COMMITTEE REPORT No. 1493

‘Submitted by the Committees on Ways and Means and Trade and Industry on

“gett

RE : House Bill No,__ 546
Recommending its approval in substitution of House Bill Nos
01, 4794, 5139 and 5161

Sponsors _: Representatives Hermilando |. Mandanas, Albert S. Garcia
Jose Ma. F. Zubiri, Ryan Luis V. Singson, Rufus B.
Rodriguez, and Maximo B. Rodriguez, Jr

Mr. Speaker:

The Committees on Ways and Means and Trade and Industry to which were
referred House Bill No. 01, introduced by Representatives Ronald V. Singson
and Jose Ma. Zubiri, entitled:

“AN ACT EXEMPTING ALL MANUFACTURERS AND
IMPORTERS OF HYBRID VEHICLES FROM THE PAYMENT
OF CERTAIN TAXES AND FOR OTHER PURPOSES”

House Bill. No. 4794 , introduced by Representative Hermilando |. Mandanas
entitied:

“AN ACT PROVIDING INCENTIVES FOR THE
MANUFACTURE, ASSEMBLY, CONVERSION AND
IMPORTATION OF ELECTRIC, HYBRID AND OTHER
ALTERNATIVE FUEL VEHICLES, AND FOR OTHER
PURPOSES

House Bill No. 5139 , introduced by Representative Ryan Luis V. Singson,
entitied:



“AN ACT EXEMPTING ALL MANUFACTURERS AND
IMPORTERS OF HYBRID VEHICLES FROM THE PAYMENT
OF CERTAIN TAXES AND FOR OTHER PURPOSES”

House Bill No, 5161, introduced by Representatives Rufus B. Rodriguez and
Maximo B. Rodriguez, Jr. , entitled:

“AN ACT PROVIDING INCENTIVES FOR THE
MANUFACTURE, ASSEMBLY, AND IMPORTATION OF
ELECTRIC, HYBRID AND OTHER ALTERNATIVE FUEL
VEHICLES, AND FOR OTHER PURPOSES

have considered the same and recommend that the attached House Bill No.

EC b3ti, entitled:

“AN ACT PROVIDING INCENTIVES FOR THE
MANUFACTURE, ASSEMBLY, CONVERSION AND
IMPORTATION OF ELECTRIC, HYBRID AND OTHER
ALTERNATIVE FUEL VEHICLES, AND FOR OTHER
PURPOSES

be approved in substitution of House Bill Nos. 01, 4794, 5139 and 5161 with
Representatives Jose Ma. Zubiri, Hermilando |. Mandanas, Ryan Luis V.
Singson, Rufus B. Rodriguez, Maximo B. Rodriguez, Jr., and Albert S. Garcia
as authors thereof.

P. HERMILANDO I. MANDANAS
n hairman
mittee on Trade and Industry ‘Committee on Ways and Means

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY


WRI tHEYN—

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

rap
HOUSE BILL NO. © = bu
(in substitution of House Bill Nos. 01, 4794, 5139 and 5161)

Introduced by Representatives Jose Ma. F. Zubiri Ill, Hermilando |.
Mandanas, Ryan Luis V. Singson, Rufus B. Rodriguez, Maximo B.
Rodriguez, Jr. and Albert S. Garcia

AN ACT
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY,
CONVERSION AND IMPORTATION OF ELECTRIC, HYBRID AND OTHER
ALTERNATIVE FUEL VEHICLES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Title. - This Act shall be known as the “Electric, Hybrid and Other
Alternative Fuel Vehicles Incentives Act of 2011."

SEC. 2. Declaration of Policy. — It is the policy of the State to safeguard life and
environment by encouraging the use of alternative sources of energy for vehicles
intended for public and private use. To protect the well-being and promote the
economic condition of the people as well as to promote energy independence
and security in the midst of development and innovation in technology, the
following are hereby declared:

A) It is the policy of the State to protect and advance the right of the
people to a balanced and healthful ecology in accord with the rhythm
and harmony in nature. The State shall recognize and address the
detrimental effects on the environment, safeguard the welfare, and
protect the health of the people by improving air quality and by
reducing the impact of greenhouse gas effects emitted from man-made
sources such as vehicles operating on fossil fuels.

B) The State supports the need to promote the development of new
technology to accelerate social progress and promote human
development. The use of alternative sources of energy on vehicles


intended for public and private use is encouraged to
innovation, energy efficiency, security and conservation, and to speed
up the deployment of cleaner technology.

C) The State recognizes the indispensable role of the private sector,

employment, the State shall provide incentives to private enterprises
and individuals engaged in the manufacture, assembly, conversion,
and importation of electric, hybrid and other altemative fuel vehicies.

