House OKs bill to hike car taxes on 2nd reading

Cars (File photo from REUTERS/Marko Djurica)

MANILA, Philippines — A bill that will amend the motor vehicle user’s charge and, in effect, increase taxes paid by car owners has been approved by the House of Representatives on a second reading.

During Tuesday’s session, House Bill Number 9647 was approved via viva voce or voice voting.

The bill will change motor vehicle users’ charges into motor vehicle road users’ taxes (MVRUT) if enacted.

The tax will gradually increase, and then the raise will be at five percent every year starting in 2027.

According to the House committee on ways and means chairperson and Albay 2nd District Representative Joey Salceda, MVRUT is government’s most important fiscal instrument against traffic congestion.

He said the measure would increase tax obligations for people with more cars.

“The Motor Vehicle Road User’s Tax is the country’s most important fiscal instrument against traffic congestion and the overuse of the country’s road facilities […],” he said.

“Clearly, vehicle owners are receiving a net subsidy for their ownership of cars,” he pointed out.

“In fact, MVUC rates have not been adjusted since 2004,” Salceda noted.

“It is, thus, no wonder that car ownership is growing faster than the economy itself, with the 2022 industry sales increasing by 26.62 percent year-on-year,” the lawmaker observed.

“Average daily traffic volumes in NCR alone now stands at 3.54 million vehicles in 2022, up from just 3.2 million in 2021,” he said.

“When you subsidize car ownership while limited public transport options exist, naturally, people will keep buying cars,” he explained.

Salceda believes the bill, which is a consolidation of eight proposals, will remove subsidies benefiting the rich.

“Most atrociously, this subsidy benefits the rich. Only 1.7 percent of cars were owned by (the) bottom 50 percent, while [the rich people] owned some 55.6 percent of cars,” he said.

Here are some of the proposed rates of adjustments:

Passenger cars with a gross vehicle weight of up to 1,600 kilograms (kg):

P2,080 in 2024
P2,560 in 2025
P3,040 in 2026
Five percent increase in 2027

Passenger cars with a gross vehicle weight from 1,600 kg up to 2,300 kg:

P4,680 in 2024
P5,760 in 2025
P6,840 in 2026
Five percent increase in 2027

Passenger cars with a gross vehicle weight of over 2,300 kg:

P10,400 in 2024
P12,800 in 2025
P15,200 in 2026
Five percent increase in 2027

Meanwhile, utility vehicles will get the following MVRUT rates:

Utility cars with a gross vehicle weight of up to 4,500 kg:

P1.40 per kg in 2024
P2.50 per kg in 2025
P3.40 per kg in 2026
Five percent increase in 2027

/abc