The measure seeking to impose a motor vehicle road user’s tax (MVRUT) to help finance the government’s public utility vehicle modernization program (PUVMP) hurdled final reading at the House of Representatives on Tuesday.

A total of 247 lawmakers voted to approve House Bill No. 9647, which proposes the MVRUT in lieu of the current motor vehicle user’s charge (MVUC). Only four lawmakers voted against the measure, while one abstained from voting.

Under the existing law, the MVUC ranges from PHP120 to PHP4,000 depending on the gross weight of the motor vehicle.

The measure proposes a schedule regarding the structured taxation plan that categorizes vehicles based on their type and gross vehicle weight (GVW), providing a nuanced approach to taxation.

The proposed rates for 2024-2027 onwards are as follows: for passenger cars up to 1,600 kilograms (kg) GVW – PHP2,080 in 2024; PHP2,560 in 2025; PHP3,040 in 2026; and from 2027 onwards, a 5 percent increase.

For passenger cars with 1,600 kg up to 2,300 kg GVW, the rates are PHP4,680 in 2024; PHP5,760 in 2025; PHP6,840 in 2026; and a 5-percent increase from 2027 onwards.

Meanwhile, passenger cars with a GVW of more than 2,300 kg would have rates at PHP10,400 in 2024, PHP12,800 in 2025, PHP15,200 in 2026, and a 5-percent increase in 2027 onwards.

The bill also introduces a weight-based taxation approach for utility vehicles with a GVW of up to 4,500 kg. The rates are set per kilogram of GVW: PHP1.40 per kg of GVW in 2024; PHP2.50 per kg of GVW in 2025; PHP3.40 per kg of GVW in 2026; 2027 onwards – 5 percent increase.

Motorcycles and tricycles are exempted from the proposed tax, while for-hire vehicles will get a 50-percent discount from their MVUC payments.

House Ways and Means Committee chairperson Joey Salceda said the measure is expected to generate additional funds amounting to PHP68.19 billion over five years.

The bill proposes that 45 percent of the incremental revenues from the MVRUT shall be allocated to finance the modernization of public utility vehicles, while 5 percent shall be allotted for government programs meant to prevent deaths due to road crash and for victims’ assistance. (PNA)