House approves increase in motor vehicle road user’s tax on final reading

The House of Representatives approved on third and final reading a bill increasing the motor vehicle road user’s tax (MVRUT), the proceeds of which would be used to fund the public utility vehicle (PUV) modernization program and road safety programs.

With 247 yes votes, four no votes, and one abstention, Tuesday’s plenary session approved House Bill 9647 which imposes the following minimum MVRUT rates:

• for passenger cars, a rate of P2,080 with a gross vehicle weight of 1,600 kilograms and below in 2024, P2,560 in 2025, P3,040 in 2026, and an annual 5% increase from 2027 thereafter;
• for utility vehicles and sports utility vehicles with a gross vehicle weight of not more than 4,500 kilograms, a rate of P1.40 per kilogram of the gross vehicle weight in 2024, P2.50 per kilogram of gross vehicle weight in 2025, P3.40 per kilogram of gross vehicle weight in 2026, and an annual 5% increase from 2027 thereafter;
• for buses, trucks, and trailers with a gross vehicle weight of above 4,500 kilograms, a rate of P1.40 per kilogram of the gross vehicle weight in 2024, P2.50 per kilogram of gross vehicle weight in 2025, P3.40 per kilogram of gross vehicle weight in 2026, and an annual 5% increase from 2027 thereafter.

The bill, however, provides that those with hire vehicles would only need to pay 50% of its MVURT rate.

In addition, the bill allocates 45% of the incremental revenue raised out of the MVRUT for financing the modernization of public utility vehicles.

Also, 5% of the revenue would go to government programs for the prevention of deaths due to road crashes and victims' assistance such as:

• improvement of existing drivers' education programs, training academies, and drivers' license examinations by the Land Transportation Office (LTO);
• provision of additional motor vehicle inspection centers by the LTO;
• improvement of existing road networks by the Road Management Systems of the Department of Transportation;
• provision of supplemental hospitalization coverage by the Philippine Health Insurance Corporation;
• provision by the Employees' Compensation Commission of workmen's compensation for victims of road crashes who are unable to perform any gainful occupation due to disability; and
• establishment by the Department of Health of emergency care facilities in areas with high incidences of road accidents.

“This will optimize the utilization of the Motor Vehicle Road User's Tax and raise additional revenues to help fund government programs for the prevention of deaths due to road crashes; to provide assistance to victims of road crashes; and to help finance the PUV modernization program,” the committee report on the measure read.

But for House Assistant Minority Leader Arlene Brosas of the Gabriela party-list, House Bill 9647 would only benefit the manufacturers involved in the anti-poor and financially unsustainable PUV modernization program.

“While there is a need to decongest roads and disincentivize car ownership in the country, legislating higher car taxes - which will be adjusted on an annual basis - is not the way to go. Instead, fixing the current public mass transport system in the country will reduce dependence on imported vehicles,” Brosas said.

“Sa mas mataas na motor vehicle road user's tax, tiyak na matindi ang tama sa maliliit na vehicle owners na pinangutang lang naman ang ibinili ng mga sasakyan. Bagamat may 50% discount sa utility vehicles, papasanin pa rin ito ng mga ordinaryong Pilipino,”

(With higher MVRUT, small-time owners of vehicles who took out loans to buy modern PUVs would be the ones burdened. Even with the 50% discount, that rate would still weigh on them.)

The allocation of 45% of MVURT revenues to PUV modernization, Brosas said, would only benefit the modern PUV manufacturers given that modern PUVs listed under the government program are priced at least P2 million per unit.

“We doubt that the government will give PUV drivers and operators a subsidy of P2 million per unit. In fact, it is not clear if this measure will mandate a specific amount of government subsidy,” Brosas said.  — DVM, GMA Integrated News