Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

4338

House Bill No.

Introduced by Rep. ANGELO MARCOS BARBA
24 District, Ilocos Norte

EXPLANATORY NOTE

Republic Act No. 8794 (R.A. No. 8794) is a legislation created to
support road infrastructure and maintenance projects for efficient movement
of people and goods and better access to employment, education, and social
services: through tax imposition on motor vehicle user’s charge (MVUC).
While its intention is clearly to generate more funds for public works and
highways projects, the 2004 version of the law, the implementing legislation
at present, is anachronistic. The ambiguous provisions pertaining to its
coverage, in addition to outdated tax rates, add up to the difficulties in the
effective and efficient implementation of the MVUC law.

This Act seeks to address amendments to the MVUC law and proposes
to determine the coverage for its imposition. Further, this Act proposes to
simplify the existing MVUC system through applying a single rate for all types
of motor vehicles. Lastly, this Act calls for implementing agencies to exercise,
such as the Department of Transportation (DOTr), Department of Finance
(DOF), and the Department of Budget and Management (DBM), facilitation of
collecting revenues.

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

ANGE!) BARBA

K. (2018). Results of the Assessment of the Motor Vehicle
Institute for Development Studies. Retrieved 30 August,

* Napalang, MS., Agate, P., Navarro, A., and Det
User's Charge Utilization in the Philippines. Pk
2022, from https://pidswebs.pids.gov.ph



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

House Bill No. 4338

Introduced by Rep. ANGELO MARCOS BARBA
2nd District, Ilocos Norte

AN ACT AMENDING REPUBLIC ACT NO. 8794, ALSO KNOWN AS
“AN ACT IMPOSING A MOTOR VEHICLE USER’S CHARGE ON
OWNERS OF ALL TYPES OF MOTOR VEHICLES AND FOR OTHER
PURPOSES”, AS AMENDED BY REPUBLIC ACT NO. 11239

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

SECTION 1. Short Title. - This Act shall be known as the “Motor Vehicle
Road User's Tax Act.”

SECTION 2. - Section 2 of Republic Act No. 8794, as amended by
Republic Act No. 11239, is hereby amended to read as follows:

“SEC. 2. Coverage. — [In lieu of the registration fee under Section
8 of 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 ROAD
USER'S TAX SHALL 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, [a Motor Vehicle User's
Charge (MVUC)] which shall be collected from and paid by the owner
of the motor vehicle.”

SECTION 3. - Section 3 of Republic Act No. 8794, as amended by
Republic Act No. 11239, is hereby amended to read as follows:

“SEC. 3. [Rates of the Motor Vehicle User's Charge. - ] RATES
OF MOTOR VEHICLE ROAD USER’S TAX. ~ [(a) For private
passenger cars registered as of the date of 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 fourth 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 Section 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 the said base rates plus one hundred percent (100%) in the
fourth year from the effectivity of this Act and thereafter: Provided,
‘That the MVUC for 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 (P300).}

L_ Typeof Vehicle Base Rates
I. Private and Government

A. Passenger Cars

(1) GVW up to 1,600 kgs. P800
(2) GVW more than 1,600 kgs. — P1,800
2,300 kgs.

(3) GVW more than 2,300 kgs. P4,000
B. Utility Vehicles

(1) GVW more than 2,700 kgs. P1,000

(2) GVW more than 2,700 kgs. — P1,000 + P20

4,500 kgs per 100 kgs. of
GVW over 2,700 kgs.

C. Motorcycles

(4) Without sidecar P120

(2) With sidecar Piso
D. Buses

GVW more than 4,500 kgs. Pg00 + P12 per 100 kgs.

of GVW over 2,700 kgs.

E. Trucks

GVW more than 4,500 kgs. P900 + P12 per 100 kgs.

of GVW over 2,700 kgs.

F. Trailers

GVW more than 4,500 kgs. P12 per 100 kgs. of GVW

II. For Hire

A. Passenger Cars


(a) GVW up to 1,600 kgs. P450

(2) GVW more than 1,600 kgs. — P900
2,300 kgs.
(3) GVW more than 2,300 kgs. P2,500

B. Utility Vehicles

GVW up to 4,500 kgs. P15 per 100 kgs.
of GVW
C. Motorcycles
(1) without sidecar Pi50
(2) with sidecar P240
D. Buses
GVW more than 4,500 kgs. Pigs per 100 kgs.
of GVW
E. Trucks
GVW more than 4,500 kgs. Pgoo + P12 per 100 kgs.
of GVW over 2,700 kgs.
F. Trailers
GVW more than 4,500 kgs. P12 per 100 kgs.
of GVW]

“[After the fourth year from the effectivity of this Act, the
President of the Philippines may adjust the rates contained in
Section 3 which shall be reflective of, but shall, not exceed the
annual rate of increase of the Consumer Price Index (CPI). The
President may adjust such rates not more than once every five (5)

years.]

“THERE SHALL BE LEVIED, ASSESSED, AND
COLLECTED ON _ REGISTERED PRIVATE AND
GOVERNMENT VEHICLES, A MOTOR VEHICLE ROAD
USER’S TAX WHICH SHALL BE COLLECTED FROM
AND PAID BY THE OWNER OF THE MOTOR VEHICLE
IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:


TYPE OF VEHICLE

2020 2021 72022 +2023 ON-
‘WARDS.
PRIVATE AND GOVERNMENT,
‘A._ PASSENGER CARS:
‘GROSS VEHICLE 2,080 2,560 ‘3,040
WEIGHT (GVW) UP
‘TO1,600
KILOGRAMS (KG) 5%
‘GVW MORE THAN 4,680 5,760 6,840 INCREASE
1,600 KG UPTO
2,300 KG
‘GVW MORE THAN 10,400 12,800 15,200
2,300 KG.
Bi, UTILITY VEHICLES
1.40 PER 2.50 3.40 3%
GvwuPTO KG OF PER KG PER KG INCREASE
4,500 KG cevw OF GVW OF
cvw
(Ba. SPORTS UTILITY VEHICLES.
1.40 PER 2.50 3.40 Bx
KG OF PER KG PER KG INCREASE
Gvw UPTO Gvw OF GVW OF
4,500 KG cvw
‘© MOTORCYCLES
‘WITHOUT SIDECAR o o o °
WITH SIDECAR ° ° ° °
D. BUSES
1.40 PER 2.50 3.40 5%
GVW ABOVE KG OF PER KG PER KG INCREASE
4,500 KG Gvw OF GvWw OF
Gvw
E. TRUCKS
1.40 PER 2.50 3.40 5%
GVW ABOVE KG OF PER KG PER KG INCREASE
4,500 KG Gvw OF Gvw OF
cvw
F TRAILERS.
1.40 PER 2.50 340 5%
GVW ABOVE KGOF PERKG PERKG INCREASE
4,500 KG Gvw OF GVW OF
cevw

“PROVIDED, THAT FOR HIRE VEHICLES SHALL BE
SUBJECT TO FIFTY PERCENT (50%) OF THE ABOVE
TAX RATES: PROVIDED, HOWEVER, THAT IN THE
EVENT THE ABOVE TAX RATE WILL RESULT IN
DOWNWARD ADJUSTMENT OF TAX RATES, THE
APPLICABLE MOTOR VEHICLE ROAD USER’S TAX OF
THE PRECEDING YEAR SHALL BE APPLIED.

“PROVIDED, FURTHER, THAT THE RATES OF
MOTOR VEHICLE ROAD USER’S TAX SHALL BE
INCREASED BY FIVE PERCENT (5%) ANNUALLY
EFFECTIVE JANUARY 1, 2023 THROUGH REVENUE
REGULATIONS TO BE ISSUED BY THE SECRETARY OF
FINANCE.

“AS USED IN THIS SECTION ---



“(A) MOTOR VEHICLE SHALL MEAN ANY VEHICLE
PROPELLED BY ANY POWER OTHER THAN
MUSCULAR POWER USING PUBLIC HIGHWAYS BUT
EXCEPTING AIRCRAFTS, MOTOR BOATS, ROAD
ROLLERS, TROLLEY CARS, STREET SWEEPERS,
SPRINKLERS, LAWN MOWERS, BULLDOZERS,
GRADERS, FORKLIFTS, AMPHIBIAN TRUCKS, AND
CRANES NOT USED IN PUBLIC HIGHWAYS, VEHICLES
WHICH RUN ONLY ON RAILS OR TRACKS, TRACTORS
AND 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, OR PASSENGER AS
DETERMINED BY THE ASSISTANT SECRETARY OF
THE LAND TRANSPORTATION OFFICE (LTO).”

SECTION 4. - Section 4 of Republic Act No. 8794, as amended by
Republic Act No. 11239, is hereby amended to read as follows:

“[SEC. 4. GOVERNMENT MOTOR VEHICLES. -

SEC. 4. PAYMENT OF MOTOR VEHICLE ROAD
USER'S TAX. - The manner of payment of the [user's charge]
MOTOR VEHICLE ROAD USER’S TAX 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 (DBM)I_]:

“(A) MANNER OF PAYMENT. — THE MOTOR
VEHICLE ROAD USER’S TAX SHALL BE PAID TO THE
LTO ANNUALLY UPON REGISTRATION,
CONFORMABLY WITH THE REGULATIONS ISSUED
JOINTLY BY THE DEPARTMENT OF FINANCE (DOF)
AND DEPARTMENT OF TRANSPORTATION (DOTr).

“(B) MANNER OF COLLECTION OF REVENUES.
THE MOTOR VEHICLE ROAD USER’S TAX SHALL BE
COLLECTED BY THE LTO AS PART OF THE ANNUAL
VEHICLE REGISTRATION IN ACCORDANCE WITH THE
RATES SET FORTH IN SECTION 3 HEREOF. THE


DATES OF ANNUAL REGISTRATION OF MOTOR
VEHICLES SHALL BE BASED ON THE REGISTRATION
SCHEME PROVIDED BY THE LTO.

“(C) EFFECT OF FAILURE TO PAY MOTOR VEHICLE
ROAD USER’S TAX. — ANY REGISTRATION OF MOTOR
VEHICLES NOT RENEWED ON OR BEFORE THE DATE
FIXED BY THE LTO SHALL BE CONSIDERED
DELINQUENT AND INVALID.”

SECTION 5. - Section 7 of Republic Act No. 8794, as amended by
Republic Act No. 12239, 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
under a 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 included in the annual
General Appropriations Act [.]: PROVIDED, THAT FIFTY
PERCENT (50%) OF THE INCREMENTAL REVENUES
COLLECTED UNDER THIS ACT SHALL BE ALLOCATED
AND USED EXCLUSIVELY FOR THE FOLLOWING
PURPOSES:

“(1) FORTY-FIVE PERCENT (45%) FOR THE
MODERNIZATION OF PUBLIC UTILITY VEHICLES,
PARTICULARLY FOR THE EQUITY SUBSIDY OF
PUBLIC TRANSPORT OPERATORS CONSOLIDATED AS
TRANSPORT COOPERATIVES FOR THE ACQUISITION
OF EURO-4 COMPLIANT PUBLIC UTILITY VEHICLES
PLYING AUTHORIZED ROUTES AS DETERMINED BY
THE DOTr AND THE LAND TRANSPORTATION
FRANCHISING AND REGULATORY BOARD (LTFRB):
PROVIDED, THAT SAID INCREMENTAL REVENUES
SHALL BE EARMARKED UPON APPROVAL OF THIS
ACT UNTIL DECEMBER 31, 2024 FOR THE
MODERNIZATION OF PUBLIC UTILITY VEHICLES:
PROVIDED, FURTHER, THAT THE EARMARKED
FUNDS SHALL REVERT TO THE SPECIAL ACCOUNT IN
THE GENERAL FUND EFFECTIVE JANUARY 1, 2025;

“(2) FIVE PERCENT (5%) FOR GOVERNMENT
PROGRAMS TO BE UNDERTAKEN FOR PREVENTION
OF DEATHS DUE TO ROAD ACCIDENTS, AND
ACCIDENT VICTIMS’ ASSISTANCE, INCLUDING THE
FOLLOWING:

@) THE IMPROVEMENT OF EXISTING
DRIVERS’ EDUCATION PROGRAMS, TRAINING
ACADEMIES AND DRIVERS’ LICENSE EXAMINATIONS


BY THE LTO;

(b) THE ESTABLISHMENT OF ADDITIONAL
MOTOR VEHICLE INSPECTION CENTERS BY THE LTO;

(©) THE IMPROVEMENT OF ROAD
MANAGEMENT SYSTEMS BY THE DOTr;

(d) THE PROVISION OF SUPPLEMENTAL
HOSPITALIZATION COVERAGE BY THE PHILIPPINE
HEALTH INSURANCE CORPORATION (PHILHEALTH)
FOR VICTIMS OF ROAD ACCIDENTS;

(e) THE PROVISION BY THE EMPLOYEES’
COMPENSATION COMMISSION OF WORKMEN’S
COMPENSATION FOR VICTIMS OF ROAD ACCIDENTS
WHO ARE UNABLE TO BE GAINFULLY EMPLOYED
FOR A CONTINUOUS PERIOD DUE TO DISABILITY,
PURSUANT TO THE PROVISIONS OF REPUBLIC ACT
NO. 772, AS AMENDED, OF THE WORKERS’
COMPENSATION ACT; AND

(f) THE ESTABLISHMENT BY THE DEPARTMENT
OF HEALTH (DOH) OF EMERGENCY CARE FACILITIES
IN AREAS THAT HAVE HIGH INCIDENCE OF ROAD
ACCIDENTS.”

SECTION 6. Implementing Rules and Regulations. - The DOTr, in
coordination with the DOF, DOH, and the Land Transportation Franchising
and Regulatory Board (LTFRB), shall promulgate the rules and regulations to
implement this Act within thirty (30) days from its effectivity.

SECTION 7. Repealing Clause. — All laws, orders, issuances, circulars,
rules and regulations or parts thereof, which are inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 8. Separability Clause. - If any provision of this Act is
declared unconstitutional or invalid, other parts or provisions hereof not
affected thereby shall continue to be in full force and effect.

SECTION 9. Effectivity. - This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in at least one (1) newspaper of
general circulation.

Approved,