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Recto opposes plan to raise road user’s tax

/ 05:08 AM January 25, 2019

Administration officials are pushing for Congress to increase the road user’s tax, according to Senate President Pro Tempore Ralph Recto, who opposes the plan.

Recto said the impending abolition of the Road Board, which administers the tax, or Motor Vehicle User’s Charge (MVUC), should not tempt the officials to call for a fee increase.

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One proposal, he said, “indexes MVUC to inflation, meaning it will be raised based on the inflation rates through the years.”

Another proposal is for the road user’s tax to be increased by 50 percent or 100 percent, he added.

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“The Road Board has ended. But raising car registration fees should not be its sequel,” Recto said in a statement.

Tax pegged to inflation

He warned that pegging the MVUC to inflation, using 2004 as the base year, would increase car registration fees by 72 percent.

According to the senator, the proposals have not been seriously considered in Congress because there is no definitive push from the executive branch or a request from President Duterte certifying the fee increase as urgent.

Recto said an increase in the MVUC would be the third whammy for motorists after the additional excise on fuel and the tax increase on motor vehicles, which both resulted from the implementation of the Tax Reform for Acceleration and Inclusion Act.

P46.25-B collections

He said the administration should make do with the P46.25 billion in MVUC collections, which could be booked as tax.

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Since the MVUC will go to the national treasury once the measure abolishing the Road Board is signed into law, the national budget will increase, he added.

“In fact, by putting this in the General Fund, there should be less pressure in increasing taxes,” he said.

The bill abolishing the Road Board is expected to be sent to Duterte for his signature after the Senate adopted the House of Representatives’ version of the measure.

The bill transfers the MVUC to the national treasury and states that the funds, which will be included in the General Appropriations Act, shall be used for the upgrading, repair, and rehabilitation of roads, bridges and road drainages.

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TAGS: Motor Vehicle User’s Charge (MVUC), Road Board, Senate President Pro Tempore Ralph Recto
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