Categories: News

Congress approves 90% road tax increase

Brace yourself – and your budget.

The House of Representatives approved a bill increasing the road user tax by 90 percent over the next three years.

In a report by The STAR, the increase would be staggered evenly at 30 percent per year up to 2022. Albay Rep. Joey Salceda and the Department of Finance (DOF) had sought a 100-percent hike – 70 percent next year, 20 percent in 2021, and 10 percent in 2022 – to regain lost revenues due to inflation for the past 15 years.

The road user tax, officially called motor vehicle user’s charge (MVUC), help comprise the annual registration fees which around 11 million motorists pay to the Land Transportation Office.

According to the version of Salceda’s proposal, fees for light vehicles and similar cars weighing up to 1,600 kilos would increase from the present P1,600 to P2,720 or hike by P1,120 (70 percent) starting next year.

The amendment of Baguio Rep. Mark Go, however, reduced the figure to P480 (30 percent). The reduction means that MVUC on light cars would be P2,080 next year, excluding registration and miscellaneous fees that LTO imposes.

Starting 2023, there would be a uniform MVUC rate of P1.42 per kilogram based on the vehicle’s gross weight, with subsequent increments of five percent. This means that a 1,600-kilo car would be levied P2,272 in road user tax in 2023.

Go said that the Salceda-DOF-proposed 70-20-10 percent adjustment would be unfair to thousands of Filipinos belonging to the middle class who only bought cars recently.

“We are unjustly penalizing them by including inflation in the road user tax at a time when they did not have cars yet,” he said.

For example, Go said that a motorist who only bought his car in 2015 would be required to pay the increased tax from 2005 to 2014.

He said that there is no justification for the government to force motorists to pay levy for 10-year period when the person was not even a car owner yet.

Meanwhile, the proposal from several committee members to allocate part of the incremental MVUC collections to the expanded health services or universal health care program was rejected by the Salceda committee.

Instead, the committee decided to allot half of the tens of billions in annual increment to assist owners of smoke-belching jeepneys in acquiring new vehicles with a subsidy of P500,000 for each new unit.

Meanwhile, Salceda earlier proposed to to spare millions of motorcycle owners from the planned tax increase, saying that owners of multi-wheel vehicles have more money to pay for higher road user tax. – Jess Diaz

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