Congress Mulls Increase of Motor Vehicle User’s Charge

MANILA: If Congress responds to the hike, car ownership costs may increase.

The House is considering raising the rate of the Motor Vehicle User's Charge (MVUC), according to a report in the Philippine Daily Inquirer. Jose Ma. Salceda, a representative for Albay, said that aside from taxing foods like chips and sugary drinks, boosting taxes on other things could be done. It was in response to requests from the Departments of Finance (DOF) and Health to impose greater charges on those types of foods and beverages.

Salceda stated that following President Ferdinand Marcos Jr.'s second State of the Nation Address, the panel will begin hearing four updates to the MVUC. Salceda added that automobile users are "heavily subsidized for car use" and that this increases traffic congestion. “The effect is, when something is artificially cheaper than it should be, more people do it than should be. So, we have more traffic than our roads can accommodate,” the congressman explained.

The Road Board used to have authority for the collection of Motor Vehicle User's Charge. But once previous president Rodrigo Duterte approved it in 2019, the Road Board was disbanded. Prior to it, the Road Board was plagued by claims of corruption and financial mismanagement. The MVUC is now being proposed for inclusion in the Tax Code by Congress.

“We will discuss taxes that hit the rich first. That’s our constitutional duty. I still have questions about the proposed tax increase on sweetened beverages, and the proposal for salty food taxes. I also want to consider other options, including closing some of the tax exemptions to the sweetened beverage tax,” said Salceda.

Nevertheless, the MVUC hike that is being considered also aims to exempt motorcycles and tricycles from the charge. Because of delivery express services and other things that make these vehicles "a means of living now," this is the case. Should the proposals of the Congress come to pass, plans for zero-interest loans to local jeepney producers are being discussed to increase local manufacturing and employment.

Photos from File, Department of Transportation

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