The Department of Finance (DOF) has objected to provisions in House Bill 2084 which grants tax incentives to manufacturers of hybrid vehicles. This is different from the perks already given to them by the Board of Investments (BOI) and the Department of Trade and Industry (DTI).
The HB 2084 gives exemptions from the payment of import duties, customs and tariff duties, excise, value-added and ad valorem taxes for those engaged in the manufacture or import of hybrid buses, including their parts and components.
The Department of Finance’s argument is that the exemptions would result in a redundancy of tax exemptions, as well as loss of revenue for the Philippine government.
House of Representatives Ways and Means committee is currently deliberating House Bill 2084 or “An Act Exempting All Manufacturers and Importers of Hybrid Vehicles from Payment of Certain Taxes and For Other Purposes” authored by Rep. Ronald Singson of Ilocos’ 1st District.
The bill is aimed at promoting the Philippines hybrid vehicles industry. Not limited to cars, it also offers the same coverage to hybrid buses running on a diesel-electric system.
Rep Singson also pointed out that a hybrid electric-diesel bus is 25 ~ 30% more fuel-efficient than the standard diesel bus, serving an estimated 7,000 gallons or roughly 26,495 liters of diesel fuel per year. It also reduces emissions by more than 90 percent when a bus accelerates from a stop.
It is but logical for the DOF to object to these provisions because the Philippines currently has an outstanding debt of P4.221 trillion as of end-December 2008. The Philippines must constantly prove to its creditors that it is capable of paying back its debts in order to get a good credit rating. One of the ways it does this is by showing that it has good internal revenue in the form of taxes and tariffs collected.
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Category: Automotive, Hybrids, Financing
