Senator Ralph Recto on Wednesday said the proposal to raise car registration fees will result in a triple whammy for car owners, as there are proposed additional taxes on motor vehicles and the fuels that run them.
In a statement, Recto said the proposal, also known as the Motor Vehicle User’s Charge, a medium passenger car with a gross vehicle weight of 1,601 kilos to 2300 kilos, will be charged with P6,552 from the current P3,600 as registration fee.
The current rates were pegged in 2004, as the fourth tranche of the fees mandated by RA 8794, which took effect in 2000.
Recto said that one of the weaknesses of the DoF-endorsed proposal is that it merely revises the rates stipulated in RA 8794, when the pressing revisions it needs cover the way the collections are earmarked and spent.
He added that “the more than 17 years that the law has been in effect provides a trove of reform opportunities which can remedy inherent defects in the utilization of MVUC income.”
Recto said that records show that over P135 billion was collected in road user’s tax from 2000 to 2016 and added that “a special audit conducted by the CoA in 2009 already flagged weaknesses in fund use which should have triggered remedial measures.”
“It is time to end MVUC’s protected status as automatic appropriations whose utilization is outside the ambit of Congress. At present, the fund is exempt from the scrutiny of the representatives of the people,” he said.
Recto noted that there are seven unelected bureaucrats comprising the Road Board who decide on its use, even as the Constitution states that no fund must leave the Treasury without an appropriation from Congress.
The senator said that “for the sake of transparency, it must be included in the itemized listing of the DPWH’s annual budget. Booking it as an off-budget account distorts the picture of total infra spending.
Second, it is time to revisit the manner by which the funds are apportioned.”
At present, collections are divided into four special accounts: Special Road Support Fund (80 percent), Special Road Safety Fund (7.5 percent), Special Vehicle Pollution Control Fund (7.5 percent), and Special Local Road Fund (5 percent).
The CoA has repeatedly tagged irregularities in the use of the vehicle pollution control fund. In 16 years, P10.6 billion had been allotted for clean air projects, whose benefits, if any, are concealed by the smog of the metropolis.
“Third, the menu must be revamped. A perpetual negative list must be put in place. The procurement of road signs, highway barriers, reflectorized signs, in gigantic quantities in the past, should be rationalized. The Philippines is abloom in signs but lacking in road order.
Fourth, is the need to align a portion of MVUC collections in solving road congestion. We should smash current orthodoxies like the manifest bias of the fund toward paving asphalt,” Recto said.
He added that the embargo in buying emergency response and obstruction removal vehicles must also be lifted.
Recto argued that if car registration fees are being collected in the name of the motorists’ safety, then “we should be open to the purchase of equipment that will keep them from harm, especially in Metro Manila, where one accident was reported every five minutes in 2015.
MVUC should fund ambulances which can be stationed in traffic-prone highways, patrol cars which can run after overspeeding vehicles at night, and tow trucks to clear roads of stalled vehicles.
Meanwhile, Senator Sonny Angara said the incremental revenues of the proposed increase in the excise tax of automobiles should be specifically allocated to projects that would improve the country’s public transport system.
Under House Bill 5636, 60 percent of the yearly incremental revenues from the Tax Reform for Acceleration and Inclusion (TRAIN) Act “shall be allocated proportionally, based on existing budget allocation, for infrastructure, health, education, housing and social protection expenditures. Provided, that the infrastructure allocation shall be prioritized to address congestion through mass transport and new road network.”
Angara, chairman of the ways and means committee, said such language is “very general.”
“You really have to explain to the people why you’re taking money from their pockets. Let’s make the tax reform bill complete in itself—from finding ways and means for funding to the spending of the money,” he said.
Senate Minority Floor Leader Franklin Drilon echoed Angara’s call, noting that if the earmarking provision would be left in general language, the power to allocate would still be with the Department of Budget and Management because they are the ones who craft the national expenditure program.
The two senators cited the sin tax law which specifically provided that incremental revenues from higher taxes slapped on sin products will be divided between the tobacco industry and universal health coverage.
“The sin tax funds has allowed PhilHealth membership coverage to expand benefits to the poor and the senior citizens. This should be on tax reform bill.”
Angara admitted that they are worried because if the tax reform bill is passed, the promises under the programmor project that would be funded from the additional tax collection can still be lost.
"That's what we are afraid. Why don’t we secure the social contract with the people and make the language of the earmarking under this bill stronger,” Angara said.
The lawmaker asked the Department of Finance to submit a list of transportation projects that could be funded by the incremental revenues of the proposed increase in the excise tax of automobiles.
Angara said auto excise tax collection could be used to fix the MRT and LRT, and to subsidize the jeepney modernization program.
“We should fast-track our projects on improving and modernizing our public transport system so that Filipinos will have a viable transportation option,” he said.