92) and Bicycles with auxiliary motor or e-bikes as we know it (item 8711.60.94) are clearly specified at zero rate for five years.
Bantay Konsyumer, Kalsada, Kuryente (BK3), a consumer rights group, has urged the President to expand tax incentives to also cover all modes of two-and three-wheel vehicles.
Its convenor, Louie Montemar, pointed out that “Those who are already given tax perks (in EO 12) are vehicle owners from the AB socio-economic bracket,” and that correcting this exclusion is the right thing to do.
Mobility advocacy group Electric Kick Scooter of the Philippines (EKS PH) co-founder Tim Vargas called EO 12 “unfair.”
Mr. Vargas believes the significant utilization of two-wheeled motorcycles along with the electric vehicle industry can contribute towards enhancing the employment rate of the country.
As we’ve seen during the pandemic and more so now when economic activities are normalizing, motorcycles are indispensable for affordable point-to-point delivery and commuting.
Electric Vehicle Association of the Philippines, an industry-led advocacy group working for policy reforms to advance the economic and ecological benefits of e-vehicles, likewise expressed their support.
Their president, Edmund Araga, said EO12 will help increase the adoption of electric vehicles in the local market.
The Philippine Business for Environmental Stewardship (PBEST), a private sector-led advocacy group pushing sustainability policy reforms and partnerships for responsible stewardship of the environment underscored the eco-friendly significance of EO12.
Eng. Felix Vitangcol, Secretary General of PBEST, said in a recent published statement that “electric-powered vehicles will lessen our dependence on fossil fuels and substantially reduce greenhouse gas emissions which is driving the planet to the brink of a global climate change catastrophe.”
He agreed EO 12 is a way to encourage the shift to environment friendly transport alternatives, but the incentives should be available to ordinary workers and commuters that are now limited to smoke belching public transports.
Indeed, the policy should be sensitive to the struggling masses that Eng. Vitangcol emphasized as being “already perennially burdened by the soaring prices of basic goods and hampered by their limited income to provide for their families.”
Stratbase ADRi President, Prof. Victor Andres “Dindo” Manhit, in a posted statement appealed to the President to expand EO 12’s scope to make all types of electric vehicles. He commended EO 12 as a positive policy move to encourage a shift to electric-powered vehicles and believes that becoming a dominantly electric vehicle country is an exciting prospect that the government must pursue.
Responding quickly to address this glaring exception can potentially transform an estimated seven million air polluting motorcycles, 1.3 million private cars, plus buses and even tricycles, into zero emission rides that will sustainably serve the commuting and supply chain of our reviving economy.
Imagine how clean our air will be and the savings on expensive petroleum fuel, when EVs become the dominant transport for all.