Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4223

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

The enactment of Republic Act No. 8794 (RA 8794) in June 27, 2000 put in place the
motor vehicle user's charge (MVUC), a single law that provides for the annual motor
vehicle registration fees by repealing the registration fee and the Private Motor Vehicle
Tax. RA 8794 increased the rates by 100% from the previous levels but the increase
in the rates was done in four tranches from 2001 to 2004.

The MVUC system needs to be simplified by applying a single rate for all types of
motor vehicles whether private, government, or for hire. The simplified MVUC systems
will ease the burden of administration and lowers cost of compliance.

In addition, Section 3 of RA 8794 grants the President the authority to adjust annually
the MVUC rates after the 4th year of its effectivity, however, the existing rates have
not been adjusted since 2004. The MVUC rate needs to incorporate the adjustment
from the 2004 rate to ensure buoyancy of the revenues. The adjusted MVUC rate will
provide sufficient sources of fund for the infrastructure programs of the government.

Itis likewise proposed that various road funds will be merged with the general fund for
efficiency and better linkages with budget. The revenues from the proposed increase
of MVUC rates will be one of the sources of funding that will finance road infrastructure
projects of the government.

This bill is filed in substitution of House Bill 1249 to reflect the more simplified rate
discussed with the Department of Finance.

In light of the foregoing, passage of this bill is earnestly sought.

LUIS 'MUND fLRAY” F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
First Regular Session
4223
HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT
AMENDING REPUBLIC ACT 8794 ENTITLED “AN ACT IMPOSING A MOTOR
VEHICLE USER’S CHARGE ON OWNERS OF ALL TYPES OF MOTOR
VEHICLES AND FOR OTHER PURPOSES”

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “2020 MVUC Law”

SECTION 2. Declaration of Policy. —

1. Simplify the structure of motor vehicle user's charge (MVUC).

2. Ensure buoyancy of the revenues from the MVUC and provide sufficient
sources of fund for the infrastructure programs of the government.

3. Provide ample revenues to finance road infrastructure projects of the
government.

SECTION 3. Section 2 of Republic Act No.8794 is hereby amended as follows:

Section 2. Coverage. [In lieu of the registration fee under section 8
Republic Act No. 4136, as amended by Batas Pambansa Bilang 74, and
the Private Motor Vehicle Tax under Executive Order No. 43, series of
1986, there is hereby] THE MOTOR VEHICLE USER’S CHARGE SHALL
CONTINUE TO BE imposed on every motor vehicle, whether for hire or


for private use, including government motor vehicles as more fully
provided in Section 3 hereof, which shall be collected from and paid by the

owner of the motor vehicle.

SECTION 4, Section 3 of RA 8794 is hereby amended as follows:

Section 3. Rates of Motor Vehicle User's Charge.

[(a) For private passenger cars registered as of the date of the effectivity of
this Act, the MVUC to be paid shall be the private motor vehicle tax under
Executive Order No. 43, series of 1986, plus twenty-five percent (25%) for
the first year, fifty percent (50%) for the second year, seventy five percent
(75%) for the third year, and one hundred percent (100%) for the year and
thereafter: Provided, however, That private passenger cars to be registered
for the first time after the effectivity of this Act, shall be subject to the MVUC_
rates prescribed in section 3(b) hereof.

(b) Except as provided under 3(a) hereof, for each motor vehicle under each
of the categories as herein provided, the MVUC shall be collected from and
paid by the vehicle owner, at the following base rates plus twenty-five
percent (25%) in the first year from the effectivity of this Act; the said base
rates plus fifty percent (50%) in the second year from the effectivity of this
Act; the said base rates plus seventy-five percent (75%) in the third year
from the effectivity of this Act; and said base rates plus one hundred percent
(100%) in the fourth year from the effectivity of this Act and their after:
Provided, That the MVUC for the sports utility vehicles shall be fifteen
percent (15%) higher than the MVUC herein set for private utility vehicles:
Provided, further, That motorcycles for hire with sidecars shall not pay more
than three-hundred pesos (300.00).]

THERE SHALL BE LEVIED, ASSESSED, AND COLLECTED ON EVERY
REGISTERED MOTOR VEHICLE, WHETHER FOR HIRE OR FOR
PRIVATE USE, INCLUDING GOVERNMENT VEHICLES, A MOTOR
VEHICLE USER’S CHARGE WHICH SHALL BE COLLECTED FROM

w


AND PAID BY THE OWNER OF THE MOTOR VEHICLE IN
ACCORDANCE WITH THE FOLLOWING SCHEDULE:

Base rates per kilogram of Gross

Type of vehicle Vehicle Weight (GVW)
2020 2021 2022
All types of motor. | are i Lae
vehicles whether | | P2.50
private, |
government, or for P1400 | P4195
hire motor |

vehicles including
motorcycles

AS USED IN THIS SECTION —

(A)

“MOTOR VEHICLE” SHALL MEAN ANY VEHICLE PROPELLED BY ANY
POWER OTHER THAN MUSCULAR POWER USING THE PUBLIC
HIGHWAYS BUT EXCEPTING AIRCRAFT, MOTOR BOATS, ROAD
ROLLERS, TROLLEY CARS, STREET SWEEPERS, SPRINKLERS,
LAWN MOWERS, BULLDOZERS, GRADERS, FORK LIFTS,
AMPHIBIAN TRUCKS, AND CRANES NOT USED IN PUBLIC
HIGHWAYS, VEHICLES WHICH RUN ONLY ON RAILS OR TRACKS,
AND TRACTORS, TRAILERS AND TRACTION ENGINES OF ALL KINDS
USED EXCLUSIVELY FOR AGRICULTURAL PURPOSES.

TRAILERS HAVING ANY NUMBER OF WHEELS, WHEN PROPELLED
OR INTENDED TO BE PROPELLED BY ATTACHMENT TO A MOTOR


VEHICLE SHALL BE CLASSIFIED AS SEPARATE MOTOR VEHICLE
WITH NO POWER RATING.

(B)

“GROSS VEHICLE WEIGHT” SHALL MEAN THE MEASURED WEIGHT
OF A MOTOR VEHICLE AS SPECIFIED BY THE MANUFACTURER
PLUS THE MAXIMUM ALLOWABLE CARRYING CAPACITY IN
MERCHANDISE, FREIGHT, AND/OR PASSENGER AS DETERMINED
BY THE ASSISTANT SECRETARY OF THE LAND TRANSPORTATION
OFFICE.

©)

“OWNER” REFERS TO ANY PERSON HOLDING TITLE TO A MOTOR
VEHICLE, OR HAVING THE LEGAL RIGHT TO REGISTER THE SAME,
INCLUDING PURCHASERS UNDER A_ CONDITIONAL SALE
AGREEMENT.

SECTION 5. Republic Act 8794 is hereby amended by introducing a
new Section 4 which shall read follows:

“SECTION 4. PAYMENT OF MOTOR VEHICLE USER CHARGE. —

(A)

PERSONS LIABLE - THE MOTOR VEHICLE USER’S CHARGE SHALL
BE PAID BY THE OWNER OF THE MOTOR VEHICLE TO THE LAND
TRANSPORTATION OFFICE (LTO), UPON EVERY ANNUAL
REGISTRATION, CONFORMABLY WITH THE REGULATIONS ISSUED
JOINTLY BY THE DEPARTMENT OF FINANCE AND DEPARTMENT OF
TRANSPORTATION.


THE MANNER OF PAYMENTS OF THE MOTOR VEHICLE USER’S
CHARGE ON GOVERNMENT MOTOR VEHICLES SHALL BE IN
ACCORDANCE WITH THE PROCEDURE THAT SHALL BE
PROMULGATED BY THE SECRETARY OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT.

(B)

MANNER OF COLLECTION OF REVENUES - THE MOTOR VEHICLE
USER’S CHARGE SHALL BE COLLECTED BY THE LTO FROM
OWNERS OF MOTOR VEHICLES AS PART OF THE ANNUAL VEHICLE
REGISTRATION IN ACCORDANCE WITH THE RATES SET FORTH IN
SECTION 202 HEREOF. THE DATES OF ANNUAL REGISTRATION OF
MOTOR VEHICLES SHALL BE BASED ON THE REGISTRATION
SCHEME PROVIDED BY THE LTO.

(Cc)

EFFECT OF FAILURE TO PAY ROAD USER CHARGE=— ANY
REGISTRATION OF MOTOR VEHICLES NOT RENEWED ON OR
BEFORE THE DATE FIXED BY THE LTO SHALL BE CONSIDERED
DELINQUENT AND INVALID.”

SECTION 6. The existing Section 4 of RA 8794 is hereby retained but renumbered as

Section 5.
SECTION 7. Section 7 of Republic Act No. 8794 is hereby amended to read as follows:

“Sec. 7. Disposition of Monies Collected, - All monies collected under this
Act shall be remitted to the National Treasury and shall ACCRUE TO THE
GENERAL FUND [under special account in the General Fund to be
earmarked solely for the construction, upgrading, repair, and rehabilitation


of roads, bridges, and road drainage to be include in the annual General
Appropriations Act].”

SECTION 8. Implementing Rules and Regulation. - The DOTr and DOF shall jointly
promulgate the implementing rules and regulations thirty (30) days from the effectivity
of this Act.

SECTION 9. Separability Clause. - Should any provision herein be declared
unconstitutional, the same shall not affect the validity of the other provisions of this
Act.

SECTION 10. Repealing Clause. ~ All laws, decrees, orders, rules, and regulations
or other issuances or parts inconsistent with the provisions of this Act are hereby
repealed, amended, or modified accordingly.

SECTION 11. Effectivity Clause. - This Act shall take effect in fifteen (15) days after
publication in the Official Gazette or in one (1) newspaper of general circulation in the

Philippines.

Approved,