‘SEC. 3. Definition of Terms. — As used herein, the following shall mean:

(a) “Electric Vehicle” (EV) shall refer to any vehicle that uses electric
motors solely for propulsion

(b) “Hybrid Vehicle" (HV) shall refer to any vehicle that combines the
technologies of using internal combustion engine (ICE) with a battery-
powered electric motor to gain advantages of both propulsion systems.

(c) Other “Alternative Fuel Vehicle” (AFV) shall refer to any vehicle using
alternative sources of energy such as but not limited to: solar, wind,
hydrogen fuel cell, compressed natural gas (CNG) or liquefied natural
gas (LNG) and liquefied petroleum gas (LPG), other than conventional
sources of energy like petroleum and gasoline for propulsion.

(d) “Manufacturer” or “Assembler” shall refer to any individual, partnership,
corporation or other entity engaged in the manufacture, assembly and
conversion of electric, hybrid and other alternative fuel vehicles
incorporated, organized and existing under Philippine laws.

eT ee ear Partnership, corporation or other
entity engaged in the importation of Sear built units (CBUs) of
electric, hybrid and other alternative vehicles incorporated,
organized and existing under Philippine i

SEC. 4, Coverage. — This Act shall cover electric, hybrid and other alternative
fuel vehicles but shall not include vehicles powered by gasoline, petroleum, bio-
diesel and bio-ethanol.

SEC. 5. Incentives to Manufacturers or Assemblers. - The provision of any
special or general law to the contrary notwithstanding, the manufacture or
assembly of completely knocked-down (CKD) parts of electric, hybrid and other
alternative fuel vehicles, including the conversion of vehicles into electric, hybrid
and other alternative fuel vehicles, shall be exempt from the payment of excise
taxes and duties for nine (9) years from the effectivity of this Act.


Seer ]gueun—

The importation of raw materials, spare parts, components and capital
equipment used in the manufacture, assembly or conversion of electric, hybrid
and other alternative fuel vehicles shall be exempted from the payment of value
added tax (VAT) for nine (9) years from the effectivity of this Act.

The sale of raw materials, spare parts, components and capital equipment
used in the manufacture or assembly of electric, hybrid and other alternative fuel
vehicle including the conversion into such vehicle shall be subject to zero percent
(0%) VAT rate for nine (9) years from the effectivity of this Act

SEC. 6. Incentives to Importers. — The provision of any special or general law
to the contrary notwithstanding, the importation of completely built units (CBUs)
of electric, hybrid and other alternative fuel vehicles shall be exempt from the
payment of excise taxes and duties for four years (4) years from the effectivity of
this Act.

SEC. 7. Registration, Implementation and Monitoring. - The Department of
Finance (DOF) and Department of Trade and Industry (DTI) shall be responsible
for the administration and implementation of the incentives granted under this
Act.

Manufacturers, assemblers, converters and importers of electric, hybrid
and other alternative fuel vehicles shall register with the Department of Finance
in order to avail of the incentives provided under this Act. For proper monitoring,
the Department of Finance and the Department of Trade and Industry shall meet
regularly to monitor and review the implementation of the incentives provided
herein.

SEC. 8. Implementing Rules and Regulations. - The Department of Finance,
in coordination with the Department of Trade and Industry, shall promulgate the
necessary rules and regulations for the effective implementation of this Act.

SEC. 9. Separability Clause. - If any provision of this Act is subsequently
declared invalid or unconstitutional, other provisions hereof which are not
affected thereby shall remain in full force and effect.

SEC. 10. Repealing Clause. - All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamations, rules and regulations or parts
thereof which are contrary to and inconsistent with any provision of this Act are
hereby repealed, amended or modified accordingly.

SEC. 11. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
Publication either in the Official Gazette, or in at least two (2) newspapers of
general circulation

Approved,


FACT SHEET

HOUSE BILLNO. __©26U
(Substitute to House Bill Nos, 01, 4794, 5139 and 5161)

AN ACT PROVIDING INCENTIVES FOR THE MANUFACTURE,
ASSEMBLY, CONVERSION AND IMPORTATION OF ELECTRIC,
HYBRID AND OTHER ALTERNATIVE FUEL VEHICLES, AND FOR
OTHER PURPOSES

Introduced by Representatives Jose Ma. F. Zubiri I, Hermilando |. Mandanas,
Ryan Luis V. Singson, Rufus B. Rodriguez, Maximo B. Rodriguez Jr. and Albert S.
Garcia

Committee Referral: Committee on Ways and Means
Chairman: Hon, HERMILANDO |, MANDANAS

Committee Referral: Committee on Trade and Industry
Chairman: Hon. Albert S. Garcia

OBJECTIVE:

* To lay out the groundwork for the widespread use of hybrid and altemative
fuel vehicles in the country and thus lessen our dependence on imported
fossil fuel as well as to mitigate the deleterious effect of harmful carbon
emission into the atmosphere to protect our environment.

