Auto industry roadmap includes electric vehicle assembly

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MANILA - The proposed roadmap for the automotive industry has included electric vehicles, according to the Electric Vehicle Association of the Philippines. 

The roadmap aims to “strengthen the position of the Philippines as a significant automotive player in the medium term and by 2020, become a regional hub for CBUs and parts in Asia supported by a strong domestic supplier base.”

Prepared by Rafaelita Aldaba of the University of Asia & the Pacific, the roadmap proposes the following fiscal incentives:

- Income tax holiday of 3 to 8 years;

- Extended ITH for high technology activities such as electric vehicles;

- Tax and duty exemption on capital equipment, spare parts and materials;

- Tax and duty exemption on imported raw materials;

- Additional tax deductions for labor expenses, export market development, innovation and R&D;

- Tax incentives for periodic increases in exports;

- Exemption from internal taxes levied on domestic products outside economic zones; and

- After the ITH and the exemption from local and national taxes, in lieu of these, special rate of only 5 percent on gross income will be applied.

 To help expand the domestic market, the following incentives and policy reforms were recommended:

- Tax credit on locally purchased supplies and materials;

- Excise tax reduction from 35 to 30 percent on vehicles engine capacities of two liters or less;

- Elimination of smuggling and complete banning of imported second hand vehicles; and

- Government procurement of locally manufactured vehicles.

“We are very happy that finally, we have a long-term vision for the local auto parts industry. We share the wisdom of the proposed strategies such as the measures to enhance competitiveness, the policy reforms and incentives to build up the domestic market and attract investments and the creation of a more predictable business environment,” Rommel Juan, president of EVAP said.

 “We at EVAP are very optimistic about this proposed roadmap as it is expected to double local CKD assembly by 2019, increase local value-added labor and parts by 50 percent by the same year, increase domestic OEM and aftermarket sales, increase export sales to $6 billion by 2015 and provide employment of about 150,000 in the mainstream auto and parts industries and another 50,000 in allied industries," he added. 

If the roadmap is approved, prices of electric jeepneys, quadricycles, tricycles, buses, scooters and bicycles will be reduced by as much as 30 percent, the executive said.

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