The House of Representatives has approved on second reading a bill increasing the motor vehicle user’s charge starting 2020.
This developed as Albay Rep. Joey Salceda, chairman of the House committee on ways and means, said House Bill 6136 updated the rates of the Motor Vehicle Road Users’ Tax (MVRUT) and significantly expands funding for the public utility vehicle modernization program (PUVMP) with no amendments and no interpellations.
“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,” Salceda, principal author and sponsor of the bill, said.
“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 added.
The MVRUT rate adjustments are as follows: For Private and Government Vehicles, there shall be a 3 percent annual rate increase for passenger cars for three years. Rates for all other vehicles namely utility vehicles, SUVs, buses, trucks and trailers is based on per kilogram of gross vehicle weight: 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 is pegged at 50 percent of the MVRUT rate for private and government vehicles.
To ensure that inflation does not erode the value of revenues, an annual increase of 5 percent is imposed by Jan.1, 2023 through revenue regulations to be issued by the secretary of Finance.
Salceda argues that the rich will primarily pay for the tax.
“55.6 percent of all cars are owned by the top 10 percent of the population, while only 1.7 percent are owned by the bottom 30 percent. This makes this tax extremely progressive. Let’s make the primary road users pay for road use,” Salceda said.
“More importantly, 50 percent of incremental revenues will finance modernization of public utility vehicles and government programs to be undertaken for the prevention of death due to road accidents and accident victims’ assistance,” Salceda added.
House Bill 6136 is expected to be passed on third and final reading next week.