Bill pushes tax break for manufacturers, users of ‘green’ vehicles

Monday, June 6, 2011

LEGISLATION pending at the Senate could give tax breaks and other incentives to manufacturers and drivers of vehicles that run on alternative fuel to encourage more people to shift away from gasoline and diesel.

Under a consolidated bill pending sponsorship by Senator Ralph Recto, drivers of hybrid, electric, and alternative fuel vehicles will be exempted from paying the Motor Vehicle Users Charge (MVUC).

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The MVUC is a fee collected by the Land Transportation Office when vehicles are registered and when registration is renewed. The fee ranges from P300 to P12,000 depending on the type and age of the vehicle.

The bill will also make the LTO give alternative fuel vehicles, or green cars, priority during registration and renewal. Owners of green cars will also get special license plates that the LTO will release faster.

The Land Transportation Franchising and Regulatory Board will also be compelled to give special treatment to public utility vehicle operators who use only green vehicles in their fleet. For nine years after the bill becomes a law, their franchise applications will given priority.

Green vehicles will also be exempted from the number-coding scheme implemented in Metro Manila and will get free access to parking spaces that the bill will require new commercial establishments to put up.

Under the bill, real estate developers will have to put up designated parking spaces for green vehicles before they can get their building permit.

Manufacturers and importers of green cars, meanwhile, will be given a nine-year holiday from excise taxes and duties. Manufacturers will also be exempted from paying value added tax (VAT) on the purchase and importation of raw materials, spare parts, components and equipment for nine years.

The bill covers hybrid and electric cars and cars that run on compressed natural gas (CNG), liquified natural gas (LNG), and liquified petroleum gas (LPG). It does not include vehicles that run on bio-diesel and bio-ethanol.

The consolidated bill was prepared by the committee on ways and means, of which Recto is chairman, Senator Manuel Villar Jr.'s committee on trade and commerce and the committee on climate change chaired by Senator Loren Legarda. It combines bills filed by Senators Ralph Recto, Miriam Defensor-Santiago, Antonio Trillanes IV, and Juan Miguel Zubiri. (Jonathan de Santos/Sunnex)