Package 1C: Motor Vehicle Users Charge

The motor vehicle users charge (MVUC) or Package 1C of the Comprehensive Tax Reform Program was introduced to provide adequate funding for maintenance of national and provincial roads. It also aims to address air pollution from motor vehicles.

An MVUC rate that reflects current prices is simple to implement and provides sufficient funds for the infrastructure programs of the government. The proposed merger of various road funds with the general fund will result in more efficient linkages with national budget, and improve transparency and accountability. The proposed abolition of the Road Board will also ensure more transparency in the utilization of the funds from MVUC and consistency with national priorities.

The current rates were set in 2004 and have not been adjusted for inflation in the past 14 years, thereby eroding the real value of revenues. These are also complex with multiple rates depending on the type of motor vehicle.

DOF proposal

  • The proposed merger of various road funds with the general fund will result in more efficient linkages with the national budget, and improve transparency and accountability.
  • The proposed abolition of the Road Board will ensure more transparency in the utilization of the funds from MVUC and consistency with national priorities.
  • 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.

After consultation with different stakeholders, the DOF proposes to increase the MVUC rates with the following features:

  1. Impose a unitary rate based on weight for all vehicles, private or government and for hire vehicles.
  2. Adopt a longer phased-year period of 3 years to increase MVUC rates.

 

Rates

Type of vehicle MVUC rates (pesos per kg of GVW)
Year 1 Year 2 Year 3
Private and government motor vehicles, including motorcycles 1.40 1.95 2.50

Publications