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DoF backs legislation raising charges on motor vehicle users

dof backs legislation raising charges on motor vehicle users 816x445 - DoF backs legislation raising charges on motor vehicle users

THE Department of Finance (DoF) said it backed proposals to raise the Motor Vehicle User’s Charge (MVUC) in its comment on two bills seeking to amend Republic Act No. 8794 or the MVUC Act of 2000.

In a letter dated Sept. 24 addressed to Ways and Means Committee chair and Albay 2nd district Rep. Jose Ma. Clemente S. Salceda, Finance Secretary Carlos G. Dominguez III said his department “fully supports” amendments contained in House Bill No. 3006 filed by Camarines Sur 2nd district Rep. Luis Raymund F. Villafuerte, Jr.

“The DoF fully supports the proposal espoused under HB 3006 as it embodies the DoF proposal on MVUC rate increase,” Mr. Dominguez said in the letter.

The DoF originated the following measures contained in the proposed bill:

• A phased-in period of three years to increase MVUC rates. Rate per kg of GVW (gross vehicle weight) in year 1 is P1.40, year 2 is P1.95, and year 3 is P2.5.

• The unitary rate will be applicable to all vehicles, private, or government and for-hire vehicles.

“The proposed unitary rate carries this principle since the heavier the vehicle, the higher the MVUC imposed. The phased-in period of three years would provide ease of transition for vehicle owners in conforming to the newly introduced rates,” Mr. Dominguez said in the letter.

The DoF estimated that the proposed MVUC structure will generate annual incremental revenue of P11.6 billion during the first year, P24.9 billion in the second year, and around P39.9 billion in succeeding years.

However, the DoF objected to the proposed exemption of green vehicles — those using clean energy — from payment of MVUC as provided in House Bill No. 3616 filed by Quezon City-5th district Rep. Alfred D. Vargas.

“Green vehicles carry the same externality on roads, therefore users should pay the same charge for road maintenance and repair,” Mr. Dominguez said.

He added, “We would like to emphasize as well that green vehicles are already given preferential excise tax rate under Republic Act 10963 or the TRAIN Law. We believe that the lower excise tax under TRAIN law is a more appropriate manner to incentivize green vehicles than the proposed exemption from MVUC.”

The House Ways and Means committee is set to discuss the bills on road user’s tax on Monday. — Vince Angelo C. Ferreras

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