House approves bill hiking road users’ tax starting 2020

Mara Cepeda
House approves bill hiking road users’ tax starting 2020
The proposed tax increases are expected to generate P9 billion that would go to the general fund for road safety and the Public Utility Vehicle Modernization Program

MANILA, Philippines – The House of Representatives passed on Tuesday, March 10, a bill that would increase starting this year the taxes paid by motor vehicle owners.

Voting 240-5-0, lawmakers approved on third and final reading House Bill (HB) No. 6136, which seeks to begin imposing a hike on the motor vehicle user’s charge (MVUC) or road users’ tax rates starting 2020.

The measure, however, did not specify what specific month this year the new taxes would take effect should HB 6136 become a law.  

HB 6136 would set a unitary tax rate based on the weight for all vehicles, except for motorcycles, private or government vehicles, and for-hire vehicles. 

It proposes the following new tax rates for owners of passenger cars, utility vehicles, and sports vehicles:

House ways and means committee chairperson Joey Salceda said the road users’ tax hike bill is ‘progressive.”

“Ito pong tax na ito, napaka-progressive. Mayaman ang magbabayad. Mahirap ang makikinabang,” Salceda said in a statement. (These taxes are very progressive. The rich will pay. The poor will benefit.)

“And we expect it to help ease transport conditions for everyone by contributing to safer road infrastructure, and by expanding the PUV modernization,” the Albay 2nd District congressman added.

The tax increases are estimated to generate P9 billion worth of government revenue that would go to the general fund for road safety and the Public Utility Vehicle Modernization Program, which did not have any allocation under th P4.1-trillion budget for 2020.

But President Rodrigo Duterte previously said he wants the MVUC revenue to fund the rehabilitation of Manila Bay and the needs of hospitals. 

The road users’ tax was the subject of controversy in 2019, after the Commission on Audit earlier found that P90.7 billion worth of road users’ tax had been “misappropriated.”

The Road Board, which was hounded by allegations of corruption and misuse of funds, had managed the multibillion-peso MVUC. In March 2019, however, Duterte signed a law that scrapped the Road Board and channeled the road users’ tax revenues to the National Treasury.  Rappler.com

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Mara Cepeda

Mara Cepeda specializes in stories about politics and local governance. She covers the Office of the Vice President, the Senate, and the Philippine opposition. She is a 2021 fellow of the Asia Journalism Fellowship and the Reham al-Farra Memorial Journalism Fellowship of the UN. Got tips? Email her at mara.cepeda@rappler.com or tweet @maracepeda.