Road user's tax exemption for EVs mulled

Published May 15, 2022, 9:30 PM

by Myrna M. Velasco

Exemption or reduction in payment of the motor vehicle user’s charge (MVUC) for electric vehicles (EVs) is among the set of incentives proposed to be incorporated in the implementing rules and regulations (IRR) of the new Electric Vehicles and Charging Stations Act.

Energy Undersecretary Felix William B. Fuentebella said the Department of Energy will judiciously study the industry stakeholders proposal to exempt EVs from road user’s tax or MVUC payment.

The MVUC, a component of the government’s tax reform program under Republic Act 8794, is collected from vehicle owners when they register with the Land Transportation Office (LTO). The MUVC collection will be used for the maintenance of national and provincial roads, as well as to address air pollution spewed by motor vehicles.

It was noted that since EVs are “clean alternatives” in the transport sector, EV registrants may be spared or at least their payments reduced from the mandated MVUC.

That policy proposition has not been expressly stipulated in the EV Law, but there are recommendations that such shall be incorporated in the IRR that has yet to be firmed up and issued by the government.

Based on the plan mapped out by the DOE, at least 10 percent or 3.3 million vehicles in the country should have already shifted to EVs by 2040 with the bulk of conversion, at 2.2 million, is expected to be coming from motorcycles.

The DOE reported though that uptake on EVs has been relatively very slow in the past 10 years just reaching 12,965 EVs as of 2020 with electric tricycles (e-trikes) contributing 7,100 units, followed by e-motorcycles with 4,845 units.

The energy department emphasized that the main advantage of the country’s portended EV shift would be to “cushion the impact of fossil fuels in the local market.” This is aligned with the country’s decarbonization strategy as a component of its nationally determined contribution (NDC) that was lodged under the Paris Agreement.

The DOE is one of the key agencies crafting the Comprehensive Roadmap for Electric Vehicle Industry (CREV) in the Philippines because the department will be instituting policy frameworks and regulations on the deployment of EV charging stations as well as in ensuring electricity supply for EVs.

The standardization of the EV chargers is one of the policy discussions being spearheaded by the DOE – primarily in setting forth if there will just be one standard to be adopted; or multiplicity of standards could be the EVs’ market play in the Philippines.

Another recommendation being weighed seriously by the energy department is the prospective use of renewable energy as a source of electricity for the EV chargers, but a final policy has yet to be laid down.