House panel backs move to increase road users’ tax

THE House Committee on Ways and Means on Monday endorsed for plenary approval a measure increasing the Motor Vehicle Road Users’ (MVRU) Tax.

House Committee on Ways and Means Chairman Jose Maria S. Salceda said House Bill 4695, which will be transmitted to the plenary for another round of deliberations, could provide P40 billion additional government revenues in three years.

HB 4695 said increasing the MVRU tax would lead to additional government revenues of P8 billion in 2020, P12 billion in 2021 and P20 billion in 2022. These revenues, according to the proposed bill, will fund the public utility vehicle modernization program (PUVMP) and as according to the original mandate of Republic Act (RA) 8794, or the “Act Imposing a Motor Vehicle User’s Charge [MVUC] on Owners of All Types of Motor Vehicles and for Other Purposes.”

According to Salceda, the existing MVUC rates have not been adjusted since 2004. RA 8794 was enacted in the year 2000.

New rates

UndeR HB 4695, the new proposed rates are: P2,080 in 2020; P2,560 in 2021; and, P3,040 in 2022 for passenger cars with gross vehicle weight (GVW) of up to 1,600 kilograms (kg).

The new tax rates for passenger cars with GVW above 1,600 kg but not exceeding 2,300 kg are: P4,680 in 2020;

P5,760 in 2021; and P6,840 in 2022. For passenger cars with GVW above 2,300 kg, the new tax rates would be P10,400 in 2020, P12,800 in 2021, and P15,200 in 2022.

The measure said a P1.40 unitary tax per kg of GVW will be imposed on utility vehicles, sport-utility vehicles, buses, trucks and trailers starting 2020 until 2023. For motorcycles without a sidecar but with an engine displacement of 400 cubic centimeters and above, the new tax rates are: P312 in 2020, P384 in 2021, and P456 in 2022.

For motorcycles with a sidecar, the rates are: P390 in 2020, P480 in 2021, and P570 in 2022.

The bill also proposes that these road tax rates be increased by 5 percent annually effective January 2024.