KEY PROVISIONS:

+ Exempts from the payment of excise taxes and duties for nine (9) years from
the effectivity of the law, the manufacture or assembly of completely knocked-
down (CKD) parts of electric, hybrid and other alternative fuel vehicles,
including the conversion of vehicles into electric, hybrid and other alternative
fuel vehicles;

* Exempts from the payment of value-added tax for nine (9) years from the
effectivity of the law, the importation of raw materials, spare parts,
components and capital equipment used in the manufacture or assembly of
electric, hybrid and other alternative fuel vehicles including the conversion of
vehicles into electric, hybrid and other alternative fuel vehicles;

* Subjects to zero percent (0%) VAT rate for nine (9) years from the effectivity
of the law, the sale of raw materials, spare parts, components and capital
equipment used in the manufacture or assembly of electric, hybrid and other
alternative fuel vehicles including the conversion of vehicles into electric,
hybrid and other alternative fue! vehicles;


Exempts from the payment of excise taxes and duties for four (4) years from
ebeegpeog dlbael the importation of completely built units (CBUs) of
electric, hybrid and other alternative fuel vehicles.

RELATED LAWS:

The National Internal Revenue Code of 1997, as amended;

Republic Act No. 9337, otherwise known as An Act Amending Sections 27,
28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148,
151, 236, 237 and 288 of the National Internal Revenue Code of 1997, as
amended;

Presidential Decree No. 1464, otherwise known as the Tariff and Customs
Code of the Philippines, as amended;

E. O. 226 otherwise know as the Omnibus Investments Code of 1987


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon, City

FIFTEENTH (15) CONGRESS
First Regular Session

rs

House Bill No. ol

: Ronald V. Singson and Jose Ma. F. Zubiri III

EXPLANATORY NOTE

This bill seeks to grant tax incentives to importers and manufacturers of hybrid
cars in the Philippines.

With the fluctuating gasoline prices in the country, car owners are mulling on
other ways and means to save fuel on their vehicles.

One feasible solution that comes to mind is the use of hybrid cars. Hybrid cars are
vehicles that use rechargeable energy system and normal gasoline-fueled power source
for propulsion. These cars are durable, low polluting and consume less gasoline than
conventional cars with pure internal combustion engines. Though most hybrid cars still
use gasoline as their primary fuel source, new technologies include the use of ethanol and
hydrogen fuel.

At a glance a hybrid car is really the answer to the fuel-saving problem in the
country, However, it is very expensive. To produce a hybrid car costs $5,000 more than a
normal vehicle. While carmaker companies in the country are considering the importation
and manufacture of hybrid models, they still cannot do so due to higher costs of
production compared with regular gas-fed vehicles. They are willing to invest if only the
government will grant importers and manufacturers special incentives like duty-free and
tax-free importation of parts and components of the said vehicle.

Parts and components are presently charged with 15 percent to 30 percent most
favored nation tariffs if they are sourced outside of member-countries of the ASEAN.
Imports from ASEAN members, on the other hand, are charged with a 5 percent common
effective preferential tariff rates.


The duty-free and tax free importation of parts will make hybrid car assembly
competitive with the production of normal gas-fed cars. If only the government will grant
tax incentives to manufacturers and importers of hybrid cars, these cars will become more
affordable and available to the Filipinos. Grant of tax exemptions shall be subject to a
periodic review of duly constituted council. The time frame given may be enough to give
time for the local automotive industry to develop its own capability to locally produce the
said parts and components.

In view of the foregoing considerations approval of this bill is highly and
earnestly recommended.

Z ‘2 he,
éé (ove 2 Te
‘Bs ‘ALD V. SIN SE MA. FXYUBIRI III


Republic of the Philippine
HOUSE OF REPRESENTATIVES

"FIFTEENTH (15") CONGRESS
First Regular Session

House Bill No. o1

Introduced by Ronald V. Singson and Jose Ma. Zubiri III

AN ACT
EXEMPTING ALL MANUFACTURERS AND IMPORTERS OF HYBRID
VEHICLES FROM THE PAYMENT OF CERTAIN TAXES AND FOR OTHER
PURPOSES

Section 1. Any provision of existing laws to the country notwithstanding, any
person, partnership or corporation who is engaged in the business of manufacturing or
importing the fuel-saving hybrid cars including its parts and components shall be exempt
from the payment of import duties, customs and tariff duties, excise, value-added and ad
valorem taxes in respect to the manufacture or importation of such cars.

