P25 billion from road tax eyed for PUV modernization

MANILA, Philippines — A bill has been filed in Congress to use some P25 billion of the road users’tax to fund the public utility vehicle (PUV) modernization program, help reduce pollution and improve fuel efficiency and road safety.

Albay Rep. Joey Salceda filed House Bill 4695 titled “Motor Vehicle Road User’s Tax Act” which seeks a 300-percent increase in the road user’s tax, officially called motor vehicle user’s charge (MVUC), which is collected by the Land Transportation Office from the annual registration of motor vehicles.

The proposal goes against moves to abolish the MVUC because of its chronic misuse and corruption scandals.

There are currently more than 11 million motor vehicles registered in the country, according to Salceda, chair of the House ways and means committee. 

He said the proposed 300 percent hike in the motor vehicle road user’s tax (MVRUT) on all types of vehicles amounts to a reasonable and optimal increase, considering that the MVUC has not been adjusted since 2004.

RA 8794 grants the President the authority to adjust the MVUC rates annually, a prerogative that was never exercised since the law’s enactment in 2004. As a result, the MVUC proceeds that was supposed to finance infrastructure projects was not maximized, Salceda said.

To cushion the impact of the 300 percent hike, Salceda said it would be implemented in phases from 2020 to 2022.

Under HB 4695, Salceda explained, incremental revenues from the MVRUT increase will help finance PUV modernization and the universal health care.

The modernized PUV is a trustworthy mode of transport, with efficient fuel consumption and therefore, reduced pollution.

HB 4695 seeks to promote efficient movement of people by providing PUV drivers and operators opportunities to modernize their fleets through substantial equity subsidies.