By Sharlaine Kate Gumayat

Photo Courtesy by President Ferdinand Marcos Jr./Reuters/Toby Melville

In an effort to entice customers to switch to "cleaner and greener" transportation, President Ferdinand Marcos Jr. has authorized the temporary zero-tariff policy for electric vehicles and spare parts.

Marcos issued Executive Order No.12 on January 13, following the National Economic and Development Authority (NEDA) Board's endorsement of a five-year temporary decrease in the Most Favored Nation (MFN) tariff rates on a select group of electric vehicles (EVs) and their parts and components on November 24, 2022.

This results in the reduction of tax rates to zero on specific e-vehicles, including bicycles, motorcycles, tricycles, buses, vans, trucks, and passenger cars, for a five-year term.

Additionally, for a period of five years, tariffs on specific EV parts and components would be reduced from three to one percent.

According to the EO, the transportation industry generates 34% of the nation's air pollution and energy-related greenhouse gas emissions, with road transportation responsible for 80% of those emissions.

“The state has the paramount obligation to protect the health and well-being of the people from hazards of pollution and greenhouse gases,” the EO stated.

The measure seeks to promote the transition to emerging technologies and help develop the country's electronic vehicle market that shall be in full force for a period of five years starting on the date of effectivity.

The recently signed order reads that the MFN tariff rates will be subject to reconsideration one year following the order's implementation.