Manila Bulletin
Philippines
House approves amended earmarking provision of Motor Vehicle Road User's Tax bill
Philippines
House approves amended earmarking provision of Motor Vehicle Road User's Tax bill
House approves amended earmarking provision of Motor Vehicle Road User's Tax bill
Published Jan 27, 2020 12:00 am
By Charissa Luci-Atienza
The House committee on ways and means approved on Monday (Jan. 27) the amended earmarking provision of a bill seeking to increase the Motor Vehicle Road Users' Tax (MVRUT).
House of the Representatives (ALVIN KASIBAN / MANILA BULLETIN / FILE PHOTO)
In less than two minutes, the House panel presided over by its vice-chairperson Nueva Ecija Rep. Estrellita Suansing passed the unnumbered substitute bill, which was approved by the House committee on appropriations last week.
On Jan. 22, the House committee on appropriations chaired by Davao City Rep. Isidro Ungab approved the proposed MVRUT Act with “minor amendments.”
Albay Rep. Joey Salceda, chairman of the House committee on ways and means and the principal author of the bill, presented the substitute bill before the Ungab panel.
"This measure does three things. It tries to update the motor vehicle road user’s charge. Since it was last imposed in 2004, it was not adjusted. Second, it is a revenue measure because in the next five years, it can raise P220 billion. In fact, on its second year , for this year, it could raise about P12 billion, the next year P25 billion, and the following year P32 billion,” Salceda said in his sponsorship speech.
He urged the Ungab panel to approve the earmarking provision of the revenue-generating bill, which was approved by his panel on Nov. 11, 2019.
The proposed MVRUT Act provides that 50 percent of the incremental revenues from the increased MVRU tax shall be allocated and used exclusively for the following purposes: 45 percent for the Public Utility Vehicle (PUV) Modernization Program and five percent for the government programs to be undertaken for prevention of deaths due to road accidents and accident victims’ assistance.
The measure provides that five percent of the incremental revenues shall be used for the improvement of existing drivers’ education programs, training academies, and drivers’ licensure examinations by the Land Transportation Office (LTO); LTO’s establishment of additional Motor Vehicle Inspection Centers; the provision of supplemental hospitalization coverage by the Philippine Health Insurance Corporation (Philheath) for victims of road accidents; the provision by the Employees’ Compensation Commission of workmen’s compensation for victims of road accidents who are unable to be gainfully employed for a continuous period due to disability; and the establishment by the Department of Health (DOH) of emergency care facilities in areas that have high incidence of road accidents.
The substitute bill approved by the Salceda panel last year provides that the incremental revenues shall be earmarked from Jan. 1, 2020 to Dec. 31, 2024.
However, this having been “overtaken by events,” Quirino Rep. Junie Cua, vice-chairperson of the House committee on appropriations, said the bill provides that the earmarking of the incremental revenues “start on January 2021, instead of January 2020.”
Cua, however, said that “Realizing that it will benefit all of us if we make this effective as soon as it is approved, instead of saying of starting from 2021, I propose that it starts upon actual approval.” His proposal was adopted by the Ungab panel.
Under the substitute measure, the following new tax rates shall apply to passenger cars with gross vehicle weight (GVW) of up to 1,600 kilograms (kg); P2,080 in 2020; P2,560 in 2021; and, P3,040 in 2022.
For cars with GVW above 1,600 kg but not exceeding 2,300 kg, the new rates are as follows: P4,680 in 2020; P5,760 in 2021; and P6,840 in 2022.
Under the bill, it was proposed that the new tax rates for passenger cars with GVW above 2,300 kg shall be P10,400 in 2020, P12,800 in 2021, and P15,200 in 2022.
The measure also calls for the imposition of a P1.40 unitary tax per kg of GVW on utility vehicles, sport-utility vehicles, buses, trucks, and trailers starting 2020 until 2023.
The bill also seeks to impose new tax rates on motorcycles without a sidecar but with an engine displacement of 400 cubic centimeters and above: P312 in 2020, P384 in 2021, and P456 in 2022.
For motorcycles with a sidecar, the new rates shall be P390 in 2020, P480 in 2021, and P570 in 2022.
The proposed MVRUT Act provides that the rate of the MVRUT shall be increased by five percent annually effective Jan. 1, 2023 through revenue regulations to be issued by the Secretary of Finance.
House of the Representatives (ALVIN KASIBAN / MANILA BULLETIN / FILE PHOTO)
In less than two minutes, the House panel presided over by its vice-chairperson Nueva Ecija Rep. Estrellita Suansing passed the unnumbered substitute bill, which was approved by the House committee on appropriations last week.
On Jan. 22, the House committee on appropriations chaired by Davao City Rep. Isidro Ungab approved the proposed MVRUT Act with “minor amendments.”
Albay Rep. Joey Salceda, chairman of the House committee on ways and means and the principal author of the bill, presented the substitute bill before the Ungab panel.
"This measure does three things. It tries to update the motor vehicle road user’s charge. Since it was last imposed in 2004, it was not adjusted. Second, it is a revenue measure because in the next five years, it can raise P220 billion. In fact, on its second year , for this year, it could raise about P12 billion, the next year P25 billion, and the following year P32 billion,” Salceda said in his sponsorship speech.
He urged the Ungab panel to approve the earmarking provision of the revenue-generating bill, which was approved by his panel on Nov. 11, 2019.
The proposed MVRUT Act provides that 50 percent of the incremental revenues from the increased MVRU tax shall be allocated and used exclusively for the following purposes: 45 percent for the Public Utility Vehicle (PUV) Modernization Program and five percent for the government programs to be undertaken for prevention of deaths due to road accidents and accident victims’ assistance.
The measure provides that five percent of the incremental revenues shall be used for the improvement of existing drivers’ education programs, training academies, and drivers’ licensure examinations by the Land Transportation Office (LTO); LTO’s establishment of additional Motor Vehicle Inspection Centers; the provision of supplemental hospitalization coverage by the Philippine Health Insurance Corporation (Philheath) for victims of road accidents; the provision by the Employees’ Compensation Commission of workmen’s compensation for victims of road accidents who are unable to be gainfully employed for a continuous period due to disability; and the establishment by the Department of Health (DOH) of emergency care facilities in areas that have high incidence of road accidents.
The substitute bill approved by the Salceda panel last year provides that the incremental revenues shall be earmarked from Jan. 1, 2020 to Dec. 31, 2024.
However, this having been “overtaken by events,” Quirino Rep. Junie Cua, vice-chairperson of the House committee on appropriations, said the bill provides that the earmarking of the incremental revenues “start on January 2021, instead of January 2020.”
Cua, however, said that “Realizing that it will benefit all of us if we make this effective as soon as it is approved, instead of saying of starting from 2021, I propose that it starts upon actual approval.” His proposal was adopted by the Ungab panel.
Under the substitute measure, the following new tax rates shall apply to passenger cars with gross vehicle weight (GVW) of up to 1,600 kilograms (kg); P2,080 in 2020; P2,560 in 2021; and, P3,040 in 2022.
For cars with GVW above 1,600 kg but not exceeding 2,300 kg, the new rates are as follows: P4,680 in 2020; P5,760 in 2021; and P6,840 in 2022.
Under the bill, it was proposed that the new tax rates for passenger cars with GVW above 2,300 kg shall be P10,400 in 2020, P12,800 in 2021, and P15,200 in 2022.
The measure also calls for the imposition of a P1.40 unitary tax per kg of GVW on utility vehicles, sport-utility vehicles, buses, trucks, and trailers starting 2020 until 2023.
The bill also seeks to impose new tax rates on motorcycles without a sidecar but with an engine displacement of 400 cubic centimeters and above: P312 in 2020, P384 in 2021, and P456 in 2022.
For motorcycles with a sidecar, the new rates shall be P390 in 2020, P480 in 2021, and P570 in 2022.
The proposed MVRUT Act provides that the rate of the MVRUT shall be increased by five percent annually effective Jan. 1, 2023 through revenue regulations to be issued by the Secretary of Finance.