For purposes of this Act, hybrid vehicles shall refer to vehicles that combine the
technologies used in a gasoline-powered internal combustion (IC) engine with a battery-
powered electric motor to gain the advantages of both propulsion systems.

Section 2. For proper implementation of this Act, an Inter-Agency Council
hereinafter referred to as the Council is hereby created which shall be responsible to
regulate and control the grant of tax exemptions to the manufacturers or importers of
hybrid vehicles in accordance with the conditions to be set forth and the regulations to be
promulgated by the council.

The Council shall be composed of the following officials or their representatives;

4.) Secretary of Finance — Chairman;
b,) Secretary of Energy — member;


c) Secretary of Science and Technology — member
4.) Secretary of Trade and Industry — member
e.) Commissioner of Customs — member

Section 3. The Grant of Tax exemptions provided in Section 1 shall be subject to
periodic review by the council every five (5) years from the effectivity of this Act and the
corresponding report shall be submitted to the Congress.

Section 4, The Inter-Agency Council shall promulgate the necessary rules and
regulations for the effective implementation of this Act.

Section 5. All laws, decrees, executive orders, letters of instructions, rules and
regulations or parts thereof which are inconsistent with this Act are hereby repealed,
amended or modify accordingly.

Section 6. This Act shalll take effect fifteen (15) days following its publications in
at least two (2) national newspapers of general circulation.

Approved.


Republic of the Philippines
House of Representatives
Quezon City

FLFTEENTH CONGRESS

First Regular Session

House Bill No. 4794

Introduced by Representative Hermilando I. Mandanas

EXPLANATORY NOTE

The problem of climate change, considering its adverse
repercussions, is, without doubt, one of the most pressing concerns that
confront many countries, the Philippines included, in the world today.
Considering our country’s location, high population and low adaptive
capacity, it is considered a climate change hot spot vulnerable to sea level
rise, flash floods, extreme and longer hot and rainy seasons, cyclones,
storm surges, droughts and a host of other serious consequences. It is, thus,
imperative for the Philippines, in line with the solutions to global warming
being undertaken by the rest of the world, to step up its own efforts in
dealing with this global concern. This it can very well do by legislating
measures that could lessen, if not eradicate, the emission to the atmosphere
of the so-called “harmful gases”, which cause the Earth to warm up way
beyond normal levels.


This bill seeks to address the climate change problem by Providing
fiscal and non-fiscal incentives for the manufacture, assembly, conversion
and importation of electric, hybrid and other alternative fuel vehicles. As
proposed, manufacturers, assemblers, converters and importers concerned
shall be exempt to pay duties, excise taxes and the Value-Added Tax
(VAT) for the period of nine (9) years, in appropriate cases. Likewise, said
electric, hybrid and other alternative vehicles shall be exempt from the
payment of the Motor Vehicle User’s Charge (MVUC). These fiscal
incentives, together with the non-fiscal ones, will promote the market for
“cleaner” vehicles, paving the way for the realization of having a healthier
environment.

In addition to this expected boon, the country will also provide an
answer to its fuel-saving woes. With the advent of these environment-
friendly cars, there will be less demand for the importation of
traditional/conventional fossil fuels (gasoline and petroleum) and more for
the production of alternative fuels like electric, solar, wind, hydrogen fuel
cell, compressed natural gas (CNG), liquefied natural gas (LNG) and
liquefied petroleum gas (LPG).

Accordingly, passage of the bill is eamestly sought.

|. HERMILANDO I. MANDANAS
Second District, Batangas


Pen anaunn

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4794

Introduced by the Honorable Hermilando I. Mandanas

AN ACT
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY,
CONVERSION AND IMPORTATION OF ELECTRIC, HYBRID AND OTHER
ALTERNATIVE FUEL, VEHICLES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1, Title. — This Act shalt be known as the “Electric, Hybrid and Other
Altemative Fuel Vehicles Incentives Act of 2011."

SEC. 2. Declaration of Policy. ~ tts the policy of the State to safeguard life and
environment by encouraging the use of alemative sources of energy for vehicles
intended for public and private use. To protect the well-being and promote the

A) It is the policy of the State to protect and advance the right of the
People to a balanced and healthful ecology in accord with the rhythm
and harmony in nature. The State shall Tecognize and address the
detrimental effects on the environment, safeguard the welfare, and
Protect the health of the people by improving air quality and by
reducing the impact of greenhouse gas effects emitted from man-made
Sources such as vehicles operating on fossil fuels.

