Press Release
August 2, 2017

Statement on the gov't proposal to raise car registration fees

Government has a triple whammy tax proposal on vehicles. Already known are the proposed additional taxes on motor vehicles and on the fuels that run them.

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.

Current rates were pegged in 2004, as the fourth tranche of the fees mandated by RA 8794, which took effect in 2000.

One of the weaknesses of the 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.

Over P135 billion was collected in road user's tax from 2000 to 2016. A special audit conducted by the 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. At present, the fund is exempt from the scrutiny of the elected representatives of the people.

Seven unelected bureaucrats comprising the Road Board decide on its use. The Constitution states 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. Booking it as an off-budget account distorts the picture of total infra spending.

Second, it is time to revisit the manner by which the funds are apportioned.

At present, collections are divided into four special accounts: Special Road Support Fund (80%), Special Road Safety Fund (7.5%), Special Vehicle Pollution Control Fund (7.5%), and Special Local Road Fund (5%).

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.

Third, 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.

Fourth, is 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.

The embargo in buying emergency response and obstruction removal vehicles must 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.

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.

For a megapolis of its size, Metro Manila lacks "jaws of life", the metal-cutting or -prying devices which can extricate passengers out of mangled vehicles.

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