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