DTI aims for Executive Order to drop EV tax

The passage of the electric vehicle law may have been underwhelming, but don’t lose hope just yet. The Department of Trade and Industry (DTI) has a proposal pending with the Tariff Commission that aims to eliminate the import duties on battery electric vehicles (BEVs).

To recall, the DTI and the National Economic Development Authority (NEDA) were still working on the details of this proposal last month.

At the launch of SM's electric vehicle charging stations at SM Aura Premier in Bonifacio Global City earlier today, DTI Secretary Ramon Lopez told the media that the agency’s goal concerning the import tariff of BEVs has not changed. 

“We need to promote EVs, and the way to promote it is to encourage their use. How will you encourage the use of EVs if they are expensive? This is one of the immediate ways that we think can be done,” said Lopez.

The DTI aims to totally remove the 30% import tariff on BEVs to make them more accessible to a broader range of car buyers. The 0% import tariff proposal will only be available for five years. The DTI did not explain why; presumably, it is to give auto manufacturers time to consider setting up local assembly.

Right now everything rests on how the Tariff Commission handles the DTI-NEDA proposal. If it is approved, an Executive Order signed by President Duterte is all that is needed to remove the 30% tariff. That is why the DTI hopes for a quick and favorable decision from the commission before May 23 to have the order signed by the president.

Why such a specific date? The DTI wants to have this done before the 19th Congress convenes because after May 23, a new law will be needed to remove the 30% import tariff, and we all know how long that will take.

If everything falls into place, the DTI hopes all terms will be formalized by June 30, 2022.