On 20 March 2020, the House of Representatives passed on third reading House Bill 6136 which seeks to adjust the Motor Vehicle User’s Charge (MVUC) rates considering inflationary changes since 2004. Moreover, the bill sets aside 50% of incremental revenues from rate adjustment (i.e. earmarking provision) to finance the Public Utility Vehicle Modernization Program or PUVMP (45%), and other government programs for the prevention of deaths due to road accidents and assistance to victims (5%).
The Congressional Policy and Budget Research Department (CPBRD) estimates that the government can generate 6.3 billion – 20.0 billion annually over the next five years even if MVUC rates are not adjusted. Alternatively, CPBRD projects revenue potential of 26.4 billion – 79.7 billion annual collections during the same period using HB 6136 proposed tax rates. In 2019, actual MVUC receipts amounted to 15.7 billion.
Implementation gaps in the utilization of MVUC funds in 2014-2018 or five years prior to the abolition of the Road Board (RA 11239) are also discussed. In particular, the paper delves on fund under-utilization and accumulation of fund balances. Relevant audit observations by the Commission on Audit are likewise provided in the paper.