B} The State supports the need to Promote the development of new
technology to accelerate social Progress and promote human
development. The use of altemative sources of energy on vehicles
intended for public and Private use is encouraged to Promote


innovation, energy efficiency, security and conservation, and to speed
up the deployment of cleaner technology.

©) The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investments. To accelerate economic growth and generate
employment, the State shall provide incentives to private enterprises
and individuals engaged in the manufacture, assembly, conversion,
and importation of electric, hybrid and other alternative fuel vehicles.

SEC. 3. Definition of Terms, ~ As used herein, the following shall mean:

(a) “Electric Vehicle” (EV) shall refer to any vehicle that uses electric
motors solely for propulsion.

(b) “Hybrid Vehicle (HV) shall refer to any vehicle that combines the
technologies of using intemal combustion engine (ICE) with a battery-
powered electric motor to gain advantages of both propulsion systems.

{c) Other “Alternative Fuel Vehicle” (AFV) shall refer to any vehicle using
alte mative sources of energy such as but not limited to: solar, wind,
hydrogen fuel cell, compressed natural gas (CNG) or liquefied natural
gas (LNG) and liquefied petroleum gas (LPG), other than conventional
sources of energy like petroleum and gasoline for propulsion.

(d) “Manufacturer” or “Assembler” shall mean any individual, partnership,
corporation or other entity engaged in the manufacture, assembly and
conversion of electric, hybrid and other alternative fuel vehicles
incorporated, organized and existing under Philippine laws.

(e) “Importer” shall mean any individual, partnership, corporation or other
entity engaged in the importation of completely built units (CBUs) of
electric, hybrid and other altemative fuel vehicles incorporated,
organized and existing under Philippine laws.

SEC. 4. Coverage. - This Act shall cover electric, hybrid and other alternative
fuel vehicles but shall not include vehicles powered by gasoline, petroleum, bio-
diesel and bio-ethanol.

SEC. 5. Incentives to Manufacturers or Assemblers. — The provision of any
special or general law to the contrary notwithstanding, the manufacture or
assembly of completely knocked-down (CKD) parts of electric, hybrid and other
altemative fuel vehicles, including the conversion of vehicles into electric, hybrid
and other alternative fuel vehicles, shall be exempt from the payment of excise
taxes and duties for nine (9) years from the effectivity of this Act.


The imposition of the Value-Added Tax (VAT) for the purchase and
importation of raw materials, spare Parts, components and capital equipment
used in the manufacture or assembly of electric, hybrid and other alternative fuel
vehicles shall be suspended for the next nine {9) years from the effectivity of this
Act.

SEC. 6. Incentives to Importers. - The provision of any special or general law
to the contrary notwithstanding, the importation of completely built units (CBUs)
of electric, hybrid and other altemative fuel vehicles shall be exempt from the
Payment of excise taxes and duties for nine (9) years from the effectivity of this
Act.

SEC. 7. Exemption from the Payment of Motor Vehicle User's Charge
(MVUC), - Electric, hybrid and other alternative fue! vehicles shall be exempt
from the payment of the Motor Vehicle User's Charge (MVUC) imposed by the
Land Transportation Office (LTO) under Republic Act (RA) No. 8794, otherwise
known as “Motor Vehicle User's Charge (MVUC) Act.”

SEC. 8. Non-Fiscal Incentives. ~

1. Priority in Registration and Issuance of Plate Number. — Registration and
Fenewal of registration of electric, hybrid and other alternative fuel vehicles shall
be prioritized by the Land Transportation Office. A special type of vehicle plate to
be determined by the Land Transportation Office shall be exclusively issued to all
electric, hybrid and other alternative fuel vehicles upon registration.

2. Priority in Franchise Application. — Public Utility Vehicle (PUV) operators
exclusively utilizing electric, hybrid and other alternative fuel vehicles shall be
Land Transportation Franchising and Regulatory Board
(LTFRB) in the approval of applications for franchise to operate, including their
fenewal, for nine (8) years from the effectivity of this Act,

3. Exemption from Unified Vehicular Volume Reduction Program (UVVRP) or
Number-Coding Scheme. — All electric, hybrid and other alternative fuel vehicles
shall be exempted from the mandatory Unified Vehicular Votume Reduction
Program (UVVRP) or Number-Coding Scheme being implemented by the Metro
Manila Development Authority (MMDA) and other local government units (LGUs)
concemed.

4. Mandatory Provision for Parking Spaces in New Establishments. — Business
and commercial establishments to be constructed after the effectivity of this Act
are mandated to provide exclusive pa ing spaces for all electric, hybrid and
other altemative fuel vehicles. No building permit shall be issued for the
construction of business and commercial establishments that include parking
Spaces unless the owner submits an affidavit that there shall be parking spaces


to be exclusively designated for electric, hybrid and other alternative fuel
vehicles.

