Senate support for e-vehicle industry heralds showdown over incentives

October 7, 2019 | 10:13 pm

https://www.bworldonline.com/senate-support-for-e-vehicle-industry-heralds-showdown-over-incentives/

THE Senate is consolidating five bills seeking to jump-start the electric vehicle industry, with subsidies for the sector the common theme of the legislation which a key Senator hopes will make it out of committee by next month.

Senator Sherwin T. Gatchalian, the chamber’s energy committee chairman, said at a briefing Monday: “We’ll enter into a technical working group two weeks from now and by November magpa-file na tayo sa (we will report it out on the) floor.”

“Hopefully, ma-approve ‘to within the year, considering na limang Senators ang may ganitong bill (We hope to have this approved within the year, considering that five Senators have filed bills on this matter).”

The committee tackled five Senate Bills which all propose to provide incentives for the production of e-vehicles and other green vehicles, heralding a possible showdown with the Department of Finance (DoF), which is currently seeking to simplify the tax incentive system.

“The challenge is cost. Mahal ang e-vehicles, kaya ang request ng industriya tulungan sila with subsidies at fiscal incentives, ibig sabihin tanggaling ang excise tax, tanggalin ang import duties (E-vehicles are expensive, which is why the industry has requested assistance in the form of fiscal incentives like the removal of excise tax and import duties),” Mr. Gatchalian said.

The bills have been supported by the Department of Energy (DoE), but opposed by the DoF.

According to the DoE’s Energy Utilization and Management Bureau, incentives, such as free charging and free parking, are needed to support the industry.

“Based on our studies, other jurisdiction were able to jump-start with government taking a more proactive role in having and offering free charging facilities,” bureau director Patrick T. Aquino told the committee.

Other non-fiscal incentives he cited were exemption from number coding and other traffic management schemes.

DoF fiscal policy planner and economist Charmaine B. Odicta said the Department does not support incentives for e-vehicles which will run against current efforts to streamline fiscal incentives under the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA).

Ms. Odicta said e-vehicles are already included in the 2017 Investment Priorities Plan. “Based on our data in 2017, there were nine manufacturers, but only three enterprises availed of the fiscal incentive… we would like to note that fiscal incentives alone are not effective in advancing the development of the industry,” she said.

“Another point is that the proposal for the fiscal incentives, contradicts the DoF’s efforts in reforming the tax system. For the VAT (Value-Added Tax) exemption, we agree that the excise tax is a better policy tool to incentivize the production of e-vehicles,” she said, noting that this issue was addressed by Republic Act no. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law. — Charmaine A. Tadalan