Exemption of Diplomatic Vehicles from Additional Duty

Executive Order No. 418 (s. 2005) imposed an additional specific duty of PHP 500,000.00 in addition to regular import duty rates on motor vehicles and other articles listed in its Annex.
Executive Order No. 418 relied on classification under Section 104 of the Tariff and Customs Code of 1978.
Section 401 of the Tariff and Customs Code of 1978, as amended empowers the President to increase, reduce, or remove existing import duty rates and to modify the form of duty and tariff nomenclature under Section 104.

The State maintains a balance between development and environment protection.
The additional duty under EO 418 addresses the need to mitigate the impact of used motor vehicle trading on air quality and road safety.
The exemption in EO 491 prevents a situation where a tax-free privilege becomes meaningless due to an additional burden upon local disposal.

Executive Order No. 491 exempts covered motor vehicles from the additional specific duty of PHP 500,000.00 imposed under EO 418 (s. 2005) upon subsequent sale or transfer to non-tax exempt individuals in the local market.
The exemption covers motor vehicles of embassy officials.
The exemption covers motor vehicles of members of the diplomatic corps and international organizations.
The exemption covers motor vehicles of Filipino diplomats.
The exemption covers motor vehicles of recalled personnel of the Department of Foreign Affairs (DFA).
The exemption covers motor vehicles of any officer or employee returning from a regular assignment for re-assignment to the DFA home office.
The exemption covers motor vehicles of government offices acquired duty free under international agreements, including loans and donations.
The exemption covers other similarly situated individuals who were given the privilege to import motor vehicles tax and duty free under relevant laws and international agreements.

The motor vehicle must have been granted the privilege to import motor vehicles tax and duty free under relevant laws and international agreements.
The privilege includes vehicles brought in under international agreements, including foreign loans and donations.
The exemption applies when the covered vehicle is subject to subsequent sale or transfer to non-tax exempt individuals in the Philippine local market.

Covered vehicles are exempted from the imposition of the additional specific duty of PHP 500,000.00 that EO 418 (s. 2005) imposes.
The exemption expressly applies upon sale or transfer to non-tax exempt individuals in the local market.
EO 491 is designed to ensure the tax-and-duty-free import privilege does not become self-defeating through an additional duty triggered by later disposition.

All other presidential issuances and administrative rules and regulations, or portions thereof, that are inconsistent with Executive Order No. 491 are revoked or modified accordingly.