SEC. 9, Registration, Implementation and Monitoring. - The Department of
Finance (DOF) and Department of Trade and industry (DT!) shall be responsible
for the administration and implementation of the incentives granted under this
Act.

Manufacturers, assemblers, converters and importers of electric, hybrid
and other alternative fuel vehicles shall fegister with the Department of Finance
in order to avail of the incentives provided under this Act. For proper monitoring,
the Department of Finance and the Department of Trade and Industry shall meet
regularly to monitor and review the implementation of the incentives Provided
herein.

SEC. 10. Implementing Rules and Regulations. - The Department of Finance,
in coordination with the Department of Trade and Industry, shall promulgate the
necessary rules and regulations for the effective implementation of this Act.

SEC. 11. Separability Clause. - If any provision of this Act is subsequently
declared invalid or unconstitutional, other provisions hereof which are not
affected thereby shall remain in full force and effect.

SEC. 12. Repealing Clause. - All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamations, rules and regulations or Parts.
thereof which are contrary to and inconsistent with any provision of this Act are
hereby repealed, amended or modified accordingly.

SEC. 13. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

Publication either in the Official Gazette, or in at least two (2) newspapers of
general circulation, whichever comes eartier.

Approved,


Republic of the Philippines
HOUSE. OF REPRESENTATIVES

FLFTEENTH (15") CONGRESS
Second Regular Session

51389

House Bill No,

RYAN LUIS V. SINGSON

EXPLANATORY NOTE

This bill seeks to grant tax incentives to importers and manufacturers of hybrid
cars in the Philippines

With the fluctuating gasoline prices in the country, car owners are mulling on
other ways and means to save fuel on their vehicles.

One feasible solution that comes to mind is the use of hybrid cars. Hybrid cars are
vehicles that use rechargeable energy system und normal gasoline-fucled power source
for propulsion. These cars are durable, low polluting and consume less gasoline than
conventional cars with pure internal combustion engines. ‘Though most hybrid cars still
use gasoline as their primary {uel source, new technologies include the use of ethanol and
hydrogen fuel

At a glance a hybrid car is really the answer to the tuel-saving problem in the
country. However, it is very expensive. To produce a hybrid car costs $5,000 more than a
normal vehicle. While carmaker companies in the country are considering the importation
and manufacture of hybrid models, they still cannot do so due to higher costs of
production compared with regular gas-fed vehicles. They are willing to invest if only the
government will grant importers and manufacturers special incentives like duty-free and
tax-free importation of parts and components of the said vehicle.

Parts and components are presently charged with 15 percent to 30 percent most
favored nation tariffs if they are sourced outside of member-countries of the ASEAN
Imports from ASEAN members, on the other hand, are charged with a 5 percent common
effective preferential tariff rates.


The duty-free and (ax free importation of parts will make hybrid car assembly
competitive with the production of normal yas-fed cars. If only the government will grant
tax incentives to manufucturers and importers of hybrid cars, these cars will become more
affordable and available to the Filipinos. Grant of tax exemptions shall be subject to 2
periodic review of duly constituted council. The time frame given may be enough to give
time for the local automotive industry to develop its own capability to locally produce the
said parts and components.

In view of the foregoing considerations approval of this bill is highly and
eamestly recommended.



Republic of the Philippine
HOUSE OF REPRESENTATIVES

FIFTEENTH (15) CONGRESS,
Second Regular Session

aq
House Bill No. 61389

Introduced by Ryan Luis V.

AN ACT
EXEMPTING ALL. MANUFACTURERS AND IMPORTERS OF HYBRID
VEHICLES FROM THE PAYMENT OF CERYTALN TAXES AND FOR OTHER
PURPOSES

Section 1, Any provision of existing laws to the country notwithstanding, any
person, partnership or corporation who is engaged in the business of manufacturing or
importing the fucl-saving hybrid cars including its parts and components shall be exempt
from the payment of import duties, customs and tariff duties, excise, value-added and ad
valorem taxes in respect to the manufacture or importation of such cars,

For purposes of this Act, hybrid vehicles shall refer to vehicles that combine the
technologies used in a gasoline-powered internal combustion (IC) engine with a battery-
powered electric motor (o gain the advantages of both propulsion systems,

Section 2. Lior proper implementation of this Act, an Inter-Agency Council
hereinafier referred to as the Council is hereby created which shall be responsible to
regulate and control the grant of tax exemptions to the manufacturers or importers of
hybrid vehicles in accordance with the conditions to be set forth and the regulations to be
promulgated by the council

The Council shall be composed of the following officials or their representatives,

a.) Secretary of Finance - Chairman;
b.) Secretary of nergy — member;


©.) Secretary of Science and ‘Technology. member
d}} Secretary of Trade and Industry - member
¢.) Commissioner of Customs ~ member

Section 3, The Grant of Tax exemptions provided in Section 1 shall be subject to
periodic review by the council every five (5) years from the effectivity of this Act and the
corresponding report shall be submitted to the Congress

Section 4, The Inter-Agency Council shall promulgate the nevessary rules and
regulations for the effective implementation of this Act

Section 5, All laws, decrocs, executive orders, letters of instructions, rules and
regulations or parts thereof which are inconsistent with this Act are hereby repealed,
amended or modified accordingly

Section 6, his Act shall take effect fifteen (15) days following its publications in
at least two (2) national newspapers of general circulation.

Approved


fos or “SEA

> eIVED ”
Sete 3G 701

FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES
House GillNo, 5164

introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

EXPLANATORY NOTE

For the first haif of 2011, oil companies in the Philippines have already increased
gas and diesel prices by almost P10 per liter. And while there is some relief in the
immediate future because of the decrease of the price oil in the world market, there is
no guarantee that it will last.

As such, there is a need to look into and encourage altemative sources of energy
and other technology that would lessen our dependence on oil, And one of these
technologies available is the hybrid technology in motor vehicles. Test driving results
show that a fuil tank of unleaded gasoline costing P1,800 for hybrid vehicles would
travel the same distance as a full tank of diesel costing P3,000.

Currently, there are very few hybrid vehicles being sold in the country because of
its very high price tag which is caused by the very high excise and other taxes imposed
by the government. Figures from Toyota Motor Philippines, Inc., dealers of the Toyota
Prius and the Lexus Hybrid Vehicles show that only about 100 hybrid vehicles were sold
by their company since starting to offer said vehicles in the country. Hence there is a
need to provide incentives for the manufacture, assembly, and importation of electric,
hybrid and other alternative fuel vehicles.

Further, these hybrid vehicles would not only lessen our dependence on oil but
also help protect our environment because of the lower amounts of pollution that they
emit.

In view of the foregoing, immediate passage of this bill is eamestly requested

MAXIMO B. RODRIGUEZ, JR.



FIFTEENTH CONGRESS }
REPUBLIC OF THE PHILIPPINES —}
First Regular Session )

HOUSE OF REPRESENTATIVES.

5161

House Bill No,

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B, Rodriguez, Jr.

AN ACT
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY, AND
IMPORTATION OF ELECTRIC, HYBRID AND OTHER ALTERNATIVE FUEL
VEHICLES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Title—This Act shall be known as the "Electric, Hybrid and Other
Alternative Fuel Vehicles incentives Act of 2011".

SEC. 2. Declaration of Policy — It is the policy of the State to safeguard life and
environment by encouraging the use of alternative sources of energy for
vehicles intended for public and private use. To protect the well-being and promote
the economic condition of the people as well as to promote energy independence
and security in the midst of development and innovation in technology, the following
are hereby declared:

A) It is the policy of the State to protect and advance the right of the
people to a balanced and healthful ecology in accord with the rhythm and
harmony in nature. The State shall recognize and address the
detrimental effects on the environment, safeguard the welfare, and
protect the health of the people by improving air quality and by reducing
the impact of greenhouse has effects emitted from man-made sources
such as vehicles operating on fossil fuels.

B) The Slate supports the need to promote the development of new

technology to accelerate social progress and promote human

development. The use of alternative sources of energy on vehicles
intended for public and private use is encouraged to promote innovation,


energy efficiency, security and conservation, and to speed-up the
deployment of cleaner technology.

C)

The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investments. To accelerate economic growth and generate employment,
the state shali provide incentives to private enterprises and individuals
engaged in the manufacture, assembly and importation of electric, hybrid
and other alternative fuel vehicles.

‘SEC. 3. Definition of Terms — As used herein, the following shail mean
(a) Electric Vehicle shall refer to any vehicle that uses electric motors solely
for propulsion;

{b) Hybrid Vehicle (HV) shall refer to any vehicle that combines the
technologies of using intemal combustion engine (ICE) with a battery-
powered electric motor to gain advantages of both propulsion systems;

{c) Other Alternative Fuel Vehicle (AFV) shall refer to any vehicle using
alternative sources of energy such as but not limited to: solar, wind,
hydrogen fuel cell, compressed natural gas (CNG) or liquefied natural gas
(LNG) and liquefied petroleum gas (LPG), other than conventional sources of

energy like petroleum and gasoline for propulsion.

