Look at your vehicle’s Official Receipt from the Land Transportation Office and you’ll notice an item called “MVUC”. That acronym stands for “Motor Vehicle User’s Charge” or more commonly, road user tax; and yes, we pay for it yearly.
In a report released two days ago, the House of Representatives approved a bill that will increase the said tax by 90%, staggered for the next three years. Penned by Albay Representative, Joey Salceda, alongside the Department of Finance, the reason behind the proposal and its subsequent approval is to “recoup lost revenues due to inflation for the past 15 years”. The last adjustment (to the MVUC) was collected in 2014.
As a background, vehicles that weigh up to 1,600 kilos will have to pay PhP 2,720 from what is currently PhP 1,600 – that translates to a PhP 1,120 increase. Originally, this was to be implemented in full come 2020, but after an amendment by Baguio Representative, Mark Go, the increase will instead be staggered over a three-year span. The Solon said that a “lump sum” would be unfair to those who only bought cars in recent years; hence, the need for staggering.
Come 2023, a uniform MVUC rate of PhP 1.42 per kilogram (based on the vehicle’s gross weight) with a subsequent annual increment of 5% will be implemented. To put that into perspective, a 1,600-kilogram vehicle would be levied PhP 2,272 in road user tax in that year.
The money that will be made following increased taxes will also be used for the Public Utlity Vehicle (PUV) Modernization Program. A provision seems to have been put in place that states that half of all the proceeds will be provided as subsidy for jeepney owners. The said subsidy will be PhP 500,000 for every new unit that they will purchase.
With the continuously increasing cost of living, the continued devaluation of the Philippine Peso, and the additional tax increases coming from all directions, this may have a profound effect on vehicle owners, and the entire automotive industry as a whole. The effects of which, we may have to wait for to see around one a half months from now.
Source: Philippine Star