Bill to Increase Taxes for Additional Vehicles Now Set in Motion

Cherryl Anne Cruz

It seems taxes and cars are at odds these days — and vehicle owners are the ones absorbing many of the blows.

Move over excise tax — there’s a new bill on the block that’s seeking for higher taxes once again: the “additional cars” tariff.

House Bill 3298: Restructuring the Private Motor Vehicle Tax

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Submitted by House of Representatives Deputy Speaker Sharon Garin as House Bill 3298 or Restructuring the Private Motor Vehicle Tax, the bill proposes to double the taxes for those who plan to buy more vehicles.

So anyone who purchases a second car will be charged a Motor Vehicle User’s Charge (MVUC) that’s 30 percent higher for the first year; 60 percent for the second; 90 percent for the third; 120 percent for the fourth year; and 150% for the fifth.

Meanwhile, those who purchase their third car (or the succeeding ones) will increase their rates depending on these guidelines:

Quantity of Cars Owned Mandated MVUC* Added Tax for the First Year Added Tax for the Second Year Added Tax for the Third Year Added Tax for the Fourth Year Added Tax for the Fifth Year
2nd Car 2x 30% 60% 90% 120% 150%
3rd Car 3x 40% 80% 120% 160% 200%
4th Car 4x 50% 100% 150% 200% 250%
5th Car 5x 60% 120% 180% 240% 300%

Limitations and designation of House Bill 3298

According to Garin, the bill will not apply to businesses that are directly related to transportation, or require the use of more than one car to operate a business.

“Persons engaged in the business of transportation or whose business requires more than one vehicle is not covered by the increased rates,” she said.

The Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) will be tasked to execute and implement these rules if approved by the House and Senate.

Solution to the Philippine’s traffic problem?

The proposed House Bill 3298 or Restructuring the Private Motor Vehicle Tax would hopefully help lessen — or possibly alleviate — the worsening traffic problem in the country once and for all.

“This bill is in conjunction with other measures of improving access roads and government projects in addressing the traffic situation,” Garin added.

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Traffic has always been a major problem of the Philippines. One of the most common causes is the huge volume of cars on the streets, which currently stand at around 2.7 million units.

Senator Ralph Recto estimates that the Philippines suffers around a P2.6 billion (or $55.8 million) economic loss each day created by traffic congestion. This figure rises to P3 billion (or $64.39 million) at the peak of the rainy season.

Over the years, the government has taken steps to alleviate the traffic problem, with many attempts ending unsuccessfully or getting postponed in the process.

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