‘Road tax hike unfair to new car owners’

MANILA, Philippines — An enormous increase in road user tax would be unfair to thousands of employees who have recently bought cars, a lawmaker said yesterday, amid plans in the House of Representatives to hike the tax paid by over 11 million Filipinos who own vehicles through annual registration fees at the Land Transportation Office (LTO).

Baguio City Rep. Mark Go, addressing his colleagues in the chamber, said that while he is not in principle against increasing the tax, adjusting the levy for inflation since 2004 would not be fair to those who have purchased cars and other motor vehicles only in recent years.            

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

For instance, he said an employee who bought his car only in 2015 would be asked to pay the increased tax for 2005 up to 2014 before he acquired his vehicle.            

There would be no justification for the government to force such employee to pay the levy for the particular 10-year period when he was not yet a car owner, he stressed.           

The 11 million owners of motor vehicles, including motorcycles, are paying the tax in the form of increased annual registration fees paid to the LTO. The levy is officially called motor vehicle user’s charge or MVUC.

Based on the estimate of Albay Rep. Joey Salceda, principal proponent of the road user tax hike, the rates would go up by at least 91 percent, which he reckoned is the total inflation for the past 15 years that the levy has not been adjusted.

Salceda wants revenues that would have been earned to be recouped, assuming there was an annual rate increase equal to inflation.

However, his bill shows that the rates would soar by more than 300 percent.

For example, the road user tax on cars with gross vehicle weight of up to 1,600 kilograms (kg) would increase from the present P800 to P2,912 next year, P3,028 in 2021 and P3,056 in 2022.

For Deputy Speaker Luis Raymund Villafuerte, the adjustment is necessary to raise enough funds for road repair and other infrastructure projects.            

He said MVUC collections “should be used for what they are intended – as a form of regulation to take into account the damage inflicted by vehicles on roads.”             

“I feel that the income from the MVUC should purely go either to the Department of Public Works and Highways or the Department of Transportation,” he said.            

He said while he strongly supports efforts to ensure enough funds for the universal health care program, its funding has been addressed through several measures, such as the bills increasing taxes on tobacco and alcohol products and e-cigarettes.