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Road user tax bill seen raising additional P8.12-B in first year

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PHILSTAR/MICHAEL VARCAS

A MEASURE gradually increasing the road users’ tax filed in the House of Representatives is expected to generate P8.12 billion worth of revenue in the first year of implementation, a key legislator said.

House Bill No. 4695, or the “Motor Vehicle Road User’s Tax Act,” according to Rep. Jose Ma. Clemente S. Salceda of the second district of Albay, hopes to update Motor Vehicle Users’ Charges, which have not been revised since 2004.

“This bill actually improves the progressivity of the current MVUC law. First, it provides relief for motorcycle owners, who, because of traffic, have been forced to use motorcycles. These people are not rich, and cannot afford cars. Actually, there are more motorcycle owners than there are owners of all other vehicles under MVUC combined, so this will also reduce bureaucratic strain.” Mr. Salceda was quoted as saying in a statement Friday.

He said the House version is expected to bring in P8.12 billion in 2020, P9.62 billion in 2021, P10.57 billion in 2022, P28.44 billion in 2023, and P32.61 billion in 2024.

Fifty percent of the proceeds will be earmarked for the Universal Health Care programs, under Republic Act No. 11223; while the remaining half will be allocated for public utility vehicle modernization until 2024.

Revenue generated beginning 2025 will be used entirely for UHC programs.




The bill among others proposes to increase MVUC rates to P2,912 on passenger cars with gross vehicle weight (GVW) of up to 1,600 kilogram (kg) in the first year of implementation; P6,552, if weighing 1,600-2,300 kg, P14,560, if over 2,300 kg.

At present, rates range from P1,400-12,000, depending on weight and age of the passenger car for private use; and P900-5,000, if for hire.

Utility vehicles weighing up to 2,700 kg will be levied P3,640 and an additional P0.73 per 100 kg over 2,700 kg; while motorcycles with engine displacement of 400 cc and above with sidecars will be charged P546. Without sidecars, the charge is P437.

This is higher than the P2,000 with additional P0.40 per 100 kg in excess of 2,700 kg for utility vehicles; and the P240 and P300 rates slapped on motorcycles without and with sidecars, respectively.

The bill also provides for the following rates for large vehicles: buses, P3,276, if weighing 4,500 kg with additional P45 per 100 kg above 2,700 kg; trucks and trailers, P3,276, if weighing over 4,500 kg with additional P0.44 per 100 kg over the GVW.

The present system imposes the following rates for trucks and buses: P1,800, plus and additional P0.24 per 100 kg in excess of 2,700 kg.

“While I am convinced that this is a progressive and equitable bill, I am very open to further improvements to this proposal. My committee will consult all the relevant stakeholders.” Mr. Salceda said. The measure forms part of the government’s comprehensive tax reform program.

President Rodrigo R. Duterte in his fourth State of the Nation Address asked the 18th Congress to pass the remaining CTRP packages, particularly the proposal to reduce corporate income tax and rationalize fiscal incentives, increase excise tax on alcohol products and e-cigarettes, centralize real property valuation and assessment and simplify the tax structure for financial investment instruments.

The government has so far passed Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Law, which slashed personal income tax and increased or added levies on several goods and services; RA 11213, the Tax Amnesty Act, which grants estate tax amnesty and amnesty on delinquent accounts left unpaid even after being given final assessment; and RA 11346, which will gradually increase excise tax on tobacco products to P60 per pack by 2023 from the current P35. — Charmaine A. Tadalan

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