House approves hike in road users’ tax

MANILA – The House of Representatives on Tuesday night approved on final reading a bill proposing a hike on the Motor Vehicle Road Users Tax (MVRUT) to help fund the government’s Public Utility Vehicle Modernization Program (PUVMP) and road safety projects.

With 239 affirmative votes, 5 negative votes, and 1 abstention, the lower chamber approved on third reading House Bill 6136, which seeks to amend Republic

Act No. 8794, otherwise known as the Motor Vehicle User’s Charge Act.

Albay Representative Joey Salceda said the bill is “doubly progressive,” as it guarantees that the rich would primarily pay the road users’ tax, which in turn, would expand the funding for the modernization program and road safety.

“[The bill is] progressive on the tax side, and progressive on the spending side,” said Salceda, author of the bill.

Under the bill, Salceda said the new rate adjustments are as follows: for private and government vehicles, there shall be a 30% annual rate increase for passenger cars for three years; rates for all utility vehicles, sport utility vehicles, buses, trucks, and trailers are based on per kilogram (kg) of gross vehicle weight (GVW): 1.40/ kg of GVW for first year, 2.50/kg of GVW for second

year, 3.40/kg of GVW for third year.

A lower rate is charged for vehicles for hire, which is pegged at 50% of the motor vehicle road user’s tax (MVRUT) rate for private and government vehicles.

Salceda argued that 55.6% of all cars are owned by the top 10% of the population, while only 1.7% is owned by the bottom 30%.

“This makes this tax extremely progressive. Let’s make the primary road users pay for road use,” Salceda said.

He noted that 50% of incremental revenues would be used to finance the modernization of public utility vehicles and government programs to be undertaken for the prevention of death due to road accidents and accident victims’ assistance.

Meanwhile, the remaining 50% would be used for road safety under the “Build, Build, Build” program.

“Ito pong tax na ito, napaka-progressive. Mayaman ang magbabayad. Mahirap ang makikinabang (This tax is totally progressive. The rich would pay. The poor would benefit),” he said.

“And we expect it to help ease transport conditions for everyone by contributing to safer road infrastructure, and by expanding the PUV modernization,” he added. (PNA)