Will the cost of car ownership go up soon? It will if Congress gets its way.
In a report by the Philippine Daily Inquirer, the House is eyeing a tax hike on vehicle owners by increasing the rate of the Motor Vehicle User’s Charge (MVIC). Albay Rep. Jose Ma. Salceda says he wants to consider raising taxes on other things instead of imposing it on snacks (chips, etc.) and sugary drinks. It was in response to the Department of Finance (DOF) and Department of Health’s suggestions to impose higher duties on those kinds of foods and drinks.
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Salceda said the panel will start hearing four proposals to update MVUC after President Ferdinand Marcos Jr.'s second State of the Nation Address on July 24. Salceda also argued that car owners are "heavily subsidized for car use", adding that it leads to more traffic congestion. “The effect is, when something is artificially cheaper than it should be, more people do it than should be. So, we have more traffic than our roads can accommodate,” added the congressman.
The collection of Motor Vehicle User's Charge used to fall under the jurisdiction of the Road Board. However, the Road Board was abolished after former President Rodrigo Duterte signed it into law in 2019. The Road Board was hounded by allegations of corruption and misuse of funds prior to that. Now, Congress proposes the inclusion of the MVUC in the Tax Code.
“We will discuss taxes that hit the rich first. That’s our constitutional duty. I still have questions about the proposed tax increase on sweetened beverages, and the proposal for salty food taxes. I also want to consider other options, including closing some of the tax exemptions to the sweetened beverage tax,” said Salceda.
That said, the proposed increase of the MVUC also seeks to exempt motorcycles and tricycles from the fee. It is because these vehicles are “a means of living now, with delivery express services and the like”. As for the revenue collected from the proposal, plans for zero-interest loans for local jeepney manufacturers are being considered to boost local production and employement, should the Congress’ plans become reality.
