PRESIDENT Marcos Jr. has approved the reduction of import duty rates on electric vehicles (EVs) and its parts and components under Republic Act (RA) No. 10863 or the Customs Modernization Act.
The President, in signing Executive Order No.12 on January 13, said the modified import duty rates on electronic vehicles will boost the EV market in the country, support the transition to emerging technologies, and encourage consumers to consider them as a cleaner and greener transportation option.
The decision to cut the tariff stemmed from the recommendations of the National Economic and Development Authority (NEDA) board in November last year to temporarily reduce the Most-Favored Nation (MFN) tariff rates on certain e-vehicles and their parts and components for a period of five years.
Under EO 12, the MFN tariff rates on Completely Built Up (CBU) units of certain electric vehicles, except for hybrid-type EVs, shall be zero percent for five years, while tariff on certain parts and components of EVs will go down to one percent from five percent, also for five years. The order also states that the MFN tariff rates shall be subject to review after one year from its implementation.
The reduction of tariff aims to help expand market sources and encourage consumers to consider acquiring EVs, improve energy security by reducing dependence on imported fuel, and promote the growth of the domestic EV industry ecosystem. It also supports government efforts to protect the health and well-being of the people from the hazards of pollution and greenhouse gases.
EO 12 said the transportation sector is one of the largest sources of air pollution and energy-related greenhouse gas emissions in the country at 34 percent, while road transportation accounts for 80 percent of those emissions.
