House bill seeks 30% hike in road user’s tax

MANILA: House Bill No. 6136, which has already been approved on second reading, wants to impose a significant hike on the motor vehicle user’s charge (MVUC) or more simply known as the road user’s tax.

According to its main sponsor Albay Representative Joey Salceda, if implemented, it will be the “most progressive transport policy in recent history."

Based on the stipulations of the bill, Salceda guarantees that the wealthy sector of society will shoulder most of the MVUC’s burden while also increasing the funds for the government’s Public Utility Vehicle Modernization Program (PUVMP).

“The cross-party consensus of the House, including the progressive groups and the minority, to move the bill forward validates the exhaustive efforts we have done to ensure that this is the most progressive transport tax in recent history. The Committee, thanks to the support of inclusive transport advocates, and the broad coalition of supporters from the transport sector may have pioneered something rarely if at all, seen in national policy: a law that is doubly progressive. Progressive on the tax side, and progressive on the spending side,” Salceda said.

Under the bill, private and government vehicles shall receive 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 percent of the motor vehicle road user's tax (MVRUT) rate for private and government vehicles.

As per Salceda, 55.6 percent of all cars are owned by the top 10 percent of the population, while only 1.7 percent is owned by the bottom 30 percent.

Salceda also adds that that 50 percent 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, while the remaining 50 percent would be used for road safety under the “Build, Build, Build” program.