Amending the Electric Vehicle Industry Development Act (R.A. No. 11697)

Senate Office of the Secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES FEB -9 P2:30 First Regular Session SENATE RECEIVED BY 1808 S.B. No. Introduced by SENATOR IMEE R. MARCOS AN ACT AMENDING REPUBLIC ACT NO. 11697 OTHERWISE KNOWN AS THE "ELECTRIC VEHICLE INDUSTRY DEVELOPMENT ACT," AND FOR OTHER PURPOSES EXPLANATORY NOTE Article II, Section 15 of the 1987 Constitution provides that, "The State shall protect and promote the right to health of the people " while Section 16 of the same Article states that, "The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature." The Paris Agreement was signed by President Rodrigo Roa Duterte and ratified by the Senate last 2017. Set within the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Agreement was designed to strengthen the global response to the urgent threat of climate change by holding the increase in global average temperature below 2' above pre-industrial levels and was signed by 196 countries. In line with the Paris Agreement, President Duterte approved the country's first Nationally Determined Contribution (NDC) last April 2021, which aims to reduce greenhouse gas (GHG) emissions by 75% by 2030. The 2025 NDC 3.0 of the Philippines continues to affirm that goal, with an updated list of implementing effective policies and measures. One of the biggest contributors to local carbon dioxide emissions is the local transportation sector, which is predominantly powered by oil products. The 2020 government inventory of Philippine greenhouse gas emissions shows that road transportation is the 5th largest contributor of greenhouse gas emissions, contributing 7.41% of total greenhouse gas emissions.

Adopting hybrids and electric vehicles which run on electric motor instead of the traditional internal combustion engine will allow the transportation sector to comply with the NDCs of the transport sector. However, the current law to encourage the uptake of electric vehicles do not provide enough incentives for the industry. This proposed measure adds additional incentives to encourage the uptake of hybrid and electric vehicles in the public and private sector in the form of reductions in the applicable duty rates and the value added tax on the sale of hybrid and electric vehicles. In view of the foregoing, the immediate passage of this bill is earnestly sought. Free h. Marca AIMEE R. MARCOS

DEALE Offier of the secterary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES FEB -9 P2:30 First Regular Session SENATE RECEIVED BY 1808 S.B. No. - Introduced by SENATOR IMEE R. MARCOS AN ACT AMENDING REPUBLIC ACT NO. 11697 OTHERWISE KNOWN AS THE "ELECTRIC VEHICLE INDUSTRY DEVELOPMENT ACT," AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 24 of Republic Act No. 11697 otherwise known as the

"Electric Vehicle Industry Development Act" shall be amended to read as follows: "Section 24. Fiscal Incentives. - (a) Manufacturing XXX (b) Importation XXX (c) Utilization A thirty percent (30%) discount for the BEVs and fifteen percent (15%) discount for HEVs from the payment of the motor vehicle user's charge imposed by the LTO under Republic Act No. 8794, otherwise known as the "Motor Vehicle User's Charge Act," as well as vehicle registration and inspection fees shall be available for eight (8) years from the effectivity of this Act. (d) SALE THE SALE OF HEVS SHALL BE SUBJECT TO FIFTY PERCENT (50%) OF THE APPLICABLE DUTY RATES ON AUTOMOBILES WHILE THE SALE OF BEVS SHALL BE EXEMPT FROM DUTY RATE ON AUTOMOBILES. PROVIDED THAT, FROM THE EFFECTIVITY OF THIS ACT, THE SALE OF HEVS AND BEVS SHALL BE SUBJECT TO LOWER VAT RATES FOR THE FIRST FIVE YEARS, AS FOLLOWS: (i) YEAR 1 - FOUR PERCENT (4%)

(ii) YEAR 2 - SIX PERCENT (6%) (ili) YEAR 3 - EIGHT PERCENT (8%) (iv) YEAR 4 TO 5 - TEN PERCENT (10%) PROVIDED FURTHER THAT, AFTER THE FIFTH YEAR, THE VAT RATE SHALL BE REINSTITUTED AT TWELVE PERCENT (12%), AS PROVIDED IN EXISTING LAWS, RULES, AND REGULATIONS.

SEC. 2. Repealing Clause. - All laws, decrees, orders, rules and regulations or

other issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 3. Separability Clause. - If any portion or provision of this Act is declared

unconstitutional, the remainder of this Act or any provision not affected thereby shall remain in force and effect.

SEC. 4. Effectivity. - This Act shall take effect after fifteen (15) days following

the completion of its publication either in the Official Gazette or in a newspaper of general circulation in the Philippines. Approved,