If you are at par with the current events, you’re well aware that most jeepneys today are fighting the PUV modernization since 2017. In fact, transport groups hold “strikes” as a way for them to be rebellious and to tell the Philippine government that they are against it. This resulted to a bill that would somehow affect the road tax that motor vehicle users pay.
In this article, we will be discussing the Road Tax Increase that has been OK-ed by the house panel as well as its goals.
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What is the road tax increase?
The road tax or the motor vehicle user’s charge (MVUC) is the annual registration fees that vehicle owners pay to the Land Transportation Office (LTO). This means that the road tax increase would be the increase of their annual registration fees.
Yes, the registration fees you settle with LTO would be affected should this bill be signed into law.
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How much would the road tax increase be?
According to the approved bill, the increase would be done slowly and it’s going to be staggered. It’s going to be evenly increased by 30 percent starting 2020 until the year 2022.
The overall increase would be seen as a 90 percent increase in 2022. Baguio Representative Mark Go was the person responsible for the amendment of the 30 percent annual fee. He amended the Department of Finance’s (DoF’s) and Albay Representative Joey Salceda proposal of a 100 percent hike.
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In the previous version, Salceda and the DOF wanted a 100 percent hike; 70 percent increase starting next year; 20 percent increase in 2021; and 10 percent increase in 2022. As per them, this is to recover revenue losses due to inflation in the past decade.
What would the road tax increase look like?
According to the bill, the House looks to impose the following tax rates:
| Vehicle Type | Base Rates | ||||
| 2020 | 2021 | 2022 | 2023 | 2024 onward | |
| Passenger cars | |||||
| Gross vehicle weight (GVW) up to 1,600 kgs | P2,080.00 | P2,560.00 | P3,040.00 | P1.42 per kg of GVW | 5 percent increase |
| GVW more than 1,600 kgs but not more than 2,300 kgs | P4,680.00 | P5,760.00 | P6,840.00 | P1.42 per kg of GVW | 5 percent increase |
| GVW more than 2,300 kgs | P10,400.00 | P12,800.00 | P15,200.00 | P1.42 per kg of GVW | 5 percent increase |
| Utility vehicles | |||||
| GVW of up to 2,700 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent increase |
| GVW of more than 2,700 kgs but not more than 4,500 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent increase |
| Sports Utility Vehicles | |||||
| GVW of up to 2,700 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent increase |
| GVW more than 2,700 kgs but not more than 4,500 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent |
So those are the proposed road tax increase rates for passenger cars, PUVs, and sports car vehicles. For motorcycles, trucks, buses, and trailers, here’s what the proposal looks like:
| Road users’ tax rates proposed by the House committee on ways and means | |||||
| Vehicle Type | Base Rates | ||||
| 2020 | 2021 | 2022 | 2023 | 2024 onwards | |
| Motorcycles | |||||
| Without sidecar (with engine displacement below 400cc) | P0.00 | P0.00 | P0.00 | P0.00 | P0.00 |
| Without sidecar with engine displacement of 400cc and above | P312.00 | P384.00 | P456.00 | P1.42 per kg of GVW | 5 percent increase |
| With sidecar | P390.00 | P480.00 | P570.00 | P1.42 per kg of GVW | 5 percent increase |
| Buses | |||||
| GVW of up to 4,500 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent increase |
| GVW above 4,500 kgs | |||||
| Trucks | |||||
| GVW of up to 4,500 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent increase |
| Trailers | |||||
| GVW of up to 4,500 kgs | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | P1.42 per kg of GVW | 5 percent increase |
Those are the proposed rates for buses, trucks, trailers, and motorcycles. As you can see, they’re quite different from regular PUVs and passenger cars. Nevertheless, these rates shall be observed should the bill be signed into law.
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What would be the purpose of the Road Tax Increase?
Joey Salceda, Albay Representative, one of the primary authors of the original bill, said that the revenue would go to the general fund for Road Safety and the Public Utility Vehicle Modernization Program. As per him, this did not have any type of allocation in the P4.1 trillion budget for 2020. With the increased taxes, the people can be assured that the funds “are going somewhere.”
In addition to that, President Rodrigo Duterte said that the revenue from the MVUC would be used to fund the rehabilitation of Manila Bay. Moreover, it’s also going to be used for the needs of the hospitals in the country.
PUJ Modernization
In addition to all the proposed projections on where the revenue will be used, Salceda said that the committee made the decision to allot half of the increment to help smoke-belching jeepneys acquire new vehicles.
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He said that these owners will be given a subsidy of P500,000.00 for each unit. The budget, if you might be asking, would generate about P9 billion in government revenue.
What do you think about the road tax increase? Is this a just and fair act to all people who own motor vehicles? Can this be the answer we’re looking for in terms of modernizing current and existing jeepneys?
Source/s: Rappler | The Philippine Star