While the party is not over yet after Malacanang came out with the Executive Order No. 12 which temporarily suspends tariffs or import duty on electric vehicles, parts, and components, there are some sectors of the car industry that are already airing some discomfort on the said issue.
The EO No. 12 was signed Jan. 13, 2023 and it was known as the “Customs Modernization, and Tariff Act” which simply halted the said duties under Section 1611 of the Republic Act No 10863, which “empowers the President, in the interest of general welfare and national security, and upon recommendation of the National Economic and Development Authority (NEDA), to increase, reduce or remove existing rates of import duty.”
In the said Order, it mentioned that in the Republic Act No. 1169 which is the “Electric Vehicle Industry Development Act,” the State should “ensure the country’s energy security and independence by reducing reliance on imported fuel for the transportation sector” and also “provide an enabling environment that permits the development of electric vehicles, including options for micro-mobility as an attractive and feasible mode of transportation.”
Last Nov. 24, 2022, the NEDA Board endorsed the temporary reduction of the most-favored nation (MFN) tariff rates on certain electric vehicles together with their parts and components.
And the EO No. 12 is the answer to that endorsement and it shall be subject to review after one year from implementation. It shall be the NEDA which shall submit to the President its findings and recommendations afterwards.
That’s an effective zero reduction on the 30 percent being slapped on various imported electric vehicles (EVs) which makes them out of reach in pricing by the ordinary consumers. And this is a great way to bring down the prices of EVs that are being sold in the market today.
But the reduction is only up to 5 years and without any support by NEDA to extend it, 30 percent taxes would be back for enforcement by customs.
One sector of the car industry bewailed the lack of support for the existing vehicles that are being sold to the market by way of bringing down the heavy taxes and too many road regulations.
The heavy taxes slapped on regular cars almost double or triple the amount of cars that are being imported abroad. The consumers are always the ones who carry the brunt of the high cost of owning one. And the problems on the roads—lots of potholes, corrupt traffic enforcers, endless traffic, and many others—also add on to the hair-pulling tragedies of the poor motorists.
The other one sector is saying that the government should have tried to bring down the price of electricity in the market even before coming out with the said tariff reduction. Yes, the price of electricity continues to be one of the highest in the region and an incentive should be given to those EV owners who rely on the electric chargers in fueling their vehicles.
Whether EO No.12 would be the answer to attract more EV buyers in the near future or not will be known when it is fully implemented soon. But by then, let’s continue to suffer from the endless traffic situations all over the metropolis all day long.