Home » Customs & Trade » Government to scrap import duty on vehicles run by alternative fuel

THE Department of Energy (DOE) revealed that the National Economic and Development Authority Board has endorsed for approval to President Gloria Macapagal-Arroyo an executive order scrapping the import duty on components, parts and accessories for the assembly of vehicles run by alternative fuel such as biodiesel, ethanol, compressed natural gas and electricity. DOE said the EO will provide the grant of preferential Most Favored Nation (MFN) and Common Effective Preferential Tariff (CEPT) rates of zero percent on imported items qualified as Motor Vehicle Development Program participants and used for assembly or manufacture of hybrid, electric, flex-fuel (bio-ethanol and bio-diesel) and compressed natural gas vehicles. The CEPT rate applies to imported parts coming from Association of Southeast Asian Nation (Asean) countries while the MFN rate applies to non-Asean countries. Current rates of import duty for motor vehicle parts and components are 1% and 3% for MFN and CEPT, respectively. Once approved, the DOE said the Board of Investments according to its motor vehicle development program aimed at promoting the country as a manufacturing hub for motor vehicle and parts in the region will come up with implementing rules for the preferential tariff privilege. Earlier, car manufacturer Ford announced it is set to build a $20-million flexible fuel factory in the Philippines. "We hope other vehicle manufacturers will follow Ford’s lead. Demand projections clearly point to increased utilization of alternative transportation fuels in the 21st century. They need to seize this opportunity if they want to survive," Energy Secretary Raphael Lotilla said.

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