The substitute measure, a consolidation of House Bills 1, 4794 and 5161, seeks to address the climate change problem by providing fiscal and nonfiscal incentives, which will promote the market for “cleaner” vehicles, paving the way for the realization of a healthier environment.
The bill said a hybrid vehicle combines the technologies of the internal combustion engine with a battery-powered electric motor to gain the advantages of both propulsion systems.
It said an electric vehicle uses electric motors solely for propulsion, while a alternative fuel vehicle (AFV) uses alternative sources of energy, such as but not limited to solar, wind, hydrogen fuel cell, compressed natural gas or liquefied natural gas and liquefied petroleum gas, other than conventional sources of energy like petroleum and gasoline for propulsion.
As embodied in the bill, manufacturers or assemblers shall be exempted from the payment of excise taxes and duties for nine years upon the effectivity of the law for exporting completely knocked-down parts of electric, hybrid and other AFV, including the conversion of vehicles into electric, hybrid and other alternative fuel vehicles,
Also, the importation of raw materials, spare parts, components and capital equipment used in the manufacture or assembly of electric, hybrid and other AFV, including the conversion into such vehicles shall be exempted from the payment of value-added tax (VAT) for nine years.
The bill also provides that the sale of raw materials, spare parts, components and capital equipment used in the manufacture or assembly of electric, hybrid and other AFV, including the conversion into such vehicles shall be subject to zero percent VAT rate for nine years.
The importation of completely built units of electric, hybrid and other AFV shall also be exempt from the payment of excise taxes and duties for four years from the effectivity of the Act.
Under the bill, the manufacturers, assemblers, converters and importers of electric, hybrid and other AFV shall register with the Department of Finance in order to avail themselves of the incentives.