(d) Manufacturer or Assembler shall mean any individual, partnership,
corporation or other entity engaged in the manufacture, assembly of electric,
hybrid and other altemative fuel vehicles incorporated, organized and
existing under Philippine laws;

(e) Importer shall mean any individual, partnership, corporation or other entity
engaged in the importation of completely built units (CBUs) of electric,
hybrid and other alternative fuel vehicles incorporated, organized and
existing under Philippine !aws.

SEC. 4. Coverage - This Act shall cover electric, hybrid and other alternative fuel
vehicles but shall not include vehicles powered by gasoline, petroleum, bio-diesel
and bio-ethanol.

SEC. 5. Incentives to Manufacturers or Assembiers — The provision of any special or
general law to the contrary notwithstanding, the manufacture or assembly of
completely knocked-down (CKD) parts of electric, hybrid and other alternative fuel
vehicles, shall be exempt from the payment of excise taxes and duties for nine
(9) years from the effectivity of this Act.

The imposition of the Value Added Tax (VAT) for the purchase and
importation of raw materials, spare parts, components and capital equipment used


in the manufacture or assembly of electric, hybrid and other alternative fuel
vehicles shall be suspended for the next nine (9) years from the effectivity of this Act.

SEC, 6, Incentives to Importers — The provision of any special or general law to the
contrary notwithstanding, the importation of compietely built units (CBUs) of electric,
hybrid and other alternative fuel vehicles shall be exempt from the payment of
excise taxes and duties for nine (9) years from the effectivity of this Act.

SEC. 7. Exemption from the Payment of Motor Vehicle User's Charge (MVUC) —
Electric, hybrid and other altemative fuel vehicles shall be exempt from the
payment of the Motor Vehicle User's Charge (MVUC) imposed by the Land
Transportation Office (LTO) under Republic Act No. 8794, otherwise known as
“Motor Vehicle User's Charge (MVUC) Act".

SEG, 8. Non-Fiscal Incentives ~

1. Priority in Registration and Issuance of Plate Number. - Registration and renewal
of registration of electric, hybrid and other alternative fuel vehicles shall be
prioritized by the Land Transportation Office. A special type of vehicle plate to be
prescribed by LTO shall be exclusively issued {o all electric, hybrid and other
altemative fuel vehicles upon registration.

2. Priority in Franchise Application - Public Utility Vehicle (PUV) operators
exclusively utilizing electric, hybrid and other alternative fuel vehicles shall be
granted priority by the Land Transportation Franchising and Regulatory Board
(LTFRB) in the approval of applications for franchise to operate, including its
renewal, for nine (9) years from the effectivity of this Act.

3. Exemption from Unified Vehicular Volume Reduction Program (UVVRP) or
Number-Coding Scheme — All electric, hybrid and other alternative fuet vehicles shall
be exempted from the mandatory Unified Vehicular Volume Reduction Program
(UWRP) or Number-Coding Scheme being implemented by the Metro Manila
Development Authority (MMDA) and other local government units (LGUs) concerned

4. Provision for Free Parking Spaces in New Establishments — Business and
commercial establishments to be constructed after the effectivity of this Act are
mandated to provide exclusive parking spaces free of charge for all electric,
hybrid and other alternative fuel vehicles. No building permit shall be issued for
the construction of business and commercial establishments that include parking
spaces unless the owner submits an affidavit that there shall be free parking
spaces to be exclusively designated for electric, hybrid and other altemative fuel
vehicles.

SEC. 9. Registration, Implementation and Monitoring — The Department of Finance
(DOF) and Department of Trade and Industry (DTI) shall be responsible for the
administration and implementation of the incentives granted under this Act.


Manufacturers, assemblers, converters and importers of electric, hybrid and
other alternative fuel vehicles shall register with OOF in order to avail of the
incentives provided under this Act. For proper monitoring, DOF and DTI shall meet
fegularly to monitor and review the implementation of the incentives provided herein.

SEC. 10. Implementing Rules and Regulations - The Department of Finance (DOF)
in coordination with the Department of Trade and Industry (DTI) shall promulgate the
necessary rules and regulations for the effective implementation of this Act

SEC. 11. Separability Clause - if any provision of this Act is declared
unconstitutional or invalid, other parts or provisions hereof not affected thereby shall
continue to be in full force and effect

SEC. 12. Repealing Clause — All other laws, orders, issuances, circutars, rules and
tegulations or parts thereof, which are inconsistent with the provisions of this Act
are hereby repealed or modified accordingly.

SEC. 13. Effectivity Clause — The Act shall take effect after fifteen (15) days fotlowing
its publication in at least two (2) newspapers of general circulation

Approved,