On top of increasing excise tax on petroleum products and automobiles, the Duterte administration is also poised to impose higher registration fees for all motor vehicles, Senate President Pro Tempore Ralph G. Recto reported on Wednesday.
“The government has a ‘triple whammy’ tax proposal on vehicles,” Recto warned.
Noting that while the public was already alerted about the proposed additional taxes on motor vehicles and the fuels that run them, the senator said “not yet on the public radar is the third one”, which seeks to double car-registration fees, or what is officially known as the Motor Vehicle User’s Charge (MVUC).
“Under the proposal, the MVUC on what is classified as a medium passenger car, one which has gross vehicle weight of 1,601 kilos to 2300 kilos, will go up to P6,552 from P3,600,” he said.
Recto recalled that current rates were pegged in 2004, as the fourth tranche of the fees mandated by Republic Act (RA) 8794, which took effect in 2000.
Recto pointed out that one of the weaknesses of the Department of Finance (DOF)-endorsed proposal is that, “It merely revises the rates stipulated in RA 8794, when the pressing revisions it needs cover the way the collections are earmarked and spent.”
“The more than 17 years that the law has been in effect provides a trove of reform opportunities which can remedy inherent defects in the utilization of MVUC income,” he said.
In a statement, the senator added that over P135 billion was collected in road user’s tax from 2000 to 2016. He noted a special audit conducted by the Commission on Audit (COA) in 2009 already flagged weaknesses in fund use, which should have triggered remedial measures.
“First, it is time to end MVUC’s protected status as automatic appropriations whose utilization is outside the ambit of Congress,” Recto said. “At present, the fund is exempt from the scrutiny of the elected representatives of the people.”
The senator lamented that “seven unelected bureaucrats” comprising the Road Board decide how this fund is used, even as the Philippine Constitution clearly stated that, “No fund must leave the Treasury without an appropriation from Congress.”
“For the sake of transparency, it must be included in the itemized listing of the DPWH’s annual budget,” Recto recommended. “Booking it as an off-budget account distorts the picture of total infra spending.”
Moreover, the senator stressed “it is time to revisit the manner by which the funds are apportioned”, noting that at present, collections are divided into four special accounts: Special Road Support Fund (80 percent), Special Road Safety Fund (7.5 percent), Special Vehicle Pollution Control Fund (7.5 percent) and Special Local Road Fund (5 percent). According to Recto, the COA has repeatedly tagged irregularities in the use of the vehicle-pollution-control fund.
“In 16 years, P10.6 billion had been allotted for clean-air projects, whose benefits, if any, are concealed by the smog of the metropolis,” he said.
At the same time, Recto recommends that “the menu must be revamped. A perpetual negative list must be put in place. The procurement of road signs, highway barriers, reflectorized signs, in gigantic quantities in the past, should be rationalized. The Philippines is abloom in signs but lacking in road order.”
In addition, the senator suggested the need to align a portion of MVUC collections in solving road congestion. “We should smash current orthodoxies like the manifest bias of the fund toward paving asphalt.”
Recto said the embargo in buying emergency response and obstruction-removal vehicles must also be lifted.
“If car-registration fees are being collected in the name of the motorists’ safety, then we should be open to the purchase of equipment that will keep them from harm, especially in Metro Manila, where one accident was reported every five minutes in 2015,” he said, adding: “MVUC should fund ambulances which can be stationed in traffic-prone highways, patrol cars which can run after overspeeding vehicles at night and tow trucks to clear roads of stalled vehicles.”
No commitment
Congress leaders, in a meeting with President Duterte at the Palace on Tuesday, gave no firm commitment lawmakers can quickly pass the pending tax bills endorsed by Malacañang.
“Nope”, Senate Majority Leader Vicente C. Sotto III said when asked if Duterte implored Senate and House leaders to fastback approval of pending revenue measures intended to raise additional funds to bankroll the administration’s multiyear infrastructure program, dubbed as “Build, Build, Build”.
“We merely discussed possibilities of tweaks to the tax reform bills,” Sotto said, adding: “The President was open to it.”
The Senate leader disclosed the finance and budget officials were the ones opposing congressional amendments in the tax bills.
“The economic managers, the DOF and DBM are against any revisions in the tax bills,” Sotto told the BusinessMirror, referring to the administration-endorsed Tax Reform for Acceleration and Inclusion, also known as TRAIN bill.
Sotto said Duterte indicated he was open to tweaks by Senate allies in the version of the tax-reform package crafted by the House of Representatives.
Image credits: Alysa Salen
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