"We are looking at the possibility of an excise tax reduction based on the level of fossil fuel displacement that AFVs would gain," said Mario Marasigan, director of the DOE's energy utilization management bureau.
"We are still studying what level of reduction it should be," he
said the fax cuts are among the measures being seriously considered to promote the shift to flex-fuel vehicles or FFVs by Filipino consumers.
FFVs are vehicles designed to run on either ethanol (E10 and higher blend) or gasoline.Their engine system has the flexibility to run either on ethanol-blended fuel or straight gasoline.
According to Marasigan
, the proposed excise tax reduction for AFVs, however, should be revenue-neutral to the National Government's coffers.
"We are looking at it in a way that it would not affect the revenues of the government," he
said that they must look at the reduced level of fossil fuel importation where savings are being generated to be able to determine the cost on excise tax reduction.Marasigan
said FFVs that may be extended tax cuts could start with E20 (vehicles that can take fuel with 20-percent blend of ethanol to gasoline) and B10 for biodiesel since these are levels considered to have already gone beyond the standard.
The DOE official said the other AFVs being explored are hybrid types or vehicles with an internal combustion engine combined with an electric motor as the power source; liquefied petroleum gas (LPG) and natural gas vehicles; and even solar cars.He
said the calculation of excise tax reduction could be based on the number of completely-built units (CBUs) manufactured or brought into the country by car companies.
"It would be difficult if we assess it on parts, that will create a lot of distortion, so we have to look at the number of units manufactured," he
said a bill would likely be filed during the opening of the 14th Congress
by the end of this month.
But if the market for AFVs will not be supported by government policies, he
said there is no certainty that the push for alternative fuels would prosper in the